Kongsberg Gruppen

Investor Presentation • Nov 12, 2020

Positioned for tomorrow

12/11/2020

Gyrid Skalleberg Ingerø, Group Executive Vice President & CFO

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. © 2020 KONGSBERG – All rights reserved.

This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-looking information and statements reflect current views with respect to future events and are subject to risks, uncertainties and assumptions. The Company cannot give assurance to the correctness of such information and statements. These forward-looking information and statements can generally be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements sometimes use terminology such as "targets", "believes", "expects", "aims", "assumes", "intends", "plans", "seeks", "will", "may", "anticipates", "would", "could", "continues", "estimate", "milestone" or other words of similar meaning and similar expressions or the negatives thereof.

By their nature, forward-looking information and statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to differ materially from any future results, performance or achievements that may be expressed or implied by the forward-looking information and statements in this presentation. Should one or more of these risks or uncertainties materialize, or should any underlying assumptions prove to be incorrect, the Company's actual financial condition or results of operations could differ materially from that or those described herein as anticipated, believed, estimated or expected.

Any forward-looking information or statements in this presentation speak only as at the date of this presentation. Except as required by the Oslo Stock Exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this presentation, including forward-looking information and statements, whether to reflect changes in the Company's expectations with regard thereto or as a result of new information, future events, changes in conditions or circumstances or otherwise on which any statement in this presentation is based.

Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements.

Solid revenue and EBITDA growth

Including acquired -and excluding divested companies

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 3

1) Included effects from IFRS16 from 2019

Improved return on capital

ROACE (%) and AVERAGE CAPITAL EMPLOYED (BNOK)

• Patria investment and Commercial Marine (CM) acquisition drive capital employed
  • ‒ Acquisition of CM fully reflected in capital employed as of LTM Q3 2020
• Increased ROACE driven by profitability improvement
  • ‒ Turn around & synergies realisation in CM/KM
  • ‒ Increased scale and good project execution in defence

ROACE % AVERAGE CAPITAL EMPLOYED (BNOK)

Solid backlog

Backlog development (BNOK)

• Backlog "Next year" increased compared to last year
• Approximately 2/3 of backlog related to defence projects
• Backlog does not include;
  • ‒ framework agreements
  • ‒ majority of aftermarket in KM
  • ‒ associated companies
  • ‒ SaaS revenues

Priorities towards 2022

		KONGSBERG MARITIME	KONGSBERG DEFENCE & AEROSPACE	KONGSBERG DIGITAL
1.	Key success factor	Adapt to changing market	Growth/ramp-up	Scale
2.	Profitability	Efficiency focus and product harmonisation	Benefit on scale and cost focus	SaaS business model
3.	Growth	Cross sales and green technology	New opportunities and execute on strategic steps	Continue to roll out digital applications and products

Net working capital

• Net working capital largely driven by project mix
• Net working capital expected to fluctuate going forward
• Net working capital adjusted for acquired and divested companies

• Significant fluctuations in net working capital driven by;
  • Payment structure from customer
  • Project timeline within large projects

Cash, debt and bond maturity profile

• ~2.5 BNOK of advance payments from customers
• Cash "looked in operation" increased post CM acquisitions
  • Expected to gradually be reduced going forward
• Increased currency exposure as business grow

Cash and Interest bearing debt (BNOK) Bond maturity profile

• Spread maturity profile
• Evenly split between floating and fixed interest rate
• Undrawn committed credit facilities of BNOK 2.8

Cash Interest bearing debt Extraordinanry dividend & SBB

Leverage ratio and capital structure target

Net debt/EBITDA of 1.0x +/- 1.0 securing;

• Access to funding
  • ‒ Investment grade credit rating equivalent securing access to debt capital markets
• Customer confidence
  • ‒ Long-term view in strategy and execution
  • ‒ Ability to handle fluctuating working capital
  • ‒ Foreign exchange hedging policy
• Financial flexibility

Net debt/EBITDA Rights issue Target range ¹ EOD

Technology development securing our positions

Self-funded R&D ex. Product maintenance by business area 2013 – LTM 2020

• Invest for the future and secure #1 position
• Benefit from customer funded R&D
• Benefit from various civilian support schemes
• ~20% of annual R&D capitalized

Benefiting from civilian R&D support scheme

Committed funding as of 2020… …results on sustainable products and solutions

Aligning dividend policy with financial strategy

• Previous dividend policy targeted dividend of 40-50% of net income
• Historical pay-out ratio has been above policy range

• Revised policy provides predictability on a per share basis
• Targets flat or growing dividend per share
• Extraordinary dividends and share buybacks to serve as supplements

Active management of business portfolio

• EV 151MNOK

▪

Patria and AIM Norway

Important part of KONGSBERG's MRO strategy

▪

• Prime MRO provider for the Finnish Defence Forces
• Supplier of strategically important products and systems to Finland and other nations
• Cooperation's through certain strategical projects e.g. MRO

Patria AIM Norway

• Premier MRO provider for the Norwegian armed aircrafts and helicopters
• Strengthen KONGSBERGs role as a strategic partner for the Norwegian armed force's operative requirements, both as a supplier of equipment and for maintenance

Revenue and EBIT development (EURm)

Rolls Royce Commercial Marine

• Total of MNOK 690 in cost synergies generated from Q2 2019 Q3 2020
• MNOK 528 in cross sales realised YTD 2020
• Strengthens Kongsberg Maritime as an integrator and technology leader
• Enhanced position to capitalise on industry trends and dynamics

KM EBITDA excluding integration & restructuring costs and cost synergies Synergies

• Total of MNOK 5.594 cash outflow related to acquisition and integration of Rolls Royce Commercial Marine (RRCM)
• RRCM generated positive FCF pre tax of ~MNOK 230 in 2019 (ex. Integration and restructuring)
• MNOK 260 and 445 generated in synergies in 2019 and YTD 2020 respectively

Finance & acquisition cost Integration cost Purchase price

WORLD CLASS – Through people, technology and dedication KONGSBERG PROPRIETARY - See Statement of Proprietary information 16

Hydroid

Solid return on investment

• Acquired in 2008 for ~81 USDm
• Sold in March 2020 for ~350 USDm
  • ‒ Implied EV/EBITDA multiple of 24x
• Pre tax IRR on investment of 15.2% (estimated ~12.8% including tax)

Cashflow from Hydroid (USDm)

POSITIONED FOR TOMORROW

Growth

• Deliver backlog and secure pipeline
• Frontrunner new technology

Profitability

• Scale and project execution
• Adapt to changing markets

Portfolio management • Active management of business portfolio