Kongsberg on a wave of profits. Crowns from business at sea, on land and in the air

By Marek Grzybowski

The operations and economic results of the Kongsberg Group in 2023 have proven that operating in the defense, maritime and space industries is a good and promising business. The Group’s order backlog increased from NOK 63,256 at the end of 2022 to NOK 88,550 million at the end of 2023. The order backlog of Kongsberg Maritime increased by NOK 2,674 million, Kongsberg Defense & Aerospace by NOK 21,837 million, Kongsberg Discovery by NOK 496 million , and Kongsberg Digital by NOK 884 million during the year.

Total orders accepted by the Group amounted to NOK 65,401 million, compared to NOK 45,150 million in 2022. The Group’s operating revenues in 2023 amounted to NOK 40,617 million, an increase of 28% compared to NOK 31,803 million in 2022 The operating revenues of Kongsberg Maritime amounted to NOK 20,180 million, and Kongsberg Defense & Aerospace reached NOK 15,949 million. Kongsberg Discovery’s sales amounted to NOK 3,913 million, and the Kongsberg Digital division achieved operating revenues of NOK 1,433 million – informs the latest Annual Report 2023 of the Kongsberg Group.
– 2023 was a strong year for Kongsberg. We have achieved further milestones, strengthened our position in sustainability and safety and exceeded NOK 40 billion in revenues. Our success is the result of years of focused and committed effort. Therefore, I would like to thank my colleagues from Kongsberg, our customers, suppliers, owners and other important partners – writes Geir Håøy, President & CEO, Kongsberg Group, in the introduction to the report.

Kongsberg has perfectly adapted

its product portfolio to the current situation. After Russia attacked Ukraine, not only the countries neighboring the conflict parties understood the need to modernize their defense potential. The energy transformation based on the diversification of supply sources has become a strategic task. There has been an acceleration in the search for ways to reduce greenhouse gas emissions and environmental pollution.
Geir Håøy draws attention to the global context of challenges, stating: “As we enter 2024, we stand in the middle of a world characterized by disruptions and geopolitical tensions. The distance between the world’s superpowers has widened and global uncertainty has increased. Both Europe and the Middle East bear the burden of ongoing conflicts and wars. “Current geopolitical tensions are a stark reminder of the world’s instability and underscore the critical need to advocate for global security.”
The Kongsberg Group is a publicly traded company headquartered in Kongsberg, Norway. In 2023, the Group focused on four business areas and continues to operate in these businesses in 2024. These are: Kongsberg Defense & Aerospace, Kongsberg Maritime, Kongsberg Discovery and Kongsberg Digital. The group is managed through the parent company Kongsberg Gruppen ASA.

Business milestones at sea, on land and in the air
Kongsberg focused on innovation in its businesses and consistently developed them. In 2023, Kongsberg Maritime introduced several new UT vessel designs (CSOVs/SOVs) to its portfolio. The new AHTS and PSV vessels can use alternative energy and fuel sources such as methanol, ammonia and hybrid battery systems.
After several years of research and testing, the Eidsvaag Pioner was piloted remotely in May 2023 from the control center at Kongsberg Maritime in Ålesund. The ship sailed out of Kristiansund, about 18 miles north. A recently completed project is the Zulu 04 inland barge. The unit was also remotely controlled in the channels of the port of Antwerp.
Sirius Rederi AB of Sweden has selected Kongsberg Maritime to carry out the design, engineering and equipment work for two chemical tankers with MGO/Biofuel and methanol engines. This contract is based on a nine-ship construction program for the operator from Denmark – Tärntank. The new ships will be low-emission tankers with a carrying capacity of 15,000 dwt. The ships will have hybrid propulsion with battery systems. The first vessel for Tärntank will be delivered in 2025, and for Sirius Rederi AB it will be delivered in July 2026.
In September 2023, Kongsberg Defense received a contract from the Polish Ministry of National Defense for the delivery of four NSM (Naval Strike Missile) Coastal Defense System systems worth approximately NOK 16 billion. This is the largest contract in the company’s history – emphasizes Kongsberg’s management and notes that “Poland is the first country to acquire NSM CDS already in 2008.
In 2023, Norway, Lithuania and the USA transferred NASAMS air defense systems to Ukraine. Its mission is to protect people and infrastructure from Russian air attacks. Norway and Lithuania also announced new orders for the replacement of NASAMS systems for Ukraine.

PROTECTOR weapons system that protects personnel in vehicles, buildings and ships. In the fall of 2023, it was ordered by the USA. The US Army has placed orders worth NOK 1 billion for the supply of 409 CROWS unmanned systems. The supply of spare parts and other elements will be provided by the factory in Johnstown, Pennsylvania.
Kongsberg is a key supplier of weapons for the F-35 fighters. In 2023, the Norwegians signed a new contract with Lockheed Martin worth NOK 1.2 billion for the supply of parts for the F-35 fighter. The contract covers production batches No. 18 and 19 for over 300 fighter aircraft.
On April 14, 2023, the Ariane 5 rocket took off from the Kourou training ground in French Guiana. The rocket carried devices to study three moons of Jupiter: Ganymede, Callisto and Europa. The mission is carried out with the support of equipment produced by Kongsberg. The rocket will reach Jupiter in 2032.



