ANNUAL REPORT and SUSTAIN ABILITY REPORT 2018 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements
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ANNUAL REPORT AND SUSTAIN ABILITY REPORT 2018 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements 01 02 3 YEAR 2018 11 ABOUT KONGSBERG 4 Key Figures 2018 12 This is KONGSBERG 7 Important milestones 2018 14 Strategy and ambitions 8 President and CEO Geir Håøy 15 Vision 16 Our values 17 Corporate Executive Management 18 Business areas 28 The world of KONGSBERG 03 04 34 SUSTAINABILITY 75 CORPORATE GOVERNANCE 35 About the Sustainability Report 76 The Board’s Report on Corporate 36 Framework for the preparation of Governance Sustainability Report 77 Policy 37 Responsible Business Conduct 78 Articles of Association 38 Responsible Tax – our Tax Policy 79 Board of Directors 40 Organisation and Management Systems 80 The Board’s Report relating to “The 41 Focus areas 2018–2019 Norwegian Code of Practice for Corporate 67 Climate Statement and Key Figures Governance” 74 Auditor’s Report, Sustainability Interactive PDF with bookmarks Navigate in Contents and hyperlinked text (hyperlinks are underlined). 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FINANCIAL STATEMENTS 93 Directors’ Report 2018 111 Financial Statements and Notes 182 Statement from the Board 183 Auditor’s report 2018 187 Financial calendar 187 Contact KONGSBERG Annual Report and Sustainability Report 2018 2 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Key Figures 2018 Important milestones 2018 President and CEO Geir Håøy 01 YEAR 2018 KONGSBERG Annual Report and Sustainability Report 2018 3 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Key Figures 2018 Important milestones 2018 President and CEO Geir Håøy Key Figures 2018 MNOK 2018 2017 2016 2015 2014 2013 20121) 20111) 2010 2009 SALES Revenues 14 381 14 490 15 845 17 032 16 613 16 323 15 652 15 128 15 497 13 816 New orders 16 574 13 430 14 319 15 238 22 097 15 043 14 605 15 016 13 584 17 605 Order backlog 17 283 15 629 16 914 19 597 21 020 15 687 16 523 17 839 17 759 19 892 Book-to-bill ratio 1.15 0.9 0.9 0.9 1.3 0.9 0.9 1.0 0.9 1.4 PERFORMANCE Earnings before interest, taxes, depreciation and amortisation (EBITDA) 1 394 1 279 1 217 1 784 2 060 2 142 2 294 2 385 2 485 1 619 Earnings before interest, taxes and amortisation (EBITA) 1 038 886 835 1 405 1 718 1 797 1 971 2 123 2 216 1 376 Earnings before interest and taxes (EBIT) 945 772 692 944 1 258 1 659 1 840 2 026 2 113 1 263 Earnings before taxes (EBT) 844 654 729 944 1 285 1 644 1 809 1 991 2 097 1 169 Profit for the year 704 559 651 755 880 1 225 1 304 1 418 1 500 828 PROFITABILITY EBITDA % 9.7% 8.8% 7.7% 10.5% 12.4% 13.1% 14.7% 15.8% 16.0% 11.7% EBITA % 7.2% 6.1% 5.3% 8.2% 10.3% 11.0% 12.6% 14.0% 14.3% 10.0% EBIT % 6.6% 5.3% 4.4% 5.5% 7.6% 10.2% 11.8% 13.4% 13.6% 9.1% BALANCE SHEET Equity 12 626 7 365 6 725 6 127 6 282 6 657 6 274 5 484 4 881 3 726 Equity ratio % 45.7 35.6 31.7 32.0 31.0 38.2 38.6 35.1 35.0 30.0 Net interest-bearing debt (5 706) 384 2 195 (941) (3 551) (1 935) (1 198) (2 191) (1 813) (634) Working capital1) (14) 955 2 533 2 698 155 775 1 000 (644) (522) (220) ROACE2) 12.5 9.1 8.2 21.8 35.9 32.5 36.3 51.6 65.2 34.8 EMPLOYEES Number of employees, total 6 842 6 830 7 159 7 688 7 664 7 493 7 259 6 681 5 681 5 423 Number of reported injuries per million hours worked (TRI) 1.6 3.2 3.5 4.1 4.7 3.7 1.5 1.7 6.3 5.5 Number of lost time days per million hours worked (ISR) 17.6 16.2 32.0 14.2 45.3 15.6 13.6 1.1 22.3 58.2 THE ENVIRONMENT Energy consumption (GWh) 131.2 124.4 122.8 119.35 123.7 127.0 114.7 108.9 103.2 100.0 CO2 emissions (metric tonnes) 35 466 32 517 33 464 39 268 26 006 25 294 19 579 22 747 20 005 12 980 Waste (metric tonnes) 1 888 1 884 1 986 2 368 1 788 1 935 1 784 1 622 1 772 1 473 OWNERS’ VALUE Market capitalisation 21 167 18 120 14 940 17 400 14 760 15 300 14 940 13 920 15 960 10 590 Earnings per share after tax (EPS) in NOK 5.58 4.62 5.44 6.23 7.28 10.24 10.91 11.83 12.46 6.83 P/E in NOK 30.20 32.70 22.95 23.05 16.77 12.49 11.46 9.82 10.64 12.92 Dividend per share in NOK 2.50 3.75 3.75 4.25 9.25 5.25 3.75 3.75 3.75 2.00 1) The figures have been revised in accordance with the description in Note 32. For other years, this change has not been taken into account. 