Second Quarter Report 2018

Highlights
CEO Letter
Board of Directors first half-year report
Group Financials
Segment Reporting
lnterior Systems
Powertrain & Chassis Products
Specialty Products
Condensed Consolidated Financial Statements
Alternative Performance Measures (APM)
Notes
Responsabillity statement
Other Company Information

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Q2 2018 (MEUR)	Q2 2017	YTD 2018	YTD 2017	FY 2017
Revenues 287.5	268.1	575.8	548.5	1056.6
EBITDA 22.3 in % Revenues 7.8 %	23.2 8.7 %	47.3 8.2 %	42.3 7.7 %	69.2 6.5 %
Adjusted EBIT* 20.8	13.9	40.9	29.1	49.8
in % Revenues 7.2 %	5.2 %	7.1 %	5.3 %	4.7 %
EBIT 15.0	12.7	29.7	20.7	23.8
in % Revenues 5.2 %	4.7 %	5.2 %	3.8 %	2.3 %
Net Profit / (Loss) 4.2	2.9	13.9	3.1	(8.0)
Adjusted NIBD / EBITDA (LTM) 2.2	2.5	2.2	2.5	2.4
Equity ratio (%) 30.2%	29.4%	30.2%	29.4%	26.4%

CEO Letter

For the second quarter of 2018, we experienced strong growth. The growth is attributable to the platforms where we supply parts having higher production volumes than last year and our new programs ramping up in volumes. Our year over year volume growth at constant exchange rates was around 11%, in actual FX rates, our growth was around 7%. The difference is due to unfavorable FX effects with the Euro strengthening versus many of our main currencies from last year. At actual FX rates, on 7% revenue growth, our adjusted EBIT grew by around 50%. Our "fall-through" positively benefitted from volume and operational savings. However, negative FX effects, increased raw materials costs, and additional tariffs partly offset the positive effects. On an overall performance basis, at constant FX rates, our revenues were up 11% compared to Q2 2017, our adjusted EBIT was up by almost 60%. In the quarter, we also experienced positive seasonality effects, most notably coming from the Easter holidays this year being split between Q1 and Q2 as opposed to 2017 where all the Easter holidays took place in Q2. The seasonality effect lead to one more workday in 2018 versus 2017.

On the restructuring front, we closed our Burton and Easley facilities where the production has moved to Poland and Mexico, respectively. The Poland move is going well. The move to Mexico has some challenges as we are moving into a greenfield facility and also transferring the supply chain from South Carolina to Mexico. Especially for the Mexican operations, we expect these transition activities to continue through the remainder of the year. Due to our experiences with our recent plant closures, we are putting further plant closures on hold until we have properly integrated and optimized the receiving facilities. We estimate that this will take place well into 2019. As a result of this, we are currently not planning to announce any further plant closures before at the earliest in the second half of 2019.

NEW BUSINESS WINS

In Q2, 2018, we continued the trend of very strong bookings of new business with quarterly new business wins of MEUR 121.5, an increase of 70% vs Q2 2017. This brings our LTM new business wins to a new all-time high of MEUR 371.7.

CAPITAL STRUCTURE

At the initiative of a major shareholder, a 10% capital increase at premium pricing was completed at the end of Q2 increasing our equity by around 40 MEUR. The capital increase was executed as a private placement. After considering the offer from the major shareholder, we offered all shareholders with more than 1% shareholding in the company to participate in the private placement. Three shareholders participated in the capital increase. The strengthening of our balance sheet through the equity increase provides financial flexibility to further support organic growth and strategic initiatives. The capital increase reconfirms strong support from our largest shareholders who demonstrate support for KA and our improvement plans.

In July, we placed a 7-year MEUR 275 bond with a 5% annual yield rate refinancing our bank debt. For the first time in the company's history, we were credit rated. We achieved bond ratings of Ba3 and BB- from Moody's and S&P, respectively. Our overall corporate ratings were of Ba3 and B+ from Moody's and S&P, respectively. We experienced strong investor interest from reputable debt investors for our bond which was solidly oversubscribed and finally completed on July 23rd.

The combination of the capital increase and the refinancing provides a stable long term capital structure for KA.

MARKET CONDITIONS

Our overall market growth expectations for 2017 and 2018 as presented during our Capital Markets' Day in November 2017 were again largely confirmed in Q2 2018.

Global Passenger Car Production

The global light vehicles production in Q2 2018 was 24m, a YoY increase of 4.0%, equivalent to approx. 1m units. The biggest contributors were China and Europe where production grew with 8.5% and 4.7%, respectively. In North America, the production predictably fell by 1.7% as the trend towards high content cars at the cost of fewer lower priced cars continues. South America continues to experience strong growth with 7.8% YoY, albeit from low levels primarily driven by Brazil.

