Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Investor Day (November 2015)
45 slides from Kongsberg Gruppen Asa's investor day presentation, November 2015
Slide 1: Kongsberg Capital Markets Day
KONGSBERG CMDs CAPITAL MARKETS DAY
Slide 2: Disclaimer
DISCLAIMER This presentation contains certain forward-looking information and statements. Such forward-looking information and statements are based on the current, estimates and projections of the Company or assumptions based on information currently available to the Company. Such forward-looking in
Slide 3: Agenda
AGENDA 09:45 09:55 10:40 Welcome Kongsberg Gruppen ASA Kongsberg Defence Systems Jan Erik Hoff, VP IR Walter Qvam, CEO Harald Aarø, EVP BD Hans-Jørgen Wibstad, CFO 11:30 12:00 13:00 Kongsberg Protech Systems Lunch & Exhibition Kongsberg Oil & Gas Tech. Espen Henriksen, EVP Egil Haugsdal, EVP 13:30 1
Slide 4: Kongsberg Gruppen ASA
KONGSBERG GRUPPEN ASA Walter Qvam, President & CEO Hans-Jørgen Wibstad, EVP & CFO
Slide 5: Agenda: Introduction – This is Kongsberg
AGENDA INTRODUCTION – THIS IS KONGSBERG FINANCIAL STATUS AMBITIONS INNOVATION SUMMARY © 2015 KONGSBERG – All rights reserved.
Slide 6: Providing advanced solutions for extreme performance under extreme conditions
PROVIDING ADVANCED SOLUTIONS FOR EXTREME PERFORMANCE UNDER EXTREME CONDITIONS © 2015 KONGSBERG – All rights reserved.
Slide 7: Involved in the world's most technology intensive industries
INVOLVED IN THE WORLD’S MOST TECHNOLOGY INTENSIVE INDUSTRIES © 2015 KONGSBERG – All rights reserved.
Slide 8: Rapidly adapting to changes and opportunities
RAPIDLY ADAPTING TO CHANGES AND OPPORTUNITIES © 2015 KONGSBERG – All rights reserved.
Slide 9: Involved in strategic areas, often of national interest
INVOLVED IN STRATEGIC AREAS, OFTEN OF NATIONAL INTEREST © 2015 KONGSBERG – All rights reserved.
Slide 10: Highly skilled, dedicated and hard working employees
HIGHLY SKILLED, DEDICATED AND HARD WORKING EMPLOYEES © 2015 KONGSBERG – All rights reserved.
Slide 11: Corporate social responsibility
CORPORATE SOCIAL RESPONSIBILITY We will further expand our international presence. This implies a continued high focus on compliance and corporate social responsibility. © 2015 KONGSBERG – All rights reserved.
Slide 12: Value based culture drives our performance
A GENUINE BELIEF IN THAT OUR STRONG, VALUE BASED CULTURE DRIVES OUR PERFORMANCE DETERMINED INNOVATIVE COLLABORATIVE RELIABLE © 2015 KONGSBERG – All rights reserved.
Slide 13: Global reach with more than 100 offices and global alliance partners
GLOBAL REACH WITH MORE THAN 100 OFFICES AND A LARGE NUMBER OF GLOBAL ALLIANCE PARTNERS © 2015 KONGSBERG – All rights reserved.
Slide 14: Business areas
BUSINESS AREAS KONGSBERG DEFENCE KONGSBERG PROTECH KONGSBERG OIL & GAS KONGSBERG MARITIME SYSTEMS SYSTEMS TECHNOLOGIES Global market leader within Modern product portfolio in Unrivalled global market leader Attractive technology positions both offshore and merchant growing defence and in remote weap
Slide 15: Diversity delivers
DIVERSITY DELIVERS - a core element in our strategic thinking GEOGRAPHY Other 10 % Merchant Shipping Defence 10 % 35 % LTM revenues INDUSTRIES TECHNOLOGIES Offshore / Oil & Gas 45 % © 2015 KONGSBERG – All rights reserved.
