Annual Report and Sustainability Report 2016 01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY
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01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY ANNUAL REPORT & SUSTAINABILITY REPORT 2016 1 KONGSBERG • Annual Report and Sustainability Report 2016 01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY • KONGSBERG • Vision, ambitions and values • Key figures • CEO Geir Håøy CONTENTS 01 02 INTRODUCTION 3 DIRECTORS’ REPORT & FINANCIAL STATEMENTS 14 KONGSBERG 3 Directors’ Report 2016 15 Vision, ambitions and values 5 Financial Statements and Notes 30 Key Figures 7 Statement from the Board 95 President and CEO Geir Håøy 10 Auditor’s Report 96 03 04 CORPORATE GOVERNANCE 100 SUSTAINABILITY 114 The Board’s report About the Sustainability Report 115 on Corporate Governance 101 Sustainable innovation 131 Policy 102 What have we achieved? 137 Articles of association 103 Climate and the environment 148 The Board’s report on the Norwegian Goals and reporting 152 Code of Practice for Corporate Governance 104 GRI 161 Auditor’s Report 166 This is an interactive PDF with bookmarks Navigate in Contents and hyperlinked text (hyperlinks are underlined by a dashed line). You can browse one page back or forward by using the arrows in the top left-hand corner. Use the menu button on the far left to go back to the table of contents. The chapters are also bookmarked, and you can find short cuts to these in the left-hand menu of the PDF Reader. 2 KONGSBERG • Annual Report and Sustainability Report 2016 01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY • KONGSBERG • Vision, ambitions and values • Key figures • CEO Geir Håøy KONGSBERG Kongsberg Gruppen (KONGSBERG) is an international technology group that delivers advanced and reliable solutions improving safety, security and performance in complex operations and under extreme conditions. KONGSBERG works with demanding customers in the global defence, maritime, oil and gas, fisheries and aerospace sectors. KONGSBERG’s solutions contribute to safer, more efficient Organisation operations at sea, on land and in space. Whether we are The Group is divided into three business areas and other talking about defence, the merchant marine, the exploitation operations. The three business areas are Kongsberg of oil and gas resources or fishery resources, our products Maritime, Kongsberg Defence Systems and Kongsberg are of strategic importance to our customers. We also supply Protech Systems. The other operations consist of Kongsberg technical solutions for global challenges such as environmen- Digital, real estate business and the corporate services. tal monitoring and resource management. The corporate services supports the business areas, the KONGSBERG KONGSBERG KONGSBERG MARITIME DEFENCE SYSTEMS PROTECH SYSTEMS • Offshore oil & gas • Missile Systems • Remote Weapon Station • Seaborne transportation • Naval Systems • Medium Caliber Turrets • Energy management • Integrated Defence Systems • Aquaculture • Aerostructures • Subsea & Marine Robotics • Defence Communications • Space & Surveillance • Develops concepts, by integrating • Premier supplier of defence and • Is the world’s leading supplier of deck management and energy aerospace-related systems. The remotely controlled weapon management together with the portfolio comprises products and stations. operational systems that provide systems for command and control, • Main product is the PROTECTOR unique customer benefits both on weapons guidance and surveillance, Remote Weapon Station. The vessels and foreland operations. communications solutions and system enhances safety for · Are among the market leaders in missiles. military personnel. dynamic positioning, automation • Has the expertise and production and surveillance systems, process facilities to make advanced automation, deck management composite and engineering equipment, fisheries, satellite products for aircraft, offshore and navigation and hydro-acoustics. helicopter markets. 3 KONGSBERG • Annual Report and Sustainability Report 2016 01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY • KONGSBERG • Vision, ambitions and values • Key figures • CEO Geir Håøy Chief Executive Officer and the Board along with associated Sustainability and corporate social responsibility committees and councils. The corporate services have exper- Sustainability and corporate social responsibility are important tise in financial affairs, business development, investor rela- topics for KONGSBERG and will be key to our strategy and tions, corporate law, anti- corruption, corporate social management. In addition, our stakeholders require that we responsibility, communication, HSE and HR. operate our business in a sustainable, accountable and re- sponsible manner and that we carry out our corporate social Ownership structure responsibility in accordance with the applicable expectations Kongsberg Gruppen ASA is listed on the Oslo Stock of society. This gives KONGSBERG the necessary “licence to Exchange and is subject to Norwegian securities legislation operate” in order to execute our business. and stock exchange regulations. The Norwegian state owns KONGSBERG has joined the UN Global Compact initiative. 