Kongsberg Gruppen

Investor Presentation • May 10, 2019

INVESTOR PRESENTATION

Q1 2019

10/05/2019

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 Q1

3 627 REVENUES 3 766 NEW ORDERS 414 EBITDA 11.4% EBITDA MARGIN

• Continued strong order intake

• Margins affected by sales of subsidiary and integration costs

• First JSM delivery contract secured

• NASAMS-selection in Australia confirmed

GROUP: DEFENCE: MARITIME: DIGITAL:

• Solid order intake
• Successful closing of RRCM 1 st April 2019

• Growth and improved profitability
• Continued good order intake

"NEW" KONGSBERG

3

FINANCIAL STATUS

Gyrid Skalleberg Ingerø, CFO

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

IFRS 16 effects Q1 2019

	KOG incl. IFRS 16	KM	KDA	Others	KOG ex. IFRS 16
Revenues	3 627	-	-	-	3 627
EBITDA	414	-51	-33	8	338
EBIT	239	-7	-4	1	229
EPS	0.95	-	-	-	1.02

Q1 2019

REVENUES KM MNOK 2 072(1 796) KDA MNOK 1 369 (1 585)

338 MNOK (286)

3 627 MNOK (3 554)

EBITDA MARGIN KM 9.0% (7.5 %) KDA 10.1% (10.9 %)

KM MNOK 187 (134) KDA MNOK 138 (172)

EBITDA

9.3% (8.0%)

3 766 MNOK (2 939)

ORDER INTAKE KM MNOK 2 413 (1 900) KDA MNOK 1 137 (798)

Special items Q1

Kongsberg Maritime

ROLLING LTM

UNDERLYING/REPORTED PERFORMANCE

UNANIMOUS SUPPORT ON RIGHTS ISSUE FROM NORWEGIAN PARLIAMENT Mainly related to lower MCT30 volumes KDA / 1 369 (1 585) KM / 2 072 (1 796) OTHER / 186 (173) 3 721 3 554 3 627 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019

REVENUES Q1

TOTAL REVENUES UP 2.1% YoY

Adjusted for Evotec, down 1.0%

KM revenues up 15.4% YoY

Adjusted for Evotec , up 9.4% YoY

KDA revenues down -13.6% YoY

EBITDA Q1

9.3 % OVERALL EBITDA MARGIN (8.0%)

8.8 % EBITDA margin adjusted for special items

9.0 % EBITDA MARGIN IN KM (7.5%) 8.1 % EBITDA margin adjusted for special items

10.1 % EBITDA MARGIN IN KDA (10.9%) Weaker contribution from Patria

Status integration - Rolls-Royce Commercial Marine

INTEGRATION COSTS

ACTIONS COMPLETED PRIOR TO CLOSING

Approximately 6 000 actions completed prior to closing

Largest external costs related to IT, legal, new organization design, separation actions and re-branding

Verification of potential for cost improvements and synergies

Development of detailed plans for realization

Successful closing took place 1st April, 2019

NEW ORDERS Q1

BOOK/BILL 1.07 (adjusted for special items) MNOK 17 301 total order backlog

KM BOOK/BILL 1.23 (adjusted for special items) Order backlog increased 26.2 % YoY

KDA BOOK/BILL 0.83 Order backlog increased 14.7 % YoY

NEW ORDERS KONGSBERG MARITIME

Q1 2018: MNOK 1 900 Q1 2019: MNOK 2 413

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information KONGSBERG PROPRIETARY - See Statement of Proprietary information Q1 FINANCES - MAY 10, 2019

NEW ORDERS KONGSBERG DEFENCE AND AEROSPACE

Q1 2018 MNOK 798

Q1 2019 MNOK 1 137

Q1 2019 2018 2017 Gross interest bearing debt 4 348 4 332 3 340 Cash and short-term deposits 10 389 10 038 2 956 Net interest bearing debt -6 041 -5 706 384 Equity ratio 43.3% 45.7 % 35.6 % ROACE 13.6 % 12.5 % 9.0 %

STRONG BALANCE SHEET

DEBT POSITION

HEALTHY MATURITY PROFILE

	2016	2017	2018*
Total dividends	MNOK 450	MNOK 450	MNOK 450
Payout ratio	68.9 %	81.2 %	64.2 %
		127,1 %	* Proposal for 2018
			HISTORICAL PAYOUTS RATIOS
			81,2 %
34,4 % 31,7 %	68,7 % 51,3 %	68,9 %	64,2 % 50%

DIVIDEND

THE BOARD PROPOSES FOR THE ANNUAL GENERAL MEETING ON 14 MAY 2019 A DIVIDEND OF NOK 2,50 PER SHARE FOR FY 2018

Dividends shall over time constitute between 40 and 50 per cent of the company's ordinary net profit after tax, future capital requirements taken into account

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

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

Good activity in general Missile breakthroughs NASAMS contract

• Revenue improvement in most divisions
• Low MCT30 activity
• Solid project execution

• Closing of AIM acquisition expected in Q2

• Japan signs contract for JSM deliveries

• US Marine Corps to integrate NSM

approaching

• Australia confirms selection of NASAMS

Joint Strike Missile

First commercial order received

Development finished

9 Countries have selected F-35

Increased number of potential F-35 clients

BUSINESS UPDATE KONGSBERG MARITIME

Continued positive development in revenues, margins and order intake

• Revenue growth within Sensors & Robotics and Global Customer Support

Delivering and integrating Solid order intake

• We have started the largest integration in the company's history. At the same time our customers always have priority