2) See Note 32 for definitions. KONGSBERG Annual Report and Sustainability Report 2018 4 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Key Figures 2018 Important milestones 2018 President and CEO Geir Håøy KEY FIGURES – KONGSBERG MNOK 2,779 4,518 MNOK 3,812 474 MNOK 4,074 635 MNOK 2,760 1,110 MNOK 608 8 MNOK 190 89 MNOK 158 8 REVENUES MNOK 14,381 Kongsberg Defence & Aerospace 42.4% Kongsberg Maritime 52.5% Other 5.1% EBITDA EBIT PROFIT FOR THE YEAR MNOK 1,394 MNOK 945 MNOK 704 DIVIDEND PER SHARE EARNINGS PER SHARE AFTER TAX MARKET CAPITALISATION NOK 2.50 NOK 5.58 MNOK 21,167 HISTORICAL DEVELOPMENT 20 000 16.0% 14.7% EBITDA, % 15 000 Revenues, MNOK 15.8% 12.4% 10 000 9.7% 13.1% 8.8% 11.7% 7.7% 5 000 10.5% 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 KONGSBERG Annual Report and Sustainability Report 2018 5 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Key Figures 2018 Important milestones 2018 President and CEO Geir Håøy KEY FIGURES – BUSINESS AREAS Kongsberg Defence Kongsberg Other & Aerospace Maritime activities 2,448 3,794 600 REVENUES REVENUES REVENUES MNOK 6,104 MNOK 7,545 MNOK 732 -3.6% from 2017 +1.6% from 2017 +0.5% from 2017 EBITDA EBITDA EBITDA MNOK 863 MNOK 594 MNOK -63 +41.0% from 2017 +0.8% from 2017 -180.8% from 2017 NEW ORDERS NEW ORDERS NEW ORDERS MNOK 6,885 MNOK 8,884 MNOK 805 +28.1% from 2017 +21.1% from 2017 +12.1% from 2017 KONGSBERG Annual Report and Sustainability Report 2018 6 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Key Figures 2018 Important milestones 2018 President and CEO Geir Håøy Important milestones 2018 KONGSBERG · Successful share flotation with high level of participation from shareholders. · Voted by students as one of the top three most attractive technology companies in Norway. KONGSBERG remains one of Norway’s most attractive employers · The acquisition of Rolls-Royce Commercial Marine reinforces KONGSBERG’s positioning as a supplier of complete solutions to the maritime industry · The acquisition of Aerospace Industrial Maintenance Norway strengthens KONGSBERG’s positioning as a strategic partner for the Norwegian Armed Forces’ operational needs KONGSBERG DEFENCE & AEROSPACE • Naval Strike Missile chosen for the US ‘Over-the-Horizon’ programme • Naval Strike Missile sold to Malaysia • Chosen as the supplier of remote weapon stations, communication, digitisation, etc. for a major vehicle programme in Qatar. Final contract negotiations are ongoing • Chosen as the supplier for the next phase of the US CROWS programme Photo: Courtesy of Knud E. Hansen Knud E. of Courtesy Photo: KONGSBERG MARITIME • Order intake of almost MNOK 9,000, an increase of over MNOK 1,500 compared with 2017 • Entered into significant agreements for major integrated system solutions from companies including Awilco and Grimaldi • Contract for the delivery of the Safety and Automation system for phase two of the Johan Sverdrup development on the Norwegian shelf • Order intake exceeding MNOK 3,000 for the first time for subsea KONGSBERG DIGITAL • Important orders from the Singapore Police for Maritime Simulation • Around 25 per cent higher order intake in 2018 compared with 2017 KONGSBERG Annual Report and Sustainability Report 2018 7 01 Year 2018 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Key Figures 2018 Important milestones 2018 President and CEO Geir Håøy President and CEO Geir Håøy 2018 can be summed up as one of the most eventful years in KONGSBERG’s history.