Kongsberg Gruppen

Investor Presentation • Feb 11, 2021

INVESTOR PRESENTATION

Q4 2020

Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & Group CFO

KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited if not otherwise explicitly agreed with KONGSBERG in writing. Any authorised reproduction in whole or in pa rt, must include this legend. © 2020 KONGSBERG – All rights reserved.

DISCLAIMER

This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. The Company cannot give assurance to the correctness of such information and statements. These forward-looking information and statements can generally be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use terminology such as "targets", "believes", "expects", "aims", "assumes", "intends", "plans", "seeks", "will", "may", "anticipates", "would", "could", "continues", "estimate", "milestone" or other words of similar meaning and similar expressions or the negatives thereof.

By their nature, forward-looking information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or implied by the forward-looking information and statements in this presentation. Should one or more of these risks or uncertainties materialize, or should any underlying assumptions prove to be incorrect, the Company's actual financial condition or results of operations could differ materially from that or those described herein as anticipated, believed, estimated or expected.

Any forward-looking information or statements in this presentation speak only as at the date of this presentation. Except as required by the Oslo Stock Exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this presentation, including forward-looking information and statements, whether to reflect changes in the Company's expectations with regard thereto or as a result of new information, future events, changes in conditions or circumstances or otherwise on which any statement in this presentation is based.

Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements

Highlights 2020

• Book/Bill of 1.13 and record-high order backlog
• BNOK 25.6 in revenues and BNOK 3.3 in EBITDA
• Solid operational performance and high degree of adaptability throughout the organization
• Successful divestment of Hydroid Inc.
• "Value Capture" program delivered above target
• Strong momentum on Dynamic Digital Twin®
• Proposed dividends of NOK 3 + 5 per share and MNOK 400 share buy back

Highlights fourth quarter 2020

• Strong order intake in defence and key milestones achieved

• 11.4 BNOK order intake, book/bill of 1.59
  • major defence orders
  • record-high order backlog entering 2021
• BNOK 7.1 in revenues and BNOK 0.95 in EBITDA
• Challenging newbuild market and COVID continue to affect order intake and revenue in maritime
• Ramp-up in digital and defence
• RWS # 20.000 delivered

Important contracts signed in the quarter

NASAMS to Hungary Remote Weapon Stations (RWS) to the JSM to Japan British Army MIV program

Propeller systems for five F110 frigates to Spanish Navy

Pile Gripper Guidance System (PGGS) for the OHT Alfa Lift to MacGregor

Remote Tower System for Air Traffic Control at Menorca Airport

Business update fourth quarter

Decreased revenues in Maritime offset by improved project mix and reduced cost

• Market continues to be challenging with low contracting of new vessels
• Improved project mix
• Cost focus and solid contribution from "Value capture" improves KM's competitiveness

High order intake in Defence and continued solid operations

• Significant order intake results in "Alltime-high" backlog
• Good progress and solid execution of projects, minimal COVID-19 effects
• MRO initiatives continue to grow and increase profitability

Dynamic digital twin® and SaaS business continue to gain momentum

• Continued roll-out and seize new opportunities for dynamic digital twin Kognitwin®
• Positive development for SaaS business and real time drilling software, SiteCom®
• Increased interest for e-learning solution K-SIM® connect

Financial status

Gyrid Skalleberg Ingerø, EVP & Group CFO

2020 order intake support book/bill above 1

Order intake 2020

2020; Revenue growth and increased profitability

• Revenue growth driven by growth in defence segment
• Growth in all business areas

• Increased EBITDA in all business areas driven by;
  • Strong project execution
  • Favourable project mix
  • Significant synergies from "Value Capture"

• Stable nominal level of depreciation and amortisation expected going forward
• Including gain from sale of Hydroid Inc. EAT is BNOK 2.9

Q4; Strong order intake and margins

Order backlog

Cashflow 2020

Strong cashflow from operations and from divestment of Hydroid Inc.

