Kongsberg Automotive (KOA) Status Update summary

Strategic priorities and business transformation

• Strategic turnaround underway with cost reductions exceeding €17 million annually and new initiatives targeting €10 million more in savings.

• Focus on profitable growth towards 2028, targeting revenues above €1 billion and an EBIT margin at or above 8.5%.

• Commercial vehicles and high-margin products are the main strategic priorities, with over 80% of 2028 revenues expected from commercial, off-highway, and industrial applications.

• Portfolio transformation since 2021 is finalized, focusing on resilient, growth-oriented products.

• Headquarters reestablished in Kongsberg, Norway, and refinancing completed with a new Nordic bond.

Operational and financial performance

• Core business revenues have grown over 10% in two years, despite recent market weakness.

• EBIT improved to €18 million for the first nine months, with significant cost reductions offsetting lower sales.

• Operating cash flow improved to €18.7 million year-to-date, with ongoing focus on capital employed and working capital efficiency.

• Leverage ratio at 1.5x and equity ratio at 34.3% as of Q3 2024; new €110 million bond issued and refinancing completed.

• Over 10% workforce reduction in the last 12 months, with further cost-saving programs underway.

Product and innovation strategy

• Balanced portfolio between resilient internal combustion products and growth in e-mobility and electrification.

• Key product launches in 2024 include gear control units (€523M lifetime value), ARC rotary actuators (€26M), and fluid transfer assemblies (€34M).

• Proprietary air brake coupling technology is a market leader in Europe, with global expansion and sustainability benefits.

• Innovation focus includes camera cleaning, steer-by-wire, and thermal management technologies, supporting electrification and sustainability trends.

• High-margin products like air couplings, gear control units, and powertrain actuators are driving profitability.