Annual Report (ESEF) • Mar 27, 2025
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Download Source FileKongsberg Automotive ASA 1 ANNUAL REPORT 2024 2 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements CORPORATE GOVERNANCE ............................... 15 BOARD OF DIRECTORS ......................................... 20 EXECUTIVE MANAGEMENT ................................. 22 RISKS .................................................................. 23 STRATEGY .......................................................... 27 WORLDWIDE PRESENCE .................................... 34 CUSTOMERS ...................................................... 35 MARKETS .......................................................... 36 OPERATIONS ....................................................... 37 ENGINEERING AND DEVELOPMENT ..................... 39 FINANCIAL PERFORMANCE ................................. 41 OUTLOOK ............................................................ 44 CONTENTS FINANCIAL STATEMENTS INTRODUCTION GENERAL INFORMATION .................................... 46 ENVIRONMENTAL INFORMATION ........................ 64 SOCIAL INFORMATION ........................................ 83 GOVERNANCE INFORMATION ........................... 104 ENTITY-SPECIFIC DISCLOSURES ..................... 108 KEY FIGURES ........................................................ 4 CEO LETTER ......................................................... 6 BUSINESS HIGHLIGHTS ...................................... 8 PRODUCT HIGHLIGHTS ........................................ 10 SUSTAINABILITY HIGHLIGHTS ........................... 11 FINANCIAL STATEMENTS OF THE GROUP ........... 111 FINANCIAL STATEMENTS OF THE PARENT COMPANY .............................. 160 CONSOLIDATED KEY FINANCIAL DATA ............ 175 ALTERNATIVE PERFORMANCE MEASURES ..... 176 DECLARATION TO THE ANNUAL REPORT 2024 ... 180 AUDITOR’ BOARD OF DIRECTORS’ REPORT ANNUAL REPORT 2024 // CONTENTS 2 3 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements 2024 IN BRIEF 4 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements BUSINESS WINS MEUR, estimated annual sales 2 0 2 1 2 0 2 2 2023 2024 831 906 885 788 KEY FIGURES 788M€ 18.7M€ 2.4% 383M€ ANNUAL REPORT 2024 // KEY FIGURES 2021 2022 2023 2024 233 247 297 383 REVENUES MEUR 4 EBIT, EBIT MARGIN EBIT (MEUR) EBIT margin (%) 2 0 2 1 2 0 2 2 2023 2024 7.0 5.7 -2.2 2.4 63. 1 18.7 47.5 -19.7 * The revenues for 2021 and 2022 include sales of Powersports products to BRP. ** The operating results for 2021 and 2022 include the impact of the Powersports product sale to BRP. Additionally, the 2022 5 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements DRIVE CONTROL SYSTEMS REVENUES MEUR REVENUES MEUR EBIT, EBIT MARGIN EBIT, EBIT MARGIN BUSINESS WINS MEUR, estimated annual sales BUSINESS WINS MEUR, estimated annual sales EBIT (MEUR) EBIT (MEUR) EBIT margin (%) EBIT margin (%) 2021 2022 2023 2024 2021 2022 2023 2024 2021 2022 2023 2024 2021 20232022 2024 2 0 2 1 2 0 2 2 2023 2024 2021 2022 2023 2024 FLOW CONTROL SYSTEMS 100 97 147 242 96 124 110 134 45.1 11.7 15.5 4.8 3.4 12.9 10.1 9.2 5.7 67.4 19.7 12.0 32.0 29.1 28.8 17.5 386 436 410 351 248 287 313 307 KEY FIGURES BUSINESS SEGMENTS ANNUAL REPORT 2024 // KEY FIGURES 5 * The revenues for 2021 and 2022 include sales of Powersports products to BRP. 6 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - cessfully implemented cost adjustment programs, which was still negative, and further improvements are required going forward. 2024 was a year of transformation. After the conclu- sion of the strategic review, the previous Board of Direc- tors (BoD) and management decided that the Driveline - ward. We also decided to focus on strengthening the core of Flow Control Systems (FCS) and Drive Control Systems (DCS), a change which came into force on January 1, 2024. - units within DCS. end customer markets – commercial vehicle, passenger car, and off-road – started to weaken due to high inter- est rates and general economic uncertainty. The decline conclude that 2024 was a challenging year for the auto- motive and off-road markets. DEAR KONGSBERG AUTOMOTIVE SHAREHOLDERS - - and reviewed its manufacturing footprint. Late in the year, cross-functional initiatives were launched to enhance prof- - BUSINESS AREA DEVELOPMENT products in 2024. The continued transition of the vehi- for any powertrain solution, whether it is fully electric, ANNUAL REPORT 2024 // CEO LETTER 6 7 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Due to the high cost of the transition, the market- - great growth opportunities as the volume will increase - - tion are further driving this shift. With manufacturing - ness with market leaders, partly due to its strategic geo- graphic presence. Like the rest of the industry, FCS and DCS faced rev- wins, while weak demand in the off-road market, espe- cially in North America, negatively impacted DCS. - - - emerging markets. OPERATIONAL EXCELLENCE targeted overhead functions. A second program was launched in the second half of 2024, in response to the The transfer of work from high- and medium-cost coun- initiatives were implemented across all plants in 2024, commitments to customer contracts, and enhance prof- - SUSTAINABILITY We are committed to fostering a safe and productive work environment, as safety is fundamental to operational results, with several plants reporting no workplace acci- dents for over a year. Reporting Directive (CSRD). As a result, our Annual Report - report. The following are some of the highlights of 2024: > > score of 60 > - sumption, compared to 47% in 2023 > > OUTLOOK - to thank our newly elected Board of Directors for their direct, and our customers, shareholders, and creditors for Sincerely, Christian Johansson ANNUAL REPORT 2024 // CEO LETTER 8 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements DRIVE CONTROL SYSTEMS HIGHLIGHTS ANNUAL REPORT 2024 // DRIVE CONTROL SYSTEMS HIGHLIGHTS 8 351M€ REVENUES 1045M€ BUSINESS WINS estimated lifetime sales EXPANDED PRODUCT PORTFOLIO OF ELECTRONIC ACTUATORS WITH FOUR NEW PRODUCTS 9 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements FLOW CONTROL SYSTEMS HIGHLIGHTS INTRODUCED TWO NEW PRODUCT LINES FOR AIR COUPLINGS DESIGNED AND SUPPLIED PROTOTYPE LINES FOR LARGE FUEL CELL ELECTRIC VEHICLE (FCEV) TRUCK PROJECT DELIVERED RECORD SALES FOR PTFE HOSES IN THE EUROPEAN MARKET ANNUAL REPORT 2024 // FLOW CONTROL SYSTEMS HIGHLIGHTS 9 307€M REVENUES 451€M BUSINESS WINS estimated lifetime sales 10 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements PRODUCT HIGHLIGHTS ANNUAL REPORT 2024 // PRODUCT HIGHLIGHTS ELECTRIC GEAR SHIFT ACTUATOR ACTUATOR FAMILY DEVELOPED TO ENGAGE AND DISENGAGE GEARS OF MULTI-SPEED TRANSMISSIONS, AS WELL AS OTHER DRIVETRAIN ELEMENTS DOG CLUTCH ACTUATOR DESIGNED FOR GEAR-SHIFTING AND DE- COUPLING APPLICATIONS FOR MULTI- SPEED TRANSMISSIONS, FOR HYBRID, BATTERY ELECTRIC, AND FUEL CELL VEHICLE APPLICATIONS, RANGING FROM PASSENGER CARS TO HEAVY-DUTY COMMERCIAL VEHICLES ABC TWISTLOCK ABC HOSE MODULE WITH TWISTLOCK IS DEVELOPED FOR AIR BRAKING SYSTEMS AND THE CONNECTION BETWEEN VALVES ON THE CHASSIS AND BRAKE CYLINDERS ON THE AXLES THERMAL MANAGEMENT SYSTEMS DEVELOPED TO CONTROL THERMAL DISTRIBUTION BETWEEN COMPONENTS INELECTRICVEHICLES 11 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SUSTAINABILITY HIGHLIGHTS 54% 14% 10 IMPROVED ECOVADIS SUSTAINABILITY RATING TO SCORE OF 60 TOP 14% OF COMPANIES IN KA’S INDUSTRY JOINED THE UNITED NATIONS GLOBAL COMPACT SHARE OF RENEWABLE RESOURCES IN TOTAL ENERGY CONSUMPTION ANNUAL REPORT 2024 // SUSTAINABILITY HIGHLIGHTS 11 COMPARED TO 47% IN 2023 COMPARED TO 2023 APPROX. REDUCTION IN SCOPE 1 AND 2 COMBINED COe EMISSIONS PLANTS USING 100% RENEWABLE ELECTRICITY 12 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements BOARD OF DIRECTORS’ LETTER 13 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Kongsberg Automotive (KA) is focused on strengthening its market position and driving protability through a leaner platform, innovation, and regaining positive cash ow from operations. The company aims to capitalize on growth in the commercial vehicle market and the shift toward sustainable mobility solutions, while navigating ongoing geopolitical and global economic challenges. BOARD OF DIRECTORS’ LETTER ANNUAL REPORT 2023 // BOARD OF DIRECTORS’ LETTER as well as economic uncertainty has lately increased, fol- lowing political shifts and the recently announced tariff increases in North America. Navigating these uncertain- As we enter 2025, the Board has appointed a new Presi- and the improvements achieved throughout her term. employees, management, partners, and shareholders who 13 During the year under review, the company took active The company performed well in securing new incre- - The market outlook for the coming years indicates rel- atively unchanged demand in 2025 versus 2024, while maintaining a strong focus to ensure a lean platform and market demand picks up. - 14 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements GOVERN ANCE 15 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements aim to ensure that investors, lenders, and other stake- - - - each of the 15 main principles of the Norwegian Code of of section 2–9 of the Norwegian Accounting Act is fur- in 2013, which aimed at ensuring equality for all regard- - CORPORATE GOVERNANCE and management structure; where everyone is valued and - 2024 and Code of Conduct. The principle is fundamental for all decisions on recruitment, promotions and remuner- - - - PRINCIPLES OF CORPORATE GOVERNANCE 1. IMPLEMENTATION OF THE PRINCIPLES FOR CORPORATE GOVERNANCE - ANNUAL REPORT 2024 // CORPORATE GOVERNANCE The Board of Directors (BoD) of Kongsberg Automotive ASA (KA) has established a set of general principles and guidelines for corporate governance. These principles cover the Board of Directors’ responsibility for determining the group’s risk prole, approving the organization of the business, allocating responsibility and authority, as well as providing requirements with respect to reporting lines and information, risk management, and internal control. 16 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements duct. The Code of Conduct includes ethical guidelines and - - cies for diversity and equal opportunities, please refer to - - The company has further clear policies on environmental 2. DEFINITION OF KA’S BUSINESS Association for the company, Article 2: The company’s objective is to engage in the engineering industry and other activities naturally related thereto, and the company shall emphasize development, marketing and manufacturing of products to the car industry. The com - pany shall be managed in accordance with general business practice. The company may co-operate with, establish, and participate in other companies. - ness of the company at present. Further, the Annual and principal strategies. The Board of Directors evalu- every year to ensure that the company creates value for its social, and environmental matters are considered. 3. EQUITY AND DIVIDENDS The company shall have an equity capital which over a Kongsberg Automotive shall create good value for its share- holders, employees, and society. Returns to shareholders will be a combination of changes in share price and dividends. The Board of Directors’ intention is that dividends will be approximately 30% of the company’s net income, provided that the company has an efcient capital structure. - date to purchase up to 95,142,313 treasury shares. 4. EQUAL TREATMENT OF SHAREHOLDERS AND TRANSACTIONS WITH RELATED PARTIES enjoy equal rights. Transactions in own shares are car- market prices. - closely associated with such parties and the company. 5. SHARES AND NEGOTIABILITY 6. GENERAL MEETINGS no later than 21 days prior to the meeting. Furthermore, the notice is sent to all known shareholders on the same date. Supporting information, such as proposals for resolutions - comprehensive to allow all shareholders to form a view on - shareholders may, according to the Articles of Association, encourages all shareholders to consent to receiving the - ing shall, according to the Articles of Association, notify the company or its announced representative no later information on procedures that the shareholders must - - tions on the voting on each individual agenda item. The Further to the amendment of the Articles of Asso- ciation of the company in 2024, shareholders may also, The Chair of the Board of Directors and the Chief ANNUAL REPORT 2024 // CORPORATE GOVERNANCE 17 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements the Board of Directors. A person that is independent of the Board of Directors, the management, and the major - - pose candidates. the shareholders to vote on each individual matter, includ- ing on each individual candidate nominated for election. regarding the right of the shareholders to propose mat- shareholders to attend. The Articles of Association for the 7. NOMINATION COMMITTEE § 5 that the company shall have a Nomination Committee - resolves otherwise. The duties of the Nomination Committee are to pro- pose candidates to the Board of Directors and to pro- Board committees. - agement and have no other functions in the company. - - ommendations are enclosed with the summons for the - site. The Nomination Committee stays in regular contact with major shareholders, Board directors, and manage- - - inated candidates and current directors, and furthermore the shareholders are encouraged to propose candidates for directorships. The remuneration to the Nomination Committee is 8. BOARD OF DIRECTORS, COMPOSITION, AND INDEPENDENCE The Board of Directors shall, according to the Articles - simple majority vote. The Board directors are independent Participation in Board meetings and Board committees in 2024 was as follows: BOARD MEETINGS COMPENSATION COMMITTEE AU DI T COMMITTEE OLAV VOLLDAL 1) 1 BÅRD KLUNGSETH 1) 1 SYNNØVE GJØNNES 1) 1 PETER THOSTRUP 2) 17 5 5 JUNYANG SHAO 18 5 BRIAN KRISTOFFERSEN 18 5 ERIK VOLDEN 2) 17 5 EMESE WEISSENBACHER 3) 6 1 CHRISTINA HALLIN 4) 5 3 SIW REIDUN WÆRÅS 18 KNUT MAGNE ALFSVÅG 17 BJØRN IVAN ØDEGÅRD 18 4 - 9. WORK OF THE BOARD OF DIRECTORS - ity for managing the group and for monitoring day-to- - - - The Board of Directors has issued Rules of Procedure - ANNUAL REPORT 2024 // CORPORATE GOVERNANCE 18 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements The Rules of Procedure include regulations pertaining to agreements with closely related parties. The Rules of Pro- Board meetings are held when deemed necessary. - of Directors has appointed a Compensation Commit- - authority of the committees is to make recommendations to the Board. The Board of Directors evaluates its performance This assessment is usually conducted using question- a common review. A self-assessment was scheduled for the election of Board directors. 10. RISK MANAGEMENT, INTERNAL CONTROL, AND FINANCIAL REPORTING 10.1 RISK MANAGEMENT AND INTERNAL CONTROL - tive is to identify, evaluate, and manage risks that could The assessment and handling of risk are integrated management system is intended to ensure that there is a the group and the general principle of value creation for unit, which follows an annual internal auditing program - nal Audit reports to the CFO. The Audit Committee is kept informed of the current status of internal audits and also approves the audit plan. 10.2 FINANCIAL REPORTING - monthly and quarterly, in which the performance of each - - reports to the group CFO. Prior to discussions with the Board, the Audit Com- mittee performs a preliminary review of the quarterly Committee meetings. - sures associated with material accounting items or other circumstances. Similar meetings are also held on a quar- the group, with a particular focus on any market changes, 11. REMUNERATION TO THE BOARD OF DIRECTORS - - ing. The Board directors hold no function in the company - ships of committees to the Board. The Board directors are not entitled to performance-related compensation and are not granted or entitled to any share options. 12. REMUNERATION TO THE EXECUTIVE MANAGEMENT - - included in the appendices to the notice for the Annual - - - - company is included in the notes to the annual accounts. - 13. INFORMATION AND COMMUNICATION for equal treatment of all participants in the securities ANNUAL REPORT 2024 // CORPORATE GOVERNANCE 19 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements 14. TAKEOVERS compliant with Article 14 of the Code of Practice. The main elements of these principles are included in the Rules of There are no defense mechanisms in the Articles of Association for the company or any underlying docu- ments, nor are there any measures implemented to limit opportunities to acquire shares in the company. - - ing the offer and making a recommendation as to whether shareholders should or should not accept the offer. The The Board of Directors shall not seek to hinder or shares unless there are particular reasons for this. 15. AUDITOR The auditor presents the main elements of the plan for the auditing of the company to the Audit Committee on an - mittee meetings and the Board meeting where the annual meets with the Board without the management of the company present at least once a year. The auditor reviews the internal controls of the company and presents the results of its review to the Audit Committee together with - compensation to the auditor is disclosed in a note to the annual accounts hereto and is also reported and approved ing to their potential impact. The group constantly evalu- - tional risks, and has developed procedures and strategies - mation regarding risk management, see note 23. GOING CONCERN - that the company is a going concern. SUBSEQUENT EVENTS OPERATIONAL RISK - a potential risk. Working methods and validation pro- - plier with a long-term commitment. This commitment - including shortages of materials, components, equip- industrial disputes, accidents, environmental pollution, the prices of raw materials, the implementation of new - cumstances that may lead to cancellations, and other risk RISK MANAGEMENT - ANNUAL REPORT 2024 // CORPORATE GOVERNANCE 20 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements BOARD OF DIRECTORS ANNUAL REPORT 2024 // BOARD OF DIRECTORS Junyang (Jenny) Shao Director Bård Klungseth Deputy Chair Olav Volldal Chair Synnøve Gjønnes Director Elected: 2024 Nationality: Norwegian Current Board positions: amongst others Education: > - ogy (1969-1973) > Experience: > > (1984-1987) > > > Experience in sustainability issues: > > Other experience: > Former Chair of the Board of Directors in various companies > - Navico (2010-2015) to name a few Number of shares as of December 31, 2024: 42,768 Elected: 2024 Nationality: Norwegian Current positions: Education: > (2010-2011) > - > (1983-1984) Experience: > > > > - tive (2003-2007) > > (1999-2002) Experience in sustainability issues: > - Other experience: > (2011-present) > > > > > (2008-2011) > > Number of shares as of December 31, 2024: 77,000 Elected: 2024 Nationality: Norwegian Current positions: Financial Advisor, Lotma Advisory AS (2023-present), various advi- Education: > - > > Experience: > > > (2018-2021) > > Research and Corporate Finance Experience in sustainability issues: > Art.8 according to SFDR (2021-2023) > - Other experience: > (2019-2022) > Financial Analysts (2019-2022) Number of shares as of December 31, 2024: 0 Elected: 2023 Nationality: Current positions: positions Education: > > > Experience: > Fosun (2016-2023) > > > Senior Consultant at PwC (2011-2012) Experience in sustainability issues: - nance levels: > - - > - Other experience: > > > Number of shares as of December 31, 2024: 0 21 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements BOARD OF DIRECTORS ANNUAL REPORT 2024 // BOARD OF DIRECTORS Bjørn Ivan Ødegård Employee representative Siw Reidun Wærås Employee representative Brian Kristoffersen Director Knut Magne Alfsvåg Employee representative Elected: 2023 Nationality: Danish Current positions: > > Education: > > Experience: > > > > > > Swedish listed company > > Experience in sustainability issues: > - pliers (manufacturing and supply chain) > Activities involve making choices that reduce waste, conserve resources, and support ethical practices. At the same time, the Other experience: > various entities within the Rosemunde group > > Number of shares as of December 31, 2024: 12,601,486 Elected: 2021 Nationality: Norwegian Current positions: - foss, Norway Education: > Technical education in computer programming at Fagskolen Experience: > > > > > Experience in sustainability issues: > > Number of shares as of December 31, 2024: 7,500 Elected: 2021 Nationality: Norwegian Current positions: Education: > Experience: > Other experience: > > > CNC operator > Car painter Number of shares as of December 31, 2024: 0 Elected: 2017 Nationality: Norwegian Current positions: Norway Education: > - > as an industrial mechanic since 2001 Experience: > Apprentice at Raufoss ASA (automotive and defense industry) (1999-2001) > > (2005-present) Number of shares as of December 31, 2024: 1,972 22 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements EXECUTIVE MANAGEMENT ANNUAL REPORT 2024 // EXECUTIVE MANAGEMENT Christian Amsel Chief Technology Ofcer Until May 31, 2025 Christian Johansson Interim President & Chief Executive Ofcer and Chief Financial Ofcer David Redfearn Chief Sales Ofcer Oscar Jaeger Chief Human Resources Ofcer and Executive Vice President, People & Culture Eduardo Pamies Executive Vice President Flow Control Systems Henrik Ruud Executive Vice President Information Systems & Technology Robert Pigg Executive Vice President Drive Control Systems Jon Munthe General Counsel Dzeki Mackinovski Executive Vice President Purchasing 23 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements RISKS FINANCIAL RISKS Due to its capital structure and the nature of its operations, the group is exposed to the following nancial risks: market risk (including foreign exchange rate risk, raw material price risk, and interest rate risk), credit risk as well as liquidity and capital management risk. FOREIGN EXCHANGE RATE RISK The group operates in many different geographical mar- kets and the resulting net assets, earnings, and cash - - - - The group has its ultimate parent company and oper- in Norway, as well as certain investments in foreign oper- has resulted in foreign currency translation risk towards - to Norway, the functional currency of the ultimate parent translation risk related to Norwegian holding operations. INTEREST RISK - - more, the group concluded a super senior revolving credit environment with declining rates. lower interest rates for the remaining maturity of the out- - ANNUAL REPORT 2024 // RISKS - - - CREDIT RISK Credit risk arises primarily from customer trade receiv- - on forward-looking assessments (see note 17 of the con- group considers that this risk is limited, as it maintains a - LIQUIDITY AND CAPITAL RISK - 24 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - - reserves is closely monitored. RATING RISK - PENSION LIABILITY RISKS - ject to changes in actuarial assumptions, such as discount rates and local pension evaluation guidelines. REGULATORY AND TAX RISKS - tions, and government and supranational policies, which - - - - sors and implements the recommended actions. For fur- CLIMATE-RELATED RISKS Climate-related risks are mainly linked to the potential - mation in this regard and insights into climate change section in this report. POLITICAL RISKS chain, production facilities, and product destinations may - - geopolitical situations and developments and is in close contact with industry partners to remain responsive and implement adequate measures to mitigate potential risks. HEALTH AND SAFETY RISKS - performance indicators to track and drive continuous improvement in safety and introduced safety engagement measures, policies, and contingency plans to protect all STRATEGIC RISKS As a supplier of advanced technology to the automo- - - tiatives and fostering customer relationships to remain - market environment and has developed response strate- gies for different scenarios. RISKS RELATED TO PRODUCT DEVELOPMENT Product development and product improvement activities are associated with a range of risks. These risks include delays in time-to-market, deviations from product speci- - OTHER RISKS ANNUAL REPORT 2024 // RISKS 25 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - nicians, and other product development staff, in addition - RISKS ASSOCIATED WITH PURCHASING AND SUPPLY CHAINS Risks in the procurement process include the risk of sup- plier insolvencies, quality defects, new non-tariff trade - - - company has no control. Sudden changes in market con- - countermeasures, ranging from commercial negotiations - supply chains will continue into 2025, posing new chal- PRODUCTION-RELATED RISKS Bottlenecks and delays can occur in manufacturing pro- can relate to materials, utilities, manpower, or equip- of a comprehensive and risk-avoiding production mate- - ously reviewing its production footprint and supply chain set up to reduce lead time. PROJECT MANAGEMENT-RELATED RISKS The launch of new products requires comprehensive and long-term planning as well as customer project man- agement. Project management represents an important functions: Sales, product development, purchasing, pro- duction equipment suppliers, plant operations, quality, - tion, selecting incorrect manufacturing equipment, miss- of these risks did occur in certain projects. To lessen these - agement and intensive management supervision. LEGAL PROCEEDINGS - - - - igation. Consequently, actual losses arising from partic- in investigations and regulatory proceedings, which other outcomes. The areas of increased focus of investi- - - ject to risks arising from alleged, or actual, violations of arising from potential employee misconduct, including non-compliance with internal policies and procedures as well as malfeasance. CYBERCRIME RISK The group uses various digital technologies for commu- nication and process management. Like other multina- pose risks to the security of its processes, systems, and - - critical applications, or a loss of critical resources, result- - - ronment such as manufacturing and research and devel- employing several measures including employee training, comprehensive monitoring of its networks and systems, - ANNUAL REPORT 2024 // RISKS 26 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements BUSINESS AND PERFORMANCE 27 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements STRATEGY BUSINESS MODEL ANNUAL REPORT 2024 // STRATEGY 27 Kongsberg Automotive (KA) provides cutting-edge technology to the global vehicle industry. KA’s vision is to “drive the global transition to sustainable mobility” by putting engineering, sustainability, and innovation into practice. Its product portfolio includes drive and motion control systems, uid and thermal management systems, air management systems, and industrial driver interface products. - turing products for the automotive and the off-highway industry. Products are, among others, pneumatic and electric actuation systems for gear control and clutch actuation, steering column mod- ules, and pedals and throttles for off- highway applications. Designs and manufactures products for vehicle market as well as industrial appli- - AUTOMOTIVE DRIVE CONTROL SYSTEMS (DCS) FLOW CONTROL SYSTEMS (FCS) % OF KA REVENUES PER REGION ORGANIZATIONS MARKETS NON-AUTOMOTIVE ORIGINAL EQUIPMENT MANUFACTURERS (OEMs) AGRICULTURE TIER 1 CONSTRUCTION AFTERMARKET INDUSTRIAL AREAS - emis- - - 47% 37% 12% 4% 28 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // STRATEGY 28 CHANNELS CUSTOMER RELATIONSHIPS important supplier and development partner. PERSONALIZED SERVICE AND SUPPORT: Offering tailored engineered solutions and dedi- cated support to meet the unique needs of each cus- tomer, fostering trust and long-lasting relationships. automotive market. CO-DEVELOPMENT AND INNOVATION: Working closely with customers during the prod- - tions that enhance vehicle performance, safety, driver meet current and future vehicle legislations around the world. LONG-TERM CONTRACTS AND PARTNERSHIPS: Securing long-term agreements with automotive competitive market position. CUSTOMER-CENTRIC APPROACH: Continuously engaging with customers to under- solutions and maintain competitive advantage. This 70% 30% while driving innovation through customer insight integration in the development process. Through per- ahead of the competition. on achieving the lowest total cost for function and improving agility. The company aims to enhance ser- - acting locally. Continuous improvements are driven SUSTAINABILITY AND QUALITY COMMITMENT: environmental protection. The company works to - KA focuses on establishing and nurturing long-term, strategic partnerships for automotive and non-automotive customers. KA’s customer relationships are focused around understanding the specic customer’s needs, collaboration, innovation, and the highest levels of service. 29 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // STRATEGY 29 REVENUE STREAMS DESIGN AND R&D The design phase involves creating engineer- ing solutions and providing services such as The company generates revenue primarily through the design, manufacturing, and sale of products to customers. MANUFACTURING - terials into components. These components, along with other purchased parts, are then SALES Revenues in the sales phase come from de- livered products and modules and from cus- - ANNUAL REPORT 2024 // STRATEGY 29 30 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements STRATEGIC DIRECTION ANNUAL REPORT 2024 // STRATEGY 30 Kongsberg Automotive’s (KA) strategic framework is built around its vision, mission, and goals. The vision represents its aspirations, the mission outlines the path to achieve them, and the goals focus on key areas for success. The company’s foundation rests on its OUR VISION OUR MISSION OUR GOALS PEOPLE AND CULTURE STRATEGIC PILLARSFOUNDATION OUR VALUES OUR HERITAGE GROWTH RESILIENT AND FORWARD-LOOKING PORTFOLIO PERFORMANCE EXCELLENCE SUSTAINABILITY people and culture, celebrating a diverse, skilled workforce that thrives on teamwork and collaboration. Rooted in Scandinavian values, KA values efciency, creativity, and accountability, positioning itself as a trusted partner to global stakeholders. 31 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // STRATEGY 31 GROWTH RESILIENT AND FORWARD-LOOKING PORTFOLIO KA’S PATH TOWARDS ITS GOALS IS BUILT ON FOUR KEY PILLARS - countries. - - > Powertrain-independent products in air management, driver interface, vehicle dynamics, and industrial applications > Products for conventional and hydrogen powertrains in gear control and power- > Products for electric and hydrogen-electric powertrains in thermal management and electric actuation - uct portfolio and services around the world in air management, gear control, ther- mal management, and electric actuation. secure leadership in selected product and market segments. 32 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // STRATEGY 32 PERFORMANCE EXCELLENCE - 1. DEVELOPING INTERNAL RESOURCES ON METHODS AND SOFT SKILLS investing in in-house training programs and skill development initia- - operations with an emphasis on reducing overhead costs to enhance 2. INCREASING CROSS-FUNCTIONAL COLLABORATION FOR PROBLEM-SOLVING AND SAVINGS - implement cost-saving initiatives. Leveraging diverse perspectives and - Supply chain coordination improves operational performance and - - rial costs while reducing operational waste and supporting environ- mental targets. 3. DRIVING SYNERGIES BETWEEN FUNCTIONS AND BUSINESS AREAS - - tion. Systematical knowledge capture and dissemination accelerates - 33 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // STRATEGY 33 SUSTAINABILITY ENVIRONMENT > Reduction of Scope 1 and 2 COe emissions in comparison to > > SOCIAL > > > GOVERNANCE > Pilot life cycle calculations for selected products > » Supplier assessments: 80% spend coverage with direct materi- als suppliers » - - emission reduction and circularity approaches, while operational - ics for 2025. 34 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements WORLDWIDE WORKFORCE 4,714 17 COUNTRIES WORLDWIDE 32 LOCATIONS - - - the region, split across two manufacturing plants, while Canada is home to the largest tech center in the region. - while the two largest manufacturing plants in the region are in Poland and Spain. (one of which also serves also as a tech center) and one The largest manufacturing plant and tech center in this NORTH & SOUTH AMERICA WORKFORCE: 1,758 EUROPE WORKFORCE: 2,347 ASIA WORKFORCE: 609 Kongsberg Automotive (KA) is present in 32 locations around the globe, covering the world’s key automotive markets. KA’s footprint is based largely on its customers: Wherever they are located, KA aims to be there, serving and supporting them in the best possible way. KA is committed to adapting to market conditions: 6.6% of its total workforce were agency workers in 2024, allowing it to build up or scale down in response to market movements. ANNUAL REPORT 2024 // WORLDWIDE 34 NORWAY SWEDEN POLAND SLOVAKIA GERMANYSPAIN BRAZIL CHINA INDIA SOUTH KOREA FRANCE UK USA MEXICO CANADA THE NETHERLANDS SWITZERLAND 35 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements CUSTOMERS Kongsberg Automotive is proud to serve leading original equipment manufacturers (OEMs) and Tier 1 suppliers in commercial vehicle, off-highway, and passenger car markets globally. ANNUAL REPORT 2024 // CUSTOMERS 36 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements MARKETS COMMERCIAL VEHICLE PRODUCTION million vehicles, primarily due to reduced production in from weaker construction activity, persistently high (though easing) interest rates, and ongoing economic pol- icy uncertainty. After a strong recovery in 2023 from the most truck markets lost momentum in 2024. occurred in the second half of the year, primarily due to - - of the year. - - - in the second half. The slowdown in the second half was partly due to uncertainty over tariff policies and a slower- production growth in 2023, recorded a slight decline of 0.5% in 2024. The Chinese truck market lost momen- - lus package designed to inject liquidity into the industrial - cle production. A decline in orders during the third and fourth quar- surrounding the potential negative impact of tariffs intro- ANNUAL REPORT 2024 // MARKETS LIGHT VEHICLE PRODUCTION - in the last quarter of the year to 24.3 million units, signal- 17.1 million units in 2024. The region faced persistent chal- - tainty and a weaker demand for new vehicles. The North in the second half, leading to an overall decline of 1.4%, - - Sources: S&P Global Mobility (formerly IHS Markit | Automotive) (January 2025) for light vehicle production; LMC Global Commercial Vehicle Forecast (January 2025) for truck production. 37 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements OPERATIONS In 2024, Kongsberg Automotive (KA)’s Drive Control Systems (DCS) and Flow Control Systems (FCS) business areas faced market challenges but demonstrated resilience through a strong focus on cost optimization and operational improvements. The DCS business area, impacted by a soft market, responded with lean initiatives and process enhancements, positioning itself for a more adaptable and positive outlook in the coming year. Similarly, the FCS business area, facing lower-than-expected sales, implemented strategic measures such as relocating to best- cost countries. This allowed FCS to optimize costs and improve operational efciency. Additionally, business wins reached record levels for KA in 2024, conrming that KA has the right products to meet the requirements of globally recognized industry brands. 37 ANNUAL REPORT 2024 // OPERATIONS 38 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // OPERATIONS FLOW CONTROL SYSTEMS (FCS) OPERATIONAL PERFORMANCE SUMMARY 2024 Although sales were lower than the intended tar- cost countries. KEY ACHIEVEMENTS IN 2024 Safety topics were a priority, resulting in 324 days with- on-time delivery and achieved a 45% inventory reduction. cost countries. FOCUS AREAS FOR IMPROVEMENT IN 2025 - - ery for customers. OPERATIONAL EXCELLENCE KEY ACHIEVEMENTS 2024 DCS successfully reduced cost to offset the decline in FOCUS AREAS FOR IMPROVEMENT IN 2025 OPERATIONAL EXCELLENCE - SUPPLY CHAIN RESILIENCE - FINANCIAL PRUDENCE AND SALES STRATEGIC EXPANSION AND RELOCATION - SUPPLY CHAIN RESILIENCE - in the Americas region successfully redirected shipments FINANCIAL PRUDENCE AND SALES 21% lower sales in commercial-vehicle products and rev- STRATEGIC EXPANSION AND RELOCATION - DRIVE CONTROL SYSTEMS (DCS) OPERATIONAL PERFORMANCE SUMMARY 2024 cost reduction measures in order to offset the declining sales in 2024. Record results in new and recurring con- tracts support growth going forward. 39 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ENGINEERING AND DEVELOPMENT In both of Kongsberg Automotive (KA)’s business areas, the automotive industry’s transition towards e-mobility drove product innovation. As development processes continue to be optimized, the generated cost savings will allow for future investments in testing capabilities. KA’s resourceful engineering workforce consisted of 307 engineers globally. FLOW CONTROL SYSTEMS (FCS) KEY ACHIEVEMENTS IN 2024 - ued to develop key products throughout 2024 to meet future market and customer needs: > Twistlock Program: - mercial vehicle markets. The new Twistlock program lines operating in the chassis areas > Next generation of couplings: performance for air management systems FOCUS AREAS FOR IMPROVEMENT IN 2025 2025. The adoption of product lifecycle management reduced development lead times and improved coordina- E-MOBILITY TRANSITION AND PRODUCT DEVELOPMENT > KA connector development: Completed the devel- - mance in low-pressure drops, reduced weight, and > Coolant lines for battery electric vehicles (BEV) and fuel cell electric vehicles (FCEV) applications: fuel cell recharging systems. > Growth in emerging markets: planning targeted product developments in air man- agement systems > Cost-effective solutions:- ical Firtree coupling and integrated solutions, tailored product portfolio in emerging markets R&D INVESTMENT AND SYNERGIES - ties. This includes enhancements in software, tools, and testing equipment to deliver innovative, high-quality ANNUAL REPORT 2024 // ENGINEERING AND DEVELOPMENT 40 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements DRIVE CONTROL SYSTEMS (DCS) KEY ACHIEVEMENTS IN 2024 FOCUS AREAS FOR IMPROVEMENT IN 2025 Among the goals for DCS in the coming year is enhanced - tions and rigorous test plans. E-MOBILITY TRANSITION AND PRODUCT DEVELOPMENT > Dog Clutch Actuator > Electronic Gear Shift Actuator – DCS continued to - GROWTH IN EMERGING MARKETS markets to ensure it designs products for their needs R&D INVESTMENT AND SYNERGIES > DCS continues to invest in simulation tools and addi- tional testing capacity to improve development time > technology together with Chassis Autonomy ANNUAL REPORT 2024 // ENGINEERING AND DEVELOPMENT 40 41 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements FINANCIAL PERFORMANCE GROUP Commercial vehicles revenues (55.7% of total reve- - compared to the full year 2023. Following the high order - - (-8.5% in constant currencies), compared to the market - - - Passenger car revenues (32.2% of total revenues) - - lion (-10.5%) compared to 2023. This was mainly driven - (-20.4% in constant currencies), against a market decline - - - - culture and construction markets. - - prising asset impairment and onerous contracts in non- - visions, severance payments, and other adjusting items. in cost reductions across manufacturing overhead and reported on in the third quarter of 2024. ANNUAL REPORT 2024 // FINANCIAL PERFORMANCE 42 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SEGMENTS - - operations. Following the adoption of the new segment restated for comparative purposes. - - - lion (-14.6%) respectively, compared to last year. - mercial vehicles market decline of -20.8%, sales in North - - ing agriculture and construction markets deteriorated - functions in a product manufactured from 2019 to 2022. - in 2024. mainly due to the declining sales in the weak market for in 2023. NET FINANCIAL ITEMS - - NET PROFIT/LOSS - pany dividends. CAPITAL - - - - The equity ratio was 33.7% at the end of the year 2024, compared to 30.2% in 2023. CASH FLOW 18.7 million, adjusted for non-cash items such as depre- - - - - ANNUAL REPORT 2024 // FINANCIAL PERFORMANCE 43 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements whereas in 2023, investments in associates resulted in an LIQUIDITY - 2023. At the end the fourth quarter of 2024, the liquid- 15.0 million. BUSINESS WINS - This corresponds to an increase of 54% and 29% in esti- mated lifetime revenues and estimated annual revenues, respectively, as compared to the previous year. KONGSBERG AUTOMOTIVE ASA – THE PARENT COMPANY - ANNUAL REPORT 2024 // FINANCIAL PERFORMANCE loan towards this entity and the proceeds from the capital - - total comprehensive income for the year 2024 amounted - 44 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements OUTLOOK Kongsberg Automotive (KA) continues to adapt to a dynamic market environment while maintaining its focus on efciency and protability. The company has taken steps to strengthen its competitive position, and the business wins in 2024 reect its ability to maintain customer trust. While the global automotive market outlook for 2024 and 2025 has been revised downward, KA remains committed to delivering on its strategic priorities. - on imported goods, with other countries responding with vehicle prices, and market demand remains uncertain. - ing year for the automotive and off-road markets, with no market growth anticipated and ongoing geopoliti- - ther ahead, commercial vehicle production is projected to see growth picking up, with North America playing a key role in this development. Passenger vehicle production is forecast to see steady growth over the same period. mitigate the impact of tariff-related cost increases, in line - of 2024, with potential for improvement later in the year. - management and employees in adapting to changing con- ANNUAL REPORT 2024 // OUTLOOK 44 45 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SUSTAINABILITY STATEMENTS GENERAL INFORMATION .......................................................... 