ANNUAL REPORT AND SUSTAIN ABILITY REPORT 2020 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and Governance Financial Statements

CORPORATE YEAR 2020 01 04 GOVERNANCE

4 Key Figures 2020 99 The Board’s Report on Corporate 7 Important milestones 2020 Governance 8 President and CEO Geir Håøy 100 Policy 101 Articles of Association 102 Board of Directors 103 The Board’s Report relating to “The Norwegian Code of Practice for Corporate Governance”

DIRECTORS’ REPORT ABOUT AND FINANCIAL KONGSBERG 02 05 STATEMENTS

13 This is KONGSBERG 116 Directors’ Report 2020 15 Strategy and ambitions 135 Financial Statements and Notes 16 Vision 215 Statement from the Board 17 Our values 216 Auditor’s Report 2020 18 Corporate Executive Management 220 Financial calendar 19 Business areas 220 Contact details 30 The World of KONGSBERG

03 SUSTAINABILITY

37 About the Sustainability Report 38 Sustainability and ESG strategy and priority 44 Framework for the preparation of Sustainability Report 45 Organisation and Management Systems 46 Responsible Business Conduct 48 Responsible Tax – our Tax Policy 50 Key Figures Sustainability 53 Focus areas 2020–2021 86 Climate and the environment 96 Auditor’s Report, Sustainability

KONGSBERG Annual Report and Sustainability Report 2020 2 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements

Key Figures 2020 Important milestones 2020 President and CEO Geir Håøy

01 YEAR 2020

KONGSBERG Annual Report and Sustainability Report 2020 3 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements

Key Figures 2020 Important milestones 2020 President and CEO Geir Håøy

Key Figures 2020

MNOK 2020 20193) 20183) 2017 2016 2015 2014 2013 2012 2011

SALES Revenues 25 612 23 245 13 807 14 490 15 845 17 032 16 613 16 323 15 652 15 128 New orders 28 818 31 413 15 879 13 430 14 319 15 238 22 097 15 043 14 605 15 016 Order backlog 35 947 32 347 16 707 15 629 16 914 19 597 21 020 15 687 16 523 17 839 Book-to-bill ratio 1.12 1.35 1.15 0.9 0.9 0.9 1.3 0.9 0.9 1.0

PERFORMANCE Earnings before interest, taxes, depreciation and amortisation (EBITDA)1) 3 250 2 113 1 126 1092 988 1 697 1 998 2 142 2 294 2 385 Earnings before interest and taxes (EBIT)1) 1 905 1 029 701 585 462 857 1 196 1 659 1 840 2 026 Earnings before taxes (EBT) 1 855 833 780 654 729 944 1 285 1 644 1 809 1 991 Earnings after tax 2 932 717 704 559 651 755 880 1 225 1 304 1 418

PROFITABILITY EBITDA % 4) 12.7% 9.1% 8.2% 7.5% 6.2% 10.0% 12.0% 13.1% 14.7% 15.8% EBIT % 4) 7.40% 4.4% 5.1% 4.0% 2.9% 5.0% 7.2% 10.2% 11.8% 13.4%

BALANCE SHEET Equity 13 301 12 810 12 626 7 365 6 725 6 127 6 282 6 657 6 274 5 484 Equity ratio % 5) 33.9% 32.8% 45.70% 35.60% 31.7% 32.0% 31.0% 38.2% 38.6% 351% Net interest-bearing debt (3 949) (1 565) (5 706) 384 2 195 (941) (3 551) (1 935) (1 198) (2 191) Working capital1) (458) 17 (14) 955 2 533 2 698 155 775 1 000 (644) ROACE1) 20.8% 10.0% 12.5% 9.1% 8.2% 21.8% 35.9% 32.5% 36.3% 51.6%

EMPLOYEES Number of employees, total 10 689 10 793 6 842 6 830 7 159 7 688 7 664 7 493 7 259 6 681 Number of reported injuries per million hours worked (TRI) 1.7 2.3 1.6 3.2 3.5 4.1 4.7 3.7 1.5 1.7 Number of lost time days per million hours worked (ISR) 21.2 31.4 17.6 16.2 32 14.2 45.3 15.6 13.6 1.1

THE ENVIRONMENT2)5) Energy consumption (GWh) 167.1 178.4 131.2 124.4 122.8 119.35 123.7 127 114.7 108.9

CO2 emissions (metric tonnes) 40 619 74 114 35 466 32 517 33 464 39 268 26 006 25 294 19 579 22 747 Waste (metric tonnes) 7 420 7 830 1 888 1 884 1 986 2 368 1 788 1 935 1 784 1 622

OWNERS’ VALUE Market capitalisation 31 714 24 839 21 167 18 120 14 940 17 400 14 760 15 300 14 940 13 920 Earnings per share after tax (EPS) in NOK 16.08 3.89 5.58 4.62 5.44 6.23 7.28 10.24 10.91 11.83 P/E in NOK 10.82 34.64 30.2 32.70