• Strong order intake for LNG Carriers and fisheries
• Awarded contracts for specialized offshore vessels
• Certain vessel segments remain weak

SOLID AND DIVERSIFIED ORDER INTAKE AT KM

TOTAL ORDER INTAKE Q1 2018: MNOK 1 900 TOTAL ORDER INTAKE Q1 2019: MNOK 2 413

BUSINESS UPDATE KONGSBERG DIGITAL AND PATRIA

40% KDI

SUBSEA

REVENUES INCREASED 38% - ACCELERATING DEVELOPMENT

Book/bill 1.09 in Q1, margin improvement

OPU & LNG Q1 2018 Experiencing substantial attention on strategic offerings from a broad range of clients

|

16% Accelerating development and initiated a strategy process to secure enough resources and attention to establish a global number one position

29% SUBSEA PATRIA

G77FI-YMUGQ-A9VXF-WGVL4-3T4N3

SEABORN & PAX

KONGSBERG PROPRIETARY - See Statement of Proprietary information

Q1 REVENUES AT MEUR 105.1, DOWN 9.9%

OPU & LNG Q1 2019 | Lower activity within Aviation and Land business. Continued lack of new orders for Land business.

7%

6%

26%

12%

OFFSHORE

OTHERS*

37%

16%

OFFSHORE

OTHERS*

* Fish, Research & Aquaculture + Seatex

11% SEABORN & PAX Good development within remaining MRO business

KONGSBERG's share of net profit was MNOK -17 in Q1 (5 in Q1 2018)

THE "NEW" KONGSBERG MARITIME

BROADENING OUR PORTFOLIO FOR THE MARITIME INDUSTRY

INTEGRATED SOLUTIONS PROPULSIONS & ENGINES

SENSORS AND ROBOTICS

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 25

SHIP DESIGN DECK MACHINERY

Finn bedre bilder

Proff opp siden

Kongsberg Maritime from 1 April 2019 - A strong and scalable business

PRO FORMA FINANCIALS AND ORDERS

Key pro forma financial information*

2018

Key pro forma financial information*

Q1 2019

Order backlog

«New» KM

Capturing the synergies - Our stated ambition is unchanged after closing

streamlining achieved by end of 2020 • Integration costs of • Potential for revenue sale of more integrated packages and broader ~200 ~375 ~475 ~500 2019 2020 2021 2022 Annual P&L effect, MNOK

• Expected annual run-rate cost synergies in excess of MNOK 500 through optimization and
• Cost synergies expected to reach 100% run-rate by 2022, with approximately 75%
• approximately MNOK 450
• synergies from cross-sales, aftermarket scope through combined installed base

Capturing the synergies - Key areas for cost improvements and synergies

Area	Key initiatives	Total savings target
Footprint & delivery streamlining	• Restructuring of loss-making businesses: Deck Machinery and Ship Design & Systems • Co-location of overlapping global footprint (close to 20 sites) • Move non-core production activities to supply chain • Consolidation of delivery organizations • Direct procurement scale savings	MNOK ~225
SG&A synergies	• Leverage scale within sales, support and administrative functions • Cost efficient set-up of group support functions • Indirect procurement scale savings • IT infrastructure synergies	MNOK ~225
Product portfolio optimization	• Consolidation of overlapping product portfolios - especially within automation • Merge KM and CM efforts to become the leading provider of digital marine solutions in combination with KDI and release duplicated activities • Optimize product portfolio to meet future market needs	MNOK ~50

Capturing the synergies - Key activities during 2019

	Signing - '19 Q1	'19 Q2	'19 H2	Savings expected realized in '19 (MNOK):
Footprint & delivery streamlining	• Verification of potential for cost improvements and synergies • Development of detailed plans for realization	• 6 sites co-located from Day 1 • Deck Machinery and Ship Design restructuring initiated • Execution of CM delivery organization rightsizing, P&L effect from end 2019 • Prepare Vietnam production facility exit	• Moving non-core production activities to supply chain • Execution of further international co-locations	MNOK ~90
SG&A synergies		• Execution of synergies arising from selected duplicated SG&A functions • IT infrastructure synergies	• Execution of synergies arising from selected duplicated SG&A functions • Realization of indirect procurement scale synergies	MNOK ~100
Product portfolio optimization		• Joint plan for digital marine development, including prioritization of activities and streamlining of overlapping efforts	• Initiate consolidation of overlapping product portfolios within automation systems	MNOK ~10
			Total:	MNOK ~200

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

Q1 VALUE CAPTURE - MAY 10, 2019

By "time of execution" is to be understood the period of implementation of the measure (e.g. an FTE is dismissed or an asset is sold) as opposed to the period where the P&L effect of the measure is realized, which normally will be at a later stage

CAPITAL MARKETS DAY 2019

Date: 24 September 2019 Time: 10:00 Place: Kongsberg

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 RRCM will impact overall profitability

KDA

Current backlog indicates some growth independent of new contracting

Due to sizable contracts in negotiation, time of signing might influence this years' revenues

KDI

Accelerating development and initiated a strategy process to secure a global number one position