March 07, 2017      

ODENSE, Denmark — The demand for collaborative robots is strong, particularly in Europe. Proof can be found in the explosive growth of Universal Robots A/S since the company launched its first cobot in 2008. In 2016 alone, UR’s revenue reached an estimated 662 million Danish krone ($94 million U.S.) and delivered a profit of DKK 92 million ($13 million) before tax, reflecting the booming cobot market.

Universal Robots‘ revenue has increased at a rate of 60 to 90 percent each year, from $5.6 million (DKK 40 million) in 2011 to $59.3 million (DKK 417 million) in 2015, according to Denmark’s Central Business Register.

According to the Odense-based company, its success can be attributed to the safety, flexibility, and the short payback time of its robotic arms. Universal Robots’ products do not require safety cages, can work side by side with humans, and have been implemented in factories and other facilities around the world.

Business Takeaways:

  • As the global cobot market continues to grow, Universal Robots has experienced rapid rises in revenue and size year over year.
  • The Danish company has been nurturing a robotics ecosystem, both to help educate end users and to maintain its market leadership.
  • Universal Robots executives said they expect particularly strong collaborative robotics growth in small and midsize enterprises and in the Asia-Pacific region.

A view of the cobot market

“We use four or five research companies to look at data, and of course they all vary,” said Jurgen von Hollen, who became president of Universal Robots last October. “We also analyze our revenues and sales to see the robotics market. We believe that the market will grow from $150 million to $180 million in 2016 by between 60 and 75 percent over the next year.”

“We expect the market to be at least $2 billion by 2020,” he told Robotics Business Review. “That’s a very large market from where we started.”

Jurgen von Hollen, Universal Robots' new president, talks about the collaborative robot market

The cobot market has plenty of room to grow, says UR President Jurgen von Hollen.

“In the collaborative space, research organizations have our market share at 50 percent, but we believe we’re around 60 to 65 percent market share,” claimed von Hollen. “Our focus as a company is to maintain that market share and take advantage of overall market growth.”

One challenge facing collaborative robots is that end users may not yet be aware of the benefits they can provide. More interest and competition could actually help the cobot market grow, von Hollen said.

“The growth of the market is limited by the number of players developing for it,” he said. “We have first-mover advantages but also challenges with educating the market. New entrants will actually increase market growth and potential applications.”

UR expects to keep growing, investing

Universal Robots should continue to grow in revenue by 50 percent or more this year, said von Hollen. The company is on target to reach DKK 1 billion ($140 million) by the end of 2017.

“The numbers are very good,” he said. “It’s always relative — there’s always more potential out there, but our new owners at Teradyne are very satisfied. We have a commitment to at least 50 percent growth this year.”

“Scaling the business to continue to deliver growth year after year is a key priority,” von Hollen stated. “Compared to 2015, we have more than tripled our investments in 2016, especially in R&D, enabling us to maintain our product leadership position.”

“Equally important has been our continued investment of more than 50 percent into Universal Robots’ staff resource base in 2016, extending our capability, knowhow, and reach globally,” he added. “On average, we had about 240 people last year, and we are scaling dramatically.”

“One challenge is to get the right people into the organization,” von Hollen said. “There was a real drive on the sales and marketing side in 2016, and in 2017, we’re also focusing on the technical side, also on from a production perspective to scale.”

Thinking globally, acting locally

Universal Robots is one of the leaders of the Danish robotics cluster around Odense.

UR is a leader in the cobot market.

Universal Robots helped create the robotics cluster in Odense, Denmark.

“We leverage the strength of region and the local university,” von Hollen said. “As area companies grow, we pass down our lessons learned. The robotics cluster is very strong in its own right; it’s not dependent on us at all.”

Universal Robots has offices in 11 countries, up from five offices in 2015. It has a presence in the U.S., Spain, Germany, Italy, the Czech Republic, China, Singapore, India, Japan, Taiwan, and South Korea. Its distribution channel covers more than 50 countries worldwide.

“In 2016, we split our revenue base with Europe, the Middle East, and Africa at 45 percent — that’s of course where we started and are based,” von Hollen said. “North America was 30 percent, and Asia was only 25 percent, although the market data says that Asia represents 50 to 60 percent of the cobot market.”

“We have a huge potential in the Asia-Pacific market, which we consider to be growing fast at 17 or 19 percent,” he said.

More on the Cobot Market and Industrial Automation:

Integrators and partners

While Universal Robots focuses on making robotic arms, it does want end users to find the best ways to use them.

“We’ve taken out a lot of the complexity for the end user, and we’ll continue driving to making our robots easy to program and use,” von Hollen said. “There are a lot of applications out there for systems integrators.”

“From a collaboration perspective, it’s still early days,” he added. “We’re looking for partners for each aspect — there are roles for integrators and distributors. We don’t want conflict; we’re scaling rapidly and looking for the best partners out there. We’re trying to double the number of partners in 2017.”