50.001 per cent of the shares in the company. We support and respect international human and labour rights such as the UN’s Universal Declaration of Human Financial value added Rights, the UN Convention on the Rights of the Child, ILO At KONGSBERG, we create value in the areas and countries Core Conventions and the OECD Guidelines for Multinational in which we operate. First, we create value for our customers Enterprises. KONGSBERG uses the Global Reporting through our products. Then we create value through the Initiative (GRI) guidelines for the voluntary reporting of payment of dividends to owners and wages to employees, sustainable development. and indirectly by buying goods and services from suppliers. Sustainability and corporate social responsibility are an Value is also created through the importance we attach to integral part of the Group’s strategy process. Sustainable research and development. technology development is a central element in contributing towards solving the major global challenges the world faces. For KONGSBERG, this means business opportunities in several markets viewed in the light of our broad technology and competence platform. KONGSBERG’S GLOBAL PRESENCE Svalbard Finland Canada Norway Russia United Kingdom Denmark Germany The Netherlands Poland France Hungary USA Italy Spain Greece South Korea China Algeria Kuwait United Arab Emirates Mexico Saudi Arabia India Panama Singapore Brazil Australia Chile South Africa Antarctica 4 KONGSBERG • Annual Report and Sustainability Report 2016 01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY • KONGSBERG • Vision, ambitions and values • Key figures • CEO Geir Håøy VISION, AMBITIONS AND VALUES Extreme performance for extreme conditions KONGSBERG develops and delivers advanced systems and technologies for extreme conditions. Our solutions ensure efficiency, safety and high performance in operations ranging from deep sea to outer space. KONGSBERG’s objective is to secure and increase the stakeholders’ values through profitable and growth-oriented industrial development in a long-term and international perspective. VISION WORLD CLASS – through people, technology and dedication We have a strong, value-based culture that drives our business performance. Our shared vision defines our direction and what we are striving to achieve. 5 KONGSBERG • Annual Report and Sustainability Report 2016 01 02 03 04 INTRODUCTION DIRECTORS’ REPORT & FINANCIAL STATEMENTS CORPORATE GOVERNANCE SUSTAINABILITY • KONGSBERG • Vision, ambitions and values • Key figures • CEO Geir Håøy AMBITIONS KONGSBERG is a leading technology group with a world-class position and a technology growth agenda. We aspire to achieve sustainable development with a good balance between financial performance, value creation and social and environmental responsibility. KONGSBERG develops and delivers value-adding solutions for our customers in key technology-intensive industries. We develop superior expertise to deliver leading systems, products and services in our international market segments. It is of great importance that the strategic and business-related decisions made by the Group are based on a sustainable perspective. • We aim for annual average growth of 10 per cent over the next five years, about half of which is organic. Organic growth is expected to increase gradually throughout the period. • We shall be a “double digit” EBITA-margin business. • New projects and initiatives will be evaluated against a 10–15 per cent return on capital employed dependent upon the project’s risk. OUR VALUES We have four core values that support this vision, that describe what we stand for, our ethical attitudes and what we believe in. Our core values are our foundations; they make us who we are and have formed the basis of our operations for over 200 years. These core values act as guidelines for the way in which we act and work, and characterise our cooperation both within and outside the Group. These values are important for developing a healthy and strong corporate culture and thereby provide a platform for good corporate governance. DETERMINED INNOVATIVE COLLABORATIVE RELIABLE Determined Innovative Collaborative Reliable (intent, resolute, (unconventional, pioneering)