Global Truck Production

The production of medium and heavy-duty commercial vehicles increased YoY by 7.1% (55k units). The growth was primarily driven by India which produced 64k units more than same quarter last year. This offset the 10.4%, production decline in China driven by the significant advancement of production completed in 2017. North and South America continued the strong growth seen in previous quarters with YoY growth rates of 13.7% and 29.3%, respectively. In Europe, the truck YoY growth rate came in at $2.8%$

OUTLOOK

The underlying assumptions for our outlook is that there are no significant changes in market conditions and foreign exchange rates. Based on current information, we reconfirm our 2018 guidance from the 2018 AGM. For Q3, 2018, we expect revenues of MEUR 260.0.

For 2019, we will provide an update at the 2018 Capital Markets Day on November 7, 2018.

Kongsberg Automotive continues to implement the Improvement Plan that was introduced at the 2016 Capital Markets Day and updated at the 2017 Capital Market Day and 2018 Annual General Meeting.

The company started to deliver on the objectives of this important initiative, it lowered its company's structural costs, increased focus on individual product lines, and improved overall operational effectiveness. The board closely monitors progress and is pleased with the tangible results of implementation. The board would also like to thank the shareholders for the support expressed at the AGM for the many initiatives.

Although management focus has been on implementing the Improvement Plan, Kongsberg Automotive acquired in the same time very strong new business that enables the company to continue its profitable growth plan. Profitable growth is the key to creating sustainable shareholder value. The reorganization was designed to improve business unit focus on growth opportunities in each of the product businesses. The business unit leaders are executing their plans.

The AGM approved a resolution authorizing a 15% increase in share capital in addition to the customary 10%. The purpose of this is to provide financing flexibility to support growth in the event that a highly strategic and accretive acquisition prospect should materialize. The additional 15% share increase would be used exclusively for acquisitions.

The Board of Directors welcomed the shareholder initiative to increase the share capital by 10% and approved the increase at a premium price in the best interest of the company and all other shareholders. We also believe that the replacement of the existing bank loan financing by a 7 years bond at fixed interest rates provides a very strong overall capital structure going forward.

RISKS

Kongsberg Automotive continuously monitors its risk factors. The most important risk exposure is end market demand for light duty and commercial vehicles worldwide. Some of the most important additional risk factors are foreign-exchange rates, interest rates, raw material prices, and credit risks. Because Kongsberg Automotive operates in many countries, it is vulnerable to changes to existing free trade agreements and the imposition of export and import restrictions (such as antidumping duties, tariffs and embargoes), and to currency risks. The most significant currency exposures for Kongsberg Automotive are associated with NOK, EUR and USD exchange rates. The greatest material exposures are within plastic resin, copper, zinc, aluminum and steel. Credit risk depends on the financial health of vehicle manufacturers and their tier-1 and -2 suppliers.

SHARE AND SHAREHOLDERS

During the first half year, the share price has decreased from NOK 11.75 to 9.36, compared to 7.40 at the end of Q2 2017. The recent share price development partially reflects on the increasing overall markets uncertainty for globally acting industrial businesses. The total number of shareholders is 4,214. At the end of Q2 2018, the total number of shares was 406.8 million with 56.3% of the shares held by foreign shareholders. After registration of the share capital increase on July 4, 2018 the total number of shares is 447.4 million.

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017

Revenues OPEX	287.5 (265.2)	268.1 (244.9)	575.8 (528.5)	548.5 (506.1)	1056.6 (987.4)
EBITDA	22.3	23.2	47.3	42.3	69.2
in % Revenues	7.8 %	8.7 %	8.2 %	7.7 %	6.5 %
Depreciation, amortization and impairment	(7.3)	(10.5)	(17.6)	(21.7)	(45.4)
EBIT	15.0	12.7	29.7	20.7	23.8
in % Revenues	5.2 %	4.7 %	5.2 %	3.8 %	2.3 %
Adjusted EBIT * in % Revenues	20.8 7.2 %	13.9 5.2 %	40.9 7.1 %	29.1 5.3 %	49.8 4.7 %
Net financial items	(7.6)	(5.4)	(6.6)	(8.1)	(17.4)
Profit / (Loss) before taxes	7.3	7.3	23.1	12.6	6.4
Income taxes	(3.1)	(4.4)	(9.2)	(9.5)	(14.4)
Net Profit / (Loss)	4.2	2.9	13.9	3.1	(8.0)

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Cash flow from operating activities	44.0	22.2	39.9	28.6	38.3
Cash flow from investing activities	(18.3)	(11.2)	(26.4)	(19.2)	(49.3)
Cash flow from financing activities	(13.2)	(9.7)	0.5	(10.3)	18.2
Currency effects on cash	0.4	(1.1)	(0.2)	(1.4)	(2.3)
Change in cash	12.9	0.1	13.8	(2.3)	4.9
Cash at beginning period	40.4	32.2	39.5	34.6	34.6
Cash at period end	53.3	32.3	53.3	32.3	39.5

