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Kongsberg reported a robust performance in Q3 2025, with total revenues reaching NOK 14.62 billion, marking a 19% increase year-over-year. The company highlighted growth across all business segments, supported by strategic acquisitions and innovation in maritime and defense technologies. According to InvestingPro data, Kongsberg’s stock is currently trading near $72.75, with analysis suggesting slight undervaluation. The company maintains a "GOOD" Financial Health Score of 2.62, reflecting strong operational performance. The earnings call also emphasized the company’s ambitious targets for future revenue and market expansion.
Key Takeaways
- Kongsberg achieved a 19% revenue increase year-over-year.
- All business areas showed growth, with Kongsberg Maritime leading at 25%.
- The company is targeting NOK 120 billion in revenues by 2033.
- Strategic acquisitions and innovations are bolstering Kongsberg’s market position.
- The global maritime fleet’s aging is driving demand for Kongsberg’s solutions.
Company Performance
Kongsberg’s performance in Q3 2025 demonstrated significant growth, with revenues increasing by 19% compared to the previous year. This growth was consistent across all business areas, notably with Kongsberg Maritime experiencing a 25% increase. The company’s impressive 27% Return on Equity and Piotroski Score of 7 underscore its operational efficiency. The company’s strategic focus on maritime and defense technologies, coupled with global market trends such as aging maritime fleets and increased defense spending, has positioned it well for continued success. For deeper insights into Kongsberg’s financial metrics and growth potential, InvestingPro offers comprehensive analysis with 12+ additional key metrics and exclusive ProTips.
Financial Highlights
- Revenue: NOK 14.62 billion, up 19% year-over-year
- Adjusted EBIT: NOK 1.84 billion, with a 13.6% margin
- Kongsberg Maritime revenue: NOK 6.74 billion, up 25%
- Kongsberg Defense and Aerospace revenue: NOK 5.38 billion, up 9%
- Kongsberg Discovery revenue: NOK 1.36 billion, up 29%
Outlook & Guidance
Kongsberg is setting ambitious targets, aiming for NOK 120 billion in revenues by 2033. The company has secured NOK 30 billion in orders for 2025 and anticipates strong demand in its maritime and defense sectors. Analysts tracked by InvestingPro project EPS to reach $4.72 in FY2026, supporting the company’s growth trajectory. The stock’s strong momentum is evident in its 28.13% return over the past year. Future growth is also expected in satellite services and defense technologies, as Kongsberg expands its capabilities with new contracts and innovations. Get access to the full Pro Research Report for comprehensive analysis of Kongsberg’s growth potential and market position.
Executive Commentary
CEO Geir Hoy emphasized the importance of maritime transportation in global trade, noting, "Maritime transportation is the backbone of global trade. More than 80% of the world’s goods are transported by sea." He expressed confidence in Kongsberg’s market leadership and future prospects, stating, "We are a key player in our markets and I am confident that we will continue to deliver on our commitments and ambitions both in 2025 and onwards."
Risks and Challenges
- Geopolitical uncertainties may pose challenges to market stability.
- Fluctuating defense budgets in key markets could impact order volumes.
- Supply chain disruptions could affect production and delivery timelines.
- The competitive landscape in maritime and defense sectors remains intense.
- Economic downturns could dampen demand for new maritime technologies.
Q&A
During the earnings call, analysts inquired about the impact of project mix on Defense and Aerospace profitability and sought clarification on tariff implications for US exports. Questions were also raised about European military spending expectations and changes in reporting for Kongsberg Digital.
Full transcript - Kongsberg Gruppen ASA (KOG) Q1 2025:
Jan Erik, Moderator/Presenter, Kongsberg: Good morning, and welcome to the presentation of Kongsberg’s First Quarter twenty twenty five Results. Today’s presentation will be given to you by President and Chief Executive Officer, Guy Hoy, as well as executive vice president and chief financial officer, Mete Toft Bergen. This is a webcast only presentation, and questions may be submitted through the webcast frame. If journalists who requires or are requesting interviews with the management after the presentation are requested to contact head of communications, Ronny Lee. And with that, I want to welcome Gair Hoy to the stage.
Geir Hoy, President and Chief Executive Officer, Kongsberg: Yes. Thank you, Jan Erik, and good morning, everyone. Kongsberg operates in a rapidly changing world. This requires us to be both agile and adaptable. In 2025, uncertainty around international framework condition have placed challenges on international trade.