Slide 16: 20-40 years profitable product life cycle after initial development
20-40 YEARS PROFITABLE PRODUCT LIFE CYCLE AFTER INITIAL DEVELOPMENT LIFE CYCLE DEVELOPMENT INTERNATIONAL SALES SUPPORT OFFSHORE & MARITIME • Customer orientated • High customer loyalty • Global Customer Support product development • High market share • Provides recurring revenue stream LIFE NATIONAL
Slide 17: Development since CMD 2014
DEVELOPMENT SINCE CMD 2014 OIL & GAS MARITIME PROTECH SYSTEMS DEFENCE SYSTEMS 90 5 Nov 2014 BRENT CRUDE OIL PRICE, USD/brl1 GLOBAL DEFENCE PROCUREMENT, USD billion2 80 420 413 411 421 430 441 388 378 381 392 70 60 50 23 Nov 2015 40 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 © 2015 KONGSBERG –
Slide 18: Agenda: Financial status
AGENDA INTRODUCTION – THIS IS KONGSBERG FINANCIAL STATUS AMBITIONS INNOVATION SUMMARY © 2015 KONGSBERG – All rights reserved.
Slide 19: Overall growth and margins strongly influenced by KPS volume reduction
OVERALL GROWTH AND MARGINS STRONGLY INFLUENCED BY SIGNIFICANT KPS VOLUME REDUCTION REVENUES EBITDA CAGR 2,8% 16 323 16 613 16 883 15 652 2 385 2 294 15 128 2 142 2 060 1 836 15,8% 14,7% 13,1% 12,4% 10,9% 2011 2012 2013 2014 2015* 2011 2012 2013 2014 2015* KM KDS KPS KOGT KOG CAGR 2011-2015*: 11,1% 2
Slide 20: Solid backlog – good visibility
SOLID BACKLOG – GOOD VISIBILITY BACKLOG 30% KDS 25% KM 20% KDS 15% 21 020 21 059 KM KM KPS 17 839 KDS 10% KPS 16 523 15 687 KPS KOGT KOGT KOGT 5% 0% 21 059 2015 2016 2017+ 18% 42% 40% 2011 2012 2013 2014 15Q3 BREAKDOWN BY DELIVERY DATES Life-cycle business and framework agreements not converted into
Slide 21: Strong balance sheet
STRONG BALANCE SHEET EQUITY KONGSBERG aims to maintain a strong balance RATIO 39% 38% 35% sheet 31% 30% • Investment grade debt rating, securing access to attractive debt markets • Enables us to take advantage of attractive aquisiton 2011 2012 2013 2014 15Q3 opportunities • Long-term customer relati
Slide 22: Supporting a fluctuating cash flow
SUPPORTING A FLUCTUATING CASH FLOW KONGSBERG has a highly fluctuating cash flow, primarily due to payment terms in certain types of projects OPERATING 2000 CASH FLOW 1500 1000 500 • • • Eight quarter moving average 0 -500 -1000 2009 2010 2011 2012 2013 2014 2015 © 2015 KONGSBERG – All rights reserve
Slide 23: Currency effects
CURRENCY EFFECTS KONGSBERG hedges all contracts in foreign currencies and a portion of anticipated future order intake TEMPORARY EFFECTS DUE TO HEDGING Hedging strategy: EQUITY • Minimize P/L fluctuations due to currency PROGNOSIS Fair value of hedging portfolio continuously adjusted against equity
Slide 24: Dividend
DIVIDEND “ HISTORICAL PAYOUT RATIO Dividends shall over time constitute between 40 and 50 per cent of the company’s ordinary net profit after tax, future capital requirements taken into account 127,1 % 93,0 %* DIVIDEND PAYOUT FY 2014 PAYOUT *EXCL. DIVIDEND RATIO IMPAIRM. ORDINARY 4,25 58,4 % 42,7 %
Slide 25: Strong financial position
STRONG FINANCIAL POSITION BALANCE SHEET & RATING EQUITY RATIO 0,30 KEY FIGURES1 LEVERAGE RATIO2 −0.71 NORWAY INTERNATIONAL CREDIT RATING 3 BBB+ REVENUES BNOK 23% 77% 16.9 SHARE PERFORMANCE LAST 12 EBITDA EBITDA MARGIN: 10.9 % BNOK 1,8 MONTHS KOG OSEBX (rebalanced) 160 ORDER INTAKE BNOK 16,9 140 ORDE
Slide 26: Agenda: Ambitions
AGENDA INTRODUCTION – THIS IS KONGSBERG FINANCIAL STATUS AMBITIONS INNOVATION SUMMARY © 2015 KONGSBERG – All rights reserved.