(MEUR)	30.06.18	30.06.17	31.12.2017
Non-current assets	365.8	361.6	358.9
Cash and cash equivalents	53.3	32.3	39.5
Other current assets	379.0	308.5	323.6
Total assets	798.2	702.4	721.9
Equity	0.0 241.0	0.0 206.7	0.0 190.7
Interest bearing debt	269.1	225.8	257.8
Other liabilities	288.1	269.9	273.5
Total equity and liabilities	798.2	702.4	721.9

	215.8	193.6	218.4
NIBD	30.2%	29.4%	26.4%
Equity ratio

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Revenues	71.9	63.3	142.1	139.1	263.9
Adjusted EBITDA	5.3	4.3	11.0	13.3	20.4
in % Revenues	7.4 %	6.8 %	7.8 %	9.6 %	7.7 %
Adjusted EBIT	4.2	1.8	5.8	8.3	10.1
in % Revenues	5.9 %	2.9 %	4.1 %	6.0 %	3.8 %
Restructuring	(1.1)	0.2	(2.2)	(0.4)	(1.5)
EBIT in % Revenues	3.1 4.4 %	2.0 3.2 %	3.6 2.6 %	7.9 5.7 %	8.6 3.2 %
Investments	(7.8)	(4.5)	(11.0)	(8.6)	(22.7)

(MEUR)			YTD 2018	YTD 2017	FY 2017
	Q2 2018	Q2 2017

Revenues	112.4	104.5	221.0	206.8	407.4
Adjusted EBITDA in % Revenues	6.6 5.9 %	4.3 4.1 %	12.8 5.8 %	7.4 3.6 %	18.4 4.5 %

Adjusted EBIT in % Revenues	2.8 2.5 %	0.1 0.1 %	5.3 2.4 %	(1.1) -0.6 %	1.5 0.4 %
Restructuring	(1.7)	(0.5)	(3.9)	(5.0)	(13.1)

EBIT in % Revenues	1.1 1.0 %	(0.3) -0.3 %	1.3 0.6 %	(6.2) -3.0 %	(11.5) -2.8 %
Investments	(5.8)	(5.2)	(10.5)	(10.1)	(19.1)

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017

Revenues	103.1	99.6	212.5	202.5	385.3
Adjusted EBITDA in % Revenues	19.2 18.6 %	18.3 18.4 %	41.3 19.4 %	36.8 18.2 %	65.5 17.0 %
Adjusted EBIT	17.1	14.6	37.0	29.4	51.1
in % Revenues	16.6 %	14.6 %	17.4 %	14.5 %	13.3 %

Restructuring	(1.9)	(0.6)	(2.9)	(2.8)	(8.7)
EBIT in % Revenues	15.2 14.8 %	13.9 14.0 %	34.1 16.1 %	26.7 13.2 %	42.4 11.0 %
Investments	(5.9)	(1.9)	(8.1)	(2.7)	(8.3)

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Revenues	287.5	268.1	575.8	548.5	1056.6
OPEX	(265.2)	(244.9)	(528.5)	(506.1)	(987.4)
EBITDA in % Revenues	22.3 7.8 %	23.2 8.7 %	47.3 8.2 %	42.3 7.7 %	69.2 6.5 %
Depreciation, amortization and impairment	(7.3)	(10.5)	(17.6)	(21.7)	(45.4)
EBIT	15.0	12.7	29.7	20.7	23.8
in % Revenues	5.2 %	4.7 %	5.2 %	3.8 %	2.3 %
Adjusted EBIT *	20.8	13.9	40.9	29.1	49.8
in % Revenues	7.2 %	5.2 %	7.1 %	5.3 %	4.7 %
Net financial items	(7.6)	(5.4)	(6.6)	(8.1)	(17.4)
Profit / (Loss) before taxes	7.3	7.3	23.1	12.6	6.4
Income taxes	(3.1)	(4.4)	(9.2)	(9.5)	(14.4)
Net Profit / (Loss)	4.2	2.9	13.9	3.1	(8.0)
Other comprehensive income (Items that may be reclassified to profit or loss in subsequent periods):	-	-	-	-	-
Translation differences on	(8.2)	(13.7)	(16.9)	(10.5)	(3.8)
foreign operations
Tax on translation differences	(2.0)	1.4	0.3	1.7	2.8
Other comprehensive income (Items that will not be reclassified to profit or loss in subsequent periods):
Translation differences on non foreign operations	10.5	5.4	11.8	4.5	(6.4)
Remeasurement of the net PBO	0.0	0.0	0.0	0.0	(0.1)
Tax on net PBO remeasurement	0.0	0.0	0.0	0.0	0.0
Other comprehensive income	0.3	(6.9)	(4.7)	(4.3)	(7.5)
Total comprehensive income	4.5	(4.0)	9.2	(1.1)	(15.4)

