01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Directors’ Report 2020 Financial Statements and Notes Statement from the Board Auditor’s Report Financial Statements and Notes Page Page KONGSBERG (GROUP) 135 Financial Statements and Notes 187 24 Cash and cash equivalents 136 Consolidated statement of income 188 25 Share capital 137 Consolidated statement of comprehensive income 189 26 Provisions 138 Consolidated statement of financial position 190 27 Other current liabilities as of 31 December 191 28 Assets pledged as collateral and guarantees 139 Consolidated statement of changes in equity 191 29 Statement on remuneration of the Group CEO 140 Consolidated statement of cash flow and Executive Management 141 Notes 194 30 Remuneration for Executive Management 141 1 General information and the Board 141 2 Basis for the preparation of the consolidated 197 31 Auditor’s fees financial statements 197 32 List of Group companies 142 3 Summary of significant accounting policies 199 33 Transactions with related parties 150 4 Fair value 200 34 Definitions and abbreviations 151 5 Management of capital and financial risks 201 35 Events after balance date 153 6 Discontinued operations 155 7 Acquisitions 158 8 Operating segments 161 9 Revenue recognition customer contracts KONGSBERG GRUPPEN ASA 165 10 Shares in joint arrangements and associated companies 202 Statement of income 166 11 Inventories 203 Statement of financial position as of 31 December 166 12 Personnel expenses 204 Statement of cash flow 166 13 Pensions 205 Notes 170 14 Property, plant and equipment 205 1 Accounting policies 171 15 Leases 206 2 Equity reconciliation 172 16 Intangible assets 206 3 Shares in subsidiaries 173 17 Impairment testing of goodwill 207 4 Personnel expenses and auditor’s fees 175 18 Financial income and financial expenses 207 5 Pensions 175 19 Income tax 208 6 Income tax 178 20 Earnings per share 209 7 Long-term interest-bearing loans and credit facilities 178 21 Other non-current assets 210 8 Guarantees 179 22 Receivables and credit risk 211 9 Related parties 180 23 Financial instruments 212 10 Currency hedging 180 A) Fair value, derivatives 214 11 Cash and cash equivalents 181 B) Currency risk and currency hedging 183 C) Cash flow hedges 184 D) Interest rate risk on loans 185 E) Liquidity risk 215 Statement from the Board 186 F) List of financial assets and liabilities 216 Auditor’s Report 2020 187 G) Assessment of fair value 220 Financial calendar 187 H) Estimate uncertainty 220 Contact details KONGSBERG Annual Report and Sustainability Report 2020 135 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Directors’ Report 2020 Financial Statements and Notes Statement from the Board Auditor’s Report Consolidated statement of income KONGSBERG (GROUP) MNOK Note 2020 2019 Operating revenues 8, 9 25 612 23 245 Total revenues 25 612 23 245 Material cost 11 (8 850) (8 609) Personnel expenses 12, 13 (9 510) (8 591) Other operating expenses 31 (4 001) (3 932) Earnings before interest tax depreciation and amortisation (EBITDA) 8, 34 3 250 2 113 Depreciation 8, 14 (481) (427) Depreciation, leasing assets 15 (411) (348) Impairment of property, plant and equipment 8, 14 (52) (18) Amortisation 8, 16 (339) (290) Impairment of intangible assets 8, 16 (60) - Earnings before interest and taxes (EBIT) 8, 34 1 905 1 029 Share of net income from joint arrangements and associated companies 10 186 21 Financial income 18 103 138 Financial expenses 18 (196) (224) Interest on leasing liabilities 18, 15 (142) (131) Earnings before tax from continuing operations (EBT) 1 855 833 Income tax expense 19 (374) (237) Earnings after tax from continuing operations 1 481 596 Earnings after tax from discontinued operations 6 1 451 121 Earnings after tax (EAT) 2 932 717 Attributable to Equity holders of the parent 2 891 701 Non-controlling interests 41 17 Earnings per share (EPS) / EPS diluted in NOK - Earnings per share from continuing operations 20 8.01 3.22 - Earnings per share from continuing operations, diluted 20 8.01 3.22 - Earnings per share 20 16.08 3.89 - Earnings per share, diluted in NOK 20 16.08 3.89 The consolidated statement of income for 2019 is adjusted for discontinued operations. In addition a reclassification between material cost, personnel expenses and other operating expenses is made on the 2019 figures. KONGSBERG Annual Report and Sustainability Report 2020 136 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Directors’ Report 2020 Financial Statements and Notes Statement from the Board Auditor’s Report Consolidated statement of comprehensive income KONGSBERG (GROUP) MNOK Note 2020 2019 Earnings after tax 2 932 