Kongsberg Gruppen

Investor Presentation • Aug 28, 2019

INVESTOR PRESENTATION

Q2 2019

28/08/2019

Geir Håøy, President & CEO Gyrid Skalleberg Ingerø, EVP & CFO Lisa E. Haugan, EVP Finance KM

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

HIGHLIGHTS Q2

6 244 REVENUES 9 617 NEW ORDERS 479 EBITDA 7.7% EBITDA MARGIN

• Rolls-Royce Commercial Marine acquisition closed
• AIM Norway acquisition closed on 29 May

on 1 April

• Strong order-intake with both NASAMS Australia and new contract on F-35
• Order backlog continues to increase in Q3 with NASAMS Qatar

GROUP: DEFENCE: MARITIME: DIGITAL:

• Strong order intake despite challenging markets
• Integration of Commercial Marine according to plan

• Growing revenues and order intake
• Profitability improved YoY
• External orders of MNOK 1 000 in backlog

FINANCIAL STATUS

Gyrid Skalleberg Ingerø, CFO

IFRS 16 effects

Q2 2019	KOG incl. IFRS 16	KM	KDA	Others	KOG ex. IFRS 16
Revenues	6 244	-	-	-	6 244
EBITDA	480	-81	-39	11	371
EBIT	160	-13	-6	-	141
EPS	0.40	-	-	-	0.48

H1 2019	KOG incl. IFRS 16	KM	KDA	Others	KOG ex. IFRS 16
Revenues	9 871	-	-	-	9 871
EBITDA	893	-132	-72	19	708
EBIT	399	-19	-10	-1	369
EPS	1.35	-	-	-	1.50

H1 2019 Excl. IFRS 16

REVENUES KM MNOK 6 293 (3 706) KDA MNOK 3 198 (3 026)

708 MNOK (527)

9 871 MNOK (7 079)

EBITDA MARGIN KM 4.9% (6.7%)

KM MNOK 311 (249) KDA MNOK 390 (372)

EBITDA

KDA 12.2% (12.3%)

7.2% (7.4%)

ORDER INTAKE KM MNOK 7 651 (4 007) KDA MNOK 5 297 (3 843)

13 383 MNOK (8 238)

Special items Kongsberg Maritime

EBITDA Q2

ROLLING LTM

UNDERLYING/REPORTED PERFORMANCE

Commercial Marine included from Q2 2019

LTM Revenues LTM EBITDA % LTM Underlying EBITDA %

Adjustments mainly include: acquisition costs, restructuring & integration costs

REVENUES Q2

Total revenues MNOK 6 244

19.6 % YoY growth excl. CM

KM revenues MNOK 4 221

KM excl. CM MNOK 2 192, up 14.8 % YoY

CM revenues MNOK 2 029 – on par with 2018

KDA revenues up 26.9% YoY

Increased activity in most divisions

6 244

EBITDA Q2

5.9 % Overall EBITDA margin (6.8%) 7.3 % EBITDA margin adjusted for special items

KM EBITDA MNOK 124 (115) KM excl. CM EBITDA MNOK 187 (8.5% margin) CM EBITDA MNOK -63 (-3.1% margin)

• CM EBITDA excl. integration and restructuring, MNOK 22

KDA EBITDA MNOK 252 (200)

Q4 FINANCES - FEBRUARY 14, 2019

KDA / 252 13.8 % MARGIN

KM / 124

2.9 % MARGIN

OTHER / -5

Status integration Commercial Marine

110 450 133 207 Act2018 Act2019 Remaining TOT 450 INTEGRATION COSTS

NEW ORDERS Q2

BOOK/BILL 1.54

MNOK 27 774 total order backlog 37% of order backlog to be delivered in 2019 38% of order backlog to be delivered in 2020

KM BOOK/BILL 1.24, MNOK 2 645 from CM

KM excl. CM order backlog increased 27.9 % YoY CM Order backlog increased 28.0 % YoY

KDA BOOK/BILL 2.27 Order backlog increased 24.7 % YoY

NEW ORDERS KONGSBERG MARITIME

Q2 2019: MNOK 5 238 KM excl. CM: MNOK 2 593 (+23.1 % YoY) CM: MNOK 2 645 (+2.5 % YoY)

KONGSBERG PROPRIETARY - See Statement of Proprietary information Q2 FINANCES - AUG 28, 2019

NEW ORDERS KONGSBERG DEFENCE AND AEROSPACE

Q2 2019	MNOK 4 160 (+36.6% YoY)
H1 2019	MNOK 5 297 (+37.8 % YoY)

STRONG BALANCE SHEET

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

*) included IFRS 16 effects. (38.2% excluded).