Net profit attributable to:
Equity holders (parent comp)	4.2	2.8	13.9	3.1	(8.0)
Non-controlling interests	(0.0)	(0.0)	(0.0)	(0.0)	(0.0)
Total	4.2	2.8	13.9	3.0	(8.0)
Total comprehensive income attributable to:
Equity holders (parent comp)2	4.5	(4.1)	9.2	(1.2)	(15.5)
Non-controlling interests2	0.0	0.0	0.0	0.0	0.0
Total2	4.5	(4.0)	9.2	(1.1)	(15.4)

Earnings per share:
Basic earnings per share, EUR	0.01	0.01	0.03	0.01	(0.02)
Diluted earnings per share, EUR	0.01	0.01	0.03	0.01	(0.02)

Other short term liabilities, interest bearing Accounts payable Other short term liabilities Current liabilities Total liabilities	142.0 109.2 251.4 0.0 557.2 0.0	103.9 224.3 0.0 495.7 0.0	103.7 234.5 0.0 531.2 0.0



		120.4	130.6
	0.1	0.1	0.1
Bank overdraft	0.0 0.0	0.0 (0.0)	0.0 (0.0)
Non-current liabilities	305.8	271.4	296.8
Other long term liabilities	19.3	20.6	19.5
Deferred tax liabilities	17.5	24.9	19.5
Interest bearing loans and borrowings	0.0 269.1	0.0 225.8	0.0 257.8
Total equity	241.0	206.7	190.7
Non-controlling interests3	3.7	3.6	3.6
Other equity	38.7	6.7	(4.9)
Share capital Share premium reserve	21.4 177.3	21.2 175.2	20.7 171.4
	0.0	0.0	0.0
Total assets	0.0 798.2	0.0 702.4	0.0 721.9
Current assets	432.3	340.8	363.1
Cash and cash equivalents	53.3	32.3	39.5
Other short term receivables Financial instruments	83.3 0.0	42.3 0.0	38.9 0.0
Accounts receivable	191.5	177.5	180.0
Inventories	104.2	88.7	104.7
Non-current assets	365.8 0.0	361.6 0.0	358.9 0.0
Other non-current assets	6.5	1.0	3.5
Property, plant and equipment	176.6	162.1	169.7
Intangible assets	162.0	169.8	162.0
Deferred tax assets	20.7	28.7	23.7
(MEUR)	30.06.18	30.06.17	31.12.2017

(MEUR)	30.06.18	30.06.17	31.12.2017
Equity as of start of period	190.7	208.6	208.6
Net profit for the period	13.9	3.1	(8.0)
Translation differences	(5.0)	(6.0)	(10.2)
Tax on translation differences	0.3	1.7	2.8

	0.0	0.0	(0.1)
Remeasurement of the net pension benefit obligation
Tax on remeasurement of the net pension benefit	0.0	0.0	0.0
obligation Total comprehensive income	9.2	(1.1)	(15.4)

Options contracts (employees)	0.1	0.3	0.1
Treasury shares	0.0	(1.0)	(2.5)
Other changes in non-controlling interests	0.0	(0.0)	0.0
Non registered capital increase	40.3	0.0	0.0
IFRS 15 and IFRS 9 first adoption*	0.7	0.0	0.0
Other changes in equity	(0.0)	(0.1)	0.0

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017

Operating activities
Profit/(Loss) before taxes	7.3	7.3	23.1	12.6	6.4
Depreciation/impairment	6.2	7.1	15.2	14.4	30.9
Amortization/impairment	1.2	3.4	2.4	7.2	14.5
Interest income	(0.1)	(0.0)	(0.2)	(0.0)	(0.2)
Interest expenses*	2.7	2.4	5.5	4.8	10.1
Taxes paid	(1.5)	(2.2)	(2.7)	(3.8)	(13.0)
(Gain) / loss on sale of non-current assets	0.3	(0.6)	(1.0)	(1.1)	(1.0)
Changes in receivables	13.7	9.5	(11.4)	(22.4)	(20.5)
Changes in inventory Changes in payables	2.5 8.2	(1.0) (6.4)	0.4 11.4	(11.9) 9.4	(26.1) 19.7
Currency (gain)/ loss	5.0	2.3	1.4	1.9	5.4
Changes in value fin. derivatives	0.0	0.4	0.0	0.6	0.7
Changes in other items	(1.7)	0.0	(4.1)	16.9	11.5
Cash flow from operating activities	44.0	22.2	39.9	28.6	38.3
	0.0	0.0	0.0	0.0
Investing activities
Investments1	(19.5)	(11.9)	(30.3)	(22.3)	(52.7)
Sale of fixed assets/business Investments in subsidiaries	1.0 0.0	0.7 0.0	3.6 0.0	2.9 0.0	3.0 0.0
Interest received	0.1	0.0	0.2	0.0	0.2
Proceeds from sale of subsidiaries	(0.0)	0.0	0.2	0.2	0.2
Cash flow from investing activities	(18.3)	(11.2)	(26.4)	(19.2)	(49.3)
	0.0	0.0	0.0	0.0	0.0
Financing activities Sale/purchase of treasury shares	0.0	(1.0)	0.0	(1.0)	(2.5)
Net repayment / drawing down of debt	(10.3)	(6.3)	6.0	(4.6)	30.6
Interest paid	(2.7)	(2.4)	(5.5)	(4.7)	(9.9)
Dividends paid	0.0	0.0	0.0	0.0	0.0
Other financial charges	0.0	(0.0)	0.0	(0.0)	(0.0)
Cash flow from financing activities	(13.2)	(9.7)	0.5	(10.3)	18.2
		0.0	0.0	0.0	0.0
Currency effects on cash	0.4	(1.1)	(0.2)	(1.4)	(2.3)
Change in cash	12.9	0.1	13.8	(2.3)	4.9
Cash at beginning period	40.4	32.2	39.5	34.6	34.6
Cash at period end	53.3	32.3 0.4	53.3	32.3	39.5
Of this, restricted cash	0.3		0.3	0.4	1.6