Business in a sailor’s uniform
In 2023, Kongsberg Naval Services, a company owned by Kongsberg Maritime and Kongsberg Defense & Aerospace, was selected as the prime contractor for the modernization, modification and extension of service of the Norwegian ship Fridtjof, a Nansen-class frigate. The contract is worth NOK 17 billion for services that will be provided until 2040.
– In close cooperation with strong Norwegian suppliers, we will offer the Armed Forces effective and sustainable maintenance services in order to strengthen the operational capacity and readiness of the Armed Forces, and at the same time provide support to allied forces – emphasizes Kongsberg.
Kongsberg joined the production of new submarines. In September last year together with Thyssenkrupp, cutting of steel for the new 212CD submarines began. The ships will be built in Kiel. Kongsberg supplies ORCCA™ combat system for 6 new 212CD submarines. Four of them will be incorporated into the forces of the Royal Norwegian Navy. Two OPs will be included in the German navy.
The ships will receive a new super rocket, which has been under development for several years. Design and research work has been ongoing since the beginning of the 21st century. The Naval Strike Missile (NSM) was introduced into the Norwegian Armed Forces in 2011–2015. To date, the missile has been introduced into service in 13 countries.
In 2023, Australia, Norway, Poland, Spain and the United States Navy placed orders for several NSM anti-ship missiles. The project was initiated when Norway and Germany announced the start of work on a next-generation anti-ship missile. Kongsberg Defense & Aerospace was the leading industrial partner and contractor of the missile.
– We developed the current Naval Strike Missile (NSM) and will play a major role in developing a new anti-ship missile to complement the NSM. The new missile will be called SuperSonic Strike Missile (3SM) Tyrfing and is expected to be ready in 2035, informs the management of the Kongsberg Group.

Business turned into profits
Kongsberg Group’s EBIT was NOK 4,600 million in 2023, with an EBIT margin of 11.3%. In 2022, NOK 3,309 million was achieved with an EBIT margin of 10.4%. EBIT increased significantly in both Kongsberg Maritime, Kongsberg Defense & Aerospace and Kongsberg Discovery. Kongsberg Digital achieved lower EBIT than a year earlier as a result of continuous expansion of the scale of operations. Development, solid project implementation and cost discipline contributed to the Group’s high profitability – emphasizes the management of the Norwegian company.
Kongsberg Defense & Aerospace increased its EBIT from NOK 1,919 million to NOK 2,398 million in 2022–2023. Kongsberg Maritime increased from NOK 1,255 million to NOK 2,053 million during this time. Kongsberg Discovery increased its EBIT from NOK 464 million to NOK 556 million. Kongsberg Digital recorded negative EBIT in 2022–2023, -NOK 380 million and -NOK 479 million, respectively.
The group’s profit before tax was NOK 4,675 million compared to NOK 3,497 million in 2022. The profit after tax was NOK 2,809 million in 2022, compared to NOK 2,809 million in the previous year. increase to NOK 3,715 million. For shareholders, this means an increase from NOK 15.64 per share in 2022 to NOK 21.08 per share in 2023. This is the result of the rate of return on constant capital (ROACE) in 2023 reaching 33.3%, while in 2022 it was negative (- 33.9%).
Since the Board of Directors concluded that Kongsberg has a solid financial situation, the Board declared that it would propose a dividend of NOK 14.00 per share to the General Meeting on May 7, 2024. It is proposed to divide the payment into two tranches of NOK 7.00 each. The last trading day for the first tranche will be May 7, 2024, and the last trading day for the second tranche will be October 8, 2024. For comparison, in 2022 a dividend of NOK 12.00 per share was paid for a total amount of NOK 2,128 million. Back then, the payout of NOK 8.40 per share exceeded the Group’s standard dividend policy. At the end of the year, the number of shares outstanding, including shares held by Kongsberg, was 175,921,849.

Financial flows
In 2023, Kongsberg recorded positive operating cash flow of NOK 5,827 million (NOK 1,106 million in 2022). This amount mainly consists of EBITDA in the amount of NOK 6,037 million adjusted for profits from the sale of real estate in the amount of NOK 135 million and changes in current assets and other items in the amount of -NOK 74 million.
In 2023, there were negative cash flows related to investing activities in the amount of -NOK 1,153 million (-NOK 1,343 million in 2022). The largest cash outlays related to investment activities amounted to NOK 1,980 million and concerned investments in tangible fixed assets, such as a new missile factory and other production plants. The amount of NOK 403 million is related to the activation of research and development works and other intangible assets, and NOK 163 million is related to investments in subsidiaries, mainly in FutureOn.
Cash flow from financing activities was negative and amounted to NOK 2,759 million (-NOK 4,002 million in 2022). This is mainly the result of the dividend paid, repayment of leasing liabilities, buyback of own shares under the buyback program and interest costs. Kongsberg issued a new batch of KOG15 bonds worth NOK 1,000 million and settled the issue of KOG13 bonds worth NOK 500 million in 2023. The net change in cash and cash equivalents, after taking into account changes in exchange rates, amounted to NOK 2,043 million (-4,186 million NOK in 2022).
The Group’s capital allocation priorities take into account the company’s dividend policy. As of December 31, 2023, the Group’s equity amounted to NOK 16,465 million, representing 30.9% of total assets. Net interest-bearing debt was NOK -2,975 million (-1,479). At the end of the year, long-term debt consisted of three groups of long-term bonds for a total amount of NOK 2,500 million. At the end of 2023, the Group’s syndicated loan in the amount of NOK 2,500 million was unused.