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A good quarter with strong maritime order intake

Q3 2018
26. October 2018

KONGSBERG's operating revenues in Q3 are NOK 3,154 million and the EBITDA is NOK 347 million. The quarterly order intake is NOK 4,477 million, which gives an order backlog of NOK 17,602 million at the end of the period. The Group signed maritime orders for more than NOK 3 billion, and a new framework agreement for the CROWS programme was signed within the defence area. On 6 July, the Group entered into an agreement concerning the acquisition of Rolls-Royce Commercial Marine.

The EBITDA margin is 11.0 per cent, compared to 8.4 per cent in Q3 2017. The EBITDA margin for the first three quarters of this year is 8.5 per cent (7.6 per cent). Order intake during the quarter gives a book/bill of 1.42.

On 6 July, KONGSBERG entered into an agreement for the acquisition of Rolls-Royce Commercial Marine from Rolls-Royce Plc. The acquisition will strengthen KONGSBERG's position as a world-leading supplier to the maritime industry and will increase business scalability.

“The acquisition of Rolls-Royce Commercial Marine is a milestone that will make us a more complete and strategically important supplier in an ever more competitive global market. It will considerably strengthen the company's business and create value for KONGSBERG's shareholders over time. We are delighted that the parliament acknowledges the strategic importance of the acquisition of Rolls-Royce Commercial Marine, both for KONGSBERG and the Norwegian maritime industry”, says Geir Håøy, President and CEO of KONGSBERG.

High order intake for Kongsberg Maritime

Kongsberg Maritime has operating revenues of NOK 1,798 million (NOK 1,815 million). EBITDA totalled MNOK 205 (MNOK 161), implying an EBITDA margin of 11.4 per cent (8.9 per cent). The margin is especially strong in Q3, partly because of considerably lower development costs from reduced development activity during the summer months. The order intake is NOK 3,024 million (NOK 1,670 million), which gives a book/bill of 1.68, and the order backlog at the end of the quarter is NOK 5,975 million.

The order intake is relatively good for all areas of Kongsberg Maritime this quarter. The largest single contracts were the following: around NOK 150 million for deliveries to a semi-submersible platform for Awilco Drilling, more than NOK 400 million for hybrid deliveries to nine roll-on-roll-off vessels for Grimaldi Group, and around NOK 110 million for deliveries to a heavy lift crane vessel for Offshore Heavy Transport.

“The order intake from the maritime market has been strong this quarter. However, it is important to emphasise that the market is still challenging, which means that both margins and order intake can vary considerably from one quarter to another. It is satisfying to see that the investments in integrated vessel solutions is beginning to give results, which is reflected by the order intake this quarter. We also see high levels of activity and utilisation in the aftermarket”, says Håøy.

Deliveries to the CROWS programme secured for the next five years for Kongsberg Defence & Aerospace

Kongsberg Defence & Aerospace's operating revenues for Q3 are NOK 1,180 million (NOK 1,281 million). EBITDA totalled NOK 120 million (NOK 61 million), which is equivalent to an EBITDA margin of 10.2 per cent (4.8 per cent). The order intake is NOK 1,272 million (NOK 648 million), which gives a book/bill of 1.08, and the order backlog at the end of the quarter is NOK 10,867 million.

In September, KONGSBERG was awarded a framework agreement for the next phase of the CROWS programme, with a value of up to USD 498 million. The first order (USD 74 million) under the agreement was also signed in September. This is the third framework agreement that has been signed since the US Army chose KONGSBERG as supplier of remote weapon stations in 2007.

“At present we see somewhat lower revenues within the defence area. This is largely due to reduced revenues within the air defence area, where the two large contracts that were signed in 2017 are in a start-up phase. Our defence area is well positioned, both through signed contracts with existing customers and through ongoing contract negotiations with potential customers. The fact that the US Army again chooses KONGSBERG as supplier to the CROWS programme in the next five year period, confirms the position we have taken in the past 10–15 years in this market”, says Håøy.

Full focus on existing operations and the upcoming integration

“Since the announcement of the acquisition of Rolls-Royce Commercial Marine, considerable work has gone into preparing for the upcoming integration. This is a highly resource-intensive process. We have a large and capable organisation that is preparing the takeover, and I'm looking forward to the date of transfer. This effort requires a lot of resources, but it is also important to keep focusing on our existing business and customers. Our customers can rely on KONGSBERG to give them the same levels of attention and quality as they are used to, despite the comprehensive integration process. We will not compromise on this”, concludes Håøy.

Further information

For further information, please contact:

  • Ronny Lie, Chief Communication Officer
    Mob: +47 916 10 798
  • Jan Erik Hoff, Group Vice President Investor Relations
    Mob: +47 991 11 916