   		   





(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
EBIT (1)	15.0	12.7	29.7	20.7	23.8
Restructuring items (2) EBIT	5.9	1.2	11.2	8.4	26.0

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
EBITDA (1)	22.3	23.2	47.3	42.3	69.2
Restructuring items (2)* EBITDA	5.8	1.2	11.2	8.1	23.2
Adjusted EBITDA, (1) + (2)	28.1	24.4	58.5	50.4	92.4

Adjusted EBITDA, (1) + (2)	28.1	24.4	58.5	50.4	92.4


(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Interior - Restructuring costs	1.1	(0.2)	2.2	0.4	1.5
Powertrain & Chassis Products - Restructuring costs	1.7	0.5	3.9	5.0	13.1
Specialty Products - Restructuring costs	1.9	0.6	2.9	2.8	8.7
Others - Restructuring costs	1.2	0.3	2.2	0.3	2.7
Group total - Restructuring costs	5.9	1.2	11.2	8.4	26.0

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Cash flow from operating activities	44.0	22.2	39.9	28.6	38.3
Cash flow from investing activities	(18.3)	(11.2)	(26.4)	(19.2)	(49.3)
Cash flow from financing activities	(13.2)	(9.7)	0.5	(10.3)	18.2
Net repayment / drawing down of	10.3	6.3	(6.0)	4.6	(30.6)
debt				3.7
			8.1
Free Cash Flow	22.9	7.6			(23.4)






(MEUR)			30.06.18	30.06.17	31.12.2017
Interest bearing loans and borrowings			269.1	225.8	257.8
Other short term liabilities, interest bearing			0.1	0.1	0.1
Bank overdraft			0.0	(0.0)	(0.0)
Cash and cash equivalents Net Interesting Bearing Debt			(53.3) 215.8	(32.3) 193.6	(39.5) 218.4

(MEUR)	30.06.18	30.06.17	31.12.2017
Total assets - Capital Employed	798.2	702.4	721.9
Deferred tax liabilities - Capital Employed	(17.5)	(24.9)	(19.5)
Other long term liabilities - Capital Employed	(19.3)	(20.6)	(19.5)
Current liabilities incl. other short-term interest bearing liabilities - Capital Employed	(251.4)	(224.3)	(234.5)

(MEUR)	30.06.18	30.06.17	31.12.2017
Total assets - Capital Employed	798.2	702.4	721.9
Deferred tax liabilities - Capital Employed	(17.5)	(24.9)	(19.5)
Other long term liabilities - Capital Employed	(19.3)	(20.6)	(19.5)
Current liabilities incl. other short-term interest bearing liabilities - Capital Employed	(251.4)	(224.3)	(234.5)

(MEUR)		Q2 2018		Q2 2017	FY 2017
Capital Employed at beginning (1)	30.06 2017	432.5	30.06 2016	454.9	447.0
Capital Employed at end (2)	30.06 2018	510.0	30.06 2017	432.5	448.5
Adjusted EBIT last twelve months (3)		61.6		33.5	49.8

(MEUR)	Q2 2018	Q2 2017	FY 2017
EBITDA last twelve months *	75.5	60.1	72.3
Restructuring items last 12 months **	22.8	14.0	21.0
EBITDA last 12 months adjusted for restructuring costs (1)	98.3	74.2	93.3
NIBD (2) ***	214.0	193.6	218.4
Adjusted Gearing Ratio (2)/(1)	2.18	2.61	2.34