46 BASIS FOR PREPARATION .................................................... 46 SUSTAINABILITY GOVERNANCE ............................................ 47 INTERESTS AND VIEWS OF STAKEHOLDERS ........................ 50 DOUBLE MATERIALITY ASSESSMENT .................................. 52 IMPACTS, RISKS, AND OPPORTUNITIES ................................ 55 DISCLOSURE REQUIREMENTS AND INCORPORATION BY REFERENCE .................................... 60 ENVIRONMENTAL INFORMATION .............................................. 64 EU TAXONOMY ........................................................................ 64 ESRS E1 – CLIMATE CHANGE ................................................... 70 ESRS E4 – BIODIVERSITY AND ECOSYSTEMS ....................... 78 ESRS E5 – RESOURCE USE AND CIRCULAR ECONOMY ......... 79 SOCIAL INFORMATION .............................................................. 83 ESRS S1 – OWN WORKFORCE ................................................. 83 ESRS S2 – WORKERS IN THE VALUE CHAIN ............................ 92 GOVERNANCE INFORMATION ................................................ 104 ESRS G1 – BUSINESS CONDUCT ........................................... 104 ENTITY-SPECIFIC DISCLOSURES ........................................ 108 46 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements in response to new regulations as well as stakeholder - > - > - > - grated annual report > - GENERAL INFORMATION BASIS FOR PREPARATION SCOPE OF CONSOLIDATION AND GENERAL REPORTING STANDARDS - pared in accordance with the requirements of the Norwe- gian Accounting Act Sections 2-3 and 2-4, including the - page 128. We have not opted to omit information correspond- ing to intellectual property, know-how or results of inno- - operations and our upstream and downstream value - - riality assessment. NORWEGIAN TRANSPARENCY ACT - on fundamental human rights and decent working con- June 2025. SOURCES OF ESTIMATION AND OUTCOME UNCERTAINTY The use of estimates for performance metrics, includ- ing when upstream and downstream value chain data is - cies. Overall, metrics related to our own operations have a higher amount of primary data, while value chain metrics are often estimated and therefore have a higher level of measurement uncertainty. All assumptions and potential uncertainties are documented in the accounting policies. The highest degree of estimation uncertainty is related to emission calculations, as well as weight estimations for RESTATEMENTS AND CHANGES IN PREPARATION AND PRESENTATION - of restatements of information from previous reports are provided where relevant in this report. ANNUAL REPORT 2024 // GENERAL INFORMATION Sustainability is a key principle in Kongsberg Automotive (KA)’s operations and business relationships. The company is striving for higher standards of performance across environmental, social, and governance topics to ensure that our value creation is aligned with the principle of sustainable development for people and planet. 46 47 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // GENERAL INFORMATION INCORPORATION BY REFERENCE - STATEMENT ON DUE DILIGENCE prevents, limits, and reports actual and potential negative impacts on the acquisitions or divestments. The core of this practice is how the different steps in the SDD process identify and measure the negative impacts that across the value chain. CORE ELEMENTS OF DUE DILIGENCE PARAGRAPHS IN THE SUSTAINABILITY STATEMENT A) EMBEDDING DUE DILIGENCE IN GOVERNANCE, STRATEGY AND BUSINESS MODEL pages 47-50, 52-59, 70-71, 78-80, 83, 93-94, 104, 108 B) ENGAGING WITH AFFECTED STAKEHOLDERS IN ALL KEY STEPS OF THE DUE DILIGENCE pages 47-50, 52-53, 72-74, 78, 80, 84-85, 88, 90, 94-102, 105-108 C) IDENTIFYING AND ASSESSING ADVERSE IMPACTS pages 52-59, 70-71, 78-80, 83, 93-94, 104, 108 D) TAKING ACTIONS TO ADDRESS THOSE ADVERSE IMPACTS pages 72-74, 78, 80, 85, 88, 90, 94-102, 105-108 E) TRACKING THE EFFECTIVENESS OF THESE EFFORTS AND COMMUNICATING pages 74-78, 80-82, 86-89, 91, 97, 100, 102-103, 105-109 SUSTAINABILITY GOVERNANCE THE ROLE OF ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES - - tain information on employee representatives, independence of Board - - - - tive (CSRD) requirements (see pages 52-54) and following developments develop group policies and directives for issues or risks that are consid- - - - - 48 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // GENERAL INFORMATION RISK MANAGEMENT AND INTERNAL CONTROL to identify, assess, and manage risk factors that may potentially have adverse effects on the overall operational performance of the group. This - important risk categories and internal control arrangements. The group statements, with Board oversight of material topics. related data capturing processes. The importance and priority of the impact and likelihood of the related risks versus their control effective- - Contingent on topic importance, data is gathered quarterly or annu- ally in efforts to support the path toward maturity. Data quality is ensured - SUSTAINABILITY-RELATED INCENTIVE SCHEMES - Provides oversight and ensures alignment of business conduct practices with long-term corporate goals. sustainability and risk reporting. Monitors compliance, risks related to business conduct, recommendations for mitigation. G1 (Business ethics), S1 (Employee development & wellbeing) and S2 (Human rights & workers in the value chain) Develop, prepare and submit sustainability actions and plans for sustainability steering committee S1 (Health & safety and product quality & safety) Develop, prepare and submit sustainability actions and plans for sustainability steering committee Separated by business area E1 Emissions & energy, E5 Resource use Develop, prepare and submit sustainability actions and plans for sustainability steering committee Decides the strategic direction, targets, roadmaps, investments and reporting. Coordinated by Corporate Sustainability Manager Operational decisions on implementation and breakdown of roadmap into measures and priorities. Determines executive remuneration structure including sustainability target incentives. General Counsel + CFO + Head of People and Culture Oversees compliance policies, investigates reported incidents, and evaluates risk management strategies. BOARD OF DIRECTORS EXECUTIVE MANAGEMENT SUSTAINABILITY STEERING COMMITTEE SUSTAINABILITY WORKING GROUP 1 SUSTAINABILITY WORKING GROUP 2 SUSTAINABILITY WORKING GROUP 3 AND 4 AUDIT COMMITTEE REMUNERATION COMMITTEE COMPLIANCE COMMITTEE INTERNAL AUDIT 49 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - human resources, 80% of the short-term incentive pro- - roadmap. The Board approves incentive program design and - STRATEGY, BUSINESS MODEL, AND VALUE CHAIN - segments, markets, channels, customer relationships and and offers a wide range of products for the passenger car, commercial vehicle, and off-highway markets. The differ- and Flow Control Systems) are mainly in terms of materi- - - SUPPLIERS’ SUPPLIERS (TIER X) Raw material extraction, mines, basic industry Metals, monomers, polymers, etc. Polymers, steel, brass, rubber, electronics, etc. KA products / components Customers’ vehicles (mainly) with KA’s components End of lifeEnd products Suppliers’ manufacturing processes KA manufacturing processes Customers’ manufacturing processes Disposal / recycling after use SUPPLIERS (TIER 1) OWN PRODUCTION CUSTOMERS TRANSPORT END CUSTOMERS (PRODUCT USE) RECYCLING /DISPOSAL PROCESSING PRODUCT - ity as well. The whole automotive industry itself is on a - ity of its products, which improves its environmental savings during their use phase (e.g. couplings). For more details see page 79. ANNUAL REPORT 2024 // GENERAL INFORMATION 49 50 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - - - - as an important element of its stakeholder engagement. The outcome of this engagement and dialog has a direct - ucts, avoidance of certain input materials, or reducing - ment and the Board of Directors. STAKEHOLDER GROUP TYPE OF ENGAGEMENT EXAMPLES OF OUTCOMES CUSTOMERS > KA’s website > Trade fairs > Customer meetings > Surveys and assessments > Request for quotation processes > Sustainability of products (e.g. recyclability) > Innovation for battery electric vehicles > KA sustainability performance ratings INVESTORS AND SHAREHOLDERS > Capital Market Days > Annual General Meeting > Annual and quarterly reports > Breakfast meetings > Sustainability ratings > Capital Market Day, May 13, 2024: Sustainability approach presented EMPLOYEES > KA intranet > Townhall meetings > Board representation for employees > Day-to-day cooperation between unions and employers > Staff meetings > Social events > Health and safety as a top focus for plant management > Wellbeing topics to be developed SUPPLIERS > Supplier days > Supplier meetings and visits > KA website > Surveys and assessments > Quoting processes > Supplier sustainability risk assessments > Supplier’s sustainability performance > Human rights and supplier’s employees’ working conditions > Responsible sourcing (especially minerals) LOCAL COMMUNITIES > Open house days > Press releases > Collaboration with universities > Participation in initiatives > Educational support (e.g. KA Mexico Scholarship Program) > Participation in the Planet 2030 initiative (Raufoss Indus- try Park) INTERESTS AND VIEWS OF STAKEHOLDERS ANNUAL REPORT 2024 // GENERAL INFORMATION 50 51 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SUSTAINABILITY FRAMEWORKS AND RATINGS UN Global Compact - SDG 5: GENDER EQUALITY 5.5 opportunities for leadership at all levels of decision-making in SDG 8: DECENT WORK AND ECONOMIC GROWTH 8.2 Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation, including 8.5 By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons 8.8 environment for all workers, including migrant workers, in particular women migrants, and those in precarious employment SDG 9: INDUSTRY, INNOVATION AND INFRASTRUCTURE 9.4 By 2030, upgrade infrastructure and retrofit industries to make greater adoption of clean and environmentally sound technology and industrial processes, with all countries taking action in SDG 13: CLIMATE ACTION 13.3 institutional capacity on climate change mitigation, adaptation, impact reduction, and early warning 51 ANNUAL REPORT 2024 // GENERAL INFORMATION Sustainable Development Goals (UN SDGS) - Carbon Disclosure Project (CDP) gold standard of environmental reporting with the richest and most compre- score in the CDP Climate Change 2024 rating. Ecovadis - 52 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ANNUAL REPORT 2024 // GENERAL INFORMATION DOUBLE MATERIALITY ASSESSMENT STEP 1: PREPARATION AND TOPIC LIST - STEP 2: IMPACT MATERIALITY The goal of the impact assessment is to identify those topics that have the greatest impact - - > > > - ering time needed for recovery > Likelihood: The likelihood that a potential impact occurs. “no impact”) to 4 (“”) for each topic at each value chain stage. - nal sources, including studies and specialist reports. impacts are those already occurring, whether positive or negative. Potential impacts - - tion of the respective levels of the individual criteria with each other. The total value per topic consists of the sum of the scores per value chain stage. Thus, the impacts of all three stages of the value chain are weighted equally. - - - - ers, especially silent stakeholders in the value chain, were predominantly incorporated STEP 3: FINANCIAL MATERIALITY The analysis contains three parts which are weighted as follows: 1. 2. 3. applied to risks and opportunities. Financial effects were qualitatively considered in terms 52 53 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - whether there are sources of current or potential risks and opportunities. The scores for risks and opportunities were individually calculated as a weighted sum of the results of the three mentioned steps of the analy- - and opportunities were weighted equally. STEP 4: CONSOLIDATION AND APPROVAL The results from the impact assessment and the risk and opportunity - quent topic-related chapters. Through setting a 50% threshold, the material topics are selected. The threshold should not cut off topics that either have a high outward impact or are related to high risks and opportunities. Particular care was taken to ensure that no topics with a high impact at any stage of the value chain the total scoring. - - responses to measure performance and disclose these metrics and tar- - ANNUAL REPORT 2024 // GENERAL INFORMATION EMPLOYEE OCCUPATIONAL HEALTH & SAFETY EMPLOYEE DEVELOPMENT & WELLBEING SHARED VALUE TRANSPARENT & ETHICAL BUSINESS CLIMATE CHANGE ADAPTATION HUMAN RIGHTS PRODUCT QUALITY & SAFETY BIODIVERSITY & ECOSYSTEMS WATER POLLUTION SOCIAL ENGAGEMENT POLITICAL ENGAGEMENT PRIVACY & CYBERSECURITY GHG EMISSIONS & ENERGY TECHNOLOGY & PRODUCT INNOVATION MATERIAL/RESOUCE USE & CIRCULAR ECONOMY HIGH IMPACT (ENVIRONMENT, ECONOMY, PEOPLE) RISKS AND OPPORTUNITIES LOW HIGH 54 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements 54 KA’S MATERIAL TOPICS KA TOPIC DESCRIPTION ESRS TOPIC GHG EMISSIONS & ENERGY ESRS E1 - Climate change CLIMATE CHANGE ADAPTATION ESRS E1 - Climate change TECHNOLOGY & PRODUCT INNOVATION ESRS E1 - Climate change BIODIVERSITY & ECOSYSTEMS ESRS E4 – Biodiversity and ecosystems MATERIAL/ RESOURCE USE & CIRCULAR ECONOMY ESRS E5 - Circular economy and resource use EMPLOYEE OCCUPATIONAL HEALTH & SAFETY ESRS S1 – Own workforce EMPLOYEE DEVELOPMENT & WELLBEING ESRS S1 – Own workforce HUMAN RIGHTS IN THE VALUE CHAIN ESRS S1 – Own workforce, S2 – Workers in the value chain TRANSPARENT & ETHICAL BUSINESS ESRS G1 – Business conduct SHARED VALUE ESRS G1 – Business conduct PRODUCT QUALITY & SAFETY (ENTITY-SPECIFIC) - > > > > - - ited to upstream value chain impacts, risks, and opportunities with suppliers. This aligns - ANNUAL REPORT 2024 // GENERAL INFORMATION 55 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IMPACTS, RISKS AND OPPORTUNITIES IRO NAME IRO TYPE DESCRIPTION TIME HORIZON BUSINESS MODEL & VALUE CHAIN S M L UPSTREAM OWN OPERATIONS DOWNSTREAM E1 CLIMATE CHANGE CO emissions (Scope 1, 2 and 3) Actual negative impact GHG emissions from the combustion of fuels and the consumption of electricity from fossil sources in the to process emissions. x Purchased goods and services KA plant’s operations & emissions Distribution CO emissions (Scope 1, 2 and 3) Transitional disruptive technologies, losing R&D investments, not competitive. x x n/a KA operations n/a CO emissions (Scope 1, 2 and 3) Opportunity Financial opportunities due to green shift in car market with demand for less carbon-intensive products and transition to BEVs and opportunity to grow product portfolio to align with low-carbon car market demands. Opportunity by developing new products to open up new business areas and replacement businesses. x x n/a KA operations n/a Climate change adaptation -physical risks Physical risk Physical risks to operations due to changing climate: Damage to property, supply chain disruption, cost for climate hazard protection x x n/a KA plants n/a Climate change adaptation - transitional risks Transitional Transitional risks through costs associated with changing legislation and taxes due to CC. Investments needed to maintain license to operate. x x n/a KA operations n/a Renewable energies Transitional al risk Increasing/volatile energy prices increase operational costs as energy production shifts to low carbon solutions. x x n/a KA production plants n/a Renewable energies and energy consumption & Opportunity x x n/a KA plants n/a ANNUAL REPORT 2024 // GENERAL INFORMATION 56 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IRO NAME IRO TYPE DESCRIPTION TIME HORIZON BUSINESS MODEL & VALUE CHAIN S M L UPSTREAM OWN OPERATIONS DOWNSTREAM E4 BIODIVERSITY AND ECOSYSTEMS Land degradation Actual negative impact Land degradation due to mining operations for raw materials. Mining of ores (iron, copper, zinc, aluminum) all require drastic interventions in local ecosystems and can cause damage. Most prominent impact is in direct proximity to mining operations, but through chemical emissions these impacts can cover larger areas. x Suppliers of raw material n/a n/a Exploitation Physical risk Risks to operation/value of services (provisioning) at stake due to progressed exploitation. x n/a KA operations n/a E5 CIRCULAR ECONOMY AND RESOURCE USE Material/resource Actual negative impact Actual resource consumption for product manufacturing (steel, aluminum, etc.) and the provision of energy (electricity and fuels) is high. x x Resource consumption of suppliers KA plant’s resource consumption KA customer’s resource consumption Circular principles including generated waste Transitional Risk of regulatory non-compliance / loss of investors (Taxonomy objective circular economy). x x n/a KA operations n/a Material/resource availability Transitional Financial risk due to price and availability of raw materials as this might lead operations to halt production. x x n/a KA operations, purchasing in particular n/a Generated waste Transitional Risk of regulatory non-compliance / loss of investors. x x n/a KA operations n/a Circular principles Opportunity Opportunity by shifting to circular economic principles to require less raw materials (reusing/recycling waste to reduce overall costs of production). x x n/a KA production plants n/a Circular principles Opportunity Opportunity by designing products with substitute materials. x x n/a KA engineering & product portfolio n/a S1 OWN WORKFORCE Working conditions of own workforce Financial risk Risk of skill shortage/talent retention to keep up with the market. Reputational damage can lead to loss of attractiveness as employer. x x n/a KA workforce n/a Collective bargaining Financial risk supply chain. x x x n/a KA workforce n/a ANNUAL REPORT 2024 // GENERAL INFORMATION 57 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IRO NAME IRO TYPE DESCRIPTION TIME HORIZON BUSINESS MODEL & VALUE CHAIN S M L UPSTREAM OWN OPERATIONS DOWNSTREAM S1 OWN WORKFORCE Child labor and forced labor Financial risk supply chain. x x x n/a KA workforce n/a Employee develop- ment and career opportunities Potential positive impact workers need to develop their skills or face danger of falling behind. KA can have positive impacts on employees by providing continuous education, development and career opportunities. x x x n/a KA training and development opportunities n/a Employee develop- ment and career opportunities Opportunity Opportunity to create competitive advantage by highly trained workforce enabling BEV shift with new products. This will have a long-term effect on competitiveness and successful innovation. Skilled people will be attracted if education and training is good. x x n/a KA workforce n/a Employee develop- ment and career opportunities Financial risk Financial risk of skill shortage/talent retention to keep up with the market (R&D, engineering). Company can lose its competitiveness, which can lead to market loss. x x n/a KA workforce n/a Occupational accidents, absence days and work- related physical and mental health Financial risk Financial risks due to accidents /sickness, lost time and insurance cost can increase. Risk of not attracting talent in case of bad performance in this area. x x x n/a KA workforce n/a S2 WORKERS IN THE VALUE CHAIN Inadequate wages in producing countries Potential negative impact Possible negative impacts through unintentional contribution to: Excessive working hours or low and x x x Suppliers n/a Distribution Occupational accidents and work-related physical and mental health Potential negative impact Possible negative impacts through unintentional contribution to: Limitations of social dialog, freedom of association, or collective bargaining, poor health and safety awareness. x x x Suppliers n/a Distribution Collective bargaining Financial risk supply chain. x x x Suppliers n/a Distribution Occupational accidents, absence days and work- related physical and mental health Financial risk supply chain. x x x Suppliers n/a n/a ANNUAL REPORT 2024 // GENERAL INFORMATION 58 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IRO NAME IRO TYPE DESCRIPTION TIME HORIZON BUSINESS MODEL & VALUE CHAIN S M L UPSTREAM OWN OPERATIONS DOWNSTREAM S2 WORKERS IN THE VALUE CHAIN Employee develop- ment and career opportunities Financial risk Financial risk of skill shortage/talent retention to keep up with the market (R&D, engineering). Company can lose its competitiveness, which can lead to market loss. x x Suppliers n/a Distribution Employee develop- ment and career opportunities Opportunity Opportunity to create competitive advantage by highly trained workforce enabling battery electric vehicle shift with new products. Long-term effect on competitiveness and successful innovation. Skilled people will be attracted if education and training is good. x x Suppliers n/a Distribution Forced labor Potential negative impact Possible negative impact through unintentional contribution during mineral sourcing: Forced or child labor. x x x Suppliers n/a n/a Child labor and forced labor Financial risk supply chain. x x x Suppliers n/a Distribution G1 BUSINESS CONDUCT Responsible marketing practices incl. assurance and labels, taxes and Financial risk x x x n/a KA operations n/a Corruption, bribery & anti-competitive behavior Financial risk Financial/legal/litigation risks due to global supply chain with lots of inherent risks for fraud, corruption, Reputational damage can be long lasting. x x x n/a KA operations n/a Protection of whistleblowers Financial risk Financial/legal/litigation risks due to global supply chain with lots of inherent risks for fraud, corruption, Reputational damage can be long-lasting. x x x n/a KA operations n/a Responsible marketing practices incl. assurance and labels Opportunity Responsible communication can be marketing tool for KA to improve its image, gain new customers and new business. x x n/a KA operations n/a Infrastructure Opportunity Financial sustainability is a precondition for long-term economic success. Contributing to the local impact. x x n/a KA operations n/a Management of relationships with suppliers Opportunity Opportunity through supplier engagement/localization to gain competitive advantage, create a more resilient supply chain as well as reputational gains. x n/a KA operations n/a ANNUAL REPORT 2024 // GENERAL INFORMATION 59 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IRO NAME IRO TYPE DESCRIPTION TIME HORIZON BUSINESS MODEL & VALUE CHAIN S M L UPSTREAM OWN OPERATIONS DOWNSTREAM ENTITY-SPECIFIC - PRODUCT QUALITY AND SAFETY Product safety (customer) and consumer health (customer) Financial risk x x x n/a KA operations Distribution Product safety (customer) Opportunity x x n/a KA operations Distribution Access to and affordability of products and services (customer) Opportunity accessibility of product). x x n/a KA operations Distribution ANNUAL REPORT 2024 // GENERAL INFORMATION 60 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements DISCLOSURE REQUIREMENTS AND INCORPORATION BY REFERENCE - - - - - CROSS-CUTTING STANDARDS DISCLOSURE REQUIREMENT ESRS 2 GENERAL DISCLOSURES PAGE ADDITIONAL INFORMATION BP-1 General basis for preparation of the sustainability statement 46 BP-2 - stances 46-47 GOV-1 The role of the administrative, management and supervisory bodies 47-49 Incorporation by reference - (ESRS 2 GOV-1 21a-3, 23 a, b): See page 20-21 for composition and competences of BoD, meeting attendance,inde- pendence, work and risk assess- ment/internal controls on page 17-18 (Corporate governance point 8-10) and diversity metrics on page 89 ESRS 2 GENERAL DISCLOSURES PAGE ADDITIONAL INFORMATION GOV-2 Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies 47-48 GOV-3 Integration of sustainability-related performance in incentive schemes 48-49 Incorporation by reference - (ESRS 2 GOV-3 (29a-e): For incentive schemes dependent on sustainabili- ty-related performance, see remuneration report, page 16 "Global long-term incentive plan 2024 for management (share-based remuneration)" GOV-4 Statement on sustainability due diligence 47 GOV-5 Risk management and internal controls over sustainability reporting 48 SBM-1 Strategy, business model and value chain (products, markets, customers) 49 Incorporation by reference - (ESRS E2 SBM-1 38, 40a-g): For overall strategy and business model (products, markets, customers), see pages 27-33. For sustainability related strategy see pages 31,33. For headcount of employees by geographical areas, see page 34 SBM-2 Interests and views of stakeholders 50 SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 55-59 IRO-1 Description of the process to identify and assess material impacts, risks and opportunities 52-53 IRO-2 Disclosure requirements in ESRS covered by the undertaking’s sustainability statement 54, 60-63 60 ANNUAL REPORT 2024 // GENERAL INFORMATION 61 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ENVIRONMENTAL STANDARDS DISCLOSURE REQUIREMENT ESRS E1 CLIMATE CHANGE PAGE ADDITIONAL INFORMATION ESRS 2, GOV-3 Integration of sustainability-related performance in incentive schemes 48-49 Incorporation by reference - ESRS E1 13: See Remuneration Report, page 16 "Global long-term incentive plan 2024 for management (share-based remuneration)" E1-1 Transition plan for climate change mitigation 72-74 ESRS 2, SBM 3 Material impacts, risks and opportunities, and their interaction with strategy and business model 55, 70-71 ESRS 2, IRO-1 Description of the processes to identify and assess material climate-related impacts, risks and opportunities 52-53, 70 E1-2 Policies related to climate change mitigation and adaptation 71 E1-3 Actions and resources in relation to climate change policies 72-74 E1-4 Targets related to climate change mitigation and adaptation 74-75 E1-5 Energy consumption and mix 75, 77 E1-6 Gross Scopes 1, 2, 3 and total GHG emissions 76-77 E1-7 GHG removals and GHG mitigation projects n/a E1-8 Internal carbon pricing n/a E1-9 physical and transitional risks and potential climate-related opportunities n/a Phase-in option used ESRS E4 BIODIVERSITY AND ECOSYSTEMS PAGE ADDITIONAL INFORMATION E4-1 Transition plan and consideration of biodiversity and ecosystems in strategy and business model 78 ESRS 2, SBM 3 Material impacts, risks and opportunities, and their interaction with strategy and business model 56,78 ESRS E4 BIODIVERSITY AND ECOSYSTEMS PAGE ADDITIONAL INFORMATION ESRS 2, IRO-1 Description of the processes to identify and assess material biodiversity and ecosys- tem-related impacts, risks and opportunities 52-53, 78 E4-2 Policies related to biodiversity and ecosystems 78 E4-3 Actions and resources related to biodiversity and ecosystems 78 E4-4 Targets related to biodiversity and ecosystems 78 E4-5 Impact metrics related to biodiversity and ecosystems change 78 E4-6 - ty and ecosystems-related risks and opportunities n/a ESRS E5 RESOURCE USE AND CIRCULAR ECONOMY PAGE ADDITIONAL INFORMATION ESRS 2, IRO-1 Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities 52-53, 79-80 E5-1 Policies related to resource use and circular economy 80 E5-2 Actions and resources related to resource use and circular economy 80 E5-3 Targets related to resource use and circular economy 80 E5-4 79-82 E5-5 79, 81-82 E5-6 resource use and circular economy-related risks and opportunities n/a Phase-in option used 61 ANNUAL REPORT 2024 // GENERAL INFORMATION 62 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SOCIAL STANDARDS DISCLOSURE REQUIREMENT ESRS S1 OWN WORKFORCE PAGE ADDITIONAL INFORMATION ESRS 2, SBM-2 Interest and views of stakeholders 50 ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 52-53, 56-57, 83-84 S1-1 Policies related to own workforce 85, 88, 90 S1-2 Processes for engaging with own workers and workers’ representatives about impacts 50, 84 S1-3 Processes to remediate negative impacts and channels for own workers to raise concerns 84, 107 S1-4 Taking action on material impacts on own workforce, and approaches to mitigating material risks and pursuing material opportunities related to own workforce, and effectiveness of those actions 85-86, 88, 90-91 S1-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 86, 88-89, 91 S1-6 Characteristics of the undertaking’s employees 86-87 S1-7 Characteristics of non-employee workers in the undertaking’s own workforce 86-87 S1-8 Collective bargaining coverage and social dialogue 86-87 S1-9 Diversity metrics 89 S1-10 Adequate wages 89 S1-11 Social protection 85-86 S1-12 Persons with disabilities n/a Phase in option used S1-13 Training and skills development metrics 88-89 S1-14 Health and safety metrics 91 S1-15 Work-life balance metrics n/a Phase in option used ESRS S1 OWN WORKFORCE PAGE ADDITIONAL INFORMATION S1-16 Compensation metrics (pay gap and total compensation) 89 S1-17 Incidents, complaints and severe human rights impacts 84, 87 ESRS S2 WORKERS IN THE VALUE CHAIN PAGE ADDITIONAL INFORMATION ESRS 2, SBM-2 Interest and views of stakeholders 50, 100-101 ESRS 2, SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model 52-53, 57-58, 93-94 S2-1 Policies related to value chain workers 94-95 S2-2 Processes for engaging with value chain workers about impacts 100-101 S2-3 Processes to remediate negative impacts and channels for value chain workers to raise concerns 101 S2-4 Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions 94-100, 102 S2-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities 102-103 62 ANNUAL REPORT 2024 // GENERAL INFORMATION 63 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements GOVERNANCE STANDARDS DISCLOSURE REQUIREMENT ESRS G1 BUSINESS CONDUCT PAGE ADDITIONAL INFORMATION ESRS 2, GOV-1 The role of the administrative, supervisory and management bodies 47-49 Refer to ESRS 2 GOV for incorporation by reference ESRS 2, IRO-1 Description of the processes to identify and assess material impacts, risks and opportunities 52-53, 58, 104 G1-1 Business conduct policies and corporate culture 105 G1-2 Management of relationships with suppliers 107, 94-99 G1-3 Prevention and detection of corruption and bribery 106 G1-4 Incidents of corruption or bribery 106 G1-5 n/a Subtopic not material G1-6 Payment practices 107 63 ANNUAL REPORT 2024 // GENERAL INFORMATION 64 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ENVIRONMENTAL INFORMATION EU TAXONOMY - system for economically and environmentally sustain- - - - - - - tives and must adhere to minimum social safeguards. - of water and marine resources, transition to a circular economy, pollution prevention and control, and protec- - - - - ing technical screening criteria outlined in the applica- ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION social safeguards in place. To comply with articles 3 and ASSESSMENT OF KA’S ACTIVITIES’ TAXONOMY-ELIGIBILITY set on the income-generating economic operations and is - - clature of economic activities), which were then mapped to the potential activities listed in the delegated acts in a - - - porting economic activities as well. The additional activ- - CLIMATE-RELATED ENVIRONMENTAL OBJECTIVES: 3.18 MANUFACTURE OF AUTOMOTIVE AND MOBILITY VEHICLE COMPONENTS The activity description refers to the manufacture, repair, - nents, separate technical units, parts, and spare parts. - - nents to include only essential parts necessary for the As a technology development and manufacturing Sales departments, the product families were discussed for electric vehicles and their electronic components. - 64 65 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements electric vehicle environmental performance, determining 3.6 MANUFACTURE OF OTHER LOW CARBON TECHNOLOGIES This activity comprises the manufacture of technolo- - - - - ings analyses. 6.5 TRANSPORT BY MOTORBIKES, PASSENGER CARS, AND LIGHT COMMERCIAL VEHICLES - 7.7 ACQUISITION AND OWNERSHIP OF BUILDINGS - - NON-CLIMATE-RELATED ENVIRONMENTAL OBJECTIVES the description of economic activities of the four non- the environmental delegate act. MINIMUM SAFEGUARDS - - - ruption. Corresponding procedures and processes are in - - policy and the corresponding processes are not yet imple- mented for the full reporting year 2024, meaning that ASSESSMENT OF KA’S ACTIVITIES’ TAXONOMY-ALIGNMENT - when they meet all requirements: minimum safeguards, assessed for the 2024 reporting year. KEY PERFORMANCE INDICATORS (KPIS) - - - - TURNOVER - generating activities (3.18). The denominator for the turn- statement of comprehensive income of 2024. Further CAPITAL EXPENDITURE (CAPEX) - - ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 66 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements 16, and investment car leases for employees (activity 6.5) - the additions reported in notes 12 to 14 of the consolidated OPERATING EXPENDITURE (OPEX) research and development costs, short-term and low- costs for maintenance and repair of property, plant, and - vidual projects were included if the underlying product development is for use in electric vehicles only. Further- more, the costs for car leases for employees (activity 6.5) CHANGES TO PRIOR REPORTING YEAR on income-generating activities and has reported eligi- the 2023 reporting year (restated): > > > NOTE ON EXPOSURE TO NUCLEAR AND FOSSIL GAS-RELATED ACTIVITIES ROW NUCLEAR ENERGY-RELATED ACTIVITIES 1 The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. NO 2 The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. NO 3 The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. NO ROW FOSSIL GAS-RELATED ACTIVITIES 4 The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. NO 5 The undertaking carries out, funds or has exposures to construction, refurbishment and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. NO 6 The undertaking carries out, funds or has exposures to construction, refurbish- ment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. NO ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 67 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements TURNOVER FINANCIAL YEAR 2024 2024 SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA (DO NO SIGNIFICANT HARM) ECONOMIC ACTIVITIES (1) CODE (2) TURNOVER (3) PROPORTION OF TURNOVER, 2024 (4) CLIMATE CHANGE MITIGATION (5)" CLIMATE CHANGE ADAPTATION (6) WATER (7) POLLUTION (8) CIRCULAR ECONOMY (9) BIODIVERSITY (10) CLIMATE CHANGE MITIGATION (11) CLIMATE CHANGE ADAPTATION (12) WATER (13) POLLUTION (14) CIRCULAR ECONOMY (15) BIODIVERSITY (16) MINIMUM SAFEGUARDS (17) PROPORTION OF TAXONOMY-ALIGNED (A.1.) OR -ELIGIBLE (A.2.) TURNOVER, 2023 (18) CATEGORY ENABLING ACTIVITY (19) CATEGORY TRANSITIONAL ACTIVITY (20) MEUR % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T Turnover of environmentally sustainable activities (Taxonomy-aligned) (A.1) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% Of which enabling 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% E Of which transitional 0.0 0.0% 0.0% Y Y Y Y Y Y Y 0.0% T EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of automotive and mobility components 3.18 2.9 0.4% EL N/EL N/EL N/EL N/EL N/EL 0.0% Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 2.9 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% A. Turnover of Taxonomy- 2.9 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Turnover of Taxonomy-non-eligible activities 785.3 99.6% TOTAL 788.2 ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 67 68 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements CAPEX FINANCIAL YEAR 2024 2024 SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA (DO NO SIGNIFICANT HARM) ECONOMIC ACTIVITIES (1) CODE (2) CAPEX (3) PROPORTION OF CAPEX, 2024 (4) CLIMATE CHANGE MITIGATION (5) CLIMATE CHANGE ADAPTATION (6) WATER (7) POLLUTION (8) CIRCULAR ECONOMY (9) BIODIVERSITY (10) CLIMATE CHANGE MITIGATION (11) CLIMATE CHANGE ADAPTATION (12) WATER (13) POLLUTION (14) CIRCULAR ECONOMY (15) BIODIVERSITY (16) MINIMUM SAFEGUARDS (17) PROPORTION OF TAXONOMY-ALIGNED (A.1.) OR -ELIGIBLE (A.2.) CAPEX, 2023 (18) CATEGORY ENABLING ACTIVITY (19) CATEGORY TRANSITIONAL ACTIVITY (20) MEUR % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T CAPEX of environmentally sustainable activities (Taxonomy- aligned) (A.1) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% Of which enabling 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% E Of which transitional 0.0 0.0% 0.0% Y Y Y Y Y Y Y 0.0% T EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Acquisition and ownership of buildings 7.7 10.8 31.6% EL N/EL N/EL N/EL N/EL N/EL 35.2% Manufacture of automotive and mobility components 3.18 2.0 5.8% EL N/EL N/EL N/EL N/EL N/EL 6.0% Transport by motorbikes, passenger cars and light commercial vehicles 6.5 0.4 1.2% EL N/EL N/EL N/EL N/EL N/EL 0.9% CAPEX of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 13.2 38.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 42.1% A. CAPEX of Taxonomy- 13.2 38.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 42.1% CAPEX of Taxonomy-non-eligible activities 21.0 61.4% TOTAL 34.2 ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 68 69 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements OPEX FINANCIAL YEAR 2024 2024 SUBSTANTIAL CONTRIBUTION CRITERIA DNSH CRITERIA (DO NO SIGNIFICANT HARM) ECONOMIC ACTIVITIES (1) CODE (2) OPEX (3) PROPORTION OF OPEX, 2024 (4) CLIMATE CHANGE MITIGATION (5) CLIMATE CHANGE ADAPTATION (6) WATER (7) POLLUTION (8) CIRCULAR ECONOMY (9) BIODIVERSITY (10) CLIMATE CHANGE MITIGATION (11) CLIMATE CHANGE ADAPTATION (12) WATER (13) POLLUTION (14) CIRCULAR ECONOMY (15) BIODIVERSITY (16) MINIMUM SAFEGUARDS (17) PROPORTION OF TAXONOMY-ALIGNED (A.1.) OR -ELIGIBLE (A.2.) OPEX, 2023 (18) CATEGORY ENABLING ACTIVITY (19) CATEGORY TRANSITIONAL ACTIVITY (20) MEUR % Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y; N; N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T OPEX of environmentally sustainable activities (Taxonomy- aligned) (A.1) 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% Of which enabling 0.0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Y Y Y Y Y Y Y 0.0% E Of which transitional 0.0 0.0% 0.0% Y Y Y Y Y Y Y 0.0% T EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL EL; N/EL Manufacture of automotive and mobility components 3.18 0.9 1.3% EL N/EL N/EL N/EL N/EL N/EL 0.5% Transport by motorbikes, passenger cars and light commercial vehicles 6.5 0.1 0.1% EL N/EL N/EL N/EL N/EL N/EL 0.1% OPEX of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 1.0 1.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.6% A. OPEX of Taxonomy-eligible 1.0 1.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.6% OPEX of Taxonomy-non-eligible activities 69.0 98.6% TOTAL 70.0 ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 69 70 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements CLIMATE CHANGE ESRS E1 IMPACTS, RISKS, AND OPPORTUNITIES As part of the process to identify climate-related mate- climate-related physical risks in its own operations and - - - - - - - (such as energy consumption and emissions reporting) as - duction processes and supply chain operations. When it - ical and transitional dimensions. Physical risks present - ations, suppliers, and customers to the increasing sever- ity of climate change. Transitional risks heavily manifest in the form of challenges associated with transitioning transition to electrical vehicles. But climate change also - - Climate change is one of the most daunting challenges of the present era, introducing serious risks across sectors, economies, and ecosystems. The automotive sector is a signicant contributor to global greenhouse gas (GHG) emissions and on a transition pathway to enable low-emission mobility. Kongsberg Automotive (KA) is constantly working towards reducing GHG emissions from its own operations and in the supply chain. KA’s vision is to make a meaningful contribution to society’s efforts to tackle climate change and support its customers’ strategic goals to transition to more sustainable transport. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 71 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE CO EMISSIONS (SCOPE 1, 2 AND 3) Actual negative impact The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. > and setting energy reduction targets to reduce energy consumption and related GHG emissions > Ongoing shift to the usage of renewable energy for KA’s production processes and buildings to reduce GHG emissions > lower weight, recyclability, lower embedded GHG emissions, and compatibility with battery electric vehicles > Purchase of input materials with lower GHG emissions CO EMISSIONS (SCOPE 1, 2 AND 3) Transitional The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. CO EMISSIONS (SCOPE 1, 2 AND 3) Opportunity The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. CLIMATE CHANGE ADAPTATION - PHYSICAL RISKS Physical risk Physical risks to operations due to changing climate: Damage to property, supply chain disruption, cost for climate hazard protection. > climate change-related topics) > Broad supplier portfolio and supplier risk mapping > Internal team of sustainability experts CLIMATE CHANGE ADAPTATION - TRANSITIONAL RISKS Transitional Customer demand products for green shift, associated with changing legislation & taxes due to CC. Investments needed to maintain license to operate. RENEWABLE ENERGIES Transitional Increasing/volatile energy prices increase oper- ational costs as energy production shifts to low carbon solutions. > electricity by 2030 RENEWABLE ENERGIES AND ENERGY CONSUMPTION & EFFICIENCY Opportunity Financial opportunities by shifting to renewable POLICIES own operations approach addressing climate change mit- > Agreement > Reduction of CO2e emissions through increased usage developed to provide general guidance and further details in terms of actions and targets are laid out in the sustain- - for suppliers to mitigate and adapt to climate change within their operations. Further details on these two pol- on pages 94 ff. - ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 72 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ACTIONS AND TRANSITION PLAN FOR CLIMATE CHANGE MITIGATION ACTIONS IN OWN OPERATIONS - long-term strategic goals supporting the transition to LOW- OR ZERO-CO DRIVE SYSTEMS ICE HEV Gear Control Systems Clutch Actuation Systems Fluid Management (ICE) Electric Actuators Vehicle Dynamics Compressed Air Management Steering Columns Pedals Thermal Management PHEV BEV/FCEV underlining the resilience in the product portfolio to - - ing group to identify opportunities as well as a policy - dinate and track progress. - - Detailed Scope 3 reduction roadmaps are currently under development. Their focus lies on Scope 3.1 (purchased goods and services) as this category represents the largest - - vehicles. The following graphic provides an overview of different types of drive systems. - uct groups are already applied in multiple powertrains CARBON-NEUTRAL PRODUCTS BY 2039 100% RENEWABLE PURCHASED ENERGY BY 2030 REDUCTION OF SCOPE 1 AND 2 COe EMISSIONS BY 85% (BASE YEAR 2023) BY 2030 AND ACHIEVING ZERO SCOPE 1 AND 2 COe EMISSIONS BY 2035 ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 73 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements KEY ACTIONS / DECARBONIZATION LEVERS DESCRIPTION SCOPE OF ACTION TARGET IN PLACE? OVERALL PROGRESS IN 2024 AND TRACKING ESTIMATED DECARBONIZATION LEVER CONTRIBUTION FOR 2035 TARGET ENERGY EFFICIENCY INCREASE AND ENERGY USE REDUCTION (SCOPE 1 AND 2) Energy use optimization initiatives and energy consumption reduction initiatives (e.g. use of waste heat) Own operations YES Energy reduction initiatives across manufacturing plants resulted in total energy reduction of 8,354 MWh APPROX. 5% SWITCH TO RENEWABLE ELECTRICITY (SCOPE 2) Achieve 100% renewable electricity at all plants by 2030. Own operations YES Increased number of plants using 100% renewable electricity (renewable energy share of 48%) APPROX. 85% ELECTRIFICATION OF PROCESSES (SCOPE 1 AND 2) Replacement of fossil fuel- based heating systems, machinery and vehicles with electric alternatives by 2035. Own operations YES Growing number of fossil fuel based forklifts are replaced by electric ones APPROX. 10% REDUCTION OF EMISSIONS FROM PURCHASED GOODS AND SERVICES (SCOPE 3.1) KA aims to produce and sell carbon-neutral products by 2039. Supply chain YES Roadmap for Scope 1 and For Scope 3 (purchased goods) more transparency has been achieved, a clear reduction roadmap still TBD - - - cles to electric vehicles and the corresponding portfo- lio transformation. UPSTREAM AND DOWNSTREAM VALUE CHAIN-RELATED ACTIONS communication and engagement with suppliers on decar- - tain topics regarding environmental and energy manage- ment policies and systems, yearly environmental targets, and employee training. and further supplier engagement to decrease emissions - plier Academy, offering training on to climate change, relevant topics to suppliers and their employees. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 73 74 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - emissions in its supply chain. The calculation showed For the calculation of downstream Scope 3 emissions - cause any emissions of their own during the use phase, - to decline in coming years due to increasing adoption of electric vehicles. upstream and downstream emissions in the future and will develop a roadmap in 2025. 12% 85% NET ZERO with a 100% reduction of Scope 2 emissions. The remain- The long-term strategic goal of achieving 100% purchased electricity and heat, underlines the prioriti- this long-term strategic goal is to switch one additional decrease its energy consumption and increase its use of - for 2025 is set to a 2% reduction compared to the 2024 target value. - milestones as well. - METRICS AND TARGETS - sions to align its climate targets with the commitments of the Paris Agreement. To achieve the long-term strategic following reduction milestone targets: ABSOLUTE REDUCTION BY 2025 (2023 BASELINE) ABSOLUTE REDUCTION BY 2030 (2023 BASELINE) (100% ABSOLUTE REDUCTION) BY 2035 FOR SCOPE 1 AND 2 (MARKET-BASED) - - ering the SBTi target setting tool and the SBTi Net-Zero - requirements, which propose 63% Scope 1 and 2 reduc- degree scenario) or 90% (SBTi Net-Zero tool) Scope 1 and - The targets were developed through workshops with ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 75 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements to further reduce emissions in 2025 and achieve its long-term targets. implementing air leak reduction programs, replacing old equipment with newer and more - sales in 2023. While energy intensity was the primary key performance indicator, man- - achieved aside from sales effects. ENERGY CONSUMPTION AND MIX 2023 2024 (1) Fuel consumption from coal and coal products (MWh) - - (2) Fuel consumption from crude oil and petroleum products (MWh) 198 267 (3) Fuel consumption from natural gas (MWh) 13,834 12,295 (4) Fuel consumption from other fossil sources (MWh) 651 857 (5) Consumption of purchased or acquired electricity, heat, steam, and cooling from fossil sources (MWh) 26,753 23,214 (6) Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5) 41,436 36,632 Share of fossil sources in total energy consumption (%) 43% 43% (7) Consumption from nuclear sources (MWh) 9,836 5,530 Share of consumption from nuclear sources in total energy consumption (%) 10% 6% (8) Fuel consumption for renewable sources, including biomass (also comprising industrial and municipal waste of biologic origin, biogas, renewable hydrogen, etc.) (MWh) - - (9) Consumption of purchased or acquired electricity, heat, steam, and cooling from renewable sources (MWh) 45,299 46,054 (10) The consumption of self-generated non-fuel renewable energy (MWh) - - (11) Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to 10) 45,299 46,054 Share of renewable sources in total energy consumption (%) 47% 54% Total energy consumption (MWh) (calculated as the sum of lines 6, 7 and 11) 96,571 88,217 Energy intensity (MWh /mEUR) 109 112 Renewable electricity share (%) 55% 61% Comparative gures have been restated to reect the CSRD-required categories and do not include ofce locations and fuel consumption of company cars. The comparative gures are not subject to limited assurance by Deloitte. 2024 gures do not include fuel consumption of company cars. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 76 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements MILESTONES AND TARGET YEARS BASE YEAR 2023 2024 2023-2024 2025 2030 -2050 ANNUAL % TARGET-/- BASE YEAR Gross Scope 1 GHG emissions (tCOe) 2,742 2,493 -9% 2,413 411 0 Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%) 0% 0% 0% 0% 0% 0% Gross location-based Scope 2 GHG emissions (tCOe) 17,705 16,410 -7% 15,580 1,656 0 Gross market-based Scope 2 GHG emissions (tCOe) 15,371 13,064 -15% 13,527 1,306 0 Total gross indirect (Scope 3) GHG emissions (tCOe) 5,074,530 4,254,202 -16% 1 Purchased goods and services 261,760 198,726 -24% 2 Capital goods 16,803 5,298 -68% 3 Fuel and energy-related activities (not included in Scope 1 or Scope 2) 4,985 4,115 -17% 4 Upstream transportation and distribution 11,933 12,127 2% 5 Waste generated in operations 1,258 1,044 -17% 6 Business travel 388 312 -20% 7 Employee commuting 4,531 4,218 -7% 8 Upstream leased assets 9 Downstream transportation 1,363 1,149 -16% 10 Processing of sold products 8,641 7,697 -11% 11 Use of sold products 4,762,161 4,018,921 -16% 12 End-of-life treatment of sold products 707 596 -16% 13 Downstream leased assets 14 Franchises 15 Investments Total GHG emissions(location-based) (tCOe) 5,094,977 4,273,104 -16% Total GHG emissions (market-based) (tCOe) 5,092,643 4,269,759 -16% GHG INTENSITY BASED ON NET REVENUE 2023 2024 Total GHG emissions (location-based) per net revenue (tCOe/mEUR) 5,758 5,421 Total GHG emissions (market-based) per net revenue (tCOe/mEUR) 5,755 5,417 ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION Comparative gures have been restated or newly calculated (scope 3) to reect the CSRD-required categories and do not include ofce locations. The comparative gures are not subject to limited assurance by Deloitte. 77 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ACCOUNTING POLICIES SCOPE 1 EMISSIONS - Security and Net Zero are applied across all locations. Fuel consumption of company cars is not material and has SCOPE 2 EMISSIONS - - sions consider contractual instruments such as energy - - released 06.09.2024). SCOPE 3 EMISSIONS - - Protocol standards. Accounting policies are only included for the two most material categories of Scope 3 – category 1 and category 11. CATEGORY 1: PURCHASED GOODS AND SERVICES are included in other Scope 3 categories. Purchased goods and services mainly comprise direct and indirect pur- chases of raw materials for products, services, packaging goods and services, the volume in terms of monetary spend and the countries and regions that the products and services are purchased from. CATEGORY 11: USE OF SOLD PRODUCTS into emit during the average lifetime. Therein, there are four main vehicle categories considered: Passenger cars, assumed product lifetime is 10 years, whereas the annual - fer per category. The emissions rate for passenger cars is Aktualisierung TREMOD/TREMOD-MM und Ermittlung der Emissions- daten des Verkehrs nach KSG im Jahr 2023. The emission - TOTAL GHG EMISSIONS - 3 emissions. TOTAL ENERGY CONSUMPTION (MWH) Total energy includes all energy derived from fuels, elec- across all its activities. The total energy consumption is split of conventional purchased electricity into origin cat- ENERGY INTENSITY (MWH/MEUR) - - ment of comprehensive income, page 112. RENEWABLE ELECTRICITY SHARE (%) consumption. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 78 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements BIODIVERSITY AND ECOSYSTEMS ESRS E4 IMPACTS, RISKS, AND OPPORTUNITIES - tools were used in the screening of this topic. - IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE LAND DEGRADATION Actual negative impact Land degradation due to mining operations for raw materials. Mining of ores (iron, copper, zinc, aluminum) all require drastic interventions in local ecosystems and can cause damage. Most prominent impact is in direct proximity to mining operations, but through chemical emissions these impacts can cover larger areas. There is an understanding within KA that this topic will become more of a focus area in the long term. However, the concrete consequences (mechanism risks remain abstract. KA will monitor this topic. EXPLOITATION Physical risk Risks to operation/value of services (provisioning) at stake due to progressed exploitation. POLICIES including the Supplier Declaration and Supplier Sustain- - - opments on this topic. ACTIONS places in the world with a high relevance for species and - - - - sequent steps. METRICS AND TARGETS Currently, no quantitative metrics or targets have Biodiversity plays a crucial role in limiting climate change, with ecosystems absorbing a signicant portion of greenhouse gas emissions. Ecosystems provide vital benets to both human society and business operations. Kongsberg Automotive (KA) has identied biodiversity and ecosystems as a standalone material topic for the rst time. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 79 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements RESOURCE USE AND CIRCULAR ECONOMY ESRS E5 - formed during production processes such as molding, - als are not used. a variety of degrees depending on the product group. The they have to align at least with the lifetime of the vehi- the actual recycling rate is dependent on the recycling infrastructure for vehicles in the different countries. - future deliveries. Effective resource and waste management practices are important to Kongsberg Automotive (KA) and the communities where it operates. KA is committed to reducing waste generation, improving waste management practices, and implementing circularity approaches. These waste reduction strategies help conserve natural resources and reduce KA’s environmental footprint. - cants and solvents. IMPACTS, RISKS, AND OPPORTUNITIES Within the process of identifying material impacts, risks - considered the results from periodical supplier assess- - with resource use and circular economy are development, - tunities related to resource use and circular economy. This topic is of relevance at all steps of the value chain - and opportunities: ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 80 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE MATERIAL/RESOURCE INFLOWS Actual negative impact Actual resource consumption for product manufacturing (steel, aluminum, etc.) and the provision of energy (electricity and fuels) is high. KA has already implemented several measures regarding waste treatment, waste management, and production scrap reuse. Building on these initiatives, additional measures and targets will be developed. CIRCULAR PRINCIPLES INCLUDING GENERATED WASTE Transitional Risk of regulatory non-compliance / loss of investors (Taxonomy objective circular economy). MATERIAL/RESOURCE AVAILABILITY Transitional Financial risk due to price and availability of raw materials as this might lead operations to halt production. GENERATED WASTE Transitional Risk of regulatory non-compliance / loss of investors. CIRCULAR PRINCIPLES Opportunity Opportunity by shifting to circular economic principles to require less raw materials (reusing/recycling waste to reduce overall costs of production). Opportunity by designing products with substitute materials. POLICIES - cient material use and improved waste management. The - - waste, reduction, reusage, recycling and recovery. Repair, - - als. The policy content addresses the material negative principles opportunity directly and the other risks indi- - initiatives require further development. The company continues to investigate approaches for advancing and ACTIONS - - duction resource requirements. - - consider the environmental impact of their work and set appropriate targets for improved performance, which also includes resources and waste management. Waste monthly discussion calls as well. Actions often depend on local circumstances and individual local initiatives. A few - - signs in the research and development department, and increase of recycling share through enhanced local waste separation processes. locations in 2023 which has ongoing positive effects - - ing in waste reduction, and cost savings. For 2025, fur- - resources necessary. METRICS AND TARGETS target for own operations is set to reduce the Disposed year. The target for 2024 was set to -2% compared to 2023 - - compared to 2024 target values). PERFORMANCE ON RESOURCE INFLOWS The overall total weight of products and technical and 0%. The use of secondary or recycled components includes - this metric in future reporting periods. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 81 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements PERFORMANCE ON RESOURCE OUTFLOWS actual recycling rate of products sold in 2024 is depen- dent on the recycling infrastructure for vehicles in the different countries at the end of the lifetime of these prod- ucts, which is at least 10-15 years into the future. disposal and the percentage of non-recycled waste also decreased from 15% in 2023 to 14% in 2024. Total waste from 8% to 6%, while the share of incinerated waste - - instead of 2024 actuals. RESOURCE INFLOWS 2024 Overall total weight of products and technical and biological materials used during the reporting period (tonnes) 84,039 Biological materials and biofuels used for non- energy purposes (%) 0 Absolute weight of secondary reused or recycled components (tonnes) 1,427 Secondary reused or recycled components (%) 1.7% RESOURCE OUTFLOWS - WASTE RESOURCE OUTFLOWS UNIT 2024 2023 TOTAL HAZARDOUS NON- HAZARDOUS TOTAL HAZARDOUS NON- HAZARDOUS Total waste generated TONNES 6,145 414 5,731 6,221 380 5,841 Diverted from disposal Preparation for reuse TONNES 0 0 0 0 0 0 Recycling TONNES 5,306 171 5,135 5,288 272 5,017 Other recovery operations TONNES 0 0 0 0 0 Total diverted from disposal TONNES 5,306 171 5,135 5,288 272 5,017 Directed to disposal Incineration TONNES 489 227 262 459 103 355 TONNES 350 16 334 474 5 469 Other disposal operations TONNES 0 0 0 0 0 0 Total directed to disposal TONNES 839 243 596 933 108 825 Non-recycled waste TONNES 839 243 596 933 108 825 Percentage of non-recycled waste % 14% 59% 10% 15% 28% 14% Total amount of radioactive waste TONNES 0 0 N/A 0 0 N/A 2024 2023 Disposed Waste Index 0.976 0.966 ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION Comparative gures have been restated to reect the CSRD-required catego- ries. The comparative gures are not subject to limited assurance by Deloitte. 82 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ACCOUNTING POLICIES OVERALL TOTAL WEIGHT OF TECHNICAL AND BIOLOGICAL PRODUCTS AND MATERIALS Total weight includes all raw materials, associated pro- cess materials and parts sourced into production. The - - duction machinery is included for 2024. ABSOLUTE WEIGHT OF SECONDARY REUSED OR RECYCLED COMPONENTS Total weight of previously used or recycled materials used - way, which is actively tracked. Base materials used in the production such as metals do have a recycled portion. - servative approach was applied, with these recycled por- PERCENTAGE OF SECONDARY REUSED OR RECYCLED COMPONENTS The weight of secondary reused and recycled materials, all materials used. RECYCLABLE CONTENT OF PRODUCTS SOLD - TOTAL WASTE GENERATED - sured through invoiced amounts from waste manage- own operations. HAZARDOUS AND NON-HAZARDOUS WASTE DIVERTED FROM DISPOSAL DUE TO PREPARATION FOR REUSE, RECYCLING OR OTHER RECOVERY OPERATIONS All waste directed for reuse without any further process- ing and waste directed for recycling or any other recovery the preparation for reuse and other recovery operations similar treatment across all plants. HAZARDOUS AND NON-HAZARDOUS WASTE DIRECTED TO DISPOSAL BY INCINERATION, LANDFILL, AND OTHER DISPOSAL OPERATIONS - - assuming similar treatment across all plants. PERCENTAGE OF NON-RECYCLED WASTE Share of all waste directed to disposal out of total waste. DISPOSED WASTE INDEX Product sales used in the calculation reconcile to group Financial Statements note 7, pages 129 ff. ANNUAL REPORT 2024 // ENVIRONMENTAL INFORMATION 83 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements growth, the cultivation of individual strengths, respect- - its operational locations. IMPACTS, RISKS, AND OPPORTUNITIES To identify any impacts, risks, and opportunities related - discussions. The potential impacts on people deriving from - - impacts, risks, and opportunities and the following pages The expertise of Kongsberg Automotive (KA)’s employees, their imaginative ideas, and their execution fuel the innovations that captivate and motivate customers. KA remains strong in its commitment to tapping the full potential of its global workforce, irrespective of geographical location or organizational hierarchy. IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE WORKING CONDITIONS OF OWN WORKFORCE Financial risk Risk of skill shortage/talent retention to keep up with the market. Reputational damage can lead to loss of attractiveness as employer. > Occupational Safety roadmap with dedicated resources, targets and actions > Training and development programs and platforms (SuccessFactors, Percipio) COLLECTIVE BARGAINING Financial risk rights/working rights non-compliance in the supply chain. CHILD LABOR AND FORCED LABOR Financial risk rights/working rights non-compliance in the supply chain. EMPLOYEE DEVELOPMENT AND CAREER OPPORTUNITIES Potential positive impact opportunities. KA is a technological company and workers As the industry is moving forward, workers need to develop their skills or face danger of falling behind. KA can have positive impacts on employees by providing continuous education, development and career opportunities. EMPLOYEE DEVELOPMENT AND CAREER OPPORTUNITIES Opportunity Opportunity to create competitive advantage by highly trained workforce enabling BEV shift with new products. This will have a long-term effect on competitiveness and successful innovation. Skilled people will be attracted if education and training is good. EMPLOYEE DEVELOPMENT AND CAREER OPPORTUNITIES Financial risk Financial risk of skill shortage/talent retention to keep up with the market (R&D, engineering). Company can lose its competitiveness, which can lead to market loss. OCCUPATIONAL ACCIDENTS, ABSENCE DAYS AND WORK- RELATED PHYSICAL AND MENTAL HEALTH Financial risk Financial risks due to accidents /sickness, lost time and insurance cost can increase. Risk of not attracting talent in case of bad performance in this area. SOCIAL INFORMATION OWN WORKFORCE ESRS S1 ANNUAL REPORT 2024 // SOCIAL INFORMATION 83 84 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements GENERAL PROCESS FOR ENGAGING WITH OWN WORKFORCE indirectly through multiple processes to inform them - - tions and units. Daily interaction with trade unions and their representatives completes the picture. Social events are also an important factor in team spirit. GENERAL GRIEVANCE MECHANISMS - other regulations. - vider and offers full anonymity to employees and stake- - and stakeholders. - lations in good faith are protected from retaliation and any other negative consequences. - phone lines. ANNUAL REPORT 2024 // SOCIAL INFORMATION 84 85 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - agement of impacts, risks and opportunities related to working conditions and equal treatment and opportu- - - ACTIONS The Code of Conduct training is an integral part of the through continuous engagement with its employees and measures, primarily through national country legisla- protects against loss of income due to sickness, unem- ployment, employment injury, parental leave, retirement, remain an attractive workplace. As detailed in this policy, - production. Nevertheless, processes are in place to miti- gate potential risks. POLICIES - sion-making, and interactions with stakeholders. This - ests, compliance with laws, equal treatment, anti-ha- corporate culture. where local laws and regulations set lower standards WORKING CONDITIONS ANNUAL REPORT 2024 // SOCIAL INFORMATION 86 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements secured income provided during these circumstances is with the norms of the respective social security systems. Additionally, where social security measures are lim- ited and do not cover loss of income, employees are safe- - ing employees receive an adequate wage that secures a adequacy across the countries where the company oper- ates. These initiatives are still in progress and will serve as a foundation for determining an adequate wage in the that upholds fair pay for all employees in line with com- pany values. TARGETS AND METRICS - - gets set in the working conditions area are of a qualita- tive nature. There are no quantitative targets for this area are regularly applied. One main target for 2024 was the development and follow-up target for 2025 is to update and enhance this developments in this area. S1-6- CHARACTERISTICS OF THE KA’S EMPLOYEES EMPLOYEES BY GENDER GENDER NUMBER OF EMPLOYEES (HEADCOUNT) MALE 2,903 FEMALE 1,691 OTHER 1 NOT REPORTED 326 (external workers) TOTAL EMPLOYEES 4,921 HEADCOUNT FOR COUNTRIES WITH AT LEAST 50 EMPLOYEES REPRESENTING AT LEAST 10% OF THE TOTAL NUMBER OF EMPLOYEES COUNTRY NUMBER OF EMPLOYEES (HEADCOUNT) MEXICO 1,024 POLAND 573 NORWAY 537 HEADCOUNT FOR PERMANENT, TEMPORARY, NON-GUARANTEED EMPLOYEES, PER GENDER FEMALE MALE OTHER NOT DISCLOSED TOTAL NUMBER OF EMPLOYEES 1,703 3,036 1 181 4,921 NUMBER OF PERMANENT EMPLOYEES 1,680 2,869 1 4,550 NUMBER OF TEMPORARY EMPLOYEES 23 167 181 371 NUMBER OF FULL-TIME EMPLOYEES 1,626 2,973 1 180 4,780 NUMBER OF PART-TIME EMPLOYEES 77 63 1 141 - nal workers, representing 7% of the total workforce. The - tional skills. EMPLOYEE TURNOVER 2024 EMPLOYEE TURNOVER IN % 33% EMPLOYEE TURNOVER ABSOLUTE 1,477 The high employee turnover rate of 33% in 2024 includes all types of leave reasons. As the company announced in - tuates within the industry standard. COLLECTIVE BARGAINING, FREEDOM OF ASSOCIATION and to join or not to join trade unions and works coun- cils without fear of discrimination or retaliation. There is - tives and maintains an open and trusting relationship. > > - - gaining agreements. ANNUAL REPORT 2024 // SOCIAL INFORMATION 87 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements COLLECTIVE BARGAINING COVERAGE SOCIAL DIALOGUE COVERAGE RATE SOCIAL DIALOG EMPLOYEES – NON-EEA WORKPLACE REPRESENTATION (EEA ONLY) 0-19 % the Netherlands, Poland India, Korea (the Republic of), United Kingdom, United States, Mexico, Switzerland the Netherlands, Spain, Germany, Slovakia, Poland, France, Korea (the Republic of), Brazil, Mexico, China, Switzerland, India, United States, United Kingdom, Canada 20-39 % 40-59 % 60-79 % China, Canada Norway 80-100 % Norway, France, Germany, Slovakia, Spain, Sweden Brazil Sweden - INCIDENTS AND COMPLAINTS UNIT 2024 Number of cases reported through the channels for own workforce NO. 5 Multinational Enterprises NO. 0 Number of discrimination cases reported NO. 0 Number of substantiated discrimination cases NO. 0 NO. 0 ACCOUNTING POLICIES EMPLOYEES (HEADCOUNT) and suspended employees, no matter whether they are full time or part EMPLOYEE TURNOVER - ring to the ratio of voluntary and involuntary leavers in the past 12 months - COLLECTIVE BARGAINING AGREEMENTS AND WORKERS’ REPRESENTATIVES COLLECTIVE BARGAINING COVERAGE RATE ANNUAL REPORT 2024 // SOCIAL INFORMATION 88 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements teams, improved decision-making processes and increas- - - of the People and Culture strategy. POLICIES - - - positive action for people from groups at particular risk - tion on the Code of Conduct, including implementation through Corporate culture and reporting mechanisms, fair and competitive compensation practices. The pol- - alignment with market standards. The policy covers EQUAL OPPORTUNITIES locations. Position evaluation follows a structured meth- impact. Bonus programs are designed to reward perfor- - maintain compliance and consistency. ACTIONS - The company conducts annual performance and employees in its workforce, promoting growth and align- employees who joined in the last quarter, as their ten- - tured assessment includes setting targets, employee self- - tion for fairness, and transparent communication of out- comes to employees. this in 2024. These include regular campaigns to develop a learning culture to enhance employee skills and capa- its employees. of the workforce. This limitation makes it challenging to - els are essential for accurate comparisons and meaningful of this analysis and is actively working on a plan to imple- TARGETS AND METRICS - - gets in the equal opportunities area are of a qualitative insights are used for individual follow-ups. One of the main targets for 2024 was further devel- opment of the Percipio learning platform to support pro- fessional development, which was achieved through enhanced employee engagement with the platform. Since its inception, 886 employees have engaged with the plat- form, dedicating an impressive 1,300 hours to their per- sonal and professional growth. The corresponding tar- get for 2025 is to further enhance employee development. ANNUAL REPORT 2024 // SOCIAL INFORMATION 89 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements platforms to support professional development. Build- ing career paths and developing a structured succession planning process are also part of the 2025 initiatives. Another target for 2025-2026 is related to the equal pay - data to identify potential gaps and take appropriate actions - tion practices. Nevertheless, the company has included as a preliminary metric the ratio for male-to-female average pay at a group level, to have a general overview. DIVERSITY METRICS required to have at least 40% female participation in the which is the same ratio as at the end of 2023. GENDER (ONLY WITHIN KA) HEADCOUNT % F 1,691 37% M 2,903 63% U 1 0% GLOBAL LEADERSHIP TEAM 10 100% F 1 10% M 9 90% BOARD OF DIRECTORS 8 100% F 3 38% M 5 62% included in the monthly management review as well. AGE GROUP (ONLY KA’S INTERNAL EMLOYEES) HEADCOUNT % <30 765 17% 30-50 2,457 53% 1,373 30% GRAND TOTAL 4,595 100% REMUNERATION METRICS UNIT 2024 Gender pay gap % 69% Ratio of annualized base pay to highest-paid individual TIMES 17 - women across different roles, with a higher proportion of industry trends and career progression patterns. As men- - sidered a rough estimation rather than a precise measure, nor is it a direct indication of unequal pay for equal work. - anced workforce through targeted initiatives that sup- port gender equity and career advancement. - - - - - ACCOUNTING POLICIES GENDER IN LEADERSHIP AND SENIOR LEADERSHIP POSITIONS GENDER PAY GAP - - RATIO OF ANNUALIZED BASE PAY TO HIGHEST-PAID INDIVIDUAL - (i.e. highest paid individual) and calculating the median - ANNUAL REPORT 2024 // SOCIAL INFORMATION ANNUAL REPORT 2024 // SOCIAL INFORMATION 89 90 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - mented policies and programs to manage risk, prevent accidents and injuries, and comply with relevant health its safety record, reduce employee injuries, and avoid acci- dents and safety violations. KA’S APPROACH - company policies and procedures. POLICIES - - - to incorporate health, safety, and environment consider- ations in all its decisions and actions, as workplace key systems), 14001 (environmental management systems), and 45001 (occupational health and safety management HEALTH AND SAFETY employees. The policy will focus on enhancing workforce - ers. The planned support system will offer access to men- tal health professionals, crisis counsellors, and assistance with stress management, relationships, family issues, and lifestyle challenges. ACTIONS - sive set of procedures that ensure a safe and healthy work environment for everyone in its facilities, with a special focus on employees and processes in production environ- of the system is to perform risk assessments every three and work areas. The company employs a risk management hierarchy of control, ranging from risk elimination to managing the risk using appropriate personal protective - - ing process. - - aid cases, and near misses recorded and closed. All facil- ities participate in monthly green card calls to review also perform an annual scored self-assessment against - - the facilities to discuss any issues they are facing, and the solutions they have implemented to address other issues. - ufacturing facility must comply with a sign-in procedure - as well as transportation and inspection audits. All local legal compliance requirements are followed. health and safety committees, comprised of employ- - ute to the continuous improvement of their health and safety management systems. The health and safety com- mittees hold meetings with employee participation to and management systems. The committees are responsi- ANNUAL REPORT 2024 // SOCIAL INFORMATION 91 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements aid cases, and reported near misses or damage. They also review the risk assessment and training plans to ensure that all employees are on schedule and assess any unre- solved or escalated matters. Additionally, the committee of health and safety, as well as the tools and processes in use, to all new dedicated health and safety employ- - turing facilities. The health and safety representatives in - tem to all new employees as well as refreshment train- the year. A full training plan is issued each year through - - performance indicators were reviewed regularly, and adjustments were made immediately as the need arose. METRICS AND TARGETS For the year 2024, there were 12 total recorded work- related accidents, including own employees (11) and con- tractors (1). Seven accidents resulted in lost time, while four incidents required medical treatment (stitches, - 17. The incident rate increased to 1.36 per million hours worked in 2024, in part due to an increase in accidents - health or occupational diseases affecting the incident rate, and no work-related fatalities. to develop an even stronger safety culture. These inter- nal measures are reviewed monthly to strengthen and ensure continuous improvement for all operational sites. - - force within manufacturing locations is engaged with formal joint management worker health and safety com- - imum requirements. - - - management systems) standards. HEALTH, SAFETY AND ENVIRONMENTAL AUDITS 2024 Internal au dits performed 500 External audits performed 42 Total of internal audits performed 542 ACCOUNTING POLICIES (FOR HEALTH & SAFETY) WORK-RELATED ACCIDENTS - ical attention, resulted in work restrictions, resulted in This metric includes all employees (full-time, part-time and temporary workers). WORK-RELATED ILL HEALTH OR OCCUPATIONAL DISEASES medical professional and are deemed work-related and either resulted in days away from work, work restric- employees (full-time, part-time and temporary workers). INCIDENT RATE All work-related accidents and work-related ill health cases per 1,000,000 hours worked within the year. LOST DAYS day on which the case is reported is not counted. WORK-RELATED FATALITIES Work-related accident resulting in the death of an employee. This metric includes all employees (full-time, part-time, and temporary workers). ANNUAL REPORT 2024 // SOCIAL INFORMATION 92 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements KA’S UPSTREAM VALUE CHAIN - print through its 1,475 (2023: 1,590) direct material sup- pliers in 38 (39 in 2023) countries and 5,881 (6,900 in 2023) indirect suppliers in 43 countries (44 in 2023). With - micro to large enterprises. Local suppliers account for 88% of direct material purchase spend (up from 86% in 2023) and 97% of indirect spend. Through local purchas- - opment and employment while reducing environmen- - and 200 indirect suppliers) account for 80% of annual purchasing spend. A central corporate purchasing func- - tions, manages all procurement of components, goods, and services. WORKERS IN THE VALUE CHAIN ESRS S2 >1,400 DIRECT SUPPLIERS DIRECT SUPPLIERS INDIRECT SUPPLIERS OUR SUPPLY CHAINS AT A GLANCE ~5,800 INDIRECT SUPPLIERS 43 COUNTRIES 38 COUNTRIES TOTAL ANNUAL DIRECT MATERIAL PURCHASING PER REGION TOTAL ANNUAL INDIRECT MATERIAL PURCHASING PER REGION EMEA (EUROPE, MIDDLE EAST AND AFRICA) 55% of total annual purchase spend, of which 92% is purchased locally THE AMERICAS 28% of total annual purchase spend, of which 77% is purchased locally APAC (ASIA PACIFIC) 17% of total annual purchase spend, of which 97% is purchased locally EMEA (EUROPE, MIDDLE EAST AND AFRICA) 64% of total annual purchase spend, of which 99% is purchased locally THE AMERICAS 29% of total annual purchase spend, of which 94% is purchased locally APAC (ASIA PACIFIC) 7% of total annual purchase spend, of which 95% is purchased locally 28% THE AMERICAS EMEA APAC 55% 17% 29% THE AMERICAS 64% EMEA 7% APAC ANNUAL REPORT 2024 // SOCIAL INFORMATION 92 93 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IMPACTS, RISKS, AND OPPORTUNITIES non-employees of manufacturing suppliers (Tier 1 direct non-employees of service providers and non-product- - have any joint venture or special purpose vehicles. Further analysis and segmentation are planned to iden- workers who: > (see later) > through chemical handling or machine operation that require comprehensive occupational health and safety management systems and heightened awareness > and human rights awareness), such as migrant work- through risk assessments and awareness programs, - risks, and opportunities and the following pages outline IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE INADEQUATE WAGES IN PRODUCING COUNTRIES Potential negative impact Possible negative impacts through unintentional contribution to: Excessive working hours or low and non- > Supplier sustainability risk assessment contains working conditions as focus area > Benchmark tools of costs of workforce > Awareness raising with buyers and within the supply chain > On-site sustainability supplier audits focusing on working conditions > Resilience OCCUPATIONAL ACCIDENTS AND WORK- RELATED PHYSICAL AND MENTAL HEALTH Potential negative impact Possible negative impacts through unintentional contribution to: Limitations of social dialog, freedom of association, or collective bargaining, poor health and safety awareness. COLLECTIVE BARGAINING Financial risk rights/working rights non-compliance in the supply chain. OCCUPATIONAL ACCIDENTS, ABSENCE DAYS AND WORK- RELATED PHYSICAL AND MENTAL HEALTH Financial risk rights/working rights non-compliance in the supply chain. EMPLOYEE DEVELOPMENT AND CAREER OPPORTUNITIES Financial risk Financial risk of skill shortage/talent retention to keep up with the market (R&D, engineering). Company can lose its competitiveness, which can lead to market loss. > Awareness raising and including equal treatment, learning and development, and inclusivity in supplier sustainability risk assessments and on-site audits > Resilience EMPLOYEE DEVELOPMENT AND CAREER OPPORTUNITIES Opportunity Opportunity to create competitive advantage by highly trained workforce enabling battery electric vehicle shift with new products. Long-term effect on competitiveness and successful innovation. Skilled people will be attracted if education and training is good. FORCED LABOR Potential negative impact Possible negative impact through unintentional contribution during mineral sourcing: Forced or child labor. > Responsible mineral sourcing due diligence process and yearly data collection (with a special focus on smelters of concern regarding tin, tungsten, tantalum, gold, mica, and cobalt sources) > Country ESG supply chain risk and natural hazard risk pre-evaluation of suppliers > Awareness raising and including human rights and climate adaptation in supplier sustainability risk assessment CHILD LABOR AND FORCED LABOR Financial risk rights/working rights non-compliance in the supply chain. ANNUAL REPORT 2024 // SOCIAL INFORMATION 94 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements rather than as individual incidents. Beyond corporate - - - guidance. While no widespread or systematic negative - igence focuses on individual supplier assessment, devel- supply chain risk scores (from CountryRisk.io) are incor- porated in evaluations, particularly for regions with ele- may nevertheless impact human rights in the supply chain, making supplier awareness a key focus. KA’S APPROACH AND POLICIES supply chains in compliance with national laws and with - - tion risks throughout its value chain while supporting automotive and manufacturing sectors. Decent employ- ment includes: > Fair wages > > Safe working conditions > > Protected trade union rights - - - To facilitate implementation, supplier documenta- tions, risk assessment platforms and validation processes POLICIES AND REQUIREMENTS Suppliers are required to adhere to the same high stan- requirements for the supply chain are set out and com- and ethical requirements for suppliers and, in turn, their - ments were updated in 2024 to include new legal and industrial requirements and standards, especially regard- - - - - - in the value chain. All purchase orders generated through Framework Agreements. needed, updating policies accordingly. These documents and requirements align with rele- vant standards and guidelines: > > - > of minerals > Declaration on Fundamental Principles and > > - lowing legal requirements: » Norwegian (Transparency Act); Canadian Forced ANNUAL REPORT 2024 // SOCIAL INFORMATION 94 95 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - Directive (CSRD) » And other relevant environmental, social or ethical legislation or voluntary agreements. - rights topics from standards as well as material impacts and risks: > - ties, commitments, Code of Conduct, and grievance mechanisms > training on: » » » Business ethics » » > standards in the value chain, including consequences for PROCESSES, ACTIONS AND METRICS KA’S DUE DILIGENCE PROCESS AND RISK PRE-ASSESSMENT - HUMAN RIGHTS DUE DILIGENCE AT KONGSBERG AUTOMOTIVE DECLARATION OF PRINCIPLES > Code of Conduct > Supplier Sustainability Manual, Supplier Declaration > Human Rights Policy > Responsible Minerals Sourcing Position Statement > Purchase orders, framework agreements and the