717 Specification of other comprehensive income for the period Items to be reclassified to profit or loss in subsequent periods Change in fair value, financial instruments: - Cash flow hedges, currency 23 C (19) (159) - Interest rate swap /basis swap 23 C (99) 42 Tax effect cash flow hedges (Currency futures and interest rate swaps) 19 26 26 Translation differences currency 76 108 Total items to be reclassified to profit or loss in subsequent periods (16) 17 Items not to be reclassified to profit or loss Actuarial gains/losses pensions 13 (167) (112) Tax effect on actuarial gain/loss on pensions 19 37 15 Total items not to be reclassified to profit or loss (131) (97) Other comprehensive income for the period (147) (80) Comprehensive income after tax for the period 2 785 637 Attributable to Equity holder of the parent 2 776 620 Non-controlling interests 9 17 KONGSBERG Annual Report and Sustainability Report 2020 137 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Directors’ Report 2020 Financial Statements and Notes Statement from the Board Auditor’s Report Consolidated statement of financial position as of 31 December KONGSBERG (GROUP) MNOK Note 2020 2019 Assets Non-current assets Property, plant and equipment 14 3 665 3 924 Leasing assets 15 1 965 2 141 Goodwill 16, 17 3 143 4 272 Other intangible assets 16 2 053 2 215 Deferred tax asset 19 306 167 Shares in joint arrangements and associated companies 10 3 465 3 247 Other non-current assets 21 209 213 Total non-current assets 14 808 16 179 Current assets Inventories 11 4 132 3 964 Trade receivables 22 5 542 6 363 Customer contracts, asset 9 5 784 5 888 Derivatives 23 A 964 376 Other short-term receivables 22 580 598 Cash and cash equivalents 24 7 420 5 654 Total current assets 24 422 22 843 Total assets 39 230 39 022 Equity, liabilities and provisions Equity Issued capital 5 933 5 933 Retained earnings 6 754 6 249 Other reserves 559 571 Equity attributable to owners of the parent 13 246 12 753 Non-controlling interests 55 57 Total equity 25 13 301 12 810 Non-current liabilities and provisions Long-term interest-bearing loans 23 D 1 971 3 469 Long-term leasing liabilities 15 1 753 1 850 Pension liabilities 13 1 137 974 Provisions 26 117 122 Deferred tax liability 19 1 194 1 350 Other non-current liabilities 61 36 Total non-current liabilities and provisions 6 233 7 801 Current liabilities and provisions Customer contracts, liabilities 9 11 217 10 481 Derivatives 23 A 546 493 Provisions 26 1 608 1 513 Short-term interest-bearing loans 23 D 1 500 620 Short-term leasing liabilities 15 339 348 Other current liabilities 27 4 486 4 956 Total current liabilities and provisions 19 696 18 411 Total liabilities and provisions 25 929 26 212 Total equity, liabilities and provisions 39 230 39 022 A reclassification is made in the consolidated statement of financial position as of 31 December 2019 between other short-term receivables and other current liabilities. Kongsberg, Eivind Reiten Per A. Sørlie Martha Kold Bakkevig Morten Henriksen 16 March 2021 Chairman Director Director Director Anne-Grete Strøm-Erichsen Sigmund Ivar Bakke Elisabeth Fossan Helge Lintvedt Geir Håøy Deputy chair Director Director Director Chief Executive Officer KONGSBERG Annual Report and Sustainability Report 2020 138 01 Year 2020 02 About 03 Sustainability 04 Corporate 05 Directors’ Report and KONGSBERG Governance Financial Statements Directors’ Report 2020 Financial Statements and Notes Statement from the Board Auditor’s Report Consolidated statement of changes in equity KONGSBERG (GROUP) Non- Equity holders of parent controlling Total interests equity Retained Issued capital Other reserves earnings Total Other Share issued Hedging Translation MNOK Note capital capital reserve difference Equity as of 1 January 2019 225 5 708 (75) 629 6 119 12 606 20 12 626 Earnings after tax 700 700 17 717 Other comprehensive income (91) 108 (97) (80) (80) Transactions with treasury shares related to employee share programme (3) (3) (3) Dividend paid 25 (450) (450) (450) Purchase/sale, non-controlling interests (20) (20) 20 - Equity as of 31 December 2019 225 5 708 (166) 737 6 249 12 753 57 12 810 Equity as of 1 January 2020 225 5 708 (166) 737 6 249 12 753 57 12 810 Earnings after tax - - - 2 890 2 890 41 2 932 Other comprehensive income - - (92) 80 (103) (115) (33) (147) Transactions with treasury shares related to employee share programme - - - (15) (15) (15) Dividend paid 25 - - - (450) (450) (450) Additional dividend paid - - - (1 800) (1 800) (1 800) Share buy-back related to share buy-back programme - - - (29) (29) (29) Purchase/sale, non-controlling interests - - - 11 11