(MEUR)	Q2 2018	Q2 2017	FY 2017
EBITDA last twelve months	74.1	60.6	69.2
Restructuring items last 12 months *	26.2	17.7	23.2
EBITDA last 12 months adjusted for restructuring costs (1)	100.4	78.3	92.4
NIBD (2)	215.8	193.6	218.4
Adjusted Gearing Ratio (2)/(1)	2.15	2.47	2.36

(MEUR)	Q2 2018	Q2 2017	FY 2017
EBITDA last twelve months Restructuring items last 12 months *	74.1 26.2	60.6 17.7	69.2 23.2
EBITDA last 12 months adjusted for restructuring costs (1)	100.4	78.3	92.4
NIBD (2)	215.8	193.6	218.4
Adjusted Gearing Ratio (2)/(1)	2.15	2.47	2.36

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENT

NOTE 1 - DISCLOSURES

GENERAL INFORMATION

Kongsberg Automotive ASA and its subsidiaries develop, manufacture and sell products to the automotive industry globally. Kongsberg Automotive ASA is a limited liability company, which is listed on the Oslo Stock Exchange. The consolidated interim financial statements are not audited.

BASIS OF PREPARATION

This condensed consolidated interim financial information. ended June 30, 2018, and has been prepared in accordance with IAS 34 "Interim financial reporting". The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year-ended December 31, 2017, which have been prepared in accordance with IFRS.

ACCOUNTING POLICIES

The accounting policies are consistent with those of the annual financial statements for the year-ended December 31, 2017, as described in those annual financial statements. Taxes on income in the interim periods are accrued using the estimated effective tax rate.

IFRS 9 FINANCIAL INSTRUMENTS

The Group adopted IFRS 9 with effect from 1 January 2018 without restating comparative information. Reference is also made to the description in note 5 of the 2017 Annual Report.

Impact on assets, liabilities and retained earnings as of 1 January 2018 are in MEUR:

Assets
Deferred tax asset	በ 5
Total assets	0.5
Liabilities
Interest-bearing debt (non-current) 2.3
Total liabilities	2.3
Net impact on equity (ret. earnings)	-1.8

The net effect on retained earnings is related to loss on a modification of the terms of the group's long term financing, and will reverse through profit and loss over a 2.25 year period from the beginning of 2017 as a reduction to interest expenses.

The Group uses factoring arrangements to sell certain portfolios of the trade receivables ahead of their due date. These receivables have been determined to be held within a business model where the objective is to collect contractual cash flows and selling the financial asset. The Group has elected to classify this portfolio of factoring receivables at fair value through profit and loss (FVTPL) in accordance with IFRS $9.4.1.4.$

RISK

Kongsberg Automotive continuously monitors its risk factors. Our activities are exposed to different types of risk.

KONGSBERG

The single most important risk that Kongsberg Automotive is exposed to is the development of demand in the end markets for light duty and commercial vehicles worldwide. Some of the most important additional risk factors are foreignexchange rates, interest rates, raw material prices, and credit risks. As we operate in many countries, we are vulnerable to currency risk. The most significant currency exposure for Kongsberg Automotive is associated with EUR and USD exchange rate. The greatest raw material exposures are for copper, zinc, aluminum and steel. As most of our revenues are earned from automotive OEMs and automotive tier-1 and -2 customers, the financial health of these automotive companies is critical to our credit risk.

SEASONALITY

The Group quarterly results are to some extent influenced by seasonality. The seasonality is mainly driven by the vacation period in the third quarter and December each year having lower sales. Also, year-over-year seasonality differences may occur as a result of varying number of working days in each quarter.

Assets
Contract assets (non-current)	2.3
Contract assets (current)	1.0
Total assets	3.3
Liabilities
Contract liabilities (non-current)	n.n
Contract liabilities (current)	0.3
Deferred tax liabilities	0.5
Total liabilities	0.8
Net impact on equity (ret. earnings)	2.5

(MEUR)	As reported	Adjustments	WIthout IFRS 15 adoption

Statement of Financial position
Total non-current assets	365.8	(2.9)	362.9
Total current assets	432.3	(0.9)	431.4
Total assets	798.2	(3.8)	794.4
Total non-current liabilities	305.8	(0.6)	305.2
Total current liabilities	251.4	(0.4)	251.0
Total liabilities	557.2	(1.0)	556.2
Total equity	241.0	(2.8)	238.2
Statement of comprehensive income - YTD
Operating revenues	575.8	0.3	576.1
Profit / (Loss) before taxes	23.1	0.3	23.4
Income taxes	(9.2)	(0.1)	(9.3)
Net Profit / (Loss)	13.9	0.2	14.1
Total comprehensive income	9.2	0.2	9.4
Statement of cash-flows - YTD
Profit / (Loss) before taxes	23.1	0.2	23.3
	39.9	(0.2)	39.7
			(26.4)
Cashflow from operating activities
Cashflow from investing activities	(26.4)	0.0
Cashflow from financing activities	0.5	0.0	0.5
Currency effects on cash Net change in cash	(0.2) 13.8	0.0 0.0	(0.2) 13.8