This demonstrates the importance of cross border cooperation and and a global footprint. Today, we are presenting the first quarter results. But I think it is important to remind everyone that we have a long term focus with high ambition. At our Capital Market Day last year, we stated an ambition that we aim for at least NOK120 billion revenues in 02/1933. The uncertainty we are experiencing today is a reminder that during such a long period, we will experience changing condition.
The current environment creates uncertainties for most companies. However, our job as management is to handle short term turmoil and at the same time navigate towards our long term ambition. Despite the current turmoil, I am confident on our long term trajectory. Maritime transportation is the backbone of global trade. More than 80% of the world’s goods are transported by sea.
This underlines its unique importance in global logistics. Maritime activities currently account for around 3% of the global greenhouse gas emission annually. The International Maritime Organization has aggressive targets to reduce emissions from the industry. However, the global supply of green energy is not sufficient to meet the needs of all industries, and we must increase energy efficiency. As an ocean technology expert, we are uniquely positioned to be a front runner in this transition and ensure that we find solutions to make energy consumption more efficient.
Ongoing war in Europe and conflicts elsewhere in the world demonstrates the importance and need for increased security. For customer management, the customer management have recently met with important stakeholders both in The EU and The US. We experienced that we play an important role and are highly relevant in the dialogue on European and transatlantic security, which is more important than ever. The European Union has placed defense and security at the top of its agenda. And Kangsberg is recognized as a trusted partner in shaping the future of European defense closely aligned with NATO.
In The U. S, Kangsberg has a solid and well established setup with partners production and supply chain. Last year, we announced that we will build a new missile factory in Virginia, and we will invest further in The U. S. Going forward.
We have been and are a long term and strategic partner on critical defense capabilities to the U. S. Army, Navy and Air Force. Kongsberg offer a range of solutions that can directly respond to the current security needs among allied nations. I would like to mention some of them before I dive into the quarterly results.
Within the sea domain, we have the only fifth generation strike missiles, which can be operated from combat aircraft, naval and coastal platforms. We are world leading in subsea monitoring and submarine warfare. In the land and air domain, we delivered the world’s most used medium range air defense system, Nascents. And I’m very proud that this system so far had destroyed almost 1,000 Russian crews, missiles and drones with a hit rate of 94% protecting people and critical infrastructure in Ukraine. In the space domain, we are a provider with solutions from launch, satellite payload as well as world buildings ground stations ground station infrastructure for downloading satellite data.
And recently, we also launched our first maritime surveillance satellite. We bring a unique and strong defense portfolio to the table, which will be fueling our long term growth going forward going together with our maritime and subsea solutions. Turning our attention to the quarter, we delivered a very solid start to 2025 with order intake above SEK20 billion, in addition to growing revenues and operating results. We made several strategic steps during the quarter. Kongsberg Digital’s maritime portfolio was integrated into Kongsberg Maritime, enhancing our ability to deliver comprehensive for the digitalization and decarbonization of the maritime industry.
We have also completed the sale of our steering gear and rudder business to Norvestor and strengthen our underwater technology base through the acquisition of Naxus Technologies. When it comes to order intake, all business areas delivered book to bill above one and are increasing their order backlogs. Customer Maritime continues to build backlog with solid signing both for deliveries to new vessels as well as to existing fleet. We continue to see a very diversified order intake from the new new building segment with deliveries to LNG carriers and offshore vessels being the two largest segments. The LNG contracting is still driven by the large Qatar project, while the offshore contracting typically relates to new OSV vessels.
In Kamsberg Discovery, we continue to experience strong demand for our underwater technologies. And in Q1, we signed orders for deliveries of six new Hugen autonomous underwater vehicles. Sustainable management of ocean resources and security are important drivers for Kongsberg Discovery. The demand for solutions to better protect and understand the ocean space from commercial actors, public administration and defense customer is increasing. We also see a positive development for our drone detection detection solutions.
Constable Defense and Aerospace is also continued to grow their order backlog. Many of the major orders the past years have been related to missiles and air defense, but it is important to remember that we are involved in more than this. Maintenance repair and overhaul has been an area of focus for us for several years. And in Q1, we signed a new important contract when the Norwegian Defense Material Agency chose us for the maintenance and future upgrade requirements of the Norwegian f 35 aircraft. The agreement has a long term perspective and is a result of close cooperation between the Norwegian Armed Forces and Kongsberg.
Another growing area within Kongsberg Defense and Aerospace is space. Close to three years ago, we acquired a small set producer Kongsberg Nano Avionics. And at the end of Q1, Spinlaunch selected Kongsberg Nano Avionics as its exclusive satellite supplier for its low Earth orbit broadband communication constellation, the Meridian Space. The contract is for delivery of 280 microsatellites. In March, we also launched our our first own new satellite.
