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Introduction & Market Context
Norwegian defense and maritime technology group Kongsberg (OSE:KOG) delivered a strong start to 2025, according to its Q1 investor presentation released on May 8. The company reported significant growth across all business areas against the backdrop of increasing European defense spending and maritime sector transformation.
Kongsberg’s presentation emphasized its strategic alignment with the "ReArm Europe Plan / Readiness 2030" initiative, positioning the company to capitalize on heightened defense priorities across the continent. The company’s diverse technological capabilities span sea, land, air, and space domains, with particular strength in missile systems, maritime solutions, and defense technologies.
Quarterly Performance Highlights
Kongsberg reported impressive financial results for Q1 2025, with total revenues reaching 14.6 billion NOK, representing a 28% increase compared to the same period last year. The company’s EBIT surged to 2.9 billion NOK, driving the EBIT margin up from 12.8% to 19.8%.
All three business areas contributed to this growth. Kongsberg Maritime saw revenues increase by 25% to 6.74 billion NOK, while Kongsberg Defence & Aerospace grew by 9% to 5.38 billion NOK. Kongsberg Discovery (NASDAQ:WBD) demonstrated the strongest percentage growth at 29%, reaching 1.36 billion NOK in revenue.
As shown in the following chart of quarterly revenue growth across Kongsberg’s business areas:
The company’s profitability metrics were equally impressive, with solid EBIT margins across all business segments. Kongsberg Maritime maintained a strong 13.6% EBIT margin, while Defence & Aerospace achieved 15.8%. Discovery posted the highest margin at 17.7%.
The following chart illustrates the EBIT performance and margin development:
Detailed Financial Analysis
Kongsberg continued to build its order backlog, reporting an order intake of 20.7 billion NOK during the quarter. The total backlog now stands at an impressive 134.0 billion NOK, providing substantial visibility into future revenues. The backlog distribution indicates 23% is scheduled for delivery in 2025, another 23% in 2026, and 55% in 2027 and beyond.
The company’s backlog distribution by business area and delivery timeline is illustrated in this chart:
Cash flow performance was particularly strong in Q1, with cash increasing by 2.17 billion NOK to reach 16.46 billion NOK by the end of the quarter. This improvement was driven by an EBITDA of 2.24 billion NOK (excluding gains from sales), partially offset by changes in working capital, investments in PPE & R&D, and M&A activities.
The cash flow development and working capital improvements are shown in the following chart:
Kongsberg’s associated companies also contributed positively to results. Kongsberg Satellite Services (KSAT) reported revenues of 556 million NOK and an EBIT of 94 million NOK, with an order backlog of 5.2 billion NOK. Patria recorded revenues of 108 million EUR and an EBIT of 3 million EUR, with an order backlog of 2.4 billion EUR.
The performance of these associated companies over recent quarters is illustrated here:
Strategic Initiatives
During Q1 2025, Kongsberg executed several strategic portfolio changes to optimize its business structure. The company acquired Naxys AS, which had 2024 revenues of approximately 124 million NOK, into its Kongsberg Discovery business area.
Simultaneously, Kongsberg divested its Maritime business (with 2024 revenues of approximately 600 million NOK) and its steering gear and rudder business (with 2024 revenues of approximately 950 million NOK) from Kongsberg Maritime. These strategic moves resulted in a gain from sales, contributing to the strong financial performance in the quarter.
The organizational changes and their financial impact are detailed in this chart:
Forward-Looking Statements
Kongsberg’s outlook remains positive, with the company highlighting continued strong demand across all business areas. For Kongsberg Maritime, the company emphasized its frontrunner position in maritime transformation and persistent high activity in the aftermarket sector. The increasing technology content in the overall fleet is expected to drive further demand.
In the defense sector, Kongsberg Defence & Aerospace continues to see strong interest, particularly for missiles and air defense systems. The company is expanding its international capacity to meet this growing demand and is finalizing negotiations for a approximately 6 billion NOK JSM-contract with a new customer.
Kongsberg Discovery is experiencing significant demand from various sectors including fishery, marine research operations, energy, naval, and surveillance. With a solid backlog and strong positions in growing markets, this business area is well-positioned for continued growth.
The company’s outlook and market positioning across its business areas are summarized in this slide:
With 134.0 billion NOK in order backlog, of which 30.2 billion NOK is scheduled for delivery in 2025, Kongsberg enters the remainder of the year with strong momentum and substantial visibility into future performance. The company’s strategic positioning across defense, maritime, and discovery sectors, combined with its solid financial foundation, suggests continued strength as European defense priorities and maritime transformation drive market demand.
Full presentation:
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