Q2 2018		Powertrain	Speciality		Total
(MEUR)	Interior	& Chassis	Products	Others *	Group
Revenues **	71.9	112.4	103.1	0.1	287.5
Adjusted EBITDA	5.3	6.6	19.2	(3.1)	28.1
Depreciation ***	(0.9)	(3.2)	(1.8)	(0.2)	(6.1)
Amortization ***	(0.2)	(0.6)	(0.3)	(0.1)	(1.2)
Adjusted EBIT	4.2 -	2.8 -	17.1 -	(3.4) -	20.8 -

Timing of revenue recognition
Goods transferred at a point	71.9	112.4	103.1	0.1	287.5
in time

Assets and liabilities
Goodwill	56.0	23.0	67.0	0.0	146.0
Other intangible assets	1.0	12.0	1.9	1.1	16.0
Property, plant and equipment	64.1	64.5	46.1	1.9	176.6
Inventories	19.5	38.4	48.1	(1.8)	104.2
Trade receivables	53.6	75.2	62.6	0.1	191.5
Segment assets	194.1	213.0	225.7	1.4	634.2
Unallocated assets				163.9	163.9
Total assets	194.1	213.0	225.7	165.3	798.2
Trade payables	33.0	57.5	64.2	(12.7)	142.0
				415.2	415.2
Unallocated liabilities	33.0	57.5	64.2	402.5	557.2
Total liabilities
Capital expenditure	(7.9)	(3.5)	(5.7)	(0.1)	(17.2)

Q2 2017 (MEUR)	Interior	Powertrain & Chassis	Speciality Products	Others *	Total Group

Revenues ** Adjusted EBITDA	63.3 4.3	104.5 4.3	99.6 18.3	0.6 (2.4)	268.1 24.4
Depreciation ***	(2.0)	(3.0)	(1.9)	(0.1)	(7.1)
Amortization ***	(0.4)	(1.1)	(1.8)	(0.1)	(3.4)
Adjusted EBIT	1.8	0.1	14.6	(2.6)	13.9
	-	-	-	-	-
Timing of revenue recognition
Goods transferred at a point
in time	63.3	104.5	99.6	0.6	268.1

Assets and liabilities
Goodwill	57.9	22.9	68.8	0.0	149.7
Other intangible assets	2.4	10.1	6.2	1.5	20.2
Property, plant and equipment	51.2	65.6	44.0	1.3	162.1
Inventories	14.1	36.8	39.1	(1.4)	88.7
	52.4	64.2	60.9	(0.0)	177.5
Trade receivables	178.1	199.5	219.1	1.4	598.1
Segment assets			219.1	104.3 105.7	104.3 702.4
Unallocated assets
Total assets	178.1	199.5
Trade payables	30.5	47.5	41.8	0.6	120.4
Unallocated liabilities				375.3	375.3
Total liabilities	30.5	47.5	41.8	375.9	495.7
Capital expenditure	(4.6)	(5.6)	(1.9)	1.5	(10.5)

(MEUR)	2018 YTD June	%	2017 YTD June	%

Europe - Sales	303.5	53%	287.5	52%
Northern America - Sales Southern America - Sales	189.2 13.4	33% 2%	187.4 10.5	34% 2%
Asia - Sales	69.4	12%	58.9	11%
Other - Sales	0.2	0%	4.2	1%

Total operating revenues	575.8		548.5



	2018		2017
(MEUR)	YTD June	%	YTD June	%
Europe - Non-current assets	191.4	57%	190.9	58%
Northern America - Non-current assets	117.1	35%	118.0	36%
	1.7	0%	1.7	1%

Southern America - Non-current assets Asia - Non-current assets	28.4	8%	21.2	6%
Other - Non-current assets	0.0	0%	0.0	0%
Total non-current assets	338.6		331.9

	2018		2017








	2018		2017
(MEUR)	YTD June	%	YTD June	%
Europe - Non-current assets	191.4	57%	190.9	58%
Northern America - Non-current assets	117.1	35%	118.0	36%
Southern America - Non-current assets	1.7	0%	1.7	1%
Asia - Non-current assets	28.4	8%	21.2	6%
Other - Non-current assets	0.0	0%	0.0	0%

(MEUR)	30.06 2018	30.06 2017	31.12.2017
Non current interest-bearing loans and borrowings	270.1	227.6	259.2
Capitalized arrangement fees*	(1.1)	(1.7)	(1.4)
Total interest-bearing liabilities	269.1	225.8	257.8
(MEUR)	30.06 2018	30.06 2017	31.12.2017

Capitalized arrangement fees* (1.1) (1.7) (1.4) Total interest-bearing liabilities 269.1 225.8 257.8 30.06 2018 30.06 2017 31.12.2017 (MEUR)