Slide 27: Adapting to changing markets and technologies
ADAPTING TO CHANGING MARKETS AND TECHNOLOGIES DEFENCE Global security challenges SPACE & SURVEILLANCE Strong foothold in several niches Increasing defence spending KONGSBERG is Norway’s largest KONGSBERG has a well positioned product space company portfolio MERCHANT MARINE High demand in the merchan
Slide 28: Adapting to changing markets – pursuing significant opportunities
ADAPTING TO CHANGING MARKETS – PURSUING SIGNIFICANT OPPORTUNITIES MARITIME DEFENCE SYSTEMS Preparing for a more challenging Executing large programs offshore market Pursuing several major potential contracts Further developing market positions Developing and launching new technology Launching new te
Slide 29: Ambitions revisited
AMBITIONS REVISITED AMBITIONS 2013 - 2015 10 % AVERAGE ANNUAL GROWTH GROWTH 5 % organic, expected ONGOING CONSOLIDATION PHASE CAGR to strengthen over the 1.7% • Oil & Gas/Maritime consolidation period • Defence orders build-up • New opportunities/segments Minimum 5 % acquired growth EBITA- MARGIN IN
Slide 30: Revenue development next five years
REVENUE DEVELOPMENT NEXT FIVE YEARS 2015 2016 2017 2018 2019 2020 DEFENCE PROJECT EXECUTION • ORDERS BUILD_UP FURTHER GROWTH AND WIDER DEPLOYMENT • F-35, MCT-30, NSM, NASAMS, JSM… ADAPTING TO CHANGING MARKETS LARGE OPPORTUNITIES, WIDER SCOPE, STRONG ALLIANCES, NEW APPLICATIONS MARITIME EXECUTION • A
Slide 31: Status DeltaOne
STATUS DELTAONE All business areas are expecting to meet targets by year end 2016 PROGRESS TOWARDS 1 BNOK • Process innovation Planned Actual • Sourcing 697 713 • Sharing best practices 303 287 Completed Sep 2015 To complete © 2015 KONGSBERG – All rights reserved.
Slide 32: Agenda: Innovation
AGENDA INTRODUCTION – THIS IS KONGSBERG FINANCIAL STATUS STATUS AMBITIONS FROM CMD 2013 INNOVATION SUMMARY © 2015 KONGSBERG – All rights reserved.
Slide 33: 200 years of innovative history
A unique history and 200 YEARS OF a strong culture. An industrial pioneer INNOVATIVE HISTORY since 1814. • High focus on R&D • Continuous pipeline of innovations • Incremental and disruptive • Diversity delivers © 2015 KONGSBERG – All rights reserved.
Slide 34: Our innovation pipeline philosophy ensures future growth
OUR INNOVATION PIPELINE PHILOSOPHY ENSURES FUTURE GROWTH REMOTE WEAPON STATION SHIP AUTOMATION AIR DEFENCE DYNAMIC POSITIONING/ HYDRO ACOUSTICS SONARS/ ECHOSOUNDERS MISSILE NEW INNOVATIONS LAUNCHED AT REGULAR INTERVALS © 2015 KONGSBERG – All rights reserved.