(BNOK)

Net Working Capital

Net Working Capital by Business Area

KONGSBERG PROPRIETARY - See Statement of Proprietary information

Kongsberg Maritime

Q3 2020

KM order intake and backlog

Book-to-bill Order intake (BNOK)

Reduced volume but increased margins in KM

Value Capture exceeding targets

• Realized cost savings of MNOK 640 in 2020, MNOK 195 in Q4
• Deck Machinery restructured and turned profitable
• Consolidation and optimization of combined organization, footprint and product portfolio
• Headcount reductions of 485 FTEs
• Strong basis for continued efficiency initiatives
• Program concluded, with results above target

Program summary Realized cost savings

FY20:

P&L effect relative to 2018, MNOK

KDA

KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited if not otherwise explicitly agreed with KONGSBERG in writing. Any authorised reproduction in whole or in pa rt, must include this legend. © 2018 KONGSBERG – All rights reserved.

KDA Backlog supports growth

Revenue growth and strong EBITDA in KDA

Associated Companies

• ~3.5 BNOK in backlog
• Demand related to microsatellites continues to increase
• ~50k satellites passes in Dec. 2020 (up from ~40k Dec. 2019)

• ~1 500 EURm in backlog
• Results from "close the gap" programme in 2020 has positive impact on the financials

Proposed dividends and share buyback

Details

• Last day including: 06 May 2021
• Ex. dividend date: 07 May 2021
• Record date: 10 May 2021
• Payment date: 20 May 2021 ("on or about")

Solid balance sheet and BNOK 35.9 in order backlog, whereof BNOK 17.9 for delivery in 2021

KDA growth to support continued growth for KONGSBERG, some growth in KDI, KM expected at or around 2020-revenues

INVESTOR PRESENTATION

Q&A

KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited if not otherwise explicitly agreed with KONGSBERG in writing. Any authorised reproduction in whole or in pa rt, must include this legend. © 2020 KONGSBERG – All rights reserved.

INVESTOR PRESENTATION

Appendix

KONGSBERG PROPRIETARY: This document contains KONGSBERG information which is proprietary and confidential. Any disclosure, copying, distribution or use is prohibited if not otherwise explicitly agreed with KONGSBERG in writing. Any authorised reproduction in whole or in pa rt, must include this legend. © 2020 KONGSBERG – All rights reserved.

195 MNOK savings realized in Q4 2020

Realized cost savings

P&L effect of cost savings relative to 2018, MNOK

Area	Q1 '19	Q2 '19	Q3 '19	Q4 '19	Q1 '20	Q2 '20	Q3 '20	Q4 '20	Comments to realized savings
Footprint & delivery streamlining	3	11	12	15	34	45	45	59	Effects of co-locations, production facility shutdowns and restructuring of delivery organizations
SG&A savings and synergies	9	52	58	60	81	93	86	111	Cost efficient set-up of support and sales functions, as well as harmonization of terms and benefits
Product portfolio optimization	4	8	13	15	20	22	19	24	Mainly related to streamlining of digital marine spending (Ship Intelligence)
Total	15	72	83	90	135	160	150	195	2020 FY savings of 640 MNOK

Cashflow fourth quarter

		Positive cashflow from operations and improved working capital	Comments
(BNOK)					Positive cashflow from operations and ▪ working capital
8.10	0.73 0.95	(0.17) (0.14)	(0.14) (1.83)		Improvement in working capital mainly due to ▪ prepayment from defence customers
				7.42 (0.07)	"Hydroid" tax related to divestment of ▪ Hydroid Inc.
Cash 1.10	EBITDA Change in working capital + other	Investing Hydroid activities	Interest & Dividend and payments share buy back on leasing obligations	Translation Cash 31.12 differences cash	Additional dividend of NOK 10/share paid out ▪ in November
	Cash from operating activities	Cash from investing activities	Cash from financing activities