EUR 162.0 157.0 162.0
USD 105.1 69.2 95.9
Other currencies 1.2 1.3 1.3
Capitalized arrangement fee* (1.1) (1.7) (1.4)
IFRS 9 - First time adoption** 1.9 0.0 0.0
Total interest-bearing liabilities 269.1 225.8 257.8

	Total	Drawn	Interest rate
(in millions)	amounts	amount	(incl margin)

	Total	Drawn	Interest rate
(in millions)	amounts	amount	(incl margin)




(in millions)		EUR	USD
2018		0.0	0.0
2019		10.8	11.5
2020 Total		171.2 182.0	160.5 172.0

(MEUR)			30.06 2018	30.06 2017	31.12.2017
Cash reserve			53.3	32.3	39.5
Restricted cash			(0.3)	(0.4)	(1.6)
Undrawn facility*			62.5	106.5	67.5
Liquidity reserve			115.4	138.3	105.4



(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Interest income - Note 5	0.1	0.0	0.2	(0.0)	0.2
	(2.6)	(2.4)	(5.2)	(4.7)	(10.1)
Interest expenses - Note 5
Foreign currency gains (losses)* - Note 5	(5.0)	(2.3)	(1.4)	(1.9)	(5.4)

(MEUR)	Q2 2018	Q2 2017	YTD 2018	YTD 2017	FY 2017
Interest income - Note 5	0.1	0.0	0.2	(0.0)	0.2
Interest expenses - Note 5	(2.6)	(2.4)	(5.2)	(4.7)	(10.1)
Foreign currency gains (losses)* - Note 5	(5.0)	(2.3)	(1.4)	(1.9)	(5.4)
Change in valuation currency contracts - Note 5	0.0	(0.4)	0.0	(0.6)	(0.7)
Other financial items** - Note 5	(0.1)	(0.4)	(0.2)	(0.9)	(1.5)

RESPONSIBILITY STATEMENT

We confirm, to the best of our knowledge, that the condensed set of financial statement for the period 1 January to 30 June 2018 has been prepared in accordance with IAS34 - Interim Financial Reporting, and gives a true and fair view of Kongsberg Automotive Holding ASA and group companies' assets, liabilities, financial position and profit or loss as a whole.

We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important events that have occurred during the first six months of the financial year 2018 and their impact on the condensed set of financial statements, a description of the principal risks and uncertainties for the remaining six months of the financial year, and major related parties' transactions.

Kongsberg 27th July 2018

Bruce E. Taylor Chairman (Sign.)

Gunilla Nordström Board member (Sign.)

Ellen M. Hanetho Board member (Sign.)

Ernst Kellermann

Board member

(Sign.)

Thomas Falck Board member (Sign.)

Kari Brænden Aaslund Employee representative (Sign.)

Bjørn Ivan Ødegård

Employee representative (Sign.)

Jon-Ivar Jørnby Employee representative (Sign.)

Henning E. Jensen President and CEO (Sign.)

OTHER COMPANY INFORMATION

THE BOARD OF DIRECTORS

Bruce E. Taylor
Thomas Falck
Gunilla Nordstrom
Flien M. Hanetho
Ernst Kellermann
Jon-Ivar Jørnby
Bjørn Ivan Ødegård
Kari Brænden Aaslund

Chairman Shareholder elected Shareholder elected Shareholder elected Shareholder elected Employee elected Employee elected Employee elected

EXECUTIVE COMMITTEE

Henning E. Jensen	President & CEO
Norbert Loers	Executive Vice President & CFO
Ralf Voss	Executive Vice President, Interior Systems
Bob Riedford	Executive Vice President, Powertrain & Chassis
Henning E. Jensen	Executive Vice President, Specialty Products (acting)
Lovisa Söderholm	Executive Vice President, Purchasing
Virginia Grando	Executive Vice President, Quality
Marcus von Pock	Executive Vice President, Human Resources & Communications
Jon Munthe	General Counsel

CORPORATE COMMUNICATIONS

Marcus von Pock	Communications	+41 43 508 94 93
Hallstein Kvam Oma	Investor relations	+41 43 508 89 63

FINANCIAL CALENDAR

Publication of the quarterly financial statements:
	Interim reports	Presentation
2nd quarter 2018	27 July 2018	27 July 2018
3rd quarter 2018	7 November 2018	7 November 2018

Kongsberg Automotive ASA

Dyrmyrgata 48 3601 Kongsberg, Norway Phone +47 32 77 05 00

www.kongsbergautomotive.com

Operational Headquarters KA Group AG Europaallee 39 8004 Zürich, Switzerland

Phone +41 43 508 65 60

Enhancing the driving experience

Kongsberg Automotive ASA, Dyrmyrgata 48, 3601 Kongsberg, Norway, Phone +47 32 77 05 00