Kongsberg Gruppen

Investor Presentation • Oct 30, 2019

INVESTOR PRESENTATION

Q3 2019

30/10/2019

Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & CFO Lisa E. Haugan, EVP Deck Machinery & Motion Control

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Highlights Q3

• NASAMS Qatar the largest KOG-contract ever
• BNOK 20 + order backlog
• MUSD 131 order intake from CROWS framework agreement
• Remote Tower live

GROUP: DEFENCE: MARITIME: DIGITAL:

• Continued strong order intake within sensors and robotics
• Lifecycle business at a solid level

• Integration of Commercial Marine ahead of plan

• Growing revenues and improved profitability

• Breakthrough contract on dynamic digitial twin

8.8%

EBITDA MARGIN

535 EBITDA

12 325

NEW ORDERS

• Solid organic growth • Strong order intake

• Record high order backlog

Financial status

Gyrid Skalleberg Ingerø, CFO

Q3 – KONGSBERG (KOG)

IFRS 16 effects Margin ex. IFRS Margin inc. IFRS

Improving revenue trend

Strong order intake

Order backlog

BNOK 7 aftermarket in KM by large not reflected in backlog (annual basis)

Kongsberg Maritime

Q3

Short- and long-term backlog improved in KM

Q3 KM Order intake

Order intake Q3:	MNOK 3 860
KM ex. CM Q3:	MNOK 2 020 (-33.2% YoY)
CM Q3:	MNOK 1 840 (-23.5% YoY)

Order intake YTD: MNOK 11 511

(+63.7% YoY)

KM ex. CM order intake flat YoY

Q3 KM Revenues*

Revenues Q3:	MNOK 4 255
KM excl. CM Q3:	MNOK 2 166 (Organic growth +20.5% YoY)
CM Q3:	MNOK 2 089 (+5.5% YoY**)
Revenues YTD:	MNOK 10 549
(Organic growth +16.8% YoY)

*) CM figures included as from Q2-2019 **) 2018 Pro forma

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information KONGSBERG PROPRIETARY - See Statement of Proprietary information Q3 FINANCES - OCT 30, 2019

Q3 KM EBITDA

EBITDA incl. IFRS 16 EBITDA excl. IFRS 16	MNOK 271 189
Restructuring- and integration costs	152
Adjusted EBITDA	341
CM	47
xKM *) EBITDA-margin 13.6%	294

KONGSBERG PROPRIETARY - See Statement of Proprietary information Q3 FINANCES - OCT 30, 2019

Q3 Development Commercial Marine*

Special items
2019	Q3
Integration costs Commercial Marine	96
Restructuring costs Commercial Marine	56
Total	152

* Pro forma figures up to Q1-2019, adjusted EBITDA show in Q2 and Q3 2019

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KONGSBERG PROPRIETARY - See Statement of Proprietary information Q3 FINANCES - OCT 30, 2019

Q3 Status integration Commercial Marine

Selected ongoing actions

• IT & Infrastructure
• Branding
• Legal
• Harmonization & Streamlining
• Organizational design
• Restructuring costs of MNOK 56 in Q3, MNOK 87 YTD

Kongsberg Defence & Aerospace

Finance

Solid pick up in order intake, major improvement in backlog

Q3 KDA Order intake

Order intake Q3: MNOK 8 254

Order intake YTD: MNOK 13 551

(+549% YoY) (+165% YoY)

Q3 KDA Revenues

Revenues Q3:	MNOK 1 578
	(Organic growth +23.1% YoY)
Revenues YTD:	MNOK 4 776

(Organic growth +9.5% YoY)

Q3 KDA EBITDA*

EBITDA Q3: MNOK 248 / MNOK 202* EBITDA-margin: 15.7% / 12.8%*

68% YoY increase

EBITDA YTD: MNOK 709 / MNOK 592* EBITDA-margin: 14.8% / 12.4%*

20% YoY increase

*) ex. IFRS 16 effects

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information KONGSBERG PROPRIETARY - See Statement of Proprietary information Q3 FINANCES - OCT 30, 2019

Balance sheet and cash flow (KOG)

Q3 Strong balance sheet

Repayment bond KOG07 – MNOK 250

	Q3 2019	Q2 2019	2018	2017
Gross interest bearing debt	4 090	4 349	4 332	3 340
Cash and short-term deposits	3 667	4 522	10 038	2 956
Net interest bearing debt	423	-173	-5 706	384
Equity ratio	35.7% 38.1%*	35.7% 38.2%*	45.7%	35.6%
ROACE	9.5%	11.0%	12.5%	9.0%

*) exclusive IFRS 16 effects.

Q3 NWC

Net Working Capital by Business Area

*Includes Proforma Revenue for Commercial Marine.

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Development in cash YTD

CM final purchase price

Final closing accounts, October 2019

Business update

Geir Håøy, President & CEO

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information

Business update Kongsberg Defence & Aerospace

Increased activity

• Activity ramping up for both missiles, aerostructures, NASAMS and CROWS-deliveries
• High campaigning activity

Record high order backlog

• BNOK 20 +
• Solid coverage for growth
• NASAMS Qatar
• CROWS

New division: Land Systems

• Merger of Protech Systems and Defence Communications divisions
• Opens for increased cross technological development and customer interaction

NASAMS Qatar / CROWS

Littoral Combat Ship successfully launches NSM

The Independence-variant littoral combat ship USS Gabrielle Giffords successfully demonstrated the capabilities of the Naval Strike Missile Oct. 1 during exercise Pacific Griffin.