Slide 35: Our innovation pipeline philosophy ensures future growth
OUR INNOVATION PIPELINE PHILOSOPHY ENSURES FUTURE GROWTH REMOTE WEAPON STATION TACTICAL RADIO SHIP AUTOMATION K-MASTER AIR DEFENCE DYNAMIC F-35 POSITIONING/ PRODUCTION HYDRO ACOUSTICS REMOTE TOWER SONARS/ ECHOSOUNDERS SPACE SERVICES & MISSILE TECHNOLOGY WELLADVISOR LEDAFLOW NEW INNOVATIONS LAUNCHED
Slide 36: Our innovation pipeline philosophy ensures future growth
OUR INNOVATION PIPELINE PHILOSOPHY ENSURES FUTURE GROWTH REMOTE WEAPON STATION WIND FARM TACTICAL RADIO MANAGEMENT SHIP AUTOMATION MEDIUM K-MASTER CALIBER AIR DEFENCE DYNAMIC F-35 POSITIONING/ K-IMS PRODUCTION HYDRO ACOUSTICS REMOTE TOWER JSM SONARS/ ECHOSOUNDERS SPACE SERVICES & OFFSHORE MISSILE FI
Slide 37: Taking on more systems-, solutions- and prime responsibilities
TAKING ON MORE SYSTEMS-, SOLUTIONS- AND PRIME RESPONSIBILITIES CORE CAPABILITIES Integrating sensors and software Supporting human decision making, precision, safety, security Cybernetics, software, signal processing and system engineering Project and supplier management © 2015 KONGSBERG – All right
Slide 38: Key opportunity areas
KEY OPPORTUNITY AREAS - focuses Group long term innovation efforts OCEAN SPACE Leveraging our’s and Norway’s unique position to take a leading role in exploring innovative opportunities in the ocean space SMART COMMUNITIES KONGSBERG technologies enabling and protecting the intelligent – but vulnerab
Slide 39: Opportunities in digitalization
OPPORTUNITIES IN DIGITALIZATION INTERNET INTERNET OF SENSOR NETWORKS THINGS INTERNET OF KNOWLEDGE SENSORS RFID INTELLIGENT TAGS © 2015 KONGSBERG – All rights reserved.
Slide 40: Our R&D focus reflects our belief in technology leadership
OUR R&D FOCUS REFLECTS OUR BELIEF IN TECHNOLOGY LEADERSHIP 1000 INTERNALLY FINANCED R&D 800 600 • Continuous investments in product development 400 • Internally and customer financed 200 • Total product development constitutes around 10 per cent of operating revenues over time 0 2007 2008 2009 2010
Slide 41: Agenda: Summary
AGENDA INTRODUCTION – THIS IS KONGSBERG FINANCIAL STATUS AMBITIONS INNOVATION SUMMARY © 2015 KONGSBERG – All rights reserved.
Slide 42: Where we are, where we are heading
WHERE WE ARE WHERE WE KONGSBERG ARE HEADING An international technology corporation with market leading positions within defence, offshore, maritime and oil & gas niches KONGSBERG We further develop our platform through our defined growth strategies: We develop and deliver advanced systems and techn
Slide 43: Kongsberg Protech Systems / Defence Systems
DEFENCE KONGSBERG DEFENCE SYSTEMS HARALD ÅNNESTAD KONGSBERG DEFENCE SYSTEMS - good profitability and large opportunities KONGSBERG PROTECH SYSTEMS ESPEN HENRIKSEN KONGSBERG PROTECH SYSTEMS - world leading market position © 2015 KONGSBERG – All rights reserved.
Slide 44: Kongsberg Oil & Gas Technologies / Maritime
MERCHANT MARINE, OFFSHORE AND OIL & GAS KONGSBERG MARITIME GEIR HÅØY KONGSBERG MARITIME - solid performance in cyclical markets KONGSBERG OIL & GAS TECHN. EGIL HAUGSDAL KONGSBERG OIL & GAS TECHNOLOGIES - challenging markets but high potential over time © 2015 KONGSBERG – All rights reserved.
Slide 45: Kongsberg Capital Markets Day
KONGSBERG CMDs CAPITAL MARKETS DAY