Geir Håøy, President and CEO Kongsberg Group
By Marek Grzybowski
Kongsberg achieved revenues of 10 BNOK from the sale of products and services in the third quarter of 2023. Revenue growth in 2023 is expected to be 28% compared to last year, Geir Håøy, President and CEO of Kongsberg Group, announced at the end of October this year. The president of Kongsberg cites the contract with Poland worth 16 BNOK from September 2023 as a success this year.
– Thanks to the strong activity of two divisions of the Kongsberg Group, Kongsberg Maritime, which achieved a 21% increase in sales, and Kongsberg Defense & Aerospace, the company achieved an operating profit of 1.3 BNOK – emphasized Met Toft Bjørgen, EVP, CFO of Kongsberg Group.
The third quarter results are impressive. The value of new contracts amounted to NOK 11.3 billion, informs Kongsberg’s financial director. Operating revenues amounted to NOK 10 billion compared to 7.7 BNOK in the third quarter of last year, an increase of 29%. EBITDA reached NOK 1.6 billion compared to NOK 1.4 billion in the third quarter of last year. EBIT amounted to 1.3 BNOK , compared to 1.0 BNOK in the third quarter of last year.
Record contract with Poland
Kongsberg Defence & Aerospace (KONGSBERG) has been awarded contract worth approximately 16 BNOK by the Polish Ministry of National Defence to deliver four NSM (Naval Strike Missile) Coastal Defence System (CDS) squadrons.
Poland was the first nation to acquire the NSM CDS capability in 2008, and then with an additional squadron in 2014. The contract award builds on more than a decade of successful cooperation between KONGSBERG, the Polish Government and Polish industry. The new deliveries will carry on into the 2030s.
“This contract is the largest single contract in the history of KONGSBERG and is an important milestone in our more than 200 year long history. Poland has been a long-standing partner, and we are proud to sign this agreement. With the changed security situation in Europe, Poland is firm in its commitment to ensure important defence capabilities, and for KONGSBERG as an industry partner, this ensures predictability to invest and continue to build capacity to deliver on these needs”, says Geir Håøy, President and CEO of KONGSBERG.
The Polish Navy operates two systems in shore missile squadrons. The contract for the first set was signed in 2008 and has been operational since 2012. The second set was ordered in 2014 and introduced into the defense system in 2017. PIT-RADWAR cooperated with Kongsberg in the implementation of both contracts.
– The second agreement, concluded by Wojskowe Zakłady Elektroniczne S.A. on the part of PGZ, ensures the transfer of knowledge and technology regarding the servicing and production of NSM missiles. For WZE S.A. This is an extension of the existing competences in the field of rocket technology to the highest possible and export-allowed level – the supplier informs in the announcement. We wrote about the contract in GospodarkaMorska.pl.
Kongsberg has an order backlog worth over NOK 69 billion and is poised for further growth in the coming years. This requires increased efficiency in terms of employees, equipment, as well as new and more efficient production and buildings, the Norwegian company says in a press release.
This year, over 1.4 BNOK was invested in fixed assets. Of this, over NOK 600 million was allocated to the construction of a new missile factory in Kongsberg. The factory will be completed in summer 2024. In addition, the company is investing in new and existing plants in several locations in Norway and beyond. Continuous investments are made in product development, both related to the development of new systems and the further development of existing ones.
Fighting for the climate – a good climate for business
– Kongsberg has a broad portfolio of products related to safety, surveillance and carbon footprint reduction through alternative energy sources and more efficient use of energy. Every year we invest significant amounts in new solutions and further development of the existing portfolio, says Håøy.
– If the world is to achieve its climate ambitions, everyone must contribute. At the same time, it is important that these investments are financially sustainable. Investing in product development is therefore one of the most important things we can do for a sustainable future, emphasizes the president of Kongsberg.
At the end of the third quarter, Kongsberg had an order backlog of 69.2 BNOK , of which products worth 10.5 BNOK will be delivered in the fourth quarter of 2023.
This is the result of the fact that in 2023 the value of orders for products and services amounted to 33.3 BNOK . Operating revenues at the end of the third quarter of this year. amounted to NOK 28.7 billion compared to NOK 22.4 billion in the three quarters of last year, which means an increase of 28%. EBITDA was 4.4 BNOK compared to 3.2 BNOK . The EBITDA margin increased to 15.2% compared to 14.3% last year. EBIT was 3.3 BNOK compared to 2.2 BNOK .
– During the Capital Markets Day in 2022, we announced that our ambition is to achieve revenues of over NOK 40 billion in 2025 – emphasizes Håøy. – Our growth rate is higher than previously anticipated and we are likely to achieve this goal ahead of schedule. We have a record high order backlog and have never experienced greater demand for the entire Kongsberg portfolio. Kongsberg’s ambition is to continue our development journey, sums up the company’s president.