company’s website IMPACT AND RISK ASSESSMENT > I supply chain score assessments > Identifying potential risk groups and sites > Analysis of existing processes, rules, and tools > Double materiality assessment incl. impact on human rights and risk assessment > Business risk analysis > Supplier sustainability risk assessment RISK MANAGEMENT PROCESSES AND TOOLS > Legal compliance requirements from local laws and regulations with respect to international standards > development plans > Supplier on-site sustainability audits > Training and raising awareness among Purchasing staff and suppliers > Memberships and initiatives > Material compliance due diligence REACH/RohS etc.) MONITORING, WHISTLEBLOWING, AND GRIEVANCE MECHANISMS > SpeakUp® line > Central and local grievance and complaint mechanism > Business reviews > Analysis of data and risk assessment results > Benchmark and desktop research > Joining initiatives > Customer audit and assurance processes REPORTING AND COMMUNICATION > Self-assessment > Customer assessment (SAQ, EcoVadis, customer questionnaires) > Annual report > Accountability reports e.g. Transparency Act report, Modern Slavery Statement etc. > Sustainability report > Website CORRECTIVE ACTION PLAN AND DEVELOPMENT > Human Rights Steering Committee evaluation > Sustainability/ESG Committee evaluation > Appropriate corrective actions to prevent or minimize risks and negative impacts ANNUAL REPORT 2024 // SOCIAL INFORMATION 96 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - All suppliers are pre-assessed with a country ESG supply chain risk score. Suppliers with high spend/impact and/or high-risk exposure need to complete an external validated, evidence-based self-assessment questionnaire. This is also mandatory for all new suppliers and sourcing board decisions for new projects. Suppliers get a sustainability risk score based on the score received in the self- assessment. If the score is medium or high, they need to develop a corrective action plan and implement it within an agreed time frame. KA provides one-to-one development support on demand and proactively for potentially high-risk suppliers. SUPPLIER DEVELOPMENT THIRD-PARTY ONSITE AUDIT EXTERNALLY VALIDATED SELF-ASSESSMENT COUNTRY RISK ASSESSMENT Suppliers who remain with a high sustainability risk exposure need to cooperate need to develop a corrective action plan and implement it within an agreed time frame. If critical non-conformities are found, a follow-up audit may be conducted. RISK ASSESSMENT AND MANAGEMENT APPROACH Requirements for acknowledgment and acceptance of human rights and sustainability requirements - supplier declaration - - gate risks concerning human rights, the environment, and ethics. HUMAN RIGHTS AND SUSTAINABILITY DUE DILIGENCE WITHIN THE SUPPLY CHAIN AT KONGSBERG AUTOMOTIVE ANNUAL REPORT 2024 // SOCIAL INFORMATION 96 97 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - steps to improve performance. INDIRECT SUPPLIERS’ COUNTRY RISK SCORE BY SPEND DIRECT SUPPLIERS’ COUNTRY RISK SCORE BY SPEND LEVEL A LEVEL B LEVEL C 79.7% 2.5% 17.8% 81.9% 0.3% 17.8% - - uments information on governance and management approaches of suppliers in seven provided that suppliers can demonstrate a sound methodology and that the report com- prehensively covers all important topics, including the sharing of detailed assessment - governance and management systems, which will help them set up effective plans for including those related to human rights. All suppliers whose assessment scores indicate other training materials and events. Selected suppliers that do not sign the Supplier Declaration or fail to undertake the - function is working diligently to increase the response rates and performance of suppli- ers. A potential risk for incorrect or inaccurate reporting or ineffective implementation locations with a high risk potential and preferred suppliers with development needs. - process steps and topics. The audits also allow for validation of self-assessment results SUPPLIER COMPLIANCE RISK ASSESSMENT AND AUDITS - identify and manage any material environmental, social, and ethical risk as well as their performance when it comes to offering training for their workforce on relevant issues and communicating the necessary requirements to their own suppliers. This information is ANNUAL REPORT 2024 // SOCIAL INFORMATION 98 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SUPPLIER AUDITS ON BEHALF OF KONGSBERG AUTOMOTIVE REGARDING HUMAN RIGHTS AND SUSTAINABILITY REQUIREMENTS AND TOPICS > Compliance and governance: Legal and ethical compliance, grievance, whistleblowing, business conduct, nes, anti-corruption > Health and safety: Policies, processes, impacts and risks, PPE, training, health checks, hazards, accidents, prevention, rst aid > Environment: policies, processes, impacts and risks, training, GHG, energy eciency, waste, chemicals, recycling, renewables > Human and labor rights: Policies, processes, impacts and risks, training, recruitment, tracking, age, working hours, wages and benets, trade unions, collective bargaining, harassment, equal treatment, living wage > Responsible sourcing: Requirements and policies, impacts and risks, conict minerals due diligence, supplier’s adherence WORKERS INTERVIEW MANAGEMENT INTERVIEW DOCUMENT REVIEW OPENING MEETINGSCHEDULING PREPARATION PRE-CHECKLIST FOR SELF-ASSESSMENT IMPLEMENTATION AND DEVELOPMENT QUALITY ASSURANCE CORRECTIVE ACTION PLAN PREPARATION AND RELEASE CLOSING MEETING VALIDATING FINDINGS CLOSING MEETING VALIDATING FINDINGS - - - development actions. ANNUAL REPORT 2024 // SOCIAL INFORMATION 98 SITE/PLANT TOUR 99 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - ments and audits relate to the following areas: > supply chain, due to the following factors: » - suppliers present minimal actual risk, they need to documentation. (widespread, systematic) » - accordingly. (widespread, systematic) » - cient awareness of their importance or the require- ments, potentially posing human rights risks to awareness programs and individual supplier devel- opment. (individual incidents) > - - tal, health, and safety topics. (widespread, systematic) > » - sive overtime occurs primarily in jurisdictions permitting unlimited voluntary overtime – while - ual incidents) » systematic) » - rights. (systematic) » Suppliers, especially smaller ones, focus on legal minimum wages without living wage considerations minimum wages, making this more a potential than actual risk » and risk assessments are not performed to identify > towards their own suppliers, mostly due to lack of pro- suppliers, including potential actions and remediation ef- forts. The company maintains its commitment to high standards in human rights, working conditions, and ethi- - initiatives. The company is committed to transparent- make a positive impact. A formal escalation process provides guidance for ad- - - - termination. Business relationships continue when sup- - RESPONSIBLE MINERAL SOURCING - and environmental impacts, operating through two stra- tegic pillars: 1. Supply chain transparency: - conducts annual data collection from Tier 1 suppliers - with suppliers through email and phone calls, includ- to reduce smelters of concern. This process supports - The due diligence process includes supplier information and training, as well as encouragement of product-level ANNUAL REPORT 2024 // SOCIAL INFORMATION 100 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements 2. Industry and cross-industry partnership:- - ness Alliance), to leverage partnerships for shared solutions to industry-wide and enhance supplier responsiveness. 2022 2023 2024 # OF SUPPLIERS ASSESSED RESPONSE RATE 31-1-2023 # OF SUPPLIERS ASSESSED RESPONSE RATE 31-1-2024 # OF SUPPLIERS ASSESSED RESPONSE RATE 31-1-2025 CONFLICT MINERALS REPORTING 700 86% 524 85% 756 90% EXTENDED MINERALS REPORTING 69% 52% 125 64% 108 68% Note: The conict minerals due diligence campaign runs from May to January of the following year. Therefore, data reects campaign completion results rather than calendar year-end gures, enabling better comparison. - ing due diligence process: > Requiring and encouraging suppliers to provide product or part-level reporting, downstream stakeholders > > - ness, scheduled to launch in 2026. ENGAGING WITH WORKERS IN THE SUPPLY CHAIN - ment occurs through: > > > New tasks and issues > Ad hoc inquiries - risks, and opportunities. implementation. On-site audits of selected high-risk suppliers include worker interviews as the primary engagement method. including plans for corrective action as well as revisions of policies and processes. Where assessments are engaged through various formats: > After validation, suppliers automatically receive a comprehensive report of their Assurance. Suppliers can update their assessment at any time without charge to improve > When suppliers maintain high-risk scores without progressing to medium or low risk, - > corrective actions ANNUAL REPORT 2024 // SOCIAL INFORMATION ANNUAL REPORT 2024 // SOCIAL INFORMATION 100 101 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements - - and serve as an instrument to ensure supplier diversity Limited resources for audits and individual meetings affect comprehensive representation. This is compen- - REMEDIATION AND CHANNELS TO RAISE CONCERNS rights, through several channels: > report and record concerns (detailed in the Business > - - parency, trust, and effective remediation that is propor- tionate to the grievance that has occurred. Workers in resource, there is no evidence yet of supply chain work- - ply chain-related report was received in 2024. For more - Therefore, no remediation activities were required. TRAINING AND DEVELOPMENT, CAPACITY BUILDING, AND RESOURCES To ensure necessary resources to implement and strength- human rights standards in the supply chain, the company also engages in initiatives to raise awareness, share infor- - petencies among Purchasing staff. - ered training to Purchasing staff worldwide, covering - - ness through regular engagement with the internal pur- chasing community. capacity. To strengthen training effectiveness where processes - lowing improvements for 2025: > enhance access and monitoring > > Regular awareness campaigns > Topic presence at town halls to maintain commitment and motivation > Continued management participation in training Other functional areas receive general knowledge Awareness raising and development targets managers and professionals in addition to staff. The following list outlines training and development activities conducted > > Providing individual support meetings: Successfully improved risk scores for 34 of 60 high-risk suppliers in 2024 through enhanced due diligence > on supplier risk assessment processes, conducted with - > - incorporating awareness raising on governance and measurements across social, environmental, and eth- ical topics ANNUAL REPORT 2024 // SOCIAL INFORMATION 102 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Leadership Team meetings. As human rights and com- - cesses, and actions continue even during challenging - accelerate human rights initiatives and enhance positive general information chapter of this report. SUMMARY OF ACTIONS AND MAIN RESULTS > activities in the supply chain regarding human rights violations with reporting standard requirements, > risk scores: 60 high-risk suppliers received individ- 33 suppliers improved to medium risk level, with one - - igence through annual data gathering and monitoring. compliance targets while continuously taking action to strengthen processes and measurements, including Sourcing Board tracking process implementation and - ity risk assessment for indirect suppliers was initiated and piloted. > - and geopolitical nature, resulting in a rapidly changing Results are monitored continuously throughout the year annually. GOALS AND TARGETS REGARDING WORKFORCE IN THE SUPPLY CHAIN - action plans, and annual targets focus on preventing in the supply chain. Progress is monitored continuously and reviewed with the Purchasing Leadership team and - and effectiveness. While supply chain workers and their representatives are not directly engaged in target setting, engagement processes. Stakeholders can monitor prog- and concerns. - focus lies on qualitative rather than quantitative long- > throughout the value chain > > aiming to increase positive impact as well as prevent and mitigate individual incidents through awareness raising and targeted corrective actions. ANNUAL REPORT 2024 // SOCIAL INFORMATION 102 103 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements SHORT-TERM TARGETS REGARDING HUMAN AND LABOR RIGHTS WITHIN THE SUPPLY CHAIN MID-TERM TARGETS REGARDING HUMAN AND LABOR RIGHTS WITHIN THE SUPPLY CHAIN LONG-TERM TARGETS REGARDING HUMAN AND LABOR RIGHTS WITHIN THE SUPPLY CHAIN KA’s short-term targets mainly serve three goals: 1. Improving transparency and accountability in supply chain-related issues 2. Decreasing risk exposure through responsible supplier selection and supplier development 3. Increasing potential positive impact through awareness raising and knowledge sharing. See below for detailed one-year targets > Maintain transparency on supply chain sustainability performance, e.g. >90% Supplier Declaration acceptance; >90% supplier risk assessment coverage; 10-20 on-site audits per year etc. > Train and develop purchasing staff (>95% coverage) and suppliers’ decision-makers and professionals (target to be set for 2027 and later) on the importance of corporate sustainability and human and labor rights and provide practical support for development > Improve data and information access throughout the value chain to enable risk validation and targeted corrective action > Deepen supplier and stakeholder engagement with the aim to better understand, support, and protect workers in the supply chain > Improve positive impact through inclusive purchasing and social buying where appropriate > Have positive impact on local economic, employment, and working conditions > Engage with low-risk suppliers only when development > Minimize the number of individual incidents and their chances by effective supplier selection and development (e.g. less > Contribute effectively through transparency and due diligence to solve widespread, systematic negative impacts and risks KA’S MAIN KPIS AND ONE -YEAR TARGETS RELATED TO S2 - WORKERS IN THE SUPPLY CHAIN TARGET 2024 S TATUS 20 24 TARGET 2025 Percentage of direct material spend with suppliers that have accepted the Supplier Declaration >90% 86% >90% Percentage of direct material spend with suppliers that have a valid Sustainability Risk Assessment >85% 88% >85% suppliers (per external assessment) <10% 4% <5% Number of on-site sustainability supplier audits (initial audits conducted by third parties, follow-up audits conducted by second or third parties) 10 9 10 Maintain share of local sourcing in all regions for direct material suppliers >80% 88% >80% Quantitative results were calculated using the R12 year-end spend report All data is calculated, with no estimation or assumptions. Target setting and calculation methodologies remain consistent with the previous year. future. Status is monitored throughout the year to achieve and maintain these results. ANNUAL REPORT 2024 // SOCIAL INFORMATION 104 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements IMPACTS, RISKS, AND OPPORTUNITIES - - - ness partners. their management: Kongsberg Automotive (KA) is committed to conducting business with the highest standards of integrity and transparency. The company’s Code of Conduct reects its core values and sets the foundation for ethical behavior across all operations. KA believes that sustainable business success requires not only nancial performance but also adherence to the principles of honesty, accountability, and respect for human rights. IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE RESPONSIBLE MARKETING PRACTICES INCL. ASSURANCE AND LABELS, TAXES AND PROFIT SHARING Financial risk losing license to operate if not adequately contributing > Code of Conduct implementation and employee training > UN Global Compact membership > Supplier assessments and audits > Collaboration with suppliers CORRUPTION, BRIBERY AND ANTI-COMPETITIVE BEHAVIOR Financial risk Financial/legal/litigation risks due to global supply chain with lots of inherent risks for fraud, corruption, bribery, disruption of supply chain due to political reasons damage can be long-lasting. PROTECTION OF WHISTLEBLOWERS Financial risk Financial/legal/litigation risks due to global supply chain with lots of inherent risks for fraud, corruption, bribery, disruption of supply chain due to political reasons damage can be long-lasting. RESPONSIBLE MARKETING PRACTICES INCL. ASSURANCE AND LABELS Opportunity Responsible communication can be marketing tool for KA to improve its image, gain new customers, and new business. INFRASTRUCTURE Opportunity Financial sustainability is a precondition for long-term economic success. Contributing to the local community investments, etc., has a positive reputational impact. MANAGEMENT OF RELATIONSHIPS WITH SUPPLIERS Opportunity Opportunity through supplier engagement/localization to gain competitive advantage, create a more resilient supply chain, and achieve reputational gains. GOVERNANCE INFORMATION BUSINESS CONDUCT ESRS G1 ANNUAL REPORT 2024 // GOVERNANCE INFORMATION 105 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements POLICIES - porate culture is essential to maintaining high ethical - ing programs on topics such as anti-corruption, human empowering employees to make ethical decisions in their daily work. following principles: 1. 2. - and anti-corruption laws 3. information to stakeholders 4. their impact on society and the environment - - tions with stakeholders. This includes topics like general CORPORATE CULTURE treatment, anti-harassment, data privacy, and responsi- the content of the Code of Conduct. All employees includ- - with these guidelines. The Code of Conduct is approved Code of Conduct. ACTIONS, TARGETS AND METRICS - ance on the requirements of the Code of Conduct, which focuses on relevant ethical dilemmas to ensure every- training and guidance are delivered through classroom training, workshops, and an e-learning program. All new The completion rate of the Code of Conduct train- - - for these employees in order to enhance the completion rate calculation. ACCOUNTING POLICIES Completion rate of Code of Conduct training of the reporting period who received a Code of Conduct - attendance is tracked on paper locally. ANNUAL REPORT 2024 // GOVERNANCE INFORMATION 106 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements POLICIES - ery and corruption policy is laid out in the Code of Conduct. This includes offering, solic- All employees who have received training on the Code of Conduct are required to provide - - ACTIONS, TARGETS AND METRICS mandatory for all employees and potential at-risk functions are therefore included as well. - 2024 either. or its employees. ANTI-CORRUPTION AND BRIBERY ANNUAL REPORT 2024 // GOVERNANCE INFORMATION 107 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ACTIONS, TARGETS AND METRICS KA continues to encourage reporting suspected breaches of the Code of Conduct or any other unethical or illegal behavior and raises awareness of options within the Code of Conduct training. All cases reported are handled with objectivity and diligence. In 2024, five whistleblower reports were received of which four were resolved within the reporting year. SPEAKUP® LINE 2024 Whistleblower reports received and resolved 4 ACCOUNTING POLICIES Number of whistleblower reports received and resolved Compliance Committee within the reporting period. PROTECTION OF WHISTLEBLOWERS POLICIES - - ing concerns outside of the direct manager or People and Culture contact is clearly laid out in the Code of Conduct. the Code of Conduct itself. - appropriate action, and a reply is posted under the case - ters are reported to the Board of Directors. All concerns - MANAGEMENT OF RELATIONSHIP WITH SUPPLIERS INCLUDING PAYMENT PRACTICES - Workers in the value chain. Timely payments are crucial for ensuring supplier sus- industry practice and apply consistently across all supplier 75 days, with no legal proceedings for late payments. ACCOUNTING POLICIES Average number of days to pay invoice Number of outstanding legal proceedings for late payments ANNUAL REPORT 2024 // GOVERNANCE INFORMATION 108 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements ENTITY-SPECIFIC DISCLOSURES PRODUCT QUALITY AND SAFETY IMPACTS, RISKS, AND OPPORTUNITIES - - their management: IRO NAME IRO TYPE DESCRIPTION KA’S RESPONSE PRODUCT SAFETY (CUSTOMER) AND CONSUMER HEALTH (CUSTOMER) Financial risk products. Reputational damage can have severe impact. > Established product quality and safety organization at KA > Comprehensive product safety program implemented PRODUCT SAFETY (CUSTOMER) Opportunity High priority of safety for customers to customers. ACCESS TO AND AFFORDABILITY OF PRODUCTS AND SERVICES (CUSTOMER) Opportunity powertrain bigger part of overall thus accessibility of product). To ensure the highest level of product quality despite increasing product complexity, Kongsberg Automotive (KA) uses a certied quality management system as well as consistent quality controls and regularly optimized processes. POLICIES - ACTIONS, TARGETS AND METRICS - tem representatives at the manufacturing and development sites assume the implementa- group-wide reporting of relevant quality data ensures that accurate information on the - sequences in the case of safety-related components for vehicles or for industrial applica- series production through quality assurance measures and monitors conformity with its - previous year. ANNUAL REPORT 2024 // ENTITY-SPECIFIC DISCLOSURES 109 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements KPI BUSINESS AREA 2023 2024 Number of accepted customer complaints per M€ sales FCS 0.69 0.53 DCS 0.34 0.43 Number of non-conforming parts per million parts sold FCS 2.27 1.7 DCS 11 3.4 ACCOUNTING POLICIES ppm rate of defective parts for external customers ANNUAL REPORT 2024 // ENTITY-SPECIFIC DISCLOSURES Kongsberg, March 26, 2025 The Interim President & CEO and the Board of Directors of Kongsberg Automotive ASA Christian Johansson Interim President & CEO and CFO Junyang (Jenny) Shao Director Bård Klungseth Deputy Chair Olav Volldal Chair Synnøve Gjønnes Director Bjørn Ivan Ødegård Employee representative Siw Reidun Wærås Employee representative Brian Kristoffersen Director Knut Magne Alfsvåg Employee representative The comparative gures are not subject to limited assurance by Deloitte. 110 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements FINANCIA 4 FINANCIAL STATEMENTS ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 111 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..............................112 CONSOLIDATED STATEMENT OF CASH FLOWS ....113 CONSOLIDATED STATEMENT OF FINANCIAL POSITION .....................................114 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................116 NOTE 1 REPORTING ENTITY ..............................117 NOTE 2 STATEMENT OF COMPLIANCE ............... 117 NOTE 3 MATERIAL ACCOUNTING POLICIES .......117 NOTE 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS ...............................................126 NOTE 5 NEW STANDARDS AND INTERPRETATIONS .....................................127 NOTE 6 SUBSIDIARIES .......................................128 NOTE 7 SEGMENT INFORMATION .......................129 NOTE 8 SALARIES AND SOCIAL EXPENSES ......133 NOTE 9 OTHER INCOME AND OPERATING EXPENSES ......................................133 NOTE 10 FINANCIAL ITEMS ...............................134 NOTE 11 TAXES .................................................135 NOTE 12 INTANGIBLE ASSETS ..........................138 NOTE 13 PROPERTY, PLANT & EQUIPMENT (PP&E) ............................140 NOTE 14 RIGHT-OF-USE ASSETS ......................141 NOTE 15 IMPAIRMENT LOSSES ..........................142 NOTE 16 INVENTORIES ......................................144 NOTE 17 TRADE AND OTHER RECEIVABLES .....145 NOTE 18 SHARE CAPITAL ..................................147 NOTE 19 EARNINGS AND DIVIDEND PER SHARE........................................149 NOTE 20 RETIREMENT BENEFIT OBLIGATIONS ... 150 NOTE 21 INTEREST-BEARING LIABILITIES ........151 NOTE 22 OTHER NON-CURRENT INTEREST-FREE LIABILITIES .............................153 NOTE 23 RISK MANAGEMENT ............................153 NOTE 24 TRADE AND OTHER PAYABLES ...........156 NOTE 25 FINANCIAL INSTRUMENTS ..................157 NOTE 26 REMUNERATION AND FEES FOR MANAGEMENT, BOARD OF DIRECTORS (BOD) AND AUDITOR .....................................................158 NOTE 27 COMMITMENTS AND GUARANTEES ..... 158 NOTE 28 CONTINGENT LIABILITIES ...................159 NOTE 29 SUBSEQUENT EVENTS .......................159 NOTE 30 RELATED-PARTY TRANSACTIONS ......159 FINANCIAL STATEMENTS OF THE GROUP ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 112 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR NOTE 2024 2023 Operating revenues 7 788.2 884.9 Other income 9 5.0 1.5 Operating expenses Raw material expenses (343.2) (429.9) Change in inventories (21.0) 5.0 Salaries and social expenses 8 (234.6) (264.9) Other operating expenses 9 (150.9) (156.4) Depreciation 13, 14 (29.1) (31.9) Amortization 12 (0.7) (1.0) (Impairment losses) / reversal of impairment 12, 13, 14, 15 5.0 (27.0) Total operating expenses (774.5) (906.1) Operating profit / (loss) 18.7 (19.7) Financial items Financial income 10 2.6 4.8 Financial expenses 10 (23.6) (30.8) Net financial items (21.0) (26.0) Profit (loss) before taxes (2.3) (45.7) Income taxes 11 (15.9) (13.4) Net profit (loss) (18.2) (59.1) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME MEUR NOTE 2024 2023 Other comprehensive income Items that may be reclassified to profit or loss in subsequent periods: Translation differences on foreign operations 19.1 31.8 Items that will not be reclassified to profit or loss in subsequent periods: Translation differences on non-foreign operations (12.7) (32.3) Remeasurement of net PBO 20 (1.0) (0.5) Tax on net PBO remeasurement 11 0.2 0.1 Other comprehensive income 5.6 (0.9) Total comprehensive income for the year (12.6) (60.0) Net profit attributable to Equity holders (parent company) (18.2) (59.5) Non-controlling interests 0.0 0.4 Total (18.2) (59.1) Total comprehensive income attributable to Equity holders (parent company) (12.7) (60.1) Non-controlling interests 0.1 0.1 Total (12.6) (60.0) Earnings per share: Basic earnings per share, euros 19 (0.02) (0.06) Diluted earnings per share, euros 19 (0.02) (0.06) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 113 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements CONSOLIDATED STATEMENT OF CASH FLOWS MEUR NOTE 2024 2023 Operating activities Profit / (loss) before taxes (2.3) (45.7) Depreciation 13, 14 29.1 31.9 Amortization 12 0.7 1.0 Impairment losses / (reversal of impairment) 12, 13, 14, 15 (5.0) 27.0 Interest income and other financial items 10 (2.4) (1.9) Interest expenses and other financial items 10 21.6 16.9 Taxes paid (11.1) (14.7) (Gain) / loss on sale of non-current assets (2.0) (0.8) Changes in trade receivables 17 20.7 5.0 Changes in inventory 16 21.0 (5.0) Changes in trade payables 24 (31.8) (5.3) Currency differences 10 3.6 5.7 Difference between pension funding contributions paid/ pensions paid and the net pension cost 20 0.4 (1.2) Changes in other items (10.1) 8.6 Cash flow from operating activities 32.4 21.5 Investing activities Capital expenditures, including intangible assets 12, 13 (24.7) (28.5) Proceeds from sale of intangible and tangible assets 2.1 0.8 Interest received and other financial items 10 2.5 1.2 Investments in associates and other 17 (1.3) (2.6) Cash flow used by investing activities (21.4) (29.1) * Comprises changes in other receivables and other assets, other short-term liabilities, and provisions. MEUR NOTE 2024 2023 Financing activities Payments for purchase of treasury shares 18 (2.4) (3.9) Net proceeds from issuing new bond notes 21 107.5 0.0 Payments for redemption / repurchase of the old bond notes 21 (190.2) (9.4) Securitization facility drawn / (repaid) 21 25.0 0.0 Interest paid and other financial items 10 (21.9) (16.6) Dividends paid to the subsidiary’s minority interest (1.1) 0.0 Repayment of lease liabilities 21 (7.0) (9.8) Cash flow used by financing activities (90.1) (39.7) Currency effects on cash (1.3) (0.9) Net change in cash (80.4) (48.2) Net cash as at January 1 164.7 212.9 Net cash as at December 31 84.3 164.7 Of this, restricted cash 0.1 0.5 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 114 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSETS EQUITY AND LIABILITIES MEUR NOTE 2024 2023 Non-current assets Intangible assets, including Goodwill 12, 15 84.6 78.3 Property, plant and equipment 13, 15 117.3 115.8 Right-of-use assets 14, 15 54.8 55.0 Deferred tax assets 11 10.0 11.4 Investments accounted for using the equity method 17 0.7 2.1 Other non-current assets 17 2.0 2.0 Total non-current assets 269.4 264.6 Current assets Inventories 16 80.5 101.5 Trade and other receivables 17 154.3 177.3 Other current assets 17 14.4 13.4 Cash and cash equivalents 21 84.3 164.7 Total current assets 333.5 456.9 Total assets 602.9 721.5 MEUR NOTE 2024 2023 Equity Share capital 18 80.6 84.6 Treasury shares 18 (5.2) (3.2) Share premium 172.0 180.6 Other reserves 110.6 91.8 Retained earnings (158.3) (140.1) Attributable to equity holders 199.7 213.7 Non-controlling interests 3.3 4.4 Total equity 203.0 218.1 Non-current liabilities Deferred tax liabilities 11 25.4 21.0 Retirement benefit obligations 20 13.0 12.0 Interest-bearing liabilities 21 132.5 189.3 Non-current lease liabilities 14, 21 63.8 65.4 Other non-current interest-free liabilities 22 0.7 3.7 Total non-current liabilities 235.4 291.4 Current liabilities Current lease liabilities 14, 21 9.9 10.2 Current income tax liabilities 11 1.3 4.2 Trade payables 24 84.8 116.6 Other current payables 24 68.5 81.0 Total current liabilities 164.5 212.0 Total liabilities 399.9 503.4 Total equity and liabilities 602.9 721.5 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 115 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Olav Volldal Chair Brian Kristoffersen Director Bård Klungseth Deputy Chair Siw Reidun Wærås Employee representative Synnøve Gjønnes Director Knut Magne Alfsvåg Employee representative Junyang (Jenny) Shao Director Bjørn Ivan Ødegård Employee representative Kongsberg, March 26, 2025 The Interim President & CEO and the Board of Directors of Kongsberg Automotive ASA Christian Johansson Interim President & CEO and CFO ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 116 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements CONSOLIDATED STATEMENT OF CHANGES IN EQUITY MEUR SHARE CAPITAL TREASURY SHARES SHARE PREMIUM OTHER RESERVES RETAINED EARNINGS EQUITY HOLDERS OF THE PARENT NON-CON - TROLLING INTEREST TOTAL EQUITY Equity as at 01.01.2023 100.3 (23.9) 208.2 72.2 (80.6) 276.2 4.3 280.5 Purchase of treasury shares (3.9) (3.9) (3.9) Cancelation of treasury shares (9.0) 23.0 (14.0) 0.0 0.0 Share-based compensation 1.5 1.5 1.5 Total comprehensive income for the year: Loss for the year (59.5) (59.5) 0.4 (59.1) Other comprehensive income: Translation differences on foreign operations 32.1 32.1 (0.3) 31.8 Translation differences on non-foreign operations (6.7) 1.6 (13.6) (13.6) (32.3) (32.3) Remeasurement of net defined pension liability (0.5) (0.5) (0.5) Tax on remeasurement of net pension liability 0.1 0.1 0.1 Other comprehensive income (6.7) 1.6 (13.6) 18.1 0.0 (0.6) (0.3) (0.9) Total comprehensive income for the year (6.7) 1.6 (13.6) 18.1 (59.5) (60.1) 0.1 (60.0) Equity as at 31.12.2023 84.6 (3.2) 180.6 91.8 (140.1) 213.7 4.4 218.1 Purchase of treasury shares (2.4) (2.4) (2.4) Share-based compensation 1.1 1.1 1.1 Dividends allocated or paid 0.0 (1.2) (1.2) Total comprehensive income for the year: Loss for the year (18.2) (18.2) 0.0 (18.2) Other comprehensive income: Translation differences on foreign operations 19.0 19.0 0.1 19.1 Translation differences on non-foreign operations (4.0) 0.4 (8.6) (0.5) (12.7) (12.7) Remeasurement of net defined pension liability (1.0) (1.0) (1.0) Tax on remeasurement of net pension liability 0.2 0.2 0.2 Other comprehensive income (4.0) 0.4 (8.6) 17.7 0.0 5.5 0.1 5.6 Total comprehensive income for the year (4.0) 0.4 (8.6) 17.7 (18.2) (12.7) 0.1 (12.6) Equity as at 31.12.2024 80.6 (5.2) 172.0 110.6 (158.3) 199.7 3.3 203.0 Specification of constituent elements of equity: • Share capital: par value for shares in issue • Treasury shares: par value for own shares and premium over par value for own shares • Share premium: premium over par value for shares in issue • Other reserves: translation differ - ences, share options and OCI • Retained earnings: accumulated retained profits and losses • Non-controlling interests: NCI share in group’s equity ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 117 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 REPORTING ENTITY Kongsberg Automotive ASA (“the Company” or “the Parent Company”) and its subsidiaries (together “the group”) develop, manufacture, and sell products to the automotive industry worldwide. The Company is a limited liability company incorporated and domiciled in Norway. The address of its registered office is Dyrmyrgata 48, NO-3601 Kongsberg, Norway. The Company is listed on the Oslo Stock Exchange. The group’s consolidated financial statements were authorized for issue by the Board of Directors on March 26, 2025. NOTE 2 STATEMENT OF COMPLIANCE The group’s consolidated financial statements have been prepared in accordance with IFRS ® Accounting Standards (IFRS) and IFRIC interpretations as endorsed by the EU. NOTE 3 MATERIAL ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial state- ments are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Basis of preparation The consolidated financial statements have been prepared on a historical cost basis except for certain financial instruments that are measured at fair value, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability the group considers the characteristics of the asset or liability if mar- ket participants would do so. Fair value for measurement and/or disclosure purposes in these consol- idated financial statements is determined on such basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transactions within the scope of IFRS 16, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 or value-in-use in IAS 36. In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurement are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows: • Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can access at the measurement date, • Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly, and • Level 3 inputs are unobservable inputs for the asset or liability. Basis of consolidation The consolidated financial statements comprise the financial statements of Kongsberg Automotive ASA and its subsidiaries as of December 31 each year. The financial statements of subsidiaries are prepared for the same reporting periods as the Company, using consistent accounting principles. The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries) made up to December 31 each year. Control is achieved when the Company: • has the power over the investee, • is exposed, or has rights, to variable returns from its involvement with the investee; and • has the ability to use its power to affect its returns. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Parent Company obtains control directly or indirectly, and continue to be consolidated until the date when such control ceases. All intra-Group assets and liabilities, equity, income, expenses, and cash flows relating to transactions between members of the group are eliminated in full. Changes in the Parent Company’s direct or indirect ownership interests in subsidiaries that do not result in losing control of the subsidiaries are accounted for as equity transactions. The carrying amounts of the controlling interests and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is rec- ognized directly in equity and attributed to owners of the Parent Company. If the Parent Company loses its direct or indirect control of a subsidiary, the group should recog- nize a gain or loss on the loss of control in the income statement, which is calculated as the difference ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 118 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements between (i) the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including Goodwill), and liabilities of the subsidiary and any non-controlling interests. All components of the other comprehensive income (OCI) that are attributable to the subsidiary are to be reclassified on the loss of control from the equity to the income statement or directly to retained earnings. Business combinations Business combinations are accounted for using the acquisition method. The consideration trans- ferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the group, liabilities incurred by the group to the former owners of the acquiree, and the equity interests issued by the group in exchange for con- trol of the acquiree. Acquisition-related costs are recognized in the income statement as incurred. At the acquisition date, the identifiable assets acquired and liabilities assumed are recognized at fair value, except as noted below: • Deferred tax assets or liabilities arising from assets acquired and liabilities assumed shall be recognized or measured in accordance with IAS 12, • Liabilities related to the acquiree’s employee benefit arrangements shall be recognized and measured in accordance with IAS 19, • Right-of-use assets and lease liabilities shall be recognized and measured in accordance with IFRS 16, • A liability or an equity instrument related to share-based payment transactions of the acquiree or the replacement of an acquiree’s share-based payment transactions with share-based payment transactions of the acquirer shall be measured in accordance with IFRS 2, and • Assets classified as held for sale and discounted operations are measured in accordance with IFRS 5. Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Non-controlling interests that are present ownership interests and entitle their holder to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured at fair value or a non-controlling interests’ proportionate share of the rec- ognized amounts of the acquiree’s identifiable net assets. As of December 31, 2024, there is a non-controlling interest recognized only in one subsidiary. The group has chosen to measure this at the proportionate share of the recognized amounts of the acquiree’s identifiable net assets. Goodwill Goodwill arising from business acquisitions is carried at cost established at the acquisition date, less accumulated impairment losses (if any). For the purposes of impairment testing, Goodwill is monitored by the management at the level of each of the group’s cash-generating units (CGUs), which are part of the respective operating seg- ments identified in note 7. A cash-generating unit to which Goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of Goodwill allocated to the unit and then the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for Goodwill is recognized directly in the income statement and is not reversed in subsequent periods. On disposal of the relevant cash-generating unit, the attributable amount of Goodwill is included in the determination of the income statement on disposal. Investments in associates An associate is an entity over which the group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operat - ing policy decisions of the investee but does not constitute control or joint control over those policies. An investment in an associate is accounted for using the equity method from the date on which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint venture, any excess of the cost of the investment over the group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognized as Goodwill, which is included within the carrying amount of the investment. Under the equity method, an investment in an associate is recognized initially in the consolidated statement of financial position at cost and adjusted thereafter to recognize the group’s share of the profit or loss and other comprehensive income of the associate or joint venture. The statement of profit or loss reflects the group’s share of the results of operations of the associ- ate. The aggregate of the group’s share of profit or loss of an associate and a joint venture is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the associate or joint venture. NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 119 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Functional and presentation currency In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency are recognized using exchange rates at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the year-end exchange rates. Non-monetary items carried at fair value that are denominated in foreign currencies are translated using the exchange rates at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. For presentation purposes, the assets and liabilities of the group’s foreign operations are trans- lated into Euro using the exchange rates at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income, accumulated in equity, and attributed to non-controlling interests as appropriate. On the disposal of a foreign operation, all the exchange differences accumulated in equity in respect of that operation attributable to the owners of the parent company are reclassified to the income statement. Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated using the exchange rate at the end of each reporting period. Exchange differences arising are recognized in comprehensive income. Exchange differences on monetary items are recognized in the income statement (in financial items) in the period in which they arise except for monetary items receivable from or payable to a foreign oper - ation for which the settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation). These are recognized initially in other comprehensive income and reclassified from equity to the income statement on the repayment day of the monetary items. The group presents its consolidated financial statements in euros. The presentation currency of the parent company is euro, while its functional currency is Norwegian krone. The reason for the use of euros is to enable all amounts in the published financial statements of both the group and the Company to be presented in the same currency. All financial information presented in euros has been rounded to the nearest thousands, except when otherwise indicated. Segment information Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the group’s Executive Committee (led by the CEO). Intangible assets other than Goodwill Internally generated intangible assets ‒ research and development expenditure Research expenditures are expensed as incurred. An internally generated intangible asset arising from the development of specific projects is recognized only when all the following criteria can be demonstrated: • the technical feasibility of completing the intangible asset so that it will be available for use or for sale • the entity’s intention to exercise the right to use or to sell the asset • the entity’s ability to use or sell the intangible asset • the entity’s asset will generate probable future economic benefits • the availability of adequate resources to complete the development and to use or sell the asset • the entity’s ability to reliably measure the expenditure incurred during its development The amount initially recognized for the internally generated asset is the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no internally generated intangible asset can be recognized, development expenditure is recognized in the income statement in the period in which it is incurred. After initial recognition, internally generated intangible assets are reported at cost less accumu- lated amortization and accumulated impairment losses. The amortization period is five years. Software Costs associated with maintaining computer software are expensed as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the group are recognized as intangible assets when the above-mentioned criteria are demonstrated to be fulfilled. Development expenses that do not meet these criteria are expensed as incurred and are not rec- ognized as an asset in a subsequent accounting period. Software costs are amortized over their estimated useful lives, which shall not exceed three years. Other intangible assets – acquired in a business combination Intangible assets acquired in a business combination and recognized separately from Goodwill are initially recognized at their fair value at the acquisition date, which is regarded as their cost. After initial recognition, intangible assets are reported at cost less accumulated amortization and accumulated impairment losses. The useful life of patents is considered to be up to 21 years. The useful life of customer relation- ships is estimated to be 10 years. NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 120 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Property, plant & equipment (PP&E) PP&E are stated at historical cost less accumulated depreciation and impairment losses. The assets are depreciated over their useful economic lives using the straight-line method. Historical costs include expenditures that are directly attributable to the acquisition of the asset and to make the non-current asset available for use. Subsequent costs, such as repair and mainte- nance costs, are expensed when incurred unless increased future economic benefits arise as a result of repair and maintenance work. Such costs are recognized in the Statement of Financial Position as additions to non-current assets. Straight-line depreciation is calculated at the following rates: • Land n/a • Buildings 3–4% • Production machinery and tooling 10–25% • Computer equipment 33% Right-of-use assets and lease liabilities The group leases various manufacturing facilities, offices, warehouses, equipment, and vehicles. Rental contracts are typically made for fixed periods of 6 months to 10 years but may have extension or termination options. Contracts may contain both lease and non-lease components. The group allocates the considera- tion in the contract to the lease and non-lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. The group has applied the practical expedients provided by IFRS 16 to exclude low-value assets and short-term leases (term of up to 12 months). The lease payments associated with these leases are charged to the income statement on a straight-line basis and are reported under cash flow from operating activities in the statement of cash flows. In addition, the expedient to include non-lease components, such as service costs, in the lease calculation has been applied. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments: • fixed payments (including in-substance fixed payments), less any lease incentives receivable, • variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date, • amounts expected to be payable by the group under residual value guarantees, • the exercise price of a purchase option if the group is reasonably certain to exercise that option, and • payments of penalties for terminating the lease, if the lease term reflects the group exercising that option. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. The lease payments should be discounted using: • the interest rate implicit in the lease; or • if the interest rate implicit in the lease cannot be readily determined, the lessee’s incremental borrowing rate. The interest rate implicit in the lease is likely to be like the lessee’s incremental borrowing rate in many cases. This is because both rates, as they are defined in IFRS 16, take into account the credit standing of the lessee, the length of the lease, the nature and quality of the collateral provided and the economic environment in which the transaction occurs. In June 2024, the group secured a new bond with a floating rate. Management determined that the previous update to the group incremental borrowing rate was still applicable given the coupon rate of the new bond in addition to the fact that no new significant leases were signed in 2024. Going forward, based on the floating rate nature of the bond and the current interest rate climate, the IBR will be assessed annually. The group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease pay - ments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset. Lease payments are allocated between principal payments and finance cost. The finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. For the classification in the statement of cash flow, the interest payments on the lease liabilities follow the same principles as other interests. Right-of-use assets are measured at cost comprising the following: • the amount of the initial measurement of the lease liability, • any lease payments made at or before the commencement date less any lease incentives received, • any initial direct costs, and • restoration costs. Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. If the group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life. The group assesses its NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 121 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) right-of-use assets for impairment after any significant changes in operations as well as on an annual basis. This assessment of individual right-of-use assets for impairment is performed in addition to the group’s overall impairment testing. Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in the income statement. Short-term leases are leases with a lease term of 12 months or less. The group uses tooling equipment that is owned by specific customers to produce parts for the customer. Under the new standard, these contracts do not constitute a lease as the group has no authority to direct the use of the equipment. Taxes on leases In most of the jurisdictions in which the group operates, tax deductions are received for lease pay- ments as they are paid, thus the tax base of the right-of-use asset as well as the lease liability is zero at the inception of the lease. Subsequently, as the straight-line depreciation of the assets exceeds the rate at which the debts reduce, a net liability arises resulting in a deductible temporary difference on which a deferred tax asset is recognized if recoverable. Impairment of PP&E, intangible assets (other than goodwill) and right-of-use assets The group tests on each reporting date whether these assets have suffered any impairment as well as if any indication arises, due to changes in circumstances, that the carrying amount is not fully recoverable. The recoverable amount of the asset is determined in order to assess the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a rea - sonable and consistent basis of allocation can be identified, corporate assets are also allocated to indi- vidual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. The recoverable amount of an asset is the greater of its fair value less costs of disposal and its value- in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recov - erable amount. An impairment loss is recognized immediately in the income statement. Upon indication that an impairment loss subsequently may no longer exist or may have decreased, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, however not exceeding the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. Assets held for sale and disposal groups held for sale Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for- sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use and they are available for immediate sale in their present condition. Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortized or depreciated. The restatement of prior-year balances in the statement of financial position is not required by IFRS 5. Discontinued operation A discontinued operation is a component of the group’s business that has either been disposed of or is classified as held for sale and • represents a separate major line of business or geographic area of operations; • is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations; or • is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement of com- prehensive income is re-presented as if the operation had been discontinued from the start of the comparative year. Inventories Inventories are stated at the lower of cost and net realizable value. Cost of inventories are determined at standard cost with capitalizable variances being capitalized at balance sheet date. Cost of raw materials comprise purchase price, inbound freight, and import duties. Cost of finished and semi-finished goods includes variable production costs and fixed costs allocated on normal capacity. Interest costs are not included. Net realizable value represents the estimated selling price for inven- tories less all estimated costs of completion and costs necessary to make the sale. Value adjustments are made for obsolete materials and excess stock. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 122 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Financial instruments Financial assets and financial liabilities are recognized when a group entity becomes party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in the income statement. Financial assets Subsequent measurement All recognized financial assets are subsequently measured at either amortized cost or fair value based on the business model for managing the financial assets and the contractual cash flow charac- teristics of the financial assets. The group holds loans and receivables (including trade receivables and other receivables, bank balances and cash) within the business model that aims to collect the contractual cash flows. Consequently, these assets are subsequently measured at amortized cost using the effective interest method, less any potential impairments. Amortized cost and effective interest method The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. Impairment of financial assets The group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortized cost. For trade receivables the group applies the simplified approach which requires expected lifetime losses to be recognized from initial recognition of the receivables. See note 17 for further details. Derecognition The group derecognizes a financial asset when the contractual rights to the cash flow from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of owner- ship of the asset to another party. Financial liabilities The group recognizes and measures its financial liabilities (including borrowings and trade and other payables) at amortized cost using the effective interest method. The effective interest method is a method of calculating the amortized cost of a debt instrument and allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or dis- counts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. The group derecognizes financial liabilities when, and only when, the group’s obligations are dis- charged, canceled, or have expired. The difference between the carrying amount of the financial lia- bility derecognized and the consideration paid and payable is recognized in profit or loss. Taxes payable and deferred taxes The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. The current tax payable is based on taxable profit for the year. Taxable profit differs from “profit before tax” because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The group’s current income tax charge is calculated on the basis of the tax laws enacted in the countries in which the Company’s subsidiaries operate. Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated finan- cial statements, using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the deferred tax asset is realized, or the deferred tax liability settled. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available, against which the temporary differences can be utilized. Deferred tax positions are netted within the same tax entity. Employee benefits ‒ retirement benefit cost and termination benefits Payment to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions. NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 123 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements For defined benefit retirement plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable), and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the income state- ment. Past service cost is recognized in the income statement when the amendment of a plan occurred. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows: • service cost (including current service cost, past service cost, as well as gains and losses on curtail- ment and settlements), • net interest expense or income on benefit obligations and/or plan assets, • remeasurement, and • administration costs. The group presents the first two components of defined benefit cost in the income statement in the line item salaries and social expenses. Curtailment gains and losses are accounted for as past service costs. The retirement benefit obligation recognized in the statement of financial position represents the actual deficit or surplus in the group’s defined benefit plans. Any surplus resulting from this calcula- tion is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans. A liability for termination benefits is recognized at the earlier of when the entity can no longer withdraw the offer or the termination benefit or when the entity recognized any related restructur- ing costs. Pension plans in the group The Company and its Norwegian subsidiary Kongsberg Automotive AS have defined benefit and defined contribution pension plans. The plans were changed from defined benefit to defined contri- bution in 2004. The defined benefit plan was continued for employees who had already retired. Defined benefit pension plans also exist in two subsidiaries in Germany (closed pension plans for both German subsidiaries), one subsidiary in France, and one subsidiary in Switzerland. The other subsidiaries have either no pension plan or defined contribution pension plans for employees. The former early-retirement arrangement in Norway was replaced in 2011. Financing of the early-re- tirement arrangement is now done by an annual fee, which represents the final cost for the compa- nies included. The arrangement is defined as a multi-employer plan and is accounted for as a defined contribution pension plan. Norwegian employees are included in this scheme. The defined contribution plans in Norway have legislative limitations when it comes to maxi- mum salary as a calculation basis for tax-deductibility. Norwegian employees with salaries that exceed this limit will be granted an addition to the pension that includes the salary above the maxi- mum limit. This obligation will only materialize if the person is employed in the Company at the time of retirement. This plan is accounted for as a defined benefit pension plan. In the case of defined contribution plans, the contributions are recognized as expense in the period in which they occurred. Short-term and other long-term employee benefits A liability is recognized for benefits employees are entitled to in respect of wages and salaries, annual leave, and sick leave for the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for the service. Liabilities recognized in respect of short-term employee benefits are measured at the undis- counted amount of the benefits expected to be settled before twelve months after the end of the reporting period in exchange for the related service rendered during the financial reporting period. Termination benefits are considered a separate category of employment benefits because the event that gives rise to an obligation is the termination of employment rather than employee service. Termination benefits are typically lump-sum payments, but sometimes also include salary pay- ments until the end of a specified notice period if the employee renders no further service that pro- vides economic benefits to the entity. Termination benefits are accrued for upon signature of the contract. Share-based payments KA has a share-based remuneration plan for eligible top executives. Like the plans granted in 2022 and 2023, the LTI plan granted in 2024 consists of two equity instruments, Performance Stock Units (PSU) and Restricted Stock Units (RSU). Both instruments are based on a service condition to vest. The PSU may be exercised at the earliest three years after the grant date. In addition, the PSU is based on three performance conditions: total shareholder return (TSR) versus a defined peer group, one financial target, and one ESG target. There is no obligation for the employer to settle the RSU and/or PSU in cash. NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 124 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Equity-settled share-based payments to employees and others providing services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 18. Provisions Provisions are recognized when a) the group has a present obligation (legal or constructive) because of a past event, b) it is probable that the group will be required to settle the obligation, and c) the amount of the obligation can be reliably estimated. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties sur- rounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, the carrying amount is the present value of those cash flows (when the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recov- ered from a third party, a receivable is recognized as an asset only if it is virtually certain that reim- bursement will be received, and the amount of the receivable can be measured reliably. Onerous contracts Present obligations arising under onerous contracts are recognized and measured as provisions. An onerous contract is considered to exist where the group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under the contract. Restructuring provisions A restructuring provision is recognized when the group has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restruc- turing by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity. Warranties Provisions for expected cost of warranty obligations under local sale of goods legislation are recog- nized, at management’s best estimate of the expenditure required to settle the group’s obligation. As soon as a claim is raised and agreed to by KA, the provision to date is recognized based on the esti- mated defective parts sold so far and warranty costs are continued to be recorded on the ongoing sales until the underlying issue is solved. The estimate of warranty-related costs is reviewed and revised quarterly. Government grants Government grants are not recognized until there is reasonable assurance that the group will comply with the conditions attached to them and that the grants will be received. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the group with no future related costs are recognized in profit or loss in the period in which they become receivable. Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the entity after deducting all its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs. Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in the income statement on the purchase, sale, issue or cancela- tion of the Company’s own equity instruments. Revenue recognition The group is in the business of providing products to the global vehicle industry. In doing so, the group provides services covering engineering and tooling, as well as the manufacturing and delivery of automotive parts. Engineering services are the development of customized designs in collabora- tion with the customer. Tooling is the provision of tools such as cutting tools and molds needed in manufacturing of parts. Tooling can be highly customized or developed to produce standardized products to a wider range of customers. Product parts are the continuous supply of automotive parts such as shifters, shifter cables, drive control systems, and fluid handling systems. Engineering, tooling, and product sales may be contracted in separate agreements (concluded at different points in time) or may be contracted in one agreement. In either case any binding obliga- tion for the customer with respect to parts is created only upon issuance of purchase orders. The group has determined that engineering, tooling, and the delivery of product parts are separate and distinct for the customer and therefore constitute separate performance obligations under IFRS 15, which are fulfilled upon transfer of control. As is normal in the automotive industry, the customer NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 125 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements does not guarantee that it will purchase a minimum quantity of parts. The prices agreed in the con- tracts for the single performance obligations are considered to be the stand-alone selling prices and are therefore used for recognizing revenue. Engineering Before manufacturing and sale of automotive parts start, the group normally undertakes application engineering to tailor the design of a part to customer needs. Where the control resulting from the engineering is transferred to the customer, the group recognizes any consideration received from the customer as revenue. The group has determined that the performance obligation from the engineer- ing is satisfied at a point in time and upon transfer of control over the results of the engineering. Transfer of control normally takes place when engineering is complete, and the tooling phase is initi- ated. Consideration received from the customer may be agreed as installments following the pro- gress of the engineering, as a lump-sum payment upon completion of the engineering phase or may be explicitly included in the piece price over a certain specific sales volume. Consideration received in advance is deferred and recognized as contract liability. Any consideration to be received through the allocation to the piece price is recognized as revenue and accrued as a receivable upon transfer of control to the customer only if the consideration for the engineering is a guaranteed amount. Tooling After the engineering phase, and before manufacturing and sale of automotive parts start, the group manufactures, or has manufactured, the tooling for use in the subsequent production of automotive parts. Where the control of tooling is transferred to the customer, the group recognizes any consider - ation received from the customer as revenue. The group has determined that the tooling performance obligation is satisfied at a point in time and upon finally approved transfer of control over the tooling to the customer. Transfer of control normally takes place in connection with start of production of the automotive parts. Consideration from the customer may be agreed as installments following the manufacturing progress of the tooling, as a lump-sum payment upon final approval of the tooling by the customer or may explicitly be included in the piece price. Revenue is recognized at a point in time upon transfer of control and final approval of the tooling by the customer. Consideration received in advance of transfer is deferred and recognized as a contract liability. Any consideration to be received through piece price is recognized as revenue and accrued as a receivable upon approval of the tooling by the customer only if the consideration for the tooling is a guaranteed amount. Product sales The sale of manufactured automotive products is satisfied upon transfer of control of the automotive products to the customer, which in general is upon delivery to the customer. Each delivery is consid- ered as a performance obligation that is satisfied at a point in time. Variable consideration Revenue will be recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. A few contracts with customers entitle the customer to price reductions after exceeding defined volume thresholds per year. Such variable considerations are estimated based on continuously updated volume projections. As is common industry practice, most of the contracts have variable elements in the form of year- on-year price reductions or staggered rebates. The group has determined that the price reductions reflect the competition in the industry and therefore are not to be considered as a loyalty bonus. Revenue recognition is therefore based on the sales price for each delivery to the customer. Warranty obligations The group generally provides warranties for general repairs and does not provide extended warran- ties in its contracts with customers. As such, most existing warranties will be assurance-type war- ranties under IFRS 15, which will continue to be accounted for under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, consistent with its current practice. Incremental contract costs Incremental costs are costs that would not have been incurred had that individual contract not been obtained, e.g., nomination fees. These costs are recognized as an asset if they are expected to be recovered from the customer through the awarded contract. An asset recognized as part of the capitalization of contract costs is amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. In case of nomination fees, the recognized amortization for the period shall be presented as a reduction of the external sales and recorded on the appropriate income statement account. NOTE 3 MATERIAL ACCOUNTING POLICIES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 126 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS In application of its accounting policies, the group is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities which are not readily available from other sources. The estimates and judgments are based on historical experience and other fac- tors, including expectations of future events that are deemed to be reasonable under the circum- stances. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods. Critical judgments in applying accounting policies The following are the critical judgments that the group has made in the process of applying the group’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements. Lease extension and termination options The group has a number of leases with options to terminate early or extend the term of the lease. When determining the lease liability of the group, the following principles were applied to options. No leases will be terminated early as the leases are necessary for regular operations of the group unless there are clear indications otherwise. All extension options on buildings and equip- ment used in production, sales and engineering have been included in the lease liability as these are core operations which require significant investment to move and are therefore reasonably certain to be kept in use for as long as possible under current conditions, unless there are clear indications otherwise. Leases used in administrative and supporting functions were determined to be more flexible and were therefore individually assessed by management to determine if they met the reasonably certain criteria. Incremental borrowing rate used to discount the lease payments More than 90% of the value of right-of-use assets relates to buildings. As any lease building by any subsidiary (lessee) requires a guarantee from the group, the credit standing of any lessee does not exceed the group’s credit standing. In addition, in June 2024, the group issued a new bond with a floating interest rate. Management determined that the previously updated group incremental borrowing rate remained appropriate, given the coupon rate of the new bond and the fact that no significant new leases were entered into in 2024. Looking ahead, considering the bond’s floating rate and the prevailing interest rate environ- ment, the IBR will be evaluated annually. Consolidation of SPE On September 25, 2020, the Company entered into an accounts receivable securitization program (the “Program”) where trade receivables generated by the Company’s subsidiaries in the United States, Canada, Slovakia and Poland were sold to Kongsberg Automotive Finance B.V., a special purpose entity domiciled and incorporated in the Netherlands (the “SPE”). As sales of the Company’s products to cus - tomers occurred, trade receivables were sold to the SPE at an agreed upon purchase price. Part of the con- sideration was received upfront in cash and part was deferred in the form of senior subordinated and junior subordinated loans notes issued by the SPE to the Parent Company and Kongsberg Automotive AS. In determining whether to consolidate the SPE, the Company has evaluated whether it has control over the SPE, in particular, whether it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Receivables are sold to the SPE under a true sale opinion with legal interest transferred from the selling subsidiaries to the SPE. While the sale of receivables to the SPE is without credit recourse, the Company continues to be exposed to the variable returns from its involvement in the SPE as it is exposed to credit risk as a subordinated lender to the SPE and it earns a variable amount of remunera - tion as master servicer of the receivables, as well as any excess return from additional service fee, including the loss or gain due to the effect of foreign exchange rates. As master servicer, the Company is responsible for the cash collection and management of any impaired receivables. Therefore, the Company is considered to have control over the SPE as it is exposed to variable returns and has the ability to affect those returns through its power over the investee. As a result of consolidating the SPE, the trade receivables purchased by the SPE are included in the Company’s consolidated statement of financial position, along with loans (see note 21) and cash held by the SPE. Key sources of estimation uncertainty The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Impairment Determining whether goodwill and other assets are impaired requires an estimation of the value-in- use of the cash-generating units to which these assets have been allocated. The value-in-use calcula- tion requires the group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Where the actual future cash flows are less than expected, a material impairment loss may arise. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 127 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements The cash-generating units in the group are the business units (Drive Control Systems segment: On-Highway, Off-Highway, Electronic Actuators and Headrest; Flow Control Systems segment: Fluid Transfer System and Couplings; Driveline segment (reported under “Other operations”)). The fore- casts of future cash flows are based on the group’s best estimates of future revenues and expenses for the cash-generating units to which these assets have been allocated. Various assumptions and esti- mates can have significant effects on these calculations and include parameters such as macroeco- nomic assumptions, market growth, business volumes, margins, and cost effectiveness. Changes to any of these parameters, following changes in the market conditions, competition, strategy or other factors, affect the forecasted cash flows and may result in impairment. The carrying amount of Goodwill as at December 31, 2024 was MEUR 73.8 (2023: MEUR 70.7). No impairment losses were recognized in 2024. In 2023 impairment losses on other assets than the Goodwill of MEUR 27.0 were recognized in the Driveline Segment. In 2024, a number of these previ- ously impaired assets were repurposed to be used in the manufacturing of products in core business segments. The impairment of these assets has been reversed in the amount of MEUR 5.0 and they were placed back on their original depreciation schedules under their new business unit. Details of the impairment test are set out in note 15. Climate change Kongsberg Automotive faces both climate change-related risks and opportunities arising from cli- mate change itself and from actions taken in climate change mitigation. These are embedded in the Company’s risk management and business strategy. The financial implications of risks of climate change can be classified into two types of risks: physical risks and transition risks. Physical risks are related to the increase and severity of extreme weather and long-term climate changes. Transition risks are related to decarbonization including new technological advances and requirements imposed by regulators or public opinion. Both are considered in the Company’s risk assessment as part of the annual budget process and in impair- ment testing at year end. There is still significant uncertainty about the future financial impact of climate risks and opportunities. During the budget process, several scenarios are considered, and the best estimate is included in the assumptions for the final budget. In addition to the annual assessment, climate change governance is embedded in the group’s structure with operational and strategic climate change issues raised being reviewed regularly by the designated bodies. As at year-end 2024, climate risk changes have not resulted in adjustments to the useful lives of long-term assets. Further, climate-related risk considerations have not resulted in adjustments of the carrying amounts of assets or liabilities. NOTE 4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (CONTINUED) NOTE 5 NEW STANDARDS AND INTERPRETATIONS New and amended standards and interpretations The group applied for the first-time certain amendments to the standards, which are effective for annual periods beginning on or after January 1, 2024. The group has not chosen to adopt any stand- ards, interpretations or amendments early that have been issued but are not yet effective. New and amended IFRS Standards that are effective for the current year The adoption of the following standards and interpretations has not had any material impact on the disclosures or on the amounts reported in these financial statements: • Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements • Amendments to IAS 1 – Classification of Liabilities as Current or Non-current • Amendments to IAS 1 – Non-Current Liabilities with Covenants • Amendment to IFRS 16 – Lease Liability in a Sale and Leaseback New and amended standards and interpretations not yet adopted At the date of the authorization of these financial statements, the group has not applied the follow- ing new and revised IFRS Standards that have been issued but are not yet effective: • Amendments to IAS 21 – The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability (effective from January 1, 2025) • Amendments to IFRS 9 and IFRS 7 – Classification and Measurement of Financial Instruments (effective from January 1, 2026) • IFRS 18 – Presentation and Disclosure in Financial Statements (effective from January 1, 2027) • IFRS 19 Subsidiaries without Public Accountability: Disclosures (effective from January 1, 2027) The group does not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the group in future periods. Even though IFRS 18 will not impact the recognition and measurement of items in the financial statements, its impacts on pres- entation and disclosure are expected to be pervasive, in particular those related to the statement of comprehensive income, the statement of cash flows, and the provision of management-defined per- formance measures within the financial statements. The group is currently working to identify all impacts the amendments will have on the primary financial statements and notes to the financial statements. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 128 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 6 SUBSIDIARIES CONSOLI-OWNED COUNTRY OF OWNER-DATION BY ENTITY NAME INCOR PORA TIONSHIPMETHODCOMPANYKongsberg Automotive Ltda Brazil 100% Full XKongsberg Inc Canada 100% FullKongsberg Automotive (Wuxi) Ltd China 100% Full XShanghai Kongsberg Automotive China 75% FullDong Feng Morse Co LtdKongsberg Driveline Systems SAS France 100% FullKongsberg Raufoss Distribution SAS France 100% FullSCI Immobilière La Clusienne France 100% FullKongsberg 1 GmbH Germany 100% FullKongsberg Actuation Systems GmbH Germany 100% FullKongsberg Automotive GmbH Germany 100% FullKongsberg Driveline Systems GmbH Germany 100% FullKongsberg Actuation Systems LtdGreat Britain100% FullKongsberg Automotive Hong Kong LtdHong Kong100% FullKongsberg Automotive (India) Private Ltd India 100% Full XKongsberg Automotive Driveline System India Ltd India 100% Full XKongsberg Automotive Technology Center India 100% FullIndia Private LtdKongsberg Automotive LtdKorea100% Full XKongsberg Driveline Systems S. de RL de CV Mexico 100% FullKongsberg Fluid Transfer Systems, S. de R.L. de CVMexico 100% FullKongsberg Actuation Systems BV Netherlands 100% FullKongsberg Automotive AS Norway 100% FullKongsberg Automotive Holding 2 AS Norway 100% Full XKongsberg Automotive Sp. z.o.o Poland 100% Full * Non-controlling interest refers to the 25% not owned of Shanghai Kongsberg Automotive Dong Feng Morse Co Ltd ** Special Purpose Entity (the “ SPE ” ) – consolidation is based on the assessment of control according to IFRS 10 (for further information see note 4). *** Not consolidated due to the immateriality of the subsidiary CONSOLI-OWNED COUNTRY OF OWNER-DATION BY ENTITY NAME INCOR PORA TIONSHIPMETHODCOMPANYKongsberg Automotive s.r.o Slovakia 100% FullKongsberg Actuation Systems SL Spain 100% FullKongsberg Automotive AB Sweden 100% FullKongsberg Power Products Systems AB Sweden 100% FullKA Group AG Switzerland 100% FullKongsberg Driveline Systems I LLC. US 100% FullKongsberg Actuation Systems II LLC. US 100% FullKongsberg Holding III Inc. US 100% FullKongsberg Automotive Inc. US 100% FullKongsberg Power Products Systems I LLC. US 100% FullKongsberg Automotive Finance BV Netherlands 100% FullChassis Autonomy AB Sweden 20% EquitySkriverform AS Norway 100% n/aEntities divested / liquidated in 2023 and 2024:Liquidated Kongsberg Automotive SARL France 100%in 2024Liquidated Kongsberg Automotive Ltd Great Britain 100%in 2024Liquidated CTEX Seat Comfort (Holding) Ltd Great Britain 100%in 2024Liquidated Kongsberg Power Products Systems Ltd Great Britain 100%in 2024Liquidated Kongsberg Automotive Japan KK Japan 100%in 2024Liquidated Kongsberg Automotive (Shanghai) Co Ltd China 100%in 2023 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 129 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 7 SEGMENT INFORMATION Operating segments As of December 31, 2024, the group had two reportable segments, which are the strategic core busi- ness segments: Drive Control Systems and Flow Control Systems. In addition, Driveline (excluding Electric Actuators) is no longer considered KA’s core business and is reported under “Other operations.” Following the adoption of new segment structure from January 1, 2024, figures in 2023 have been restated accordingly to reflect this change. The strategic business areas (segments) offer different products and services and are managed separately because they require different technology and marketing strategies. The group’s risks and rates of return are affected predominantly by differences in the products manufactured. The seg- ments have different risk profiles in the short-term perspective, but over a long-term perspective the profiles are considered to be the same. The group’s Executive Committee (led by the CEO) reviews the internal management reports from all strategic business areas on a monthly basis. Information regarding the results of each reportable segment is included below. Performance is measured by EBITDA and EBIT as included in the internal management reports issued on a monthly basis. Segment EBIT is used to measure performance as management believes that such information is the most relevant in evaluating the results of the segments (also relative to other entities that operate within these industries). Sales transactions and cost allocations between the business units are based on the arm’s length principle. The results for each segment and the capital allocation elements comprise both items that are directly related to and recorded within the segment, as well as items that are allocated based on reasonable allocation keys. The following summary describes the operations of each of the group’s core reportable segments: Drive Control Systems Drive Control Systems develops and manufactures a comprehensive range of drive control products for heavy- and light-duty vehicles, including clutch actuation systems, advanced vehicle systems, operator control systems for construction, agriculture, outdoor power equipment and power elec- tronics-based products. Drive Control Systems serves the commercial vehicle, off-highway and pas- senger car markets, with particularly strong positions in Europe and the Americas. Flow Control Systems Flow Control Systems designs and manufactures fluid handling systems for both the passenger cars and commercial vehicles markets, as well as industrial applications and coupling systems for com- pressed-air circuits in heavy-duty vehicles. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 130 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements FY 2024DRIVE FLOW CORPO-OTHER CONTROL CONTROL RATE & TOTAL OPERA-TOTAL MEURSYSTEMSSYSTEMSOTHERCORETIONSGROUPProduct sales 346.0 299.9 0.1 646.0 128.6 774.6Tooling 2.4 6.0 0.0 8.4 0.2 8.6 Engineering 2.8 1.4 0.0 4.2 0.8 5.0 Revenues 351.2 307.3 0.1 658.6 129.6 788.2 EBITDA 26.4 31.2 (17.9) 39.7 8.8 48.5 Depreciation (13.8) (13.6) (1.7) (29.1) 0.0 (29.1)Amortization (0.6) (0.1) 0.0 (0.7) 0.0 (0.7)EBIT 12.0 17.5 (19.6) 9.9 8.8 18.7 Reversal of impairment losses, 4.6 0.4 0.0 5.0 0.0 5.0thereof:- allocated to assets other than 4.6 0.4 0.0 5.0 0.0 5.0GoodwillTiming of revenue recognitionOwnership transferred 351.2 307.3 0.1 658.6 129.6 788.2 at a point in time NOTE 7 SEGMENT INFORMATION (CONTINUED) * The column “Corporate & Other” mainly includes corporate expenses and balance sheet items related to tax, pensions, and financing. See next section for specification of unallocated assets and liabilities. ** The column relates to Driveline (excluding Electric Actuators), which is no longer considered KA’s core business. *** For segment reporting purposes, the revenues are only external revenues; the related expenses are adjusted accordingly. The EBIT thus excludes IC profit. FY 2024DRIVE FLOW CORPO-OTHER CONTROL CONTROL RATE & TOTAL OPERA-TOTAL MEURSYSTEMSSYSTEMSOTHERCORETIONSGROUPAssets and liabilitiesGoodwill 16.5 57.3 0.0 73.8 0.0 73.8 Other intangible assets 5.9 4.5 0.1 10.5 0.3 10.8 Property, plant and equipment 51.5 63.7 2.1 117.3 0.0 117.3 Right-of-use assets 19.0 32.8 3.0 54.8 0.0 54.8 Inventories 26.4 42.4 0.0 68.8 11.7 80.5Trade receivables 69.9 51.9 0.0 121.8 19.0 140.8 Other assets 3.8 3.6 0.0 7.4 0.0 7.4 Segment assets 193.0 256.2 5.2 454.4 31.0 485.4Unallocated assets 117.5 117.5 117.5Total assets 193.0 256.2 122.7 571.9 31.0 602.9 Trade payables 30.6 31.2 2.7 64.5 20.3 84.8 Accrued expenses 16.1 11.5 3.3 30.9 15.4 46.3 Provisions 11.4 0.3 3.0 14.7 1.2 15.9 Non-current lease 17.3 37.4 3.5 58.2 5.6 63.8 interest-bearing liabilitiesCurrent lease 3.9 2.6 1.0 7.5 2.4 9.9 interest-bearing liabilitiesSegment liabilities 79.3 83.0 13.5 175.8 44.9 220.7 Unallocated liabilities 179.2 179.2 179.2 Total liabilities 79.3 83.0 192.7 355.0 44.9 399.9 Total equity 203.0 203.0 203.0 Total equity and liabilities 79.3 83.0 395.7 558.0 44.9 602.9 Capital expenditure (9.8) (14.2) (0.6) (24.6) (0.1) (24.7) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 131 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 7 SEGMENT INFORMATION (CONTINUED) * The column “Corporate & Other” mainly includes corporate expenses and balance sheet items related to tax, pensions, and financing. See next section for specification of unallocated assets and liabilities. ** The column relates to Driveline (excluding Electric Actuators), which is no longer considered KA’s core business. *** For segment reporting purposes, the revenues are only external revenues; the related expenses are adjusted accordingly. The EBIT thus excludes IC profit. Figures presented in this table were restated following the adoption of a new segment structure. FY 2023DRIVE FLOW CORPO-OTHER CONTROL CONTROL RATE & TOTAL OPERA-TOTAL MEURSYSTEMSSYSTEMSOTHER*CORETIONSGROUPProduct sales 401.9 308.8 0.0 710.7 159.3 870.0Tooling 4.5 2.1 0.0 6.6 1.3 7.9 Engineering 4.0 2.1 0.0 6.1 0.9 7.0Revenues 410.4 313.0 0.0 723.4 161.5 884.9 EBITDA 33.4 40.9 (30.5) 43.8 (30.6) 13.2 Depreciation (13.1) (11.9) (1.5) (26.5) (5.4) (31.9)Amortization (0.6) (0.2) 0.0 (0.8) (0.2) (1.0)EBIT 19.7 28.8 (32.0) 16.5 (36.2) (19.7)Impairment losses, thereof: 0.0 0.0 0.0 0.0 (27.0) (27.0)- allocated to assets other than 0.0 0.0 0.0 0.0 (27.0) (27.0)GoodwillTiming of revenue recognitionOwnership transferred 410.4 313.0 0.0 723.4 161.5 884.9 at a point in time FY 2023DRIVE FLOW CORPO-OTHER CONTROL CONTROL RATE & TOTAL OPERA-TOTAL MEURSYSTEMSSYSTEMSOTHERCORETIONSGROUPAssets and liabilitiesGoodwill 16.2 54.5 0.0 70.7 0.0 70.7 Other intangible assets 4.9 2.6 0.1 7.6 0.0 7.6 Property, plant and equipment 52.8 62.1 0.9 115.8 0.0 115.8 Right-of-use assets 18.0 31.9 5.1 55.0 0.0 55.0 Inventories 37.8 46.7 0.0 84.5 17.0 101.5 Trade receivables 81.3 50.3 0.2 131.8 29.7 161.5 Other assets 0.6 4.0 0.0 4.6 0.0 4.6 Segment assets 211.6 252.1 6.3 470.0 46.7 516.7 Unallocated assets 204.8 204.8 204.8 Total assets 211.6 252.1 211.1 674.8 46.7 721.5 Trade payables 47.4 41.7 4.0 93.1 23.5 116.6 Accrued expenses 17.3 12.6 6.4 36.3 19.2 55.5 Provisions 5.9 0.3 7.8 14.0 3.2 17.2 Non-current lease liabilities 16.6 33.9 4.3 54.8 10.6 65.4 Current lease liabilities 3.3 2.4 1.7 7.4 2.8 10.2 Segment liabilities 90.5 90.9 24.2 205.6 59.3 264.9 Unallocated liabilities 238.5 238.5 238.5 Total liabilities 90.5 90.9 262.7 444.1 59.3 503.4 Total equity 218.1 218.1 218.1 Total equity and liabilities 90.5 90.9 480.8 662.2 59.3 721.5 Capital expenditure (11.8) (14.1) (0.2) (26.1) (2.4) (28.5) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 132 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR 2024 2023Segment assets of reportable segments 480.2 510.4 Assets of segment Corporate & Other 5.2 6.3 Unallocated assets include:Deferred tax assets 10.0 11.4 Investments accounted for using the equity method 0.7 2.1 Other non-current assets 1.7 1.6 Cash and cash equivalents 84.3 164.7 Other current receivables 20.8 25.0 Total assets of the group 602.9 721.5 MEUR 2024 2023Trade payables of reportable segments 82.1 112.6 Accrued expenses of reportable segments 43.0 49.1 Provisions of reportable segments 12.9 9.4 Non-current lease liabilities of reportable segments 60.3 61.1 Current lease liabilities of reportable segments 8.9 8.5 Liabilities of segment Corporate & Other 13.5 24.2 Unallocated liabilities include:Deferred tax liabilities 25.4 21.0 Retirement benefit obligations 13.0 12.0 Interest-bearing loans and borrowings 132.5 189.3 Other non-current interest-free liabilities 0.8 3.7 Current income tax liabilities 1.3 4.2 Other short term liabilities 6.2 8.3 Total liabilities of the group 399.9 503.4 NOTE 7 SEGMENT INFORMATION (CONTINUED) Operating segments – reconciliation to total assets Operating segments – reconciliation to total liabilities Operating segments – geographical areas The following segmentation of the group’s geographical sales to external customers is based on the geographical locations of the customers. The segmentation of non-current assets is based on the geographical locations of its subsidiaries. Non-current assets comprise intangible assets (including Goodwill), right-of-use assets and property, plant and equipment. Sales to external customers by geographical location MEUR 2024 % 2023 %Europe 344.9 43.8% 406.3 45.9%North America 271.4 34.4% 297.5 33.6%South America 46.3 5.9% 45.4 5.1%Asia 122.0 15.5% 129.5 14.6%Other 3.6 0.5% 6.2 0.7%Revenues 788.2 884.9 MEUR 2024 % 2023 %Europe 146.4 57.0% 147.4 59.2%North America 86.5 33.7% 80.4 32.3%South America 1.6 0.6% 2.1 0.8%Asia 22.2 8.7% 19.2 7.7%Total intangible assets, PP&E and RoU 256.7 249.1 Intangible assets, PP&E and RoU by geographical location Major customers Included are revenues of MEUR 100.8 in 2024 (2023: MEUR 97.5) which arose from sales to the group’s largest customer. Two single customers contributed 10% or more each to the group’s reve- nues in 2024 and 2023. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 133 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR 2024 2023Wages and salaries 162.6 179.0 Social security tax 31.4 39.6 Severance payments 2.7 8.0 Pension cost, defined benefit plans 1.0 (0.2)Pension cost, defined contribution plans 7.8 7.6 Other employee-related expenses 29.1 31.0 Government support – wages and salaries 0.0 (0.1)Total salaries and social expenses 234.6 264.9 MEUR 2024 2023Gain on external sale of non-current assets 0.1 0.8 Gain on sale of major operations 1.9 0.0 Corporate service income 0.0 0.7 Income from sub-leases 0.2 0.0Income from compensation received 2.8 0.0Total other income 5.0 1.5 NOTE 8 SALARIES AND SOCIAL EXPENSES Specification of salaries and social expenses as recognized in the statement of comprehensive income NOTE 9 OTHER INCOME AND OTHER OPERATING EXPENSES Specification of other income as recognized in the statement of comprehensive income Other employee-related expenses include bonus costs. As of December 31, 2024, the group had 4,714 employees, while as of December 31, 2023, the number of employees was 5,286. Corporate service income After the completion of the sale transactions of the Interior segment and the sale of part of the Shawinigan plant of Off-Highway business, Kongsberg Automotive and the Buyer Parties have entered into the Transition Services Agreements in which the Buyer Parties expressed the need to obtain the use of certain services from Kongsberg Automotive for a transition period after the com- pletion of the sale transactions to effectuate an orderly transition of the operations and permit the Buyer Parties the opportunity to obtain alternative sources to provide such services after the transi- tion period. The main services to be provided by Kongsberg Automotive were: (1) ERP support and hosting, (2) IT infrastructure and security support, (3) Finance services, (4) HR Payroll services and other services. For the provision of those services the Buyer Parties were obliged to pay all fees in full on the terms provided under the Transition Services Agreements. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 134 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 10 FINANCIAL ITEMS Specification of financial items as recognized in the statement of comprehensive income MEUR 2024 2023Change in fair value of cash equivalents 0.0 2.8 Interest income 1.7 1.9 IFRS 16 interest income 0.1 0.1 Other financial income 0.8 0.0 Total financial income 2.6 4.8 Interest expense (11.3) (10.8)IFRS 16 interest expense (4.5) (4.3)Foreign currency losses (1.9) (13.3)Account receivables securitization – expense (0.4) (0.9)Change in value of financial derivatives (0.1) 0.0 Share of net profit (loss) from investments accounted for using (0.2) 0.0 the equity methodImpairment of the equity investments and loans granted to (2.4) 0.0 equity and at cost investmentsOther financial expenses (2.8) (1.5)Total financial expenses (23.6) (30.8)Total financial items (21.0) (26.0) * Includes realized currency gain of MEUR 1.7 and unrealized currency loss of MEUR 3.6 (2023: realized currency loss of MEUR 7.6 and unrealized currency loss of MEUR 5.7) Specification of other operating expenses as recognized in the statement of comprehensive income MEUR 2024 2023Operating expensesFreight, packaging and customs duties charges 34.1 42.4 Facility costs 11.6 14.0 Consumables 20.9 21.2 Repairs and maintenance 11.7 14.0 Service costs / external services 10.1 9.0 Warranty expenses 19.5 12.4 Other costs 11.7 2.4 Administrative expensesUtilities 0.3 3.0 Service costs / external services 17.6 21.3 Consumables 4.6 5.6 Travel costs 2.4 2.4 Other costs 6.4 8.7 Total other operating expenses 150.9 156.4 NOTE 9 OTHER INCOME AND OTHER OPERATING EXPENSES (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 135 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 11 TAXES Tax recognized in statement of income The major components of income tax expense: Reconciliation of Norwegian nominal statutory tax rate to effective tax rate MEUR 2024 2023Current tax on profits for the year (8.2) (8.7)Adjustments in respect of prior years – current tax 0.0 (3.5)Total current tax (8.2) (12.2)Current year change in deferred tax (7.8) (2.3)Impact of changes in tax rates (0.4) 0.2 Adjustments in respect of prior years – deferred tax 0.5 0.9 Total change in deferred tax (7.7) (1.2)Total income tax (expense) / credit (15.9) (13.4) MEUR 2024 2023Tax on pension remeasurement 0.2 0.1 Tax in other comprehensive income 0.2 0.1 MEUR 2024 2023Profit / (loss) before taxes (2.3) (45.7)Expected tax calculated at Norwegian tax rate 0.5 10.0 Other permanent differences / currency (2.4) 0.9 Effect of withholding tax (3.0) (1.4)Foreign tax rate differential (1.7) (2.1)Impact of changes in tax rates and legislation (0.4) 0.2 Losses not recognized as deferred tax assets (8.8) (6.9)Write down of deferred tax assets (0.6) (11.2)Adjustments in respect of prior years and other adjustments 0.5 (2.9)Income tax (expense) / credit (15.9) (13.4)Average effective tax rate -691% -29% Includes withholding tax. Further details can be found in table below. Tax recognized in other comprehensive income MEUR 2024 2023Current income tax receivables 1.8 1.9 Current income tax liabilities (1.3) (4.2)Total 0.5 (2.3) Tax recognized in the statement of financial position Current income tax Included under “Trade and other receivables.” MEUR 2024 2023Deferred tax assets 10.0 11.4 Deferred tax liabilities (25.4) (21.0)Total (15.4) (9.6) Deferred tax ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 136 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 11 TAXES (CONTINUED) Specification of deferred tax assets / (liabilities) recognized in the statement of financial position 2024FX DIFF AND OPENING CHARGED CHANGES RECLASSIFI-CLOSING MEURBALANCETO INCOMEIN R ATE OCICATIONBALANCEProperty, plant (2.0) 1.1 (0.4) 0.0 (0.1) (1.4)and equipmentIntangible assets (5.4) 0.0 (0.1) 0.0 (0.3) (5.8)Leases 1.5 0.4 0.1 0.0 (0.1) 1.9 Retirement benefits 1.4 (0.1) 0.0 0.2 0.1 1.6 obligationsLosses carried forward 4.8 (2.4) 0.0 0.0 0.2 2.6 Trade and other receivables 3.2 0.4 0.0 0.0 (0.1) 3.5Accrued expenses 7.1 (3.2) 0.0 0.0 0.1 4.0 Accrued interest 0.0 1.4 0.0 0.0 0.0 1.4 Unrealized exchange differences on long-term (26.0) (5.6) 0.0 0.0 1.3 (30.3)receivables / payablesOther temporary differences5.8 0.7 0.0 0.0 0.6 7.1 Net deferred tax assets / (9.6) (7.3) (0.4) 0.2 1.7 (15.4)(liabilities) 2023FX DIFF AND OPENING CHARGED CHANGES RECLASSIFI-CLOSING MEURBALANCETO INCOMEIN R ATE OCICATION BALANCEProperty, plant 1.3 (3.3) 0.0 0.0 0.0 (2.0)and equipmentIntangible assets (11.6) (2.0) 0.0 0.0 8.2 (5.4)Leases 1.4 0.1 0.0 0.0 0.0 1.5 Retirement benefits 1.4 (0.1) 0.0 0.1 0.0 1.4 obligationsLosses carried forward 9.9 (4.9) 0.0 0.0 (0.2) 4.8 Trade and other receivables 2.5 0.8 0.0 0.0 (0.1) 3.2Accrued expenses 4.2 3.0 0.0 0.0 (0.1) 7.1 Accrued interest 1.2 (1.2) 0.0 0.0 0.0 0.0 Unrealized exchange differences on long-term (27.2) (0.5) 0.0 0.0 1.7 (26.0)receivables / payablesOther temporary differences 7.0 6.7 0.2 0.0 (8.1) 5.8 Net deferred tax assets / (9.9) (1.4) 0.2 0.1 1.4 (9.6)(liabilities) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 137 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Tax positions not recognized NOTE 11 TAXES (CONTINUED) Remaining lifetime of tax losses (gross tax value) MEUR 2024 2023Tax positions not recognized 50.6 41.8 Total 50.6 41.8 MEUR 2024 2023Less than five years 19.8 19.6 5–10 years 13.9 7.9 10–15 years 1.9 0.0 15–20 years 0.0 0.0 Without time limit 17.6 19.0 Total 53.2 46.5 Measurement of deferred taxes Deferred tax assets and liabilities are measured at the tax rates enacted. Limitation and assumptions for the utilization of losses carried forward and deferred tax assets The carrying amount of deferred tax assets is reviewed at each balance sheet date and recognized for unused tax losses and unused tax credits to the extent that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. As part of the review, the group conducts comprehensive analyses of future profits within the legal entity as well as consider- ing possibilities for utilization within the group. As at the year-end, the estimates indicated that tax losses at MEUR 50.6 will not be deductible within the foreseeable future, resulting from a change of tax positions not recognized of MEUR 8.8 in the current year. OECD Pillar Two model rules The Parent Company Kongsberg Automotive ASA is incorporated in Norway, which enacted the Pillar Two income taxes legislation in January 2024 with effective date January 1, 2024. Under the new leg- islation, the parent company is required to pay top-up tax in Norway on profits of its subsidiaries that are taxed at an effective tax rate of less than 15 percent. Based on the assessments to date, the group does not expect the impact of the Pillar Two legislation to be material to its consolidated financial statements. There is no current top-up tax exposure based on the assessment for 2024. Therefore, no top-up current tax expense has been booked. The temporary exception issued by the IASB in May 2023 from the accounting requirements for deferred taxes in IAS 12 is applied. Accordingly, the group neither recognizes nor discloses informa- tion about deferred tax assets or liabilities related to Pillar Two income taxes. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 138 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 12 INTANGIBLE ASSETS PATENTS CUSTOMER AND SOFT-RELATION-DEVELOP-WARE AND MEUR GOODWILLSHIPSMENTOTHER TOTALAcquisition costs 97.9 20.2 48.4 9.2 175.7 Accumulated amortization & (25.3) (20.2) (43.4) (8.1) (97.0)impairmentNet book value at 31.12.2022 72.6 0.0 5.0 1.1 78.7 Cost at 01.01.2023 97.9 20.2 48.4 9.2 175.7 Additions 0.0 0.0 3.2 0.0 3.2 Disposals accumulated cost 0.0 0.0 (6.6) 0.0 (6.6)Translation differences (2.0) (0.5) (0.9) (0.4) (3.8)Acquisition costs at 31.12.2023 95.9 19.7 44.1 8.8 168.5 Accumulated amortization (25.3) (20.2) (43.4) (8.1) (97.0)& impairment at 01.01.2023Amortization 0.0 0.0 (0.6) (0.4) (1.0)Impairment loss 0.0 0.0 (0.6) 0.0 (0.6)Disposals accumulated amortization 0.0 0.0 6.6 0.0 6.6 Translation differences 0.1 0.5 0.7 0.5 1.8 Accumulated amortization (25.2) (19.7) (37.3) (8.0) (90.2)& impairment at 31.12.2023Acquisition costs 95.9 19.7 44.1 8.8 168.5 Accumulated amortization & (25.2) (19.7) (37.3) (8.0) (90.2)impairmentNet book value at 31.12.2023 70.7 0.0 6.8 0.8 78.3 PATENTS CUSTOMER AND SOFT-RELATION-DEVELOP-WARE AND MEUR GOODWILLSHIPSMENTOTHER TOTALCost at 01.01.2024 95.9 19.7 44.1 8.8 168.5 Additions0.0 0.0 3.8 0.2 4.0 Translation differences 3.2 1.2 (0.7) (0.1) 3.6 Acquisition costs at 31.12.2024 99.1 20.9 47.2 8.9 176.1 Accumulated amortization (25.2) (19.7) (37.3) (8.0) (90.2)& impairment at 01.01.2024Amortization 0.0 0.0 (0.4) (0.3) (0.7)Reversal of impairment loss 0.0 0.0 0.3 0.0 0.3 Translation differences (0.1) (1.2) 0.3 0.1 (0.9)Accumulated amortization (25.3) (20.9) (37.1) (8.2) (91.5)& impairment at 31.12.2024Acquisition costs 99.1 20.9 47.2 8.9 176.1 Accumulated amortization (25.3) (20.9) (37.1) (8.2) (91.5)& impairmentNet book value at 31.12.2024 73.8 0.0 10.1 0.7 84.6 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 139 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Internally developed intangible assets NOTE 12 INTANGIBLE ASSETS (CONTINUED) MEUR 2024 2023Internally developed intangible assets at 01.01. 7.4 7.8 Additions during the year 3.6 3.0 Disposals during the year 0.0 (2.4)Amortization (0.4) (0.7)Translation differences (0.3) (0.3)Internally developed intangible assets at 31.12. 10.3 7.4 Non-capitalized development costs net of customer contribution (25.8) (27.4)Amortization of internally developed intangible assets (0.4) (0.7)Total recognized development cost in the reporting period (26.2) (28.1)Cash investment in development (29.4) (30.4) Net amount, gross amount MEUR 31.2 in 2024 (2023: MEUR 35.0). The internally developed intangible assets include capitalized costs related to the development of new products. These assets are included in “Patents and Development.” 140 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements ANNUAL REPORT 2023 // FINANCIAL STATEMENTS OF THE GROUP NOTE 13 PROPERTY, PLANT & EQUIPMENT (PP&E) EQUIP-MEUR LAND BUILDINGSMENT TOTALAcquisition costs 3.0 27.2 446.1 476.3 Accumulated depreciation & impairment (1.2) (21.2) (320.3) (342.7)Net book value at 31.12.2022 1.8 6.0 125.8 133.6 Cost at 01.01.2023 3.0 27.2 446.1 476.3 Additions 0.0 0.6 24.7 25.3 Disposals accumulated cost 0.0 0.0 (8.3) (8.3)Translation differences 0.0 (0.6) (11.2) (11.8)Acquisition costs at 31.12.2023 3.0 27.2 451.3 481.5 Accumulated depreciation & impairment (1.2) (21.2) (320.3) (342.7)at 01.01.2023Depreciation 0.0 (0.8) (21.3) (22.1)Impairment loss (0.4) (0.2) (16.8) (17.4)Disposals accumulated depreciation 0.0 0.0 7.7 7.7 Translation differences 0.0 0.5 8.3 8.8 Accumulated depreciation (1.6) (21.7) (342.4) (365.7)& impairment at 31.12.2023Acquisition costs 3.0 27.2 451.3 481.5 Accumulated depreciation & impairment (1.6) (21.7) (342.4) (365.7)Net book value at 31.12.2023 1.4 5.5 108.9 115.8 EQUIP-MEUR LAND BUILDINGSMENT TOTALCost at 01.01.2024 3.0 27.2 451.3 481.5 Additions 0.0 2.8 17.9 20.7 Disposals accumulated cost 0.0 (0.1) (7.3) (7.4)Translation differences 0.0 0.2 (0.7) (0.5)Acquisition costs at 31.12.2024 3.0 30.1 461.2 494.3 Accumulated depreciation (1.6) (21.7) (342.4) (365.7)& impairment at 01.01.2024Depreciation 0.0 (0.8) (19.7) (20.5)Reversal of impairment loss 0.0 0.0 1.6 1.6 Disposals accumulated depreciation 0.0 0.1 7.0 7.1 Translation differences 0.0 (0.1) 0.6 0.5 Accumulated depreciation (1.6) (22.5) (352.9) (377.0)& impairment at 31.12.2024Acquisition costs 3.0 30.1 461.2 494.3 Accumulated depreciation & impairment (1.6) (22.5) (352.9) (377.0)Net book value at 31.12.2024 1.4 7.6 108.3 117.3 Impairment testing See note 15 for information related to impairment testing of intangible assets, PP&E and right-of-use assets. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 141 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 14 RIGHT-OF-USE ASSETS EQUIP-MEUR BUILDINGSMENT TOTALAcquisition costs 92.5 6.2 98.7 Accumulated depreciation & impairment (35.3) (2.7) (38.0)Net book value at 31.12.2022 57.2 3.5 60.7 Cost at 01.01.2023 92.5 6.2 98.7 Additions 15.2 1.2 16.4 Lease terminations (4.3) (1.4) (5.7)Translation differences (0.1) 0.0 (0.1)Acquisition costs at 31.12.2023 103.3 6.0 109.3 Accumulated depreciation & impairment at 01.01.2023 (35.3) (2.7) (38.0)Depreciation (9.0) (0.8) (9.8)Impairment loss (8.4) (0.6) (9.0)Lease terminations 1.5 1.2 2.7 Translation differences (0.2) 0.0 (0.2)Accumulated depreciation & impairment at 31.12.2023(51.4) (2.9) (54.3)Acquisition costs 103.3 6.0 109.3 Accumulated depreciation & impairment (51.4) (2.9) (54.3)Net book value at 31.12.2023 51.9 3.1 55.0 EQUIP-MEUR BUILDINGSMENT TOTALCost at 01.01.2024 103.3 6.0 109.3 Additions 8.2 1.3 9.5 Lease terminations (6.2) (0.5) (6.7)Translation differences (2.8) (0.1) (2.9)Acquisition costs at 31.12.2024 102.5 6.7 109.2 Accumulated depreciation & impairment at 01.01.2024 (51.4) (2.9) (54.3)Depreciation (7.6) (1.0) (8.6)Reversal of impairment loss 3.0 0.1 3.1 Lease terminations 4.1 (0.1) 4.0 Translation differences 1.4 0.0 1.4 Accumulated depreciation & impairment at 31.12.2024(50.5) (3.9) (54.4)Acquisition costs 102.5 6.7 109.2 Accumulated depreciation & impairment (50.5) (3.9) (54.4)Net book value at 31.12.2024 52.0 2.8 54.8 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 142 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR 2024 2023Non-current lease liabilities 63.8 65.4 Current lease liabilities 9.9 10.2 Total lease liabilities 73.7 75.6 MEUR 2024 2023Within one year 14.3 14.5 One to five years 41.9 41.9 More than five years 43.0 45.6 Total undiscounted lease commitments 99.2 102.0 MEUR 2024 2023Interest expense on lease liabilities (included in financial items) (4.5) (4.3)Interest income on subleases 0.1 0.1 Depreciation of right-of-use assets (8.6) (9.8)Expenses relating to low-value and short-term leases (0.3) (0.4)Total expenses relating to leases (13.3) (14.4) In 2024, the group had total cash outflows of approximately MEUR 14.7 (2023: MEUR 14.1) for all leases, including non-material leases which are not part of the group’s IFRS 16 reporting. Amounts recognized in the statement of comprehensive income relating to leases Lease liabilities Maturity analysis – contractual undiscounted cash flows NOTE 14 RIGHT-OF-USE ASSETS (CONTINUED) NOTE 15 IMPAIRMENT LOSSES The group has performed impairment tests on the carrying values of all intangible assets (including Goodwill), property, plant & equipment, and right-of-use assets (RoU) in accordance with the requirements of IAS 36. The group used the cash-generating unit’s value in use to determine the recoverable amount. Value in use (VIU) was derived as the net present value (NPV) of projected future cash flows for each of the cash-generating units (CGUs). To align the organizational structure with the opportunities and challenges present in the global market, Kongsberg Automotive (KA) announced in Q4 2023 the merger of the Powertrain & Chassis business segment and the Off-Highway business unit to form the Drive Control Systems (DCS) busi- ness area. This reporting structure came into effect in January 2024. Additionally, Driveline (exclud- ing e-actuators) is no longer be considered KA’s core business. The business units On-Highway, Off-Highway, Electronic Actuators, Headrest, Couplings, Fluid Transfer Systems and Driveline were identified as the respective CGUs. Cash flow projections and assumptions (applicable for all business units except for Driveline) The model was based on a four-year projection of discounted cash flows plus a terminal value (cal- culated using Gordon’s growth model with perpetual growth of 2% (applicable for all business units)). The net discounted cash flows were calculated before tax. The projected cash flows were derived from the business plans set up by the management of the business units and reviewed as well as finally approved by the top management in the course of the budget and strategic planning process covering the period until 2028. The business plans were based on the group’s four-year long-range plan (LRP), adjusted for relevant recent changes in internal short- term forecasts and market data. Adjustments were made to exclude significant cash flows related to restructuring not yet committed, future investments or enhancements. Assumptions on labor infla- tion as well as on raw material price development were provided centrally. The input data on devel- opments of the relevant markets were taken from well-known external sources, such as LMC Automotive (commercial vehicles market), IHS (passenger cars market) and customers, in addition to all relevant internal information such as change in orders, customer portfolio, fitment rate for products, geographical development, market shares, etc. Discount rate assumptions The required rate of return was calculated by using the WACC method. The input data of the WACC was chosen by an individual assessment of each parameter. Information from representative sources and peer groups were used to determine the best estimate. The WACC was calculated to be 10.2% pre-tax. The WACC used was the same for all CGUs, the reason being that the long-term risk ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 143 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements profiles of the CGUs are not considered to be significantly different. The key parameters were set to reflect the underlying long-term period of the assets and time horizon of the forecast period of the business cases. The following parameters were applied: • Risk-free interest rate: 3.69%. Based on 10-year governmental Eurobond rate and US treasury 10-year yield, weighted 50/50. • Beta: 1.64. Based on an estimated unlevered beta for the automotive industry levered to the group’s structure. • Market risk premium: 4.11% (post tax). Based on market sources. • Cost of debt: based on the market value of the group’s debt. The discount rate has been adjusted to reflect the current market assessment of the risks specific to the group’s business activity and was estimated based on the weighted average cost of capital for the group. Further changes to the discount rate may be necessary in the future to reflect changing risks for the industry and changes to the weighted average cost of capital. Sensitivity analysis and allocation of impairment as of 31.12.2024 The value in use is dependent on the free cash flow and discount rate. The cash flow will fluctuate in relation to changes in price, currency, and volume. Business awards, success of the vehicle model, prod - uct fitment rates, government regulations, and economic conditions in turn influence the volume. On-Highway: The value in use is significantly higher than the carrying value. Hence, no reasonable change in any of the key assumptions would cause the recoverable amount to be lower than the carrying value. Off-Highway: No reasonable change in any of the key assumptions would cause the recoverable amount to be lower than the carrying value. NOTE 15 IMPAIRMENT LOSSES (CONTINUED) Headrest: No reasonable change in any of the key assumptions would cause the recoverable amount to be lower than the carrying value. Electric Actuators: Despite projections of negative cash flows in the near term, the business is expected to be of signifi- cant importance for other business units such as On-Highway as well. Strategic investments in this innovative technology position KA to capitalize on market opportunities and solidify its leadership position in the industry. Couplings: The value in use is significantly higher than the carrying value. No reasonable change in any of the key assumptions would cause the recoverable amount to be lower than the carrying value. Fluid Transfer Systems: No reasonable change in any of the key assumptions would cause the recoverable amount to be lower than the carrying value. Driveline: This business unit is undergoing a gradual wind-down. The value-in-use calculation reflects a negative outcome based on projected cash flows over the next four years. In 2023, it was determined that the business unit Driveline should be fully impaired, therefore, all assets used in the production of Driveline products were written down to zero. In 2024, in line with the shift of Driveline to a non-core operating business segment, a significant number of these previ- ously impaired assets were repurposed to be used in the manufacturing of products in core business segments. The impairment of these assets has been reversed in the amount of MEUR 5.0 and they were placed back on their original depreciation schedules under their new business unit. Other than that, and given the current key assumptions, no plausible changes are expected to justify the further reversal of the previously recorded impairment. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 144 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS OTHER OPERATIONSELECTRIC FLUID TRANSFERMEUR ON-HIGHWAY OFF-HIGHWAYACTUATORS HEADREST COUPLINGSSYSTEMS DRIVELINE TOTALGoodwillGross book value as at 01.01.2024 16.3 0.0 0.0 0.0 0.2 54.2 6.7 77.4Accumulated impairment as of 01.01.2024 0.0 0.0 0.0 0.0 0.0 0.0 (6.7) (6.7)Translation adjustments 0.2 0.0 0.0 0.0 0.0 2.9 (0.0) 3.1 Net book value as at 31.12.2024 16.5 0.0 0.0 0.0 0.2 57.1 0.0 73.8 NOTE 15 IMPAIRMENT LOSSES (CONTINUED) Net carrying value of the Goodwill per business unit NOTE 16 INVENTORIES Specification of inventories MEUR 2024 2023Raw materials 47.3 59.8 Work in progress 17.4 20.0 Finished goods 15.8 21.7 Total inventories 80.5 101.5 Values displayed above are net of provisions for slow-moving and obsolete inventory shown below. MEUR 2024 2023Book value at 01.01. (14.2) (12.4)Write-down (2.2) (4.6)Products sold (previously written down) 0.0 0.1 Reversal of prior write-downs 3.1 2.6 Foreign currency effects (0.1) 0.1 Book value at 31.12. (13.4) (14.2) Provision for slow-moving and obsolete inventory ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 145 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 17 TRADE AND OTHER RECEIVABLES Specification of trade and other receivables MEUR 2024 2023Trade receivables 140.8 161.5 Public duties 6.6 7.3 Other short-term receivables 6.9 8.5 Total trade and other receivables 154.3 177.3 MEUR 2024 2023Not overdue 123.3 141.4 Overdue 1–20 days 11.7 8.8 Overdue 21–40 days 1.8 5.1 Overdue 41–80 days 1.2 1.7 Overdue 81–100 days 0.3 1.2 Overdue > 100 days 3.4 3.9 Gross trade receivables 141.7 162.1 Total provision for bad debt (0.9) (0.6)Net trade receivables 140.8 161.5 Trade receivables maturity The provision for bad debt increased by MEUR 0.3 compared to 31.12.2023. Trade receivables are subject to constant monitoring. The impairment of receivables is reflected through provision for bad debt. Monthly assessments of loss risk, including forward-looking information, are performed and corre - sponding provisions are made at the entity level. The provision for bad debt reflects the total expected loss risk on the group’s trade receivables. The oldest trade receivables, overdue > 100 days, represent the highest risk level. Most of the impaired trade receivables are included in that category. Expected losses on trade receivables were MEUR 0.9 in 2024 (2023: MEUR 0.6). The risk for losses on receivables other than trade receivables is assessed to be insignificant. For risk management see note 23. MEUR 2024 2023Tooling for sale 5.9 4.1 Customer development for sale 1.0 0.0 Prepayments 7.4 9.1 Capitalized financing costs – current 0.0 0.1 Contract costs – current 0.1 0.1 Total other current assets 14.4 13.4 MEUR 2024 2023Investments accounted for using the equity method 0.7 2.1 Investments in non-material subsidiary 0.6 0.6 Contract costs – non-current 0.4 0.4 Net pension assets 0.2 0.2 Other non-current assets 0.8 0.8 Total other non-current assets 2.7 4.1 Receivables by currency MEUR 2024 2023EUR 52.5 74.0 USD 42.5 47.1 CNY 31.5 21.3 NOK 4.7 8.7 Other 23.1 26.2 Total trade and other receivables 154.3 177.3 Other current assets Other non-current assets ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 146 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 17 TRADE AND OTHER RECEIVABLES (CONTINUED) Investments accounted for using the equity method Due to severe financial difficulties at the associate, the net investment was impaired to the recoverable amount of MEUR 0.7. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 147 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements The twenty largest shareholders in the Company as at 31.12.2024 were as follows: SHAREHOLDERS AND NOMINEES NO. OF SHARES % COUNTRY TYPE OF ACCOUNTApollo Asset Limited 114,171,000 12.0% Cayman Islands OrdinaryNordnet Bank AB 39,936,768 4.2% Sweden Nominee (multiple investors)Saxo Bank A/S 37,409,268 3.9% Denmark Nominee (multiple investors)Skandinaviska Enskilda Banken AB 28,180,000 3.0% Luxembourg Nominee (multiple investors)Kongsberg Automotive ASA 21,994,445 2.3% Norway OrdinaryChristoffersen Arild Vigen 14,305,690 1.5% Norway OrdinaryDanske Bank A/S 13,713,423 1.4% Denmark Nominee (multiple investors)Commuter 2 AS 7,300,000 0.8% Norway OrdinaryKransekakebakeren AS 6,884,868 0.7% Norway OrdinaryUBS Switzerland AG 5,999,320 0.6% Switzerland Nominee (multiple investors)Rimestad Lars 5,300,000 0.6% Norway OrdinaryJohn Stien Invest AS 5,030,000 0.5% Norway OrdinaryNordnet Livsforsikring AS 4,612,773 0.5% Norway OrdinaryKommunal Landspensjonskasse Gjensi 4,579,844 0.5% Norway OrdinaryAvestruz Daniel 4,450,000 0.5% United Arab Emirates OrdinaryA/S Skarv 4,000,000 0.4% Norway OrdinaryAlfaplan AS 3,990,000 0.4% Norway OrdinaryArnesen Finn 3,961,010 0.4% Norway OrdinaryChristoffersen Carrie Louise Vigen 3,800,000 0.4% Norway OrdinaryMapsi Holding AS 3,800,000 0.4% Norway OrdinaryTotal 20 largest shareholders 333,418,409 35.0%Other shareholders 618,004,722 65.0%Number of shares in issue at 31.12.2024 951,423,131 100.0%Number of shareholders 24,090Foreign ownership 32.4% NOTE 18 SHARE CAPITAL Shares The share capital of the Company is NOK 951,423,131 comprising 951,423,131 ordinary shares with a par value of NOK 1.00. The Company holds 21,994,445 shares as treasury shares. For more information see the Statement of Changes in Equity. The Company is listed on the Oslo Stock Exchange with the ticker code “KOA.” Treasury shares The Company holds 21,994,445 treasury shares (2023: 10,535,914) as of December 31, 2024. On November 15, 2023, the Board of Directors of Kongsberg Automotive ASA resolved to initiate a new share repurchase pro- gram. The program was concluded on March 11, 2024, when the Company purchased back up to 2.5% of its outstanding shares in the open market. Kongsberg Automotive ASA has purchased back 23,785,578 shares in total as part of this share repurchase program, of which 15,085,578 shares were repurchased between January 1, 2024, and March 11, 2024. 2024 2023Number of shares 951,423,131 1,054,860,644in issue at 01.01.Cancelation of own shares (103,437,513)Number of shares 951,423,131 951,423,131in issue at 31.12.Of these, treasury shares 21,994,445 10,535,914 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 148 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Share options Options at NOK 3.0 (grant 2021) are performance stock options and expire 10 years after the date of grant. No other share options were granted thereafter. The Company has no legal or constructive obli - gation to repurchase or settle the options in cash. Refer to note 3 for further information. Movements in share options (NOK) Movements in restricted stock units (RSU) Outstanding restricted stock units at the end of the year Outstanding options at the end of the year (NOK) 2024 2023AVERAGE AVERAGE EXERCISE EXERCISE NOKPRICE OPTIONSPRICE OPTIONSOptions at 01.01. 3.0 4,677,069 4.1 5,771,412 Granted ‒ ‒ – –Forfeited 3.0 (1,294,116) 3.0 (750,831)Expired 3.0 (716,177) 20.5 (343,512)Adjusted (quantity) 3.0 (838,941) – –Options at 31.12. 3.0 1,827,835 3.0 4,677,069 2024 2023EXERCISE EXERCISE PRICE PRICE EXPIRY DATE(NOK) OPTIONS (NOK) OPTIONS 10.06.2031 (grant 2021) 3.0 1,827,835 3.0 4,677,069 Options at 31.12. 1,827,835 4,677,069 NOK 2024 2023RSU at 01.01. 26,545,542 14,567,343 Granted 16,854,565 13,844,990 Released (4,713,359) (358,318)Forfeited (8,725,343) (1,508,473)Adjusted (164,867) –RSU at 31.12. 29,776,538 26,545,542 GRANT (VESTING DATE) 2024 2023Grant 2021 (10.06.2024) ‒ 3,292,149Grant 2022 (02.06.2025) 5,369,783 9,523,243Grant 2023 (05.06.2026) 7,754,410 13,730,150Grant 2024 (30.05.2027) 16,652,345 –RSU at 31.12. 29,776,538 26,545,542 NOTE 18 SHARE CAPITAL (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 149 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 19 EARNINGS AND DIVIDEND PER SHARE Earnings per share for the group Dividend per share 2024 2023Net profit attributable to equity shareholders (MEUR) (18.2) (59.5)Weighted average number of shares in issue (in millions) 1,039.2 1,000.6 Weighted average total number of ordinary shares (in millions) 1,061.9 1,061.9 Weighted average number of treasury shares held (in millions) (22.7) (61.3)Basic earnings per share, EUR (0.02) (0.06)Weighted average number of shares in issue (diluted) (in millions) 1,068.4 1,028.9 Weighted average number of outstanding options & RSU/PSU (in millions) 29.2 28.3 Diluted earnings per share, EUR (0.02) (0.06) EUR 2024 2023Dividend per share paid 0.0 0.0 Dividend per share proposed 0.0 0.0 No dividend was proposed for 2024. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 150 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Defined benefit scheme change in net pension liability Defined benefit scheme – net pension liability Specification of carrying value of net pension liability MEUR 2024 2023Net pension liability 01.01. 11.3 12.0 Pension cost for the year 1.0 (0.2)Remeasurement of net defined benefit liability 0.9 0.5 Paid pensions (0.6) (0.6)Pension plan contributions (0.3) (0.6)Translation differences 0.1 0.2 Net pension liability 31.12. 