The satellite was launched from the Vanderberg Space Force Base in California, which marked a milestone for Kangsberg. In q one, we added a new user of naval naval strike missile when we signed the delivery contract with Denmark. Denmark will integrate the missile on one of their frigate classes, and the contract was valued at 2,100,000,000.0. An important milestone was also met when the US Air Force expanded their initial joint strike missile order with another 70,000,000 US dollars. Consumer Defense and Aerospace is currently in a final negotiation with a new JSM customer for a contract valued at around SEK6 billion expected to be concluded this summer.
Later this year, we will also start the construction of our new missile production facilities facility in US. This comes in addition to the recently opened new facility in Norway as well as the facility which is under construction in Australia. For the remaining year, Gamsberg has already secured 30,000,000,000 worth of orders for deliveries. We are exposed to markets in demand for our technology. We are continuously adapting and we have a worldwide network of both own business and partners.
That together found a solid foundation for continued growth. So with that, I leave the floor to Mete to take us through the financial status.
Mete Toft Bergen, Executive Vice President and Chief Financial Officer, Kongsberg: Thank you, Geir. Good morning, everyone. It’s a pleasure to start 2025 by reporting solid financial performance for Kongsberg. We have made some structural changes since our last reporting. So before we dive into the figures, I would like to go through these changes for more clarification.
In Q1, we completed the sale of our steering gear and rudder business to Norvestor. In 2024, this business generated revenues of approximately million. This is a mature business with an EBIT margin close to Kongsberg Maritime’s average EBIT margin. The gain from the sale of the steering gear and rudder business made a positive impact of NOK1.05 billion, both to revenues and operating results in the quarter and is reflected in other activities. As announced earlier this year, we have transferred Kongsberg Digital’s maritime portfolio to Kongsberg Maritime.
In 2024, this business had operating revenues of approximately NOK600 million, with an EBIT close to zero. We have also increased and strengthened offerings from Kungsberg Discovery through the acquisition of Naxes Technologies. This company achieved operating revenues of NOK124 million in 2024 with a solid margin. Now looking at the first quarter, Kongsberg delivered a total of $14,620,000,000 in revenues. Adjusted for the gain of the sale of our steering gear and rudder business, the year on year increase is 19%.
All business areas contributed to the growth. Kongsberg Maritime delivered revenues of GBP 6,740,000,000.00, a year on year growth of 25%. The growth was driven by strong activity both related to the newbuilding and aftermarket. In the newbuilding market, the contribution from the LNG carrier segment continued to be solid in the quarter. The aftermarket is still strong and accounts for 57% of the revenues in the first quarter.
Conspira Defense and Aerospace came in at $5,380,000,000 up 9% from Q1 last year. Last year included $500,000,000 in revenues from a project with extraordinarily high deliveries. Adjusted for this, the growth rate is 22%. The largest contributors to the growth were air defense and missile projects. Comms per Discovery achieved GBP 1,360,000,000.00 revenues, an increase of 29% year on year.
The main drivers for the increased revenues were high activity related to autonomous underwater vehicles, drone detection radar, as well as deliveries of mapping and positioning systems. The contribution from AUVs will vary between quarters due to the timing of project milestones and deliveries. Looking at operating results, the group achieved a quarterly EBIT of NOK2.89 billion. Adjusted for the sales gain, operating results is NOK1.84 billion, representing an underlying EBIT margin at 13.6%. This is an improvement compared to last year of NOK382 million and 0.8 percentage points higher EBIT margin.
All business areas improved operating results compared to last year. The largest contributor in nominal terms was Consumer Maritime, with $919,000,000 and a corresponding margin of 13.6%. In Q1 last year, EBIT was $753,000,000 and the improvement comes as a result of increased volume and solid project execution. Kongsberg Defense and Aerospace delivered $848,000,000 in EBIT and a margin of 15.8%. This is compared to $7.00 $3,000,000 and a margin of 14.2 in Q1 twenty twenty four.
The improved margin is a result of strong project execution and favorable project mix in the quarter. As previously stated, defense margins will fluctuate depending on project mix. The overall mix in our current backlog confirms our previously stated expectations on Defense margins going forward. Commsford Discovery reported a $240,000,000 and a margin of 17.7%. This is up from $114,000,000 and 10.9% margin in Q1 last year.