DEVELOPMENT IN CASH AND SHORT TERM DEPOSITS Q2

DEBT POSITION

HEALTHY MATURITY PROFILE

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

• Revenue improvement in all divisions, except Protech Systems
• Project deliveries speeding up
• Solid project execution

Record high order backlog

• NASAMS Australia
• F-35 orders
• …and continued to grow in Q3 with NASAMS Qatar

Kongsberg Aviation Maintenance Services

• Acquisition closed 29 May
• MRO on fighters and helicopters
• 49.9% of the shares in AIM sold to Patria
• Strategic agreement with NDLO on MRO support

BUSINESS UPDATE KONGSBERG MARITIME

A strong quarter within Sensors & Robotics

• Revenue growing due to strong order intake the past year
• AUV & Fisheries
• Q2 order intake close to MNOK 1,300

Global aftermarket increasingly important

• 60% of CM's revenues in Q2 from aftermarket
• With CM included, KM serves more than 30,000 vessels.
  • Enables more competitive solutions for the after market

Other segments

• Good revenues as well as order intake for LNG/OPU segment
• Second semi-sub for Awilco with combined KM/CM delivery
• BNOK 1 order intake for Propulsion & Engines

SOLID AND DIVERSIFIED ORDER INTAKE AT KM

TOTAL ORDER INTAKE H1 2018: MNOK 4 007 TOTAL ORDER INTAKE H1 2019: MNOK 5 006*

* Does not include order intake from Commercial Marine

NORWAY'S 3 NEW COAST GUARD VESSELS

• The 136 meter long vessels are to be constructed at Vard Langsten, Norway
• Significant equipment delivery from Kongsberg Maritime
• Contract value of approx. MNOK 280
• To be delivered from KM in 2020, 2021 and 2022
• About 80 % of KMs deliveries to these vessels will be manufactured in Norway

(Photo: Vard/LMG Marin/Norwest3D/K.R. Venås)

BUSINESS UPDATE KONGSBERG DIGITAL AND PATRIA

40% KDI

SUBSEA

SOLID REVENUE INCREASE PAST YEAR

Book/bill 1.11 in Q2, 1.10 in H1

16% Experiencing substantial attention on strategic offerings from a broad range of clients

6% OTHERS* 26% OPU & LNG Q1 2018 | 0 200 400 600 800 June 18 June 19 Development in LTM Revenues MNOK

7%

12%

OFFSHORE

37%

16%

OTHERS*

OPU & LNG

OFFSHORE

29% SUBSEA PATRIA

SEABORN & PAX

G77FI-YMUGQ-A9VXF-WGVL4-3T4N3

KONGSBERG PROPRIETARY - See Statement of Proprietary information

Q2 REVENUES AT MEUR 134, up from MEUR 116 YoY

Q1 2019 Mainly related to MRO business, especially increased activity within Millog.

11% SEABORN & PAX | Increased focus on capture teams to position for, and secure orders, especially within Land business

Acquired 49.9 % of AIM Norway and 100% Belgium Engine Center (BEC)

* Fish, Research & Aquaculture + Seatex KONGSBERG's share of net profit was MNOK 5 in Q2 (MNOK 2 in Q2 2018)

VALUE CAPTURE PROGRAM PROGRESSING ACCORDING TO PLAN

Overview of cost improvements and synergies Overall status

Planned annual P&L effect relative to 2018, MNOK

• Execution of Value Capture program proceeding according to the plan outlaid in the Q1 2019 Investor Presentation
• Realized savings YTD June of ~87 MNOK, well on track for ~200 MNOK effect realization for 2019 FY
• Process concluded for ~180 FTEs out of the announced reduction of 260
• Joint plan for digital marine development established. Streamlining of overlapping efforts and prioritization of activities to market needs result in significant cost reductions, while retaining ambition to be the leading provider of digital marine solutions
• Restructuring of Deck Machinery and Ship Design on track, to improve loss-making CM units. Key ongoing measures include capacity rightsizing, exit of Vietnam facility (Vung Tau) and establishment of Brattvåg Innovation Park
• Optimization of overlapping international footprint continues. 12 sites co-located to date, in total ~20 locations to be co-located

EFFECTS STARTING TO MATERIALIZE

Realized cost savings

P&L effect relative to 2018, MNOK

Area	Realized YTD June	FY plan	Comments to realized savings
Footprint & delivery streamlining	18	90	Initial effects of co-locations and optimization of delivery organizations
SG&A savings and synergies	59	100	Savings driven by more cost efficient set-up of group support functions
Product portfolio optimization	10	10	Savings related to streamlining of digital marine spending (Ship Intelligence)
Total	87	200	Realized cost savings on track for FY 2019 target

Restructuring costs incurred to date is 34 MNOK

CAPITAL MARKETS DAY 2019

Date: 24 September 2019 Time: 12:00 – 15:30 Place: Oslo, Felix Conference Center

Strategy and business update, including updated financial targets

2019 OUTLOOK

KM

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

Integration of CM will impact overall profitability

KDA

Current backlog indicates growth independent of new contracting

Order backlog continued to grow in July 2019 and is now more than BNOK 19

KDI Solid growth in backlog

Accelerating development to secure a global number one position