12.4 11.3 MEUR 2024 2023Pension liabilities and assets:Projected benefit obligation (PBO) 16.2 16.1 Fair value of pension assets (3.8) (4.8)Net pension liability before social security taxes 12.4 11.3 Social security taxes liabilities 0.0 0.0 Net pension liability 12.4 11.3 MEUR 2024 2023Retirement benefit obligation 16.2 16.1 Retirement benefit asset (3.8) (4.8)Net pension liability 12.4 11.3 NOTE 20 RETIREMENT BENEFIT OBLIGATIONS Retirement benefit obligations recognized in statement of financial position Defined benefit scheme – assumptions Defined benefit scheme – net periodic pension cost MEUR 2024 2023Defined benefit pension obligation 12.4 11.3 Top hat, retirement provisions and other employee obligations 0.6 0.7 Retirement benefit obligations 13.0 12.0 2024 2023Discount rate 2.9% 3.6%Rate of return on plan assets 0.2% 0.2%Salary increases 1.1% 1.1%Increase in basic government pension amount 1.0% 1.0%Pension increase 0.4% 0.5% MEUR 2024 2023Service cost 0.6 0.6 Interest on benefit obligations 0.4 0.4 Effect of curtailment (0.0) (1.2)Net periodic pension cost 1.0 (0.2)Remeasurement of net defined benefit liability 0.9 0.5 Actual return on plan assets 2.5% -0.1% The assumptions for KA Group are presented as a weighted average of the assumptions reported from respective subsidiaries. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 151 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 21 INTEREST-BEARING LIABILITIES Interest-bearing liabilities as presented in the statement of financial position MEUR 2024 2023Non-current interest-bearing loans and borrowings 110.0 190.6 Capitalized arrangement fees (2.5) (1.3)Drawn securitization facility 25.0 0.0 Interest-bearing lease liabilities 73.7 75.6 Total interest-bearing liabilities 206.2 264.9 On June 24, 2024, the previous secured five-year bonds with the outstanding principal amount of MEUR 190.6 as of March 31, 2024, were settled and new senior secured four-year bonds (the “Notes”) with the principal amount of MEUR 110.0 were issued (ISIN: NO0013260943). The Notes are due in 2028 and have an interest rate of 3M EURIBOR plus a margin of 5.25% (payable quarterly). The Notes are listed on the Open Market of Frankfurt Stock Exchange and the Oslo Stock Exchange. Subject to an incurrence covenant, the group can at any time tap the bond with an additional notional of up to MEUR 50.0. The group may call the bond in parts any time after December 2026 at the agreed call prices plus accrued interest on the redeemed amounts. As part of the refinancing in June 2024, KOA entered a revolving credit facility (RCF) agreement with DANSKE Bank for an amount of MEUR 15.0. The RCF was undrawn at the end of December 2024. The indenture for our outstanding Senior Notes and the RCF include customary terms and condi- tions, including restrictions on incurrence of additional debt unless it qualifies as permitted finan- cial indebtedness and restrictions on our ability to make distributions unless they are classified as permitted distributions. Furthermore, the terms restrict corporate actions which could have a mate- rial impact on the group such as disposal or transfer of a substantial part of the assets of the material group companies, or merger and consolidation with other entities. Additionally, a negative pledge clause prevents the creation of any security over our assets, ensuring that no preferential claims are placed on the Company’s assets that could disadvantage existing creditors. These measures collec- tively support our commitment to maintaining robust financial health and adhering to strategic business practices. On January 31, 2024, the group amended and extended the existing Accounts Receivables Securitization Agreement with NORD/LB and Finacity Corporation (“Finacity”). This has a commit- ted MEUR 25.0 facility at rate of 1.75% above the funding rate. The actual drawing of the funds could be less than the commitment depending on the availability of receivables meeting the investment criteria. At the end of December 2024, MEUR 25.0 had been drawn from the facility. Defined benefit scheme – sensitivities DBO AS AT DBO AS AT MEUR31.12.202431.12.2023Actual valuation 12.4 11.3 Discount rate + 0.5% 11.7 10.7 Discount rate – 0.5% 13.1 11.9 Expected rate of salary increase + 0.5% 12.4 11.3 Expected rate of salary increase – 0.5% 12.3 11.2 Expected rate of pension increase + 0.5% 12.8 11.7 Expected rate of pension increase – 0.5% 11.9 10.8 The sensitivity does not include all schemes, however it covers the significant part of the pension liability. Defined benefit scheme – average expected lifetime Average expected lifetime at the balance sheet date for a person retiring on reaching age 65: • Male employee 21 years • Female employee 24 years Average expected lifetime 20 years after the balance sheet date for a person retiring on reaching age 65: • Male employee 24 years • Female employee 27 years Expected pension payment The pension payment for 2025 is expected to be in line with the 2024 payment. NOTE 20 RETIREMENT BENEFIT OBLIGATIONS (CONTINUED) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 152 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Changes in liabilities arising from financing activities Liquidity reserve The liquidity reserve of the group consists of cash and cash equivalents in addition to undrawn credit facilities. MEUR 2024 2023Opening balance at 01.01. 264.9 267.6 Changes arising from cash flows:Net proceeds from issuing the new bond notes 107.5 0.0 Payments for redemption / repurchase of the old bond notes (190.2) (9.4)Securitization facility drawn / (repaid) 25.0 0.0 Repayment of lease liabilities (7.0) (9.8)Repayment of other debt 0.0 (0.1)Non-cash changes:Additions – lease liabilities 4.3 16.1 Amortization of capitalized arrangement fees 0.0 0.8 Reduction of capitalized arrangement fees due to the bond repayment 1.3 0.0Other:Foreign exchange movement 3.7 0.0 Translation effect (3.3) (0.3)Closing balance at 31.12. 206.2 264.9 MEUR 2024 2023Cash and cash equivalents 84.3 164.7 Restricted cash (0.1) (0.5)Undrawn revolving credit facility 15.0 30.0 Undrawn securitization facility 0.0 25.0 Liquidity reserve 99.2 219.2 NOTE 21 INTEREST-BEARING LIABILITIES (CONTINUED) The group was in compliance with all applicable debt covenants at and for the year ended December 31, 2024. Specification of total interest-bearing liabilities by currency MEUR 2024 2023EUR 170.7 228.3 USD 14.8 11.7 Other currencies 23.2 26.2 Capitalized arrangement fees (2.5) (1.3)Total interest-bearing liabilities 206.2 264.9 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 153 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 23 RISK MANAGEMENT Finance risk management policies The group’s overall financial risk management focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the group’s financial performance. The group exploits derivative financial instruments for potential hedging of certain risk exposures; however, the current usage of such instruments is limited. Foreign exchange risk The group operates internationally in numerous countries and is exposed to foreign exchange risk arising from various currency exposures. The primary exposures are related to USD. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities and net investments in foreign operations. As the group reports its financial results in EUR, changes in the relative strength of EUR to the currencies in which the group conducts business can adversely affect the group’s financial development. Historically, changes in currency rates have influenced the top line development. However, they have not had a significant impact on operating profit since the costs usually offset the effects from the top line. Hence, the group seeks to align its revenue and cost base to reduce the currency exposure on a net cash flow basis. Management is monitoring the currency exposure on the group level. The group treasury uses the debt structure and profile to balance some of the net exposure of the cash flow from operations. The group’s treasury function regularly evaluates the use of hedging instruments but currently has no usage of such instruments. The group has its ultimate parent company and operations with functional currency Norwegian krone in Norway, as well as certain investments in foreign operations with functional currencies being other than EUR, which results in foreign currency translation risks in relation to the presenta- tion currency EUR. Furthermore, EUR-denominated financial instruments like intercompany loans and the new EUR bond held by the ultimate parent have led to significant FX losses when the NOK weakened. In line with the relocation of the operational headquarters back to Norway, the functional currency of the ultimate parent Kongsberg Automotive ASA and its holding subsidiary was changed to EUR, which will eliminate FX gains / losses on the EUR-denominated financial instruments as well as the translation risk related to Norwegian holding operations. Sensitivity As of December 31, 2024, if the currency USD had weakened / strengthened by 5% against the EUR with all other variables being constant, revenues would vary by (1.7%) and 1.9% or MEUR (13.4) and MEUR 14.8 and the operating result would increase by MEUR 0.2 (10.2%) and decrease by MEUR 0.3 (11.2%). NOTE 22 OTHER NON-CURRENT INTEREST-FREE LIABILITIES Specification of other non-current interest-free liabilities MEUR 2024 2023Provision for employee litigations 0.5 0.5 Provision for onerous contracts 0.0 2.0 Other non-current interest-free liabilities 0.2 1.2 Total other non-current interest-free liabilities 0.7 3.7 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 154 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 23 RISK MANAGEMENT (CONTINUED) The prices can be subject to large fluctuations in response to relatively minor changes in supply and demand and a variety of additional factors beyond the control of the group, including government regulation, capacity, and general economic conditions. A substantial part of the group’s products based on steel and brass (copper and zinc) is sold to truck manufacturers. Business practice in the truck industry allows the group to some extent to pass increases in steel, aluminum, and brass prices over to its customers. However, there is a time lag of three to six months before the group can adjust the price of its products to reflect fluctuations in the mentioned raw material prices, and a sudden change in market conditions could therefore impact the group’s financial position, revenues, profits, and cash flow. When the market prices go down the adverse effect will occur. For products sold to passenger car applications, the group does not have the same opportunity to pass along increases in raw materials prices. Uninsured losses The group maintains a number of separate insurance policies to protect its core businesses against loss and/or liability to third parties. Risks insured include general liability, business interruption, workers’ compensation and employee liability, professional indemnity, and material damage. Supply chain-related risks and uncertainties The Company’s ability to meet the customers’ needs depends on the ability to maintain key manu- facturing and supply arrangements. The loss or disruption of such manufacturing and supply arrangements may be caused by the issues such as labor disputes, inability to procure sufficient raw or input materials, natural disasters, disease outbreaks or other external factors over which the Company has no control. Risks related to the Russia-Ukraine war The war in Ukraine has created considerable uncertainty, particularly with regard to the potential impact of the political actions, primarily where the duration, intensity and allocation of energy sup- plies as well as their impact on the supply chain are concerned. Due to the Russia-Ukraine war, the supply of energy, other raw materials and parts for the pro- duction process has resulted in greater constraints, especially in Europe. Higher energy and com- modity prices plus greater volatility added to the strain. Furthermore, rising inflation rates could reduce purchasing power, adversely affect end-customer behavior, and put a damper on demand for the products offered to the customers. Operational risks Operation and investment risks and uncertainties The group is usually contracted as a supplier with a long-term commitment. The commitment is usually based on the model platforms, which for passenger cars are typically three to five years, while on commercial vehicles it is typically five to seven years and in some cases even longer. Purchase orders are achieved on a competitive bidding basis for either a specific period or indefinite time. Even if present commitments are cost reimbursable, they can be adversely affected by many factors and short-term variances including shortages of materials, equipment and work force, politi- cal risk, customer default, labor conflicts, accidents, environmental pollution, the prices of raw materials, unforeseen problems, changes in circumstances that may lead to cancelations and other factors beyond the control of the group. In addition, some of the group’s customer contracts may be reduced, suspended or terminated by the customer at any time upon the giving of notice. Customer contracts also permit the customer to vary the scope of work under the contract. As a result, the group may be required to renegotiate the terms or scope of such contracts at any time, which may result in the imposition of terms less favorable than the previous terms. Competition The group has significant competitors in each of its business areas and across the geographical mar- kets in which the group operates. The group believes that competition in the business areas in which it operates will continue in the future. The group continuously monitors its competitive environment as it is constantly exposed to potential strategic M&A activities by the supplier, customers or com- petitors that may negatively impact the group’s market position. Volatility in prices of input factors The group’s financial performance is dependent on prices of input factors, i.e. raw materials and dif- ferent semi-finished components with a varying degree of processing, used in the production of the various automotive parts. Some of the major raw materials are: • Steel including rod and sheet metal, cast iron and machined steel components • Polymer components of rubber, foam, plastic components and plastic raw materials • Copper • Zinc • Aluminum ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 155 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements As consequence of this war, the following negative risks might arise in the near future: protectionist tendencies, turbulence in the financial markets, structural deficits in individual countries as well as high inflation and rising interest rates worldwide. The group’s operations were not directly impacted by the conflict as none of group’s plants is located in Ukraine and Russia and most of KA’s customers do not have close economic ties with these countries. However, the group’s financials have been impacted by the indirect consequences of this war, such as an increase in energy prices and rising freight. Climate change risk Kongsberg Automotive has put in place adequate procedures that enable Management and the Board of Directors to regularly review material climate change issues that may have a significant impact on the Company’s operations from the operational and strategic point of view. The Company expects and is preparing for regulatory changes and policy measures targeted at reducing carbon emissions, especially as part of the commitments resulting from the Paris Agreement. The Company invests in sources of renewable energy, such as solar panels, to become more sustainable. Moreover, Kongsberg Automotive actively monitors its supply chains in relation to the potential disruptions caused by extreme weather events. In case of an occurrence of such unfavorable events, the Company works on mitigation actions together with its suppliers. In the group’s assessment, there are no material phys- ical climate risks that the group is expected to face in the foreseeable future. In 2024, the Company’s financial reporting was not significantly impacted by climate change risk. Interest rate risk Through its refinancing via senior secured notes with a fixed coupon, the group is not exposed to interest rate risk for the duration of the notes. Credit risk Credit risk is managed at the group and entity level. Credit risk arises mainly from trade with cus- tomers and outstanding receivables. The level of receivables overdue is monitored on a weekly basis. Historically the group has had limited losses on receivables. Applying forward-looking information, we do not see any material increase in the credit risk. Refer to note 17. The automotive industry consists of a limited number of vehicle manufacturers; hence the five biggest customers will be around 42.6% of total sales in 2024. The group has a diversified customer NOTE 23 RISK MANAGEMENT (CONTINUED) base with two individual customers representing more than 10% of the group’s revenues. In addition, the customer base consists of solvent OEMs and Tier 1 suppliers. In the group’s opinion there is lim- ited concentration risk; however due to the number of vehicle manufacturers and hence customers, concentration risk could be considered to exist. Funding and liquidity risk Cash flow forecasting is performed by each operating entity of the group on a weekly basis for the following 15 weeks. The group keeps track of its liquidity requirements and monitors to ensure there is sufficient cash to meet operational needs while always maintaining sufficient headroom on its undrawn committed borrowing facility. Surplus cash held by the operating entities over and above balance required for working capital management is transferred to the group treasury. For unused liquidity reserve, see note 21. Capital risk management The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital and balance the risk profile. The group monitors capital based on the gearing ratio and the level of equity. These ratios are calculated as net debt divided by adjusted EBITDA and equity divided by the total balance. The group has a treasury policy regulating the levels on these key ratios. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 156 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 24 TRADE AND OTHER PAYABLES Specification of trade and other payables as presented in the statement of financial position MEUR 2024 2023Trade payables 84.8 116.6 Accrued expenses 46.4 55.5 Provisions 15.9 17.2 Interest payable 0.1 4.6 Other short-term liabilities 6.1 3.7 Total trade and other payables 153.3 197.6 Provisions Maturity structure RESTRUC-RESTRUC-PROVISION TURING TURING FOR AND OTHER TOTAL WARRANTY AND OTHER TOTAL MEURWARRANTIESPROVISIONS2024RESERVEPROVISIONS2023Opening balance 9.2 8.0 17.2 8.4 2.1 10.5 P&L charge 19.7 2.2 21.9 12.5 8.5 21.0 Payments (16.6) (5.3) (21.9) (11.4) (2.0) (13.4) Release (0.1) (1.7) (1.8) (0.2) (0.5) (0.7) Translation effect 0.5 0.0 0.5 (0.1) (0.1) (0.2) Closing balance 12.7 3.2 15.9 9.2 8.0 17.2 OTHER ACCRUED INTEREST SHORT-TERM TRADE TOTAL MEURPROVISIONSEXPENSESPAYABLESLIABILITIESPAYABLES2024Repayable 0–3 months 10.2 28.2 0.1 4.7 76.1 119.3 after year-endRepayable 3–6 months 1.4 12.1 0.0 0.8 5.2 19.5 after year-endRepayable 6–9 months 0.1 3.4 0.0 0.1 3.2 6.8 after year-endRepayable 9–12 months 4.2 2.7 0.0 0.5 0.3 7.7 after year-endTotal 15.9 46.4 0.1 6.1 84.8 153.3 OTHER ACCRUED INTEREST SHORT-TERM TRADE TOTAL MEURPROVISIONSEXPENSESPAYABLESLIABILITIESPAYABLES2023Repayable 0–3 months 14.9 35.2 4.6 3.6 100.9 159.2 after year-endRepayable 3–6 months 0.8 14.3 0.0 0.1 8.5 23.7 after year-endRepayable 6–9 months 0.2 3.3 0.0 0.0 4.6 8.1 after year-endRepayable 9–12 months 1.3 2.7 0.0 0.0 2.6 6.6 after year-endTotal 17.2 55.5 4.6 3.7 116.6 197.6 P&L charge and Payments lines in 2023 related to warranty reserve have been restated accordingly. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 157 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Classification, measurement and fair value of financial instruments NOTE 25 FINANCIAL INSTRUMENTS 2024LOANS, RECEIVABLES LOANS, RECEIVABLES FINANCIAL AND CASH AT AND CASH LIABILITIES AT MEURAMORTIZED COSTAT FAIR VALUEAMORTIZED COST TOTAL 2024Trade and other receivables 154.3 154.3 Cash and cash equivalents 84.3 84.3Interest-bearing loans and borrowings (132.5) (132.5)Interest-bearing lease liabilities (73.7) (73.7)Trade payables and accrued expenses (131.2) (131.2)Total 238.6 (337.4) (98.8)Fair value 238.6 (337.5) (98.9)Unrecognized gain / (loss) (0.1) (0.1) 2023LOANS, RECEIVABLES LOANS, RECEIVABLES FINANCIAL AND CASH AT AND CASH LIABILITIES AT MEURAMORTIZED COSTAT FAIR VALUEAMORTIZED COST TOTAL 2023Trade and other receivables 177.3 177.3 Cash and cash equivalents 124.2 40.5 164.7 Interest-bearing loans and borrowings (189.3) (189.3) Interest-bearing lease liabilities (75.6) (75.6)Trade payables and accrued expenses (172.1) (172.1)Total 301.5 40.5 (437.0) (95.0)Fair value 301.5 40.5 (435.3) (93.3)Unrecognized gain / (loss) 1.7 1.7 Based on level 1 input. The bond was traded at 97.8% of its par value as at 31.12.2024 (98.5% as at 31.12.2023). Based on level 1 input ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 158 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Remuneration and fees recognized in the statement of comprehensive income Specification of fees paid to the auditors KEUR 2024 2023*Total remuneration of the Board of Directors 321.9 302.4 Gross base salary to the CEO 518.0 686.1 CEO’s short-term incentive 0.0 343.1 CEO’s long-term incentive costs 92.7 272.2 Pension costs to the CEO 10.9 56.3 Other remuneration to the CEO 19.7 71.4 Management salaries other than to the CEO 2,626.2 2,264.8 Bonus, LTI costs and other remuneration of management other 907.6 1,285.3 than the CEO Pension costs of management other than the CEO 364.5 246.0 Termination benefits to former CEO 0.0 2,281.5 Total – Board of Directors and Senior Management 4,861.4 7,809.1 Remuneration to Nomination Committee 46.4 47.9 KEUR 2024 2023Statutory audit services to the Parent Company (Deloitte) 364.2 213.7 Statutory audit services to subsidiaries (Deloitte) 613.8 664.8 Statutory audit services to subsidiaries (other) 113.3 95.6 Non-audit services (Deloitte) 50.2 29.5 Tax services (Deloitte) 290.0 486.2 Total 1,431.5 1,489.8 NOTE 26 REMUNERATION AND FEES FOR MANAGEMENT, BOARD OF DIRECTORS (BOD) AND AUDITOR NOTE 27 COMMITMENTS AND GUARANTEES Commitments The group’s operating lease commitments are now disclosed in note 14. In relation to low-value and short-term leases that are not presented as lease liabilities, the group is committed to an expected expense of MEUR 0.3 in 2025. Guarantees The issued senior secured notes are guaranteed on a senior basis by: • Parent guarantor (Kongsberg Automotive ASA), • Material group companies: Kongsberg Automotive Holding 2 AS, Kongsberg Automotive AS, Kongsberg Power Products Systems AB, Kongsberg Actuation Systems B.V., Kongsberg Actuation Systems Ltd, Kongsberg Automotive Sp. z.o.o, Kongsberg Holding III, Inc., Kongsberg Actuation Systems II, LLC, Kongsberg Power Products Systems I, LLC, Kongsberg Automotive, Inc., Kongsberg Driveline Systems I, LLC, and KA Group AG. General information In 2024 total parent guarantees in the total amount of around MEUR 70.0 (MEUR 60.5 and MUSD 10.0) were issued for entities in Slovakia, Poland, and Mexico. 2023 CEO remuneration items consist of former CEO Joerg Buchheim during the period of January 1, 2023 to July 24, 2023 and former CEO Linda Nyquist-Evenrud from July 25, 2023 to December 31, 2023. *Long-term incentive plans – share-based compensation. The amounts represent the expenses accounted for according to IFRS 2. Including health insurance, car allowance, and broadband Thereof, kEUR 74.8 (kNOK 870.0) related to the Deloitte’s ESG attestation services ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE GROUP 159 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 28 CONTINGENT LIABILITIES There are no current material disputes involving either the Company or its subsidiaries that need to be disclosed. NOTE 29 SUBSEQUENT EVENTS No significant subsequent events have been identified. NOTE 30 RELATED-PARTY TRANSACTIONS Kongsberg Automotive ASA is listed on the Oslo Stock Exchange and is the group’s ultimate parent. The group has no material transactions with related parties. Key Management and BoD compensation See note 26 – it includes remuneration for Senior Management and the Board of Directors. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 160 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 12 TRADE AND OTHER RECEIVABLES .......171 NOTE 13 SHARE CAPITAL ..................................171 NOTE 14 INTEREST-BEARING LIABILITIES ........171 NOTE 15 RISK MANAGEMENT ............................172 NOTE 16 TRADE AND OTHER PAYABLES ...........172 NOTE 17 REMUNERATION AND FEES FOR MANAGEMENT, BOARD OF DIRECTORS AND AUDITORS ..................................................173 NOTE 18 COMMITMENTS AND GUARANTEES ......173 NOTE 19 CONTINGENT LIABILITIES ...................173 NOTE 20 SUBSEQUENT EVENTS .......................173 NOTE 21 RELATED-PARTY TRANSACTIONS ......174 FINANCIAL STATEMENTS OF THE PARENT COMPANY STATEMENT OF COMPREHENSIVE INCOME ........... 161 STATEMENT OF CASH FLOWS ............................. 162 STATEMENT OF FINANCIAL POSITION ................ 163 STATEMENT OF CHANGES IN EQUITY .................. 165 NOTE 1 REPORTING ENTITY ..............................166 NOTE 2 STATEMENT OF COMPLIANCE ...............166 NOTE 3 SIGNIFICANT ACCOUNTING POLICIES ....166 NOTE 4 INVESTMENTS IN SUBSIDIARIES ..........166 NOTE 5 SALARIES AND SOCIAL EXPENSES ......167 NOTE 6 OTHER OPERATING EXPENSES .............167 NOTE 7 FINANCIAL ITEMS .................................167 NOTE 8 TAXES ...................................................168 NOTE 9 INTANGIBLE ASSETS ............................169 NOTE 10 PROPERTY, PLANT AND EQUIPMENT ... 169 NOTE 11 RIGHT-OF-USE ASSETS .......................170 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 161 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR NOTE 2024 2023 Operating revenues 21 5.3 6.0 Operating expenses Salaries and social expenses 5 (0.3) (0.5) Other operating expenses 6 (3.5) (3.2) Total operating expenses (3.8) (3.7) Operating profit 1.5 2.3 Financial items Financial income 7 58.6 28.2 Financial expenses 4, 7 (12.8) (185.3) Net financial items 45.8 (157.1) Profit / (loss) before taxes 47.3 (154.8) Income taxes 8 (7.2) (3.6) Net profit / (loss) 40.1 (158.4) Other comprehensive income Translation differences (12.7) (34.1) Other comprehensive income (12.7) (34.1) Total comprehensive income for the year 27.4 (192.5) STATEMENT OF COMPREHENSIVE INCOME ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 162 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR NOTE 2024 2023 Operating activities Profit / (loss) before taxes 47.3 (154.8) Impairment of IC shares 4 0.0 172.0 Interest income 7 (4.7) (24.1) Dividend income 7 (26.8) (1.7) Interest expenses and other financial expenses 7 12.4 11.4 Taxes paid 0.0 (0.2) (Gain) / loss on sale of non-current assets (1.0) 0.0 Changes in trade receivables 12 42.4 (8.5) Changes in trade payables 16 15.8 (2.1) Currency differences 7 (21.1) (1.9) Changes in other items 1.1 1.9 Cash flow from / used by operating activities 65.4 (8.0) Investing activities Repayment of investments in subsidiaries 4 9.7 0.0 Interest received 7 4.7 24.1 Dividends received 7 24.5 1.7 Cash flow from investing activities 38.9 25.8 Financing activities Payments for purchase of treasury shares 13 (2.3) (3.9) Net proceeds from issuing the new bond notes 14 107.5 0.0 Repayment of IC loans 14 (199.0) 0.0 Interest paid 7 (12.3) (11.2) Cash flow used by financing activities (106.1) (15.1) Currency effects on cash 0.4 (1.5) Net change in cash (1.4) 1.2 Net cash at January 1 1.4 0.2 Net cash at December 31 0.0 1.4 Of this, restricted cash 0.0 0.0 STATEMENT OF CASH FLOWS * Comprises changes in short-term group loans and receivables and in-house bank (note 12) ** Comprises changes in trade payables and short-term group liabilities (note 16) *** Comprises changes in other short-term receivables and prepayments (note 12) as well as other short-term liabilities and accrued expenses (note 16) ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 163 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements STATEMENT OF FINANCIAL POSITION ASSETS EQUITY AND LIABILITIES MEUR NOTE 2024 2023 Non-current assets Right-of-use assets 11 0.0 0.1 Investments in subsidiaries 4 228.6 113.7 Loans to subsidiaries 21 238.6 354.9 Other non-current assets 0.1 0.1 Total non-current assets 467.3 468.8 Current assets Trade and other receivables 12, 21 11.5 54.9 Cash and cash equivalents 0.0 1.4 Total current assets 11.5 56.3 Total assets 478.8 525.1 MEUR NOTE 2024 2023 Equity Share capital 13 80.6 84.6 Treasury shares 13 (5.2) (3.2) Share premium 172.0 180.6 Other reserves (49.5) (50.1) Retained earnings 87.6 47.5 Total equity 285.5 259.4 Non-current liabilities Deferred tax liabilities 8 26.5 22.7 Retirement benefit obligations 0.3 0.3 Interest-bearing liabilities 14 107.5 197.8 Total non-current liabilities 134.3 220.8 Current liabilities Current income tax liabilities 8 0.0 0.1 Trade and other payables 16, 21 59.0 44.8 Total current liabilities 59.0 44.9 Total liabilities 193.3 265.7 Total equity and liabilities 478.8 525.1 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 164 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Kongsberg, March 26, 2025 The Interim President & CEO and the Board of Directors of Kongsberg Automotive ASA Christian Johansson Interim President & CEO and CFO Olav Volldal Chair Brian Kristoffersen Director Bård Klungseth Deputy Chair Siw Reidun Wærås Employee representative Synnøve Gjønnes Director Knut Magne Alfsvåg Employee representative Junyang (Jenny) Shao Director Bjørn Ivan Ødegård Employee representative ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 165 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements STATEMENT OF CHANGES IN EQUITY MEUR SHARE CAPITAL TREASURY SHARES SHARE PREMIUM OTHER RESERVES RETAINED EARNINGS TOTAL EQUITY Equity as at 01.01.2023 100.3 (23.9) 208.2 (36.2) 205.9 454.3 Purchase of treasury shares (3.9) (3.9) Cancelation of treasury shares (9.0) 23.0 (14.0) 0.0 Share-based compensation 1.5 1.5 Total comprehensive income for the year: Loss for the year (158.4) (158.4) Other comprehensive income: Translation differences (6.7) 1.6 (13.6) (15.4) (34.1) Total comprehensive income for the year (6.7) 1.6 (13.6) (15.4) (158.4) (192.5) Equity as of 31.12.2023 / 01.01.2024 84.6 (3.2) 180.6 (50.1) 47.5 259.4 Purchase of treasury shares (2.4) (2.4) Share-based compensation 1.1 1.1 Total comprehensive income for the year: Profit for the year 40.1 40.1 Other comprehensive income: Translation differences (4.0) 0.4 (8.6) (0.5) (12.7) Total comprehensive income for the year (4.0) 0.4 (8.6) (0.5) 40.1 27.4 Equity as of 31.12.2024 80.6 (5.2) 172.0 (49.5) 87.6 285.5 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 166 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTES NOTE 1 REPORTING ENTITY Kongsberg Automotive ASA (“the Company”) is a limited liability company incorporated and domiciled in Norway. The address of its registered office is Dyrmyrgata 48, NO-3601 Kongsberg, Norway. The Company is listed on the Oslo Stock Exchange. The Company is the ultimate parent of the group and serves the purpose of holding company in the group. The information provided in the consolidated financial statements covers the Company to a significant degree. For a description of the operating activities of the subsidiaries of Kongsberg Automotive ASA, please refer to the consolidated financial statements of the group. The Company financial statements were authorized for issue by the Board of Directors on March 26, 2025. NOTE 2 STATEMENT OF COMPLIANCE The Company’s financial statements are prepared in accordance with simplified IFRS according to the Norwegian Accounting Act § 3-9, and regulations regarding simplified application of IFRS issued by the Ministry of Finance on February 7, 2022. NOTE 3 SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting principles are consistent with the accounting principles of the group, as described in note 3 of the group’s consolidated financial statements. Where the notes for the Company are substantially different from the notes for the group, it is shown accordingly. Otherwise, refer to the notes to the group’s consolidated financial statements. Dividends and group contributions received are recognized as income in the same year as allocated by the subsidiary. If the dividend exceeds the share of retained profits after the purchase, the excess part represents repayment of invested capital and the disbursements received are deducted from the value of the investment in the balance sheet. Kongsberg Automotive ASA has decided to utilize the option in the regulations of simplified application of international financial reporting standards which allow it to account for dividends and group contributions in accordance with Norwegian General Accepted Accounting Principles (NGAAP). NOTE 4 INVESTMENTS IN SUBSIDIARIES ENTITY NAME COUNTRY OF INCOR- PORA TION OWNER- SHIP 2024 OWNER- SHIP 2023 2024 2023 Kongsberg Automotive Holding 2 AS Norway 100% 100% 125.6 0.0 KA Group AG Switzerland 0% 0% 97.5 102.3 Kongsberg Automotive (Wuxi) Ltd China 100% 100% 0.8 6.4 Kongsberg Automotive Ltda Brazil 100% 100% 2.0 2.1 Kongsberg Automotive Ltd Korea 100% 100% 1.5 1.6 Kongsberg Automotive (India) Private Ltd India 100% 100% 0.8 0.8 Kongsberg Automotive Driveline System India Ltd India 100% 100% 0.4 0.4 Kongsberg Automotive Japan KK Japan 0% 100% 0.0 0.1 Kongsberg Automotive SARL France 0% 100% 0.0 0.0 CTEX Seat Comfort (Holding) Ltd Great Britain 0% 100% 0.0 0.0 Total investments in subsidiaries 228.6 113.7 Investments In 2024, the Company executed a debt-equity conversion to Kongsberg Automotive Holding 2 AS, as part of its efforts to optimize the capital structure of the subsidiary. This transaction resulted in a MEUR 125.6 increase in the Company’s shareholding in the subsidiary, while simultaneously reducing inter - company loans given to subsidiaries (see note 21). Furthermore, in 2024 following companies were liquidated as part of the Company’s efforts to optimize the group’s footprint: • Kongsberg Automotive Japan KK • Kongsberg Automotive SARL • Kongsberg Automotive Ltd • CTEX Seat Comfort (Holding) Ltd Impairment testing The Company has performed impairment tests on all KA companies owned or financed directly by Kongsberg Automotive ASA. The following assets have been considered for impairment: Share investments; intercompany loans ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 167 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements to group companies, intercompany receivables. The impairment assessment is made at “net invest- ment” level (all direct loans, receivables and share investments are considered together). Shares are impaired before loans, and loans before receivables. In a first step, the net investment was compared to the carrying value of the equity of the respec- tive subsidiaries. The equity carrying value is considered as a conservative valuation of the company value. In a second step, the net investment was compared to the enterprise value. The enterprise value has been derived from the net present value of all future cash flows including terminal value. The principal model has been taken into account as well as all assumptions used for the three-year stra- tegic planning in the cash flow estimation of each tested subsidiary. Discount rate assumptions The required rate of return was calculated using the WACC method. The same WACC was used as calcu- lated for group impairment purposes. For details, please refer to group note 15. Impairment test results and conclusion In 2023, the intercompany shares held in Kongsberg Automotive Holding 2 AS and KA Group AG were impaired by MEUR 172.0, which was recorded under financial expenses. Based on the results from the impairment test performed, the Company concluded that there is no requirement for impairment indi - cated as at 31.12.2024. NOTE 5 SALARIES AND SOCIAL EXPENSES NOTE 4 INVESTMENTS IN SUBSIDIARIES (CONTINUED) NOTE 7 FINANCIAL ITEMS MEUR 2024 2023 Wages and salaries 0.3 0.4 Pension cost (defined contribution plans) 0.0 0.1 Total salaries and social expenses 0.3 0.5 MEUR 2024 2023 Dividend and other financial income 26.6 1.7 Foreign currency gains 25.1 2.3 Account receivables securitization – income 0.7 1.0 Interest income 4.0 23.2 Reversal of write-down of intercompany shares 2.2 0.0 Total financial income 58.6 28.2 Interest expense (12.0) (10.1) Foreign currency losses 0.0 0.0 Account receivables securitization – expense 0.0 (0.2) Change in value of financial derivatives (0.1) 0.0 Impairment of intercompany shares 0.0 (172.0) Write-down of intercompany loans (0.3) (3.0) Other financial expenses (0.4) 0.0 Total financial expenses (12.8) (185.3) Total financial items 45.8 (157.1) MEUR 2024 2023 Service costs 2.6 2.9 Other costs 0.9 0.3 Total other operating expenses 3.5 3.2 The Company had no employees as of 31.12.2024 and there were no employees as of 31.12.2023 either. Wages and salaries comprise directors’ fees. Includes unrealized currency gain of MEUR 21.1 (2023: unrealized gain of MEUR 2.3) NOTE 6 OTHER OPERATING EXPENSES ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 168 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Tax recognized in statement of income The major components of income tax expense: NOTE 8 TAXES MEUR 2024 2023 Current tax on profits for the year (2.2) (3.7) Adjustments in respect of prior years – current tax (0.1) (0.1) Total current tax expense (2.3) (3.8) Current year change in deferred tax (5.0) 0.3 Adjustments in respect of prior years – deferred tax 0.1 (0.1) Total change in deferred tax (4.9) 0.2 Total income tax expense (7.2) (3.6) MEUR 2024 2023 Profit / (loss) before taxes 47.3 (154.8) Expected tax calculated at Norwegian tax rate (10.4) 34.0 Dividends (permanent differences) 5.7 0.4 Other permanent differences (0.3) (38.0) Effect of withholding tax (2.2) 0.0 Income tax (expense) / credit (7.2) (3.6) Average effective tax rate 15.2% -2.3% MEUR 2024 2023 Current income tax receivables 0.0 0.0 Current income tax liabilities 0.0 0.0 Total 0.0 0.0 MEUR 2024 2023 Deferred tax liability (26.5) (22.7) Total (26.5) (22.7) Includes withholding tax of MEUR 2.2. Further details can be found in table below. Tax recognized in other comprehensive income No tax was recognized in other comprehensive income in 2024 and 2023. Reconciliation of Norwegian nominal statutory tax rate to effective tax rate Tax recognized in the statement of financial position Current tax Deferred tax Deferred tax positions are netted within the tax entity. Paid by the distributing entity. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 169 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR OPENING BALANCE CHARGED TO INCOME CHANGES IN R ATE OCI EXCHANGE DIFFER- ENCES CLOSING BALANCE Property, plant and equipment 0.0 0.0 0.0 0.0 0.0 0.0 Retirement benefits obligations 0.1 0.0 0.0 0.0 0.0 0.1 Losses 0.0 0.1 0.0 0.0 0.0 0.1 Trade and other receivables 3.0 0.4 0.0 0.0 (0.1) 3.3 Unrealized FX on long-term receivables / payables (26.0) (5.6) 0.0 0.0 1.3 (30.3) Other temporary differences 0.2 0.1 0.0 0.0 0.0 0.3 Net deferred tax asset / (liability) (22.7) (5.0) 0.0 0.0 1.2 (26.5) NOTE 8 TAXES (CONTINUED) Specification of deferred tax assets / (liabilities) recognized in the statement of financial position Tax positions not recognized The Company had no unrecognized positions in 2024 and 2023. Remaining lifetime of tax losses (net tax value) Tax losses have no expiration date and amount to MEUR 0.5. NOTE 9 INTANGIBLE ASSETS All intangible assets were fully amortized as of December 31, 2024. NOTE 10 PROPERTY, PLANT & EQUIPMENT (PP&E) All PP&E assets were fully depreciated as of December 31, 2024. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 170 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR BUILDINGS TOTAL Cost at 01.01.2023 0.2 0.2 Additions 0.0 0.0 Lease terminations 0.0 0.0 Translation differences 0.0 0.0 Acquisition costs at 31.12.2023 0.2 0.2 Accumulated depreciation at 01.01.2023 (0.1) (0.1) Depreciation 0.0 0.0 Lease terminations 0.0 0.0 Translation differences 0.0 0.0 Accumulated depreciation at 31.12.2023 (0.1) (0.1) Cost 0.2 0.2 Accumulated depreciation (0.1) (0.1) Book value at 31.12 2023 0.1 0.1 Cost at 01.01.2024 0.2 0.2 Additions 0.0 0.0 Lease terminations 0.0 0.0 Translation differences 0.0 0.0 Acquisition costs at 31.12.2024 0.2 0.2 Accumulated depreciation at 01.01.2024 (0.1) (0.1) Depreciation 0.0 0.0 Lease terminations (0.1) (0.1) Translation differences 0.0 0.0 Accumulated depreciation at 31.12.2024 (0.2) (0.2) Cost 0.2 0.2 Accumulated depreciation (0.2) (0.2) Book value at 31.12 2024 0.0 0.0 NOTE 11 RIGHT-OF-USE ASSETS Lease liabilities Maturity analysis – contractual undiscounted cash flows MEUR 2024 2023 Non-current lease liabilities 0.1 0.1 Current lease liabilities 0.0 0.0 Total lease liabilities 0.1 0.1 MEUR 2024 2023 Within one year 0.1 0.1 One to five years 0.0 0.1 More than five years 0.0 0.0 Total undiscounted lease liabilities 0.1 0.2 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 171 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 12 TRADE AND OTHER RECEIVABLES During 2019, the group changed from a notional cash pool under Kongsberg Automotive ASA to a physical cash pool with KA Group AG as the master header for the group and Kongsberg Automotive ASA as a sub-header for some of the European entities. Due to the transactions carried out under Kongsberg Automotive’s share buy-back program initiated in November 2023, the Company held the cash as of December 31, 2023 which was needed to perform the repurchase transactions in the fol- lowing 10 days. In addition to that, its cash held by KA Group AG was included as in-house bank under trade and other receivables. Specification of trade and other receivables NOTE 14 INTEREST-BEARING LIABILITIES Interest-bearing liabilities as presented in the statement of financial position Specification of total interest-bearing liabilities MEUR 2024 2023 Short-term group loans and receivables 9.7 7.9 In-house bank 1.3 46.7 Other short-term receivables 0.1 0.1 Receivables 11.1 54.7 Prepayments 0.4 0.2 Total trade and other receivables 11.5 54.9 MEUR 2024 2023 NOK 4.5 49.0 EUR 5.5 5.9 USD 1.5 0.0 Total trade and other receivables 11.5 54.9 MEUR 2024 2023 External non-current interest-bearing loans and borrowings 110.0 0.0 Non-current interest-bearing loan 0.0 199.0 Capitalized arrangement fees (2.5) (1.3) Interest-bearing lease liabilities 0.0 0.1 Total interest-bearing liabilities 107.5 197.8 MEUR 2024 2023 EUR 110.0 199.0 NOK 0.0 0.1 Capitalized arrangement fee (2.5) (1.3) Total interest-bearing liabilities 107.5 197.8 Receivables by currency NOTE 13 SHARE CAPITAL Refer to note 18 in the group’s statements. * Relates to the loan granted by KA Group AG ** In 2023, this relates to the bond fees paid by Kongsberg Automotive ASA on behalf of Kongsberg Actuation Systems BV On June 24, 2024, new senior secured four-year bonds with the principal amount of MEUR 110.0 were issued (ISIN: NO0013260943). The Notes are due in 2028 and have an interest rate of 3M EURIBOR plus a margin of 5.25% (payable quarterly). The Notes are listed on the Open Market of Frankfurt Stock Exchange and the Oslo Stock Exchange. Subject to an incurrence covenant, the group can at any time tap the bond with an additional notional of up to MEUR 50.0. The group may call the bond in parts any time after December 2026 at the agreed call prices plus accrued interest on the redeemed amounts. Refer to note 27 of the group’s statements for list of the material group companies, guaran- teeing the new issued secured bond notes. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 172 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 15 RISK MANAGEMENT The Company’s risk management is an integral part of the group’s risk management. Refer to note 23 of the group’s statements for further information. Currency exposure Management monitors the currency exposure at a group level. The group treasury uses the debt structure and profile to balance some of the net exposure of the cash flow from operations. The group’s treasury function regularly evaluates the use of hedging instruments but currently has low usage of such instruments. Interest risk The Company is exposed to limited interest risk. MEUR 2024 2023 Trade payables 0.8 1.0 Short-term group liabilities 57.0 43.1 Accrued expenses 1.0 0.6 Other short-term liabilities 0.2 0.1 Total trade and other payables 59.0 44.8 MEUR ACCRUED EXPENSES OTHER SHORT-TERM LIABILITIES TRADE PAYABLES TOTAL 2024 Repayable 0–3 months after year-end 0.4 0.2 0.8 1.4 Repayable 3–6 months after year-end 0.3 0.0 0.0 0.3 Repayable 6–9 months after year-end 0.0 0.0 0.0 0.0 Repayable 9–12 months after year-end 0.3 0.0 0.0 0.3 Total 1.0 0.2 0.8 2.0 Provisions The Company had no provisions as of December 31, 2024, and December 31, 2023. Maturity structure NOTE 16 TRADE AND OTHER PAYABLES Specification of trade and other payables as presented in the statement of financial position NOTE 14 INTEREST-BEARING LIABILITIES (CONTINUED) Changes in liabilities arising from financing activities MEUR 2024 2023 Opening balance as of 01.01. 197.8 197.0 Net proceeds from issuing the new bond notes 107.5 0.0 Repayment of IC loans (199.0) 0.0 Reduction of capitalized arrangement fees due to the redemption of the old bond 1.3 0.0 Foreign exchange movement 6.4 12.7 Translation effect (6.6) (12.7) Other 0.1 0.8 Closing balance as of 31.12. 107.5 197.8 ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 173 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements NOTE 17 REMUNERATION AND FEES FOR MANAGEMENT, BOARD OF DIRECTORS AND AUDITORS Refer to note 26 in the group’s consolidated financial statements. NOTE 18 COMMITMENTS AND GUARANTEES Guarantees Some subsidiaries require a financial support guarantee from the Parent to satisfy the going concern assumption. The Company has issued guarantees towards suppliers of subsidiaries. The risk exposure is assessed to be immaterial. In 2024 total parent guarantees in the total amount of around MEUR 70.0 (MEUR 60.5 and MUSD 10.0) were issued for entities in Slovakia, Poland, and Mexico. In relation to the Offering of Senior Secured Notes, the Company is the parent guarantor. NOTE 19 CONTINGENT LIABILITIES Refer to note 28 in the group’s consolidated financial statements. NOTE 20 SUBSEQUENT EVENTS No significant subsequent events have been identified. Refer to note 29 in the group’s consolidated financial statements for the group-relevant subsequent events. ANNUAL REPORT 2024 // FINANCIAL STATEMENTS OF THE PARENT COMPANY 174 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR 2024 2023 Kongsberg Actuation Systems S.L.U. 0.1 0.1 Kongsberg Automotive Hong Kong Ltd 1.5 0.0 Kongsberg Automotive (Wuxi) Ltd 2.6 2.5 KA Group AG 2.1 2.8 Other group companies 3.4 2.5 Total outstanding receivables to other group companies 9.7 7.9 MEUR 2024 2023 Trade and other payable group companies 57.0 43.1 Total 57.0 43.1 Current assets and liabilities have due dates within one year. The outstanding accounts are repayable on demand based on available liquidity in the respective subsidiary. Outstanding liabilities with other group companies Includes the group contribution to Kongsberg Automotive Holding 2 AS of MEUR 6.2 (2023: MEUR 17.8). Outstanding loans and receivables with other group companies Loans to other group companies MEUR 2024 2023 Kongsberg Automotive Holding 2 AS 235.9 351.8 Kongsberg Automotive Finance BV 2.5 2.9 Other group companies 0.2 0.2 Total outstanding loans with other group companies 238.6 354.9 In 2024, the Company executed a debt-equity conversion to Kongsberg Automotive Holding 2 AS, as part of its efforts to optimize the capital structure of the subsidiary. This transaction resulted in a MEUR 125.6 increase in the Company’s shareholding in the subsidiary, while simultaneously reducing intercompany loans given to subsidiaries. Most of the Company ’ s loans to group companies have due dates exceeding one year. The interest rate on loans to group companies consists of the reference rate in the respective cur - rency plus a margin. The margin on new intercompany loans is determined according to the Moody's rating methodology. Short-term group receivables NOTE 21 RELATED-PARTY TRANSACTIONS The group’s ultimate parent is Kongsberg Automotive ASA. The Company has carried out the following transactions with related parties: Specification of revenues – type of services MEUR 2024 2023 Group benefits fees from subsidiaries 1.9 2.1 Service fee from KA AG 3.4 3.9 Operating revenues 5.3 6.0 MEUR 2024 2023 Switzerland 5.3 6.0 Operating revenues 5.3 6.0 Specification of revenues – revenues by geographical location ANNUAL REPORT 2024 // CONSOLIDATED KEY FINANCIAL DATA 175 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements CONSOLIDATED KEY FINANCIAL DATA Definitions 5 Profit after tax 9 Gross expenses – Payments from customers 10 (Operating profit / (loss)) + depreciation and amortization) / Operating revenues 11 (Operating profit / (loss)) / Operating revenues 12 (Net profit / (loss)) / Operating revenues 13 (Operating profit / (loss)) / Average total assets 14 EBIT / Average capital employed 15 (Net profit / (loss)) / Average equity 17 Operating assets – Operating liabilities 20 Cash + Unutilized credit facilities and loan approvals 22 (Operating profit / (loss)) / Financial expenses 23 Current assets / Current liabilities 2024 2023 2022 2021 2020 (RESTATED) Operations and profit 1 Operating revenues (MEUR) 788.2 884.9 905.6 831.4 687.3 2 Depreciation / amortization (MEUR) 29.8 32.9 34.9 32.1 33.4 3 Operating profit / (loss) (MEUR) 18.7 (19.7) 63.1 47.5 (18.0) 4 Profit / (loss) before taxes (MEUR) (2.3) (45.7) 46.3 38.0 (63.6) 5 Net profit / (loss) (MEUR) (18.2) (59.1) 20.8 28.5 (58.5) 6 Cash flow from operating activities (MEUR) 32.4 21.5 64.5 56.7 57.7 7 Investment in property, plant and equipment (MEUR) 24.7 28.5 26.4 25.6 31.8 8 Development expenses, gross (MEUR) 31.2 35.0 42.2 55.9 54.9 9 Development expenses, net (MEUR) 26.2 28.1 36.6 47.5 46.4 Profitability 10 EBITDA margin % 6.2 1.5 10.8 9.6 2.2 11 Operating margin % 2.4 (2.2) 7.0 5.7 (2.6) 12 Net profit margin % (2.3) (6.7) 2.3 3.4 (8.5) 13 Return on total assets % 2.8 (2.6) 8.2 5.7 (2.0) 14 Return on capital employed (ROCE) % 5.8 (5.9) 6.8 8.5 2.4 15 Return on equity % (8.7) (23.8) 7.6 11.2 (22.1) 2024 2023 2022 2021 2020 (RESTATED) Capital as at 31.12. 16 Total assets (MEUR) 602.9 721.5 797.9 984.8 898.0 17 Capital employed (MEUR) 319.5 319.9 538.8 507.6 691.2 18 Total equity (MEUR) 203.0 218.1 280.5 265.6 245.5 19 Equity ratio % 33.7 30.2 35.2 27.0 27.3 20 Liquidity reserve (MEUR) 99.2 219.2 287.4 140.9 197.0 21 Long-term interest-bearing debt (MEUR) 196.3 254.7 258.3 338.7 363.0 22 Interest coverage ratio 0.8 (0.6) 2.7 2.4 (0.4) 23 Current ratio (banker’s ratio) 2.0 2.2 2.4 1.6 1.7 Personnel 24 Number of employees at 31.12. 4,714 5,286 5,270 5,624 11,234 * Capital employed in 2023 has been adjusted to align with the updated definition starting from 2024; ROCE in 2023 has been adjusted to align with the updated capital employed definition and transition from adjusted EBIT to EBIT starting in Q1 2024; Capital employed and ROCE in 2022, 2021 and 2020 have not been adjusted and fol- low the old definition. ** Items of the Statement of Comprehensive income and Statement of Cash Flow classified as discontinued oper- ations are excluded in 2022, 2021 and 2020. ANNUAL REPORT 2024 // ALTERNATIVE PERFORMANCE MEASURES 176 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements ALTERNATIVE PERFORMANCE MEASURES (APM) This section describes the non-GAAP financial measures that are used in this report and in the quarterly presentation. The following measures are not defined nor specified in the applicable financial reporting framework of the IFRS GAAP. They may be considered as non-GAAP financial measures that may include or exclude amounts that are calculated and presented according to the IFRS GAAP. • Operating profit / (loss) – EBIT / Adjusted EBIT • EBITDA / Adjusted EBITDA • Operating revenues at constant currencies • Business wins • Free cash flow • NIBD • Capital employed • ROCE OPERATING PROFIT / (LOSS) – EBIT / ADJUSTED EBIT EBIT, earnings before interest and tax, is defined as the earnings excluding the effects of how the operations were financed, taxed and excluding foreign exchange gains and losses. Adjusted EBIT is defined as EBIT excluding unusual or non-recurring items as well as restructuring items. Restructuring items include sever- ance cost related to the overhead cost optimization program and rightsizing of a plant with Driveline business. EBIT is used as a measure of operational profitability. Consequently, the group also reports the adjusted EBIT, which is the EBIT excluding restructuring items and impairment losses / reversal of impairment. 2024 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS CORPORATE & OTHER OTHER OPERATIONS GROUP MEUR Operating profit / (loss) 12.0 17.5 (19.6) 8.8 18.7 Restructuring costs 0.1 0.0 (0.7) 0.0 (0.6) Additional salaries and social expenses 0.9 0.4 1.7 3.4 6.4 Other additional operating expenses / (income) (1.8) 0.0 0.5 0.9 (0.4) Impairment losses / (reversal of impairment) (4.6) (0.4) 0.0 0.0 (5.0) Adjusted EBIT 6.6 17.5 (18.1) 13.1 19.1 Adjusted EBIT margin 1.9% 5.7% 10.1% 2.4% 2023 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS CORPORATE & OTHER OTHER OPERATIONS GROUP MEUR Operating profit / (loss) 19.7 28.8 (32.0) (36.2) (19.7) Restructuring costs 0.2 0.4 1.6 3.5 5.7 Additional salaries and social expenses 0.3 0.2 3.3 1.0 4.8 Other additional operating expenses 0.8 0.0 2.3 2.8 5.9 Impairment losses / (reversal of impairment) 0.0 0.0 0.0 27.0 27.0 Adjusted EBIT 21.0 29.4 (24.8) (1.9) 23.7 Adjusted EBIT margin 5.1% 9.4% -1.2% 2.7% ANNUAL REPORT 2024 // ALTERNATIVE PERFORMANCE MEASURES 177 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements EBITDA / ADJUSTED EBITDA EBITDA is defined as EBIT (previously defined) before depreciation and amortization. Adjusted EBITDA is therefore EBITDA excluding restructuring items and impairment losses / reversal of impairment. EBITDA is used as an additional measure of the group’s operational profitability, excluding the impact from depreciation and amortization. 2024 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS CORPORATE & OTHER OTHER OPERATIONS GROUP MEUR Operating profit / (loss) 12.0 17.5 (19.6) 8.8 18.7 Depreciation 13.8 13.6 1.7 0.0 29.1 Amortization 0.6 0.1 0.0 0.0 0.7 EBITDA 26.4 31.2 (17.9) 8.8 48.5 Restructuring items (0.9) 0.4 1.6 4.3 5.4 Impairment losses / (reversal of impairment) (4.6) (0.4) 0.0 0.0 (5.0) Adjusted EBITDA 20.9 31.2 (16.3) 13.1 48.9 Adjusted EBITDA margin 6.0% 10.2% 10.1% 6.2% 2023 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS CORPORATE & OTHER OTHER OPERATIONS GROUP MEUR Operating profit / (loss) 19.7 28.8 (32.0) (36.2) (19.7) Depreciation 13.1 11.9 1.5 5.4 31.9 Amortization 0.6 0.2 0.0 0.2 1.0 EBITDA 33.4 40.9 (30.5) (30.6) 13.2 Restructuring items 1.3 0.6 7.2 7.3 16.4 Impairment losses / (reversal of impairment) 0.0 0.0 0.0 27.0 27.0 Adjusted EBITDA 34.7 41.5 (23.3) 3.7 56.6 Adjusted EBITDA margin 8.5% 13.3% 2.3% 6.4% ANNUAL REPORT 2024 // ALTERNATIVE PERFORMANCE MEASURES 178 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements OPERATING REVENUES AT CONSTANT CURRENCIES In order to measure the actual revenue development and to have it comparable year-over-year, currency translation effects are excluded. For that reason, the actual operating revenues are remeasured at prior-year currency rates (constant currencies). BUSINESS WINS Business wins are reported when KA is awarded: (1) New contracts, (2) extension of the existing contract, (3) price or volume adjust- ments to existing programs/business awards. Annualized business wins are calculated as the annual average of total awarded future revenues, disregarding the sales in years of start of production and end of production. 2024 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS OTHER OPERATIONS GROUP MEUR Operating revenues (incl. currency translation effects) 351.3 307.2 129.7 788.2 Currency translation effects (1.4) 0.3 (1.2) (2.3) Operating revenues (excl. currency translation effects) 352.7 306.9 130.9 790.5 2024 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS OTHER OPERATIONS GROUP MEUR Annualized business wins 241.6 133.7 7.4 382.8 Lifetime business wins 1,044.8 451.4 29.8 1,526.0 2023 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS OTHER OPERATIONS GROUP MEUR Annualized business wins 147.0 110.2 39.7 296.9 Lifetime business wins 538.4 297.4 153.6 989.4 ANNUAL REPORT 2024 // ALTERNATIVE PERFORMANCE MEASURES 179 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements MEUR 2024 2023 Cash flow from operating activities 32.4 21.5 Cash flow used by investing activities (21.4) (29.1) Cash flow used by financing activities (90.1) (39.7) Currency effects on cash (1.3) (0.9) Add back / less: Purchase of treasury shares 2.4 3.9 Net proceeds from issuing the new bond notes (107.5) 0.0 Payments for redemption / repurchase of the old bond notes 190.2 9.4 Securitization facility drawn / (repaid) (25.0) 0.0 Free cash flow (20.3) (34.9) MEUR 2024 2023 Interest-bearing loans and borrowings 132.5 189.3 Long-term interest-bearing lease liabilities 63.8 65.4 Other short-term liabilities, interest-bearing 9.9 10.2 Cash and cash equivalents (84.3) (164.7) Net interest-bearing debt 121.9 100.2 FREE CASH FLOW Free cash flow is measured based on sum of cash flow from operating activities, investing activities, financial activities, and currency and translation effects on cash flow (together described as change in cash), excluding net draw-down/repayment of debt and proceeds received from capital increase/ purchase of treasury shares. The group considers that this measurement illustrates the amount of additional cash generated by the group that it has at its disposal to pursue additional investments or to repay debt. NIBD Net interest-bearing debt (NIBD) consists of interest-bearing liabilities less cash and cash equivalents. The group risk of default and financial strength is measured by the net interest-bearing debt. It shows the group’s financial position and leverage. As cash and cash equivalents can be used to repay debt, this measurement shows the net overall financial position of the group. CAPITAL EMPLOYED Capital employed includes the total sum of intangible assets, property, plant and equipment, net working capital (which in turn comprises trade receivables and inventories net of trade payables) and right-of-use assets less lease liabilities. Capital employed is measured to assess how much capital is needed for the operations/business to function and evaluate if the capital employed can be utilized more efficiently and/or if operations should be discontinued. MEUR 2024 2023 Intangible assets 84.6 78.3 Property, plant and equipment 117.3 115.8 Right-of-use assets 54.8 55.0 Net working capital (inventories and trade receivables less trade payables) 136.5 146.4 IFRS 16 lease liabilities (long-term and short-term) (73.7) (75.6) Capital employed 319.5 319.9 MEUR 2024 2023* Capital employed beginning (1) 01.01.2024 319.9 01.01.2023 344.3 Capital employed at end (2) 31.12 2024 319.5 31.12 2023 319.9 EBIT last twelve months (3) 18.7 (19.7) ROCE (3) / ((1) + (2)) * 2 5.8% -5.9% ROCE Return on capital employed (ROCE) is based on EBIT for the last twelve months divided by the aver- age of capital employed at the beginning and end of the period. Return on capital employed is used to measure the return on the capital employed and is used to assess the Company’s profitability and efficiency during the period under review. The group consid- ers this ratio as appropriate to measure the return of the period. * adjusted to align with the updated definition of capital employed (starting Q1 2024) * adjusted to align with the updated definition of capital employed and transition from adjusted EBIT to EBIT (starting Q1 2024) ANNUAL REPORT 2024 // DECLARATION TO THE ANNUAL REPORT 180 2024 in Brief Contents Auditor’s Report Governance Business and PerformanceBoD's Letter Sustainability Statements Financial Statements Responsibility Statement The President & Chief Executive Ofcer and the Board of Directors conrm, to the best of their knowledge, that the nancial statements for the peri- od January 1 to December 31, 2024, have been prepared in accordance with current applicable accounting standards, and give a true and fair view of the company’s and the group’s assets, liabilities, nancial position, and prot or loss of the entity and the group taken as a whole. We also conrm that the Board of Directors’ report includes a true and fair view of the development and performance of the business and the position of the entity and the group, together with a description of the principal risks and uncertainties the group and the company face. Additionally, we conrm that the annual report and the report of the Board of Directors have been prepared in accordance with standards for sus- tainability reporting established pursuant to section 2-6 of the Accounting Act, and in accordance with rules laid down pursuant to Article 8(4) of the Taxonomy Regulation. Kongsberg, March 26, 2025 The Interim President & CEO and the Board of Directors of Kongsberg Automotive ASA Christian Johansson Interim President & CEO and CFO DECLARATION TO THE ANNUAL REPORT 2024 Junyang (Jenny) Shao Director Bård Klungseth Deputy Chair Olav Volldal Chair Synnøve Gjønnes Director Bjørn Ivan Ødegård Employee representative Siw Reidun Wærås Employee representative Brian Kristoffersen Director Knut Magne Alfsvåg Employee representative 181 ANNUAL REPORT 2024 // AUDITOR'S REPORT Auditor’s Report Contents Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements AUDITOR’S REPORT 182 ANNUAL REPORT 2024 // AUDITOR'S REPORT Auditor’s Report 2024 in Brief Contents Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Deloitte AS Dronning Eufemias gate 14 Postboks 221 NO -0103 Oslo Norway +47 23 27 90 00 www.deloitte.no Deloitte AS and Deloitte Advokatfirma AS are the Norwegian affiliates of Deloitte NSE LLP, a member firm of Deloitte Touche T ohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and ind ependent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms. Deloitte Norway conducts business through two legally separate and independent limit ed liability companies; Deloitte AS, providing audit, consulting, financial advisory and risk management services, and Deloitte Advokatfirma AS, providing tax and legal services. Registrert i Foretaksregisteret Medlemmer av Den norske Revisorforening Organisasjonsnummer: 980 211 282 To the General Meeting of Kongsberg Automotive ASA INDEPENDENT AUDITOR’S REPORT Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Kongsberg Automotive ASA, which comprise: • The financial statements of the parent company Kongsberg Automotive ASA (the Company), which comprise the statement of financial position as at 31 December 2024, statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. • The consolidated financial statements of Kongsberg Automotive ASA and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2024, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including material accounting policy information. In our opinion • the financial statements comply with applicable statutory requirements, • the financial statements give a true and fair view of the financial position of the Company as at 31 December 2024, and its financial performance and its cash flows for the year then ended in accordance with simplified application of International Accounting Standards according to the Norwegian Accounting Act section 3-9, and • the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2024, and its financial performance and its cash flows for the year then ended in accordance with IFRS Accounting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of Kongsberg Automotive ASA for 15 years from the election by the general meeting of the shareholders on 4 June 2010 for the accounting year 2010. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of 2024. These matters were addressed in the context of our audit of the financial Independent auditor’s report Kongsberg Automotive ASA 2 statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. • Impairment of Intangible assets, including Goodwill, Property, plant and equipment and Right-of use assets Description of the Key Audit Matter How the matter was addressed in the audit Refer to note 15 to the Group financial statements for description of management’s impairment testing process and key assumptions. As disclosed in note 12, 13 and 14 the carrying value of Intangible assets, including Goodwill, Property, plant and equipment and Right-of use assets (‘identified assets’) amounted to EUR 256.7 million at 31 December 2024. Management’s annual impairment testing is based on the Group’s four-year long-range plan, adjusted for relevant recent changes in internal short-term forecasts and market data. Changes in these assumptions could have a significant impact on the value in use of the cash-generating units (CGU’s) and the recoverability of the carrying values of the identified assets allocated to these CGU’s. Transparent disclosures and clarity about sensitivities to key assumptions used in the valuations are critical to inform readers how management has made their assessments, given the uncertainty associated with the valuation of the recoverable amounts. Due to the inherent uncertainty involved in the forecasting and discounting of future cash flows, which are the basis of the assessment of recoverability of the CGU and the level of management judgement involved, this has been identified as a key audit matter. We challenged management’s assumptions used in its impairment model for assessing the recoverability of the identified assets. We focused on the appropriateness of CGU identification, methodology applied to estimate recoverable values, discount rates and forecasted cash flows. Specifically: • We obtained a detailed understanding of management’s process for performing the CGU impairment assessment. As part of this we assessed the design and implementation of the key controls. • We tested the methodology applied to estimate recoverable values as compared to the requirements of IAS 36, Impairment of assets; • We tested the mathematical accuracy of management’s impairment models; • We obtained an understanding of and assessed the basis for the key assumptions for the Group’s four-year long-range plan; • We evaluated and challenged management’s cash flow forecasting included in the four-year plan and the growth rate beyond with reference to the recent and historical performance of the CGU’s and external market forecasts and by performing sensitivity analysis; • We assessed the discount rate applied by benchmarking against independent data. We used Deloitte valuation specialists to assist our audit of the impairment testing. We considered the appropriateness of the related disclosures provided in note 15. O ther Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. 183 ANNUAL REPORT 2024 // AUDITOR'S REPORT Auditor’s Report 2024 in Brief Contents Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Independent auditor’s report Kongsberg Automotive ASA 3 In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appear to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • is consistent with the financial statements and • contains the information required by applicable statutory requirements. Our statement on the Board of Directors’ report applies correspondingly to the statement on Corporate Governance. Our statement that the Board of Directors’ report contains the information required by applicable law does not cover the sustainability report, for which a separate assurance report is issued. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements of the Company that give a true and fair view in accordance with simplified application of International Accounting Standards according to the Norwegian Accounting Act section 3-9, and for the preparation of the consolidated financial statements of the Group that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU. Management is responsible for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and the Group's internal control. Independent auditor’s report Kongsberg Automotive ASA 4 • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • conclude on the appropriateness of management’s use of the going concern basis of accounting, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements Report on Compliance with Requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of Kongsberg Automotive ASA, we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name 5967007LIEEXZXJDCG21-2024-12-31-en, have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. 184 ANNUAL REPORT 2024 // AUDITOR'S REPORT Auditor’s Report 2024 in Brief Contents Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Independent auditor’s report Kongsberg Automotive ASA 5 Auditor’s Responsibilities Our responsibility, based on audit evidence obtained, is to express an opinion on whether, in all material respects, the financial statements included in the annual report have been prepared in compliance with ESEF. We conduct our work in compliance with the International Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or reviews of historical financial information”. The standard requires us to plan and perform procedures to obtain reasonable assurance about whether the financial statements included in the annual report have been prepared in compliance with the ESEF Regulation. As part of our work, we have performed procedures to obtain an understanding of the Company’s processes for preparing the financial statements in compliance with the ESEF Regulation. We examine whether the financial statements are presented in XHTML-format. We evaluate the completeness and accuracy of the iXBRL tagging of the consolidated financial statements and assess management’s use of judgement. Our procedures include reconciliation of the iXBRL tagged data with the audited financial statements in human- readable format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Oslo, 26 March 2025 Deloitte AS Lars Atle Lauvsnes State Authorised Public Accountant (This document is signed electronically) 185 ANNUAL REPORT 2024 // AUDITOR'S REPORT Auditor’s Report 2024 in Brief Contents Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Independent sustainability auditor's limited assurance report Kongsberg Automotive ASA 2 Responsibilities for the Sustainability Statement The Board of Directors and the Managing Director (management) are responsible for designing and implementing a process to identify the information reported in the Sustainability Statement in accordance with the ESRS and for disclosing this Process in Double Materiality Assessment subsection on page 52-53 of the Sustainability Statement. This responsibility includes: • understanding the context in which the Group's activities and business relationships take place and developing an understanding of its affected stakeholders; • the identification of the actual and potential impacts (both negative and positive) related to sustainability matters, as well as risks and opportunities that affect, or could reasonably be expected to affect, the Group's financial position, financial performance, cash flows, access to finance or cost of capital over the short-, medium-, or long-term; • the assessment of the materiality of the identified impacts, risks and opportunities related to sustainability matters by selecting and applying appropriate thresholds; and • making assumptions that are reasonable in the circumstances. Management is further responsible for the preparation of the Sustainability Statement, in accordance with the Norwegian Accounting Act section 2-3, including: • compliance with the ESRS, and • preparing the disclosures in subsection EU Taxonomy on page 64 of the Sustainability Statement, in compliance with the Taxonomy Regulation; • designing, implementing and maintaining such internal control that management determines is necessary to enable the preparation of the Sustainability Statement that is free from material misstatement, whether due to fraud or error; and • the selection and application of appropriate sustainability reporting methods and making assumptions and estimates that are reasonable in the circumstances. Inherent limitations in preparing the Sustainability Statement In reporting forward-looking information in accordance with ESRS, management is required to prepare the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and possible future actions by the Group. Actual outcomes are likely to be different since anticipated events frequently do not occur as expected. Sustainability auditor’s responsibilities Our responsibility is to plan and perform the assurance engagement to obtain limited assurance about whether the Sustainability Statement is free from material misstatement, whether due to fraud or error, and to issue a limited assurance report that includes our conclusion. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence decisions of users taken on the basis of the Sustainability Statement as a whole. As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise professional judgement and maintain professional scepticism throughout the engagement. Our responsibilities in respect of the Sustainability Statement, in relation to the Process, include: • obtaining an understanding of the Process, but not for the purpose of providing a conclusion on the effectiveness of the Process, including the outcome of the Process; • considering whether the information identified addresses the applicable disclosure requirements of the ESRS; and • designing and performing procedures to evaluate whether the Process is consistent with the Group's description of its Process set out in the subsection Double Materiality Assessment on pages 52-59. Deloitte AS Dronning Eufemias gate 14 Postboks 221 NO -0103 Oslo Norway +47 23 27 90 00 www.deloitte.no Deloitte AS and Deloitte Advokatfirma AS are the Norwegian affiliates of Deloitte NSE LLP, a member firm of Deloitte Touche T ohmatsu Limited, a UK private company limited by guarantee (“DTTL”). DTTL and each of its member firms are legally separate and independent entities. DTTL and Deloitte NSE LLP do not provide services to clients. Please see www.deloitte.com/about to learn more about our global network of member firms. Deloitte Norway conducts business throu gh two legally separate and independent limited liability companies; Deloitte AS, providing audit, consulting, financial advisory and risk management services, and Deloitte Advokatfirma AS, providing tax and legal services. Registrert i Foretaksregisteret Medlemmer av Den norske Revisorforening Organisasjonsnummer: 980 211 282 To the General Meeting of Kongsberg Automotive ASA INDEPENDENT SUSTAINABILITY AUDITOR'S LIMITED ASSURANCE REPORT Limited assurance conclusion We have conducted a limited assurance engagement on the consolidated sustainability statement of Kongsberg Automotive ASA (the “Group”), included in the Sustainability Statement of the Board of Directors’ report (the “Sustainability Statement”), as at 31 December 2024 and for the year then ended. Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the Sustainability Statement is not prepared, in all material respects, in accordance with the Norwegian Accounting Act section 2-3, including: • compliance with the European Sustainability Reporting Standards (ESRS), including that the process carried out by the Group to identify the information reported in the Sustainability Statement (the “Process”) is in accordance with the description set out in subsection Double Materiality Assessment on page 52, and • compliance of the disclosures in subsection EU Taxonomy on page 64 of the Sustainability Statement with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”). Basis for conclusion We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements (ISAE) 3000 (Revised), Assurance engagements other than audits or reviews of historical financial information (“ISAE 3000 (Revised)”), issued by the International Auditing and Assurance Standards Board. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Our responsibilities under this standard are further described in the Sustainability auditor’s responsibilities section of our report. Our independence and quality management We have complied with the independence and other ethical requirements as required by relevant laws and regulations in Norway and the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour The firm applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Other matter The comparative information included in the Sustainability Statement was not subject to an assurance engagement. Our conclusion is not modified in respect of this matter. 186 ANNUAL REPORT 2024 // AUDITOR'S REPORT Auditor’s Report 2024 in Brief Contents Governance Business and PerformanceBoD’s Letter Sustainability Statements Financial Statements Independent sustainability auditor's limited assurance report Kongsberg Automotive ASA 4 • performed inquiries of relevant personnel, analytical procedures and substantive procedures on selected taxonomy disclosures included in the Sustainability Statement. Oslo, 26 March 2025 Deloitte AS Lars Atle Lauvsnes State Authorised Public Accountant - Sustainability Auditor (This document is signed electronically) Independent sustainability auditor's limited assurance report Kongsberg Automotive ASA 3 Our other responsibilities in respect of the Sustainability Statement include: • identifying where material misstatements are likely to arise, whether due to fraud or error; and • designing and performing procedures responsive to where material misstatements are likely to arise in the Sustainability Statement. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Summary of the work performed A limited assurance engagement involves performing procedures to obtain evidence about the Sustainability Statement. The procedures in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. The nature, timing and extent of procedures selected depend on professional judgement, including the identification of disclosures where material misstatements are likely to arise in the Sustainability Statement, whether due to fraud or error. In conducting our limited assurance engagement, with respect to the Process, we: • obtained an understanding of the Process by: o performing inquiries to understand the sources of the information used by management (e.g., stakeholder engagement, business plans and strategy documents); and o reviewing selected parts the Group’s internal documentation of its Process; and • evaluated whether the evidence obtained from our procedures with respect to the Process implemented by the Group was consistent with the description of the Process set out in subsection Double Materiality Assessment on pages 52-53. In conducting our limited assurance engagement, with respect to the Sustainability Statement, we: • obtained an understanding of the Group's reporting processes relevant to the preparation of its Sustainability Statement by obtaining an understanding of the Group's control environment, processes, control activities and information system relevant to the preparation of the Sustainability Statement, but not for the purpose of providing a conclusion on the effectiveness of the Group's internal control; • evaluated whether the information identified by the Process is included in the Sustainability Statement; • evaluated whether the structure and the presentation of the Sustainability Statement is in accordance with the ESRS; • performed inquires of relevant personnel and analytical procedures on selected information in the Sustainability Statement; • performed substantive assurance procedures on selected information in the Sustainability Statement; • where applicable, compared selected disclosures in the Sustainability Statement with the corresponding disclosures in the financial statements and other sections of the Board of Directors’ report; • evaluated selected methods, assumptions and data for developing estimates and forward-looking information; • obtained an understanding of the Group's process to identify taxonomy-eligible and taxonomy- aligned economic activities and the corresponding disclosures in the Sustainability Statement; • evaluated whether information about the identified taxonomy-eligible and taxonomy-aligned economic activities is included in the Sustainability Statement, and 186 KONGSBERG AUTOMOTIVE ASA DYRMYRGATA 48 3611 KONGSBERG NORWAY WWW.KONGSBERGAUTOMOTIVE.COM 5967007LIEEXZXJDCG212024-01-012024-12-315967007LIEEXZXJDCG212023-01-012023-12-315967007LIEEXZXJDCG212023-12-315967007LIEEXZXJDCG212024-12-315967007LIEEXZXJDCG212022-12-315967007LIEEXZXJDCG212022-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXJDCG212023-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXJDCG212022-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXJDCG212023-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXJDCG212022-12-31ifrs-full:SharePremiumMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:SharePremiumMember5967007LIEEXZXJDCG212023-12-31ifrs-full:SharePremiumMember5967007LIEEXZXJDCG212022-12-31ifrs-full:OtherReservesMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:OtherReservesMember5967007LIEEXZXJDCG212023-12-31ifrs-full:OtherReservesMember5967007LIEEXZXJDCG212022-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXJDCG212023-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXJDCG212022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXJDCG212023-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXJDCG212022-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXJDCG212023-01-012023-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXJDCG212023-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXJDCG212024-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXJDCG212024-12-31ifrs-full:TreasurySharesMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:SharePremiumMember5967007LIEEXZXJDCG212024-12-31ifrs-full:SharePremiumMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:OtherReservesMember5967007LIEEXZXJDCG212024-12-31ifrs-full:OtherReservesMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXJDCG212024-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXJDCG212024-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXJDCG212024-01-012024-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXJDCG212024-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:EURiso4217:EURxbrli:shares
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