Favorable project mix, strong project execution and increased volume contributed to the increased margin. In addition, last year was negatively affected by high development costs related to one specific project. The cash conversion in the quarter is strong, driven by a solid EBITDA and relatively stable net working capital. Both Kongsberg Defense and Aerospace and Kongsberg Discovery ended the quarter with a working capital position approximately in line with last quarter. Kongsberg Maritime improved net working capital by 400,000,000.0 in the quarter.
Part of the improvement is related to structural changes, but also reduced working capital as a percentage of revenues has contributed the last couple of quarters. Total contribution from associated companies were $13,500,000 in Q1. Our two largest associated companies are Kongsberg Satellite Services and Patriot. Kongspar Satellite Services delivered revenues of $556,000,000 in Q1, which is a year on year increase of 4%. First quarter sees some impact from delays in several launches, which is quite common in the industry.
The small satellite market is increasing with a significant growth in number of satellites. With KSAT’s solid market share, we expect the revenue growth to pick up going forward. EBIT in the quarter is $94,000,000 with a corresponding EBIT margin of 16.9%. The EBIT margin is affected by investments, which is important to deliver on the solid $5,200,000,000 backlog. Patria started the year with a 5% revenue growth compared to last year.
The growth was primarily driven by deliveries of armored vehicles. Note that we, as previous years, only include numbers from January and February for Patria. EBIT is in line with the typical EBIT profile we see from Patria, with most of the profits towards the end of the year. Now going forward, we expect Patria to grow further with the same seasonality effects that we have seen previous years. Patria’s order backlog is €2,400,000,000 The backlogs from our associated companies are not recognized in Comsper’s reported backlog.
And with that, I’ll leave the floor for Guy for some final remarks.
Geir Hoy, President and Chief Executive Officer, Kongsberg: Thank you, Mehta. Before we open for questions, let me touch upon the most important drivers for our business going forward. The global fleet is aging and the race for more energy efficient maritime fleet is a key driver for the industry going forward. Looking at the newbuild contracting at the yards, 2024 contracting was strong and ended higher than most analysts projected. We see estimates from such as Clarksons indicating softer newbuild contracting in 2025.
On the other hand, the mix for us continues to look strong. There are expectations of continued solid volumes on LNG carriers as well as growing offshore contracting among others. With the uncertainty in the geopolitical landscape as well as more industry specific challenges such as the choice of fuel and long lead time on new builds from yards, We also see that demand for upgrades continues to be strong. The age of the fleet continues to increase and for the existing fleet to stay relevant for the vessel owners, the vessel owner has to modernize both systems and equipment, which is and will continue to be good business for Congressman Maritime. We see continued increased demand for our portfolio of defense systems.
Defense spending is increasing both in Norway, NATO and other allies. The order backlog in Kungsberg defense and aerospace is above NOK 100,000,000,000, whereof NOK 85,000,000,000 is related to missiles and air defense. Our position towards the current market demand has never been stronger. We’re currently negotiating several projects. And as I mentioned in my introduction, this also includes the next JSM user, which we expect to sign within a a couple of months.
In Commsford Discovery, we are continuously expanding our offerings and we are experiencing strong and increased demand for our world leading portfolio of sensors, robotics and hydroacoustic products. The naval market and the water surveillance and monitoring as well as protection and surveillance of critical infrastructure are areas of specific interest. During my introduction, I mentioned the challenging geopolitical climate we along with others are experiencing. I would like to emphasize that Kangsberg has proven to be agile and adapting to changing environment. We have a highly international business, both in terms of our own customer base as well as our organizational setup.
This global presence allows us to be flexible and adapt to shifting condition. Overall, Kongsberg’s market position and the demand we are experiencing throughout our business are strong. We are a key player in our markets and I am confident that we will continue to deliver on our commitments and ambitions both in 2025 and onwards. With that, I would like to open up for questions from our viewers.
Jan Erik, Moderator/Presenter, Kongsberg: We have received several questions from our viewers today. And the first two questions, I will ask them together, comes from Lukas Dahl, Arctic Securities. The first one is regarding Conspirator Defense and Aerospace outlook. Could you please give some color to what you mean by mix of projects impacting profitability going forward? And preferably by giving some examples.
And also question number two, with regards to the order size for the six Hugen projects, can it be somewhat more specific?
Mete Toft Bergen, Executive Vice President and Chief Financial Officer, Kongsberg: Okay. Can answer to If I start with the last question. The order intake for the Hugin orders are a couple of hundred millions. So I’ll leave it to that. And when it comes to the projects for Kongsberg Defense and Aerospace, we do have a quite variation of the projects that we are delivering on from time to time.