Business update Kongsberg Maritime

Another strong quarter LNG increasingly

• strong order intake the past year
• Marine Robotics
• Global Customer Support
• Integration of CM ahead of plan

important

• Revenue growing due to ship "Innovation" • ~50 % growth in new build orders YTD, Expecting close to BNOK 1 in 2019
• Market leading position in a strong market
• Expressed further demand from large operators

Extensive Full picturedelivery for expedition cruise

• To be built on Damen Shipyard
• Fully compliant with IMO2020
• MNOK 190 contract value

Solid and diversified KM order intake

MNOK 11 511 order intake YTD 2019 Order intake KM ex CM at Q3 2019: MNOK 7 217 Order intake KM ex CM at Q3 2018: MNOK 7 038

Business update Kongsberg Digital and Patria

KDI

Solid revenue increase and order intake past year

Book/bill 1.07 YTD, 0.99 in Q3

Breakthrough contract October 2019

Continued roll out of Vessel Insight

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PATRIA

Q3 revenues at MEUR 103, up from MEUR 93 YoY

| Mainly related to sales from Belgium Engine Center (BEC) that was acquired in June 2019

Increased focus on capture teams to position for, and secure orders, especially within Land business

EBITDA in Q3 was MEUR 3 (MEUR 10), KONGSBERG's share of net profit was MNOK - 31 in Q3 (MNOK 7 in Q3 2018)

Kongsberg Digital and Shell signs agreement on digitalization partnership of the Nyhamna gas facility

Value Capture program with strong progress

Recap: Overview of cost improvements and synergies Status per Q3

Planned annual P&L effect relative to 2018, MNOK

• Value Capture program with strong progress, concerning both realization of savings, execution of measures and ongoing identification of additional initiatives
• Realized savings YTD September of ~MNOK 170. Target of MNOK 200 savings for FY 2019 will be exceeded; revised guidance of MNOK 250 realization
• Ongoing execution of a large range of measures, including Deck Machinery and Ship Design restructuring, consolidation of delivery organizations and optimization of global service network
• Headcount reductions according to plan. The initially announced reduction of 260 is now concluded1) . Execution of further headcount reduction of 180-200 FTEs initiated2)
• Footprint rationalization continues. 13 sites co-located to date. Divestment of Vietnam (Vung Tau) and close-down of Gdansk production facilities initiated
• Revision of targets for 2020-22 will be presented at the Q4 Investor Presentation

1) Processes concluded, while P&L effect will continue to materialize following conclusion of notice periods 2) Headcount reduction figures include effects of Vietnam and Gdansk close-downs

Realized savings YTD September of ~MNOK 170

Realized cost savings

P&L effect relative to 2018, MNOK

Area	Realized YTD Sept.	Comments to realized savings
Footprint & delivery streamlining	32	Initial effects of co-locations and optimization of delivery organizations
SG&A savings and synergies	122	Savings driven by more cost efficient set-up of support and sales functions, as well as harmonization of terms and benefits
Product portfolio optimization	15	Savings related to streamlining of digital marine spending (Ship Intelligence)
Total	170	Realized cost savings ahead of plan

Restructuring costs incurred YTD September is MNOK 87.

Outlook

KM

2019 revenues will grow compared to 2018.

Good order backlog and some improvement in lifecycle business founds revenue growth also in 2020

Segments within new build market expected to remain challenging

KDA

Current backlog founds solid growth both in 2019 and 2020 independent of new contracting

Positioned for several major contracts over the next 3-24 months

KDI

Continue development to secure a global number one position

Accelerating our campaigns related to dynamic digital twin and Vessel Insight

Emphasis on product portfolio and strategic opportunities

WORLD CLASS WORLD CLASS –– Through people, technology and dedication Through people, technology and dedication KONGSBERG PROPRIETARY KONGSBERG PROPRIETARY - See Statement of Proprietary information - See Statement of Proprietary information Q3 Outlook - OCT 30, 2019

Q3 IFRS 16 effects

Q3 2019	KOG incl. IFRS 16	KM	KDA	Others	KOG ex. IFRS 16
Revenues	6 046	-	-	-	6 046
EBITDA	535	-82	-46	10	417
EBIT	230	-14	-6	-1	209
EPS	0.62	-	-	-	0.72

YTD 2019	KOG incl. IFRS 16	KM	KDA	Others	KOG ex. IFRS 16
Revenues	15 917	-	-	-	15 917
EBITDA	1 428	-215	-117	30	1 126
EBIT	629	-34	-16	-1	578
EPS	1.97	-	-	-	2.22

Q3 IFRS 16 adjustments

Estimated full year effects from IFRS16 adjustments (MNOK)

Q3 Debt position Healty maturity profile

Repayment of bond KOG07

MNOK 250 September 2019

Bonds - Maturity profile (MNOK)

Net interest bearing debt (MNOK)

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY KONGSBERG PROPRIETARY - See Statement of Proprietary information - See Statement of Proprietary information Q3 APPENDIX - OCT 30 2019