Kongsberg Automotive (KOA) Q1 2026 earnings summary

Executive summary

• Leadership renewal and organizational simplification over the past year focused on value creation and a performance-driven culture, with management emphasizing cost discipline and operational efficiency.

• Profitability and cash flow improved in Q1 2026, with EBIT rising to EUR 5.5 million from EUR 2.2 million and net profit to EUR 5.2 million from a loss of EUR 2.2 million year-over-year.

• Revenue for Q1 2026 was EUR 179.6 million, down 1.7% year-over-year at constant currency, but up 7.2% sequentially from Q4 2025, reflecting a stabilizing market.

• Cost-reduction initiatives totaling EUR 42 million annually are 95% implemented, with full impact expected from Q3 2026.

• Free cash flow improved to negative EUR 4.7 million from negative EUR 10.5 million a year ago, showing a positive trend despite seasonal working capital increases.

Financial highlights

• EBIT margin improved to 3.1% from 1.2% year-over-year, with a long-term target of 6.5% on EUR 730 million revenue.

• Free cash flow trend improved from negative EUR 16 million to positive EUR 12.6 million over the last 12 months.

• Leverage ratio reduced to 2.2 in Q1 2026 from 3.1 in Q1 2025, strengthening financial flexibility.

• Return on Capital Employed (ROCE) increased for three consecutive quarters, now at 5.4%.

• Equity ratio has risen to 32.4%, reflecting improved solidity.

Outlook and guidance

• EBIT margin for 2026 expected to continue its positive trend as cost and restructuring programs are completed.

• Market outlook is cautiously optimistic, with small growth expected in commercial vehicle production, but uncertainties remain due to geopolitical tensions and high oil prices.

• Warranty cost improvements are expected to contribute a 1% EBIT impact improvement from 2025 levels.

• Margin improvement initiatives continue to target a 6.5% EBIT margin.