And if we’re looking at our project order backlog of 105,000,000,000, there are a number of projects that are deliveries to Norway and we’ve said that deliveries to Norway are subject to profit cap regime, which means that it’s a cost plus contract. On other export contracts, we are competing in a competitive market, so we’re able to price these contracts competitively. And as such, they will have a different margin. I can give an example of a development contract that we signed last summer, which is the joint development for the supersonic strike missile to Norway and Germany. This is a development contract where Norway and Germany are together developing a new missile type.
This is a very low margin project. And when we have milestones and deliveries on these type of projects, they will generate a much lower margin in a quarter, whereas when we’re delivering on a big export project, for example, within air defense to a country that is not participating in development of our systems, will generate much higher margin in the quarter. So these type of milestones and delivery dates will significantly impact the margin in the quarter.
Geir Hoy, President and Chief Executive Officer, Kongsberg: May I just add on the AUVs? I think it’s important to remember that we have several type of AUVs and it’s very the contract price depends very much on the payload on the Hugin itself. What type of sensors, what kind of mission this vehicle should operate. So this contract with the sixty Huggins is not it’s actually undisclosed these figures. But again, it’s very important to remember that there are several type of engines with different payloads.
So it’s not one price for everything.
Jan Erik, Moderator/Presenter, Kongsberg: Thank you. With regards to a subject that has gotten a lot of attention lately, tariffs. Do you can you elaborate a little bit around the tariffs and how you eventually see this impacting Kongsberg?
Mete Toft Bergen, Executive Vice President and Chief Financial Officer, Kongsberg: Yes, I can answer to that. Of course, we do have sales to The US. The majority of our US exports is defense products. And when it comes to defense products, these are regulated by the FAR, DFAR regulations and as such are subject to duty free imports. So the majority of our export sales to Kongsberg is tax exempt, and we expect this to continue going forward.
When it comes to other type of products, we do also have some sales. Our contracts are in a majority put the tolls and the tariffs on the customer side. So in the short term, this has very little impact for our sales. Of course, the competitive situation and how this will change with these tariffs is something that we follow quite intensely and we go through all the sales and the products that we have. I’d also like to emphasize that we do have a very global footprint with more than 40 we’re in 40 different countries and more than 100 locations.
So we are utilizing this global footprint to assess how we can also adjust should the tariff and the impact be more significant on our business.
Geir Hoy, President and Chief Executive Officer, Kongsberg: And as I mentioned that we have a fairly large footprint in U. S. Today, including supply chain, which we, of course, also will continue to expand. So that is also, let’s say, important part.
Jan Erik, Moderator/Presenter, Kongsberg: Thank you. Next question from Marta Fracowiak. Do you have any comments on the European boosting or Europe boosting military spending? And when do you expect higher European spending to roll into your order intakes and results? Are you already seeing it?
Or do you eventually have an estimate when it will start showing?
Geir Hoy, President and Chief Executive Officer, Kongsberg: I can start. We are spending a lot of time, as I mentioned, in Europe these days. We have done that for quite some time now. Obviously, it’s important for us. Europe is the most important market for us, Norway and also an important market for Kongsberg.
And we are already well established in Europe. I mean, many of our customer are in Europe. We have also a supply chain, large supply chain in Europe. I would say that we see already the impact of the larger spendings in Europe. Of course, there are some very important programs coming online, which has been announced in the EU Commission.
And Norway, even though we are not a member of EU, we are part of the internal market. And that’s also why it’s important for us to be in Brussels and explain them and tell them what Kongsberg can contribute with. And what we hear and what we see also from the last white paper that was released in March is that Norway and Kongsberg are in there in these programs. These are huge programs, so it will take time before we will see the major impact, I would say. But these are programs that is coming online as we speak.
Jan Erik, Moderator/Presenter, Kongsberg: Thank you. Question from Daryl Carberg. Can you please elaborate around why you have stopped reporting Kongsberg Digital as a separate area?
Mete Toft Bergen, Executive Vice President and Chief Financial Officer, Kongsberg: Sure. As I mentioned in the portfolio changes for Q1, we have transferred a part of the Maritime Digital portfolio from Kungsberg Digital to Kungsberg Maritime. As such, this represents some SEK 600,000,000 of the revenue for Kungsberg Digital and the remaining revenue is around SEK 900,000,000. Now with our growing business and with the size of the other areas, we don’t see this business area big enough to report stand alone as from this year.
Jan Erik, Moderator/Presenter, Kongsberg: Thank you. That was the final question from the webcast viewers.
Geir Hoy, President and Chief Executive Officer, Kongsberg: Okay. Thank you very much for joining us this morning, and look forward to see you next time.
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