Kongsberg Gruppen Asa · OSL:KOG
Kongsberg Gruppen Asa — Investor Day (2016)
32 slides from Kongsberg Gruppen Asa's investor day presentation, 2016
Slide 1: KONGSBERG
KONGSBERG
Slide 2: Agenda
AGENDA 09:45 09:50 10:25 10:45 11:20 11:35 WELCOME KONGSBERG KONGSBERG KONGSBERG KONGSBERG KONGSBERG GRUPPEN MARITIME DEFENCE PROTECH DIGITAL SYSTEMS SYSTEMS JAN ERIK HOFF GEIR HÅØY, PRESIDENT & CEO EGIL HAUGSDAL HEGE SKRYSETH VP IR HANS JØRGEN WIBSTAD, CFO PRESIDENT KM HARALD AARØ ESPEN HENRIKSEN P
Slide 3: Kongsberg Gruppen
KONGSBERG GRUPPEN Geir Håøy, President & CEO Hans-Jørgen Wibstad, EVP & CFO
Slide 4: 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 5: Agenda
AGENDA THIS IS KONGSBERG AMBITIONS TECHNOLOGY FINANCIAL STATUS © 2016 KONGSBERG – All rights reserved.
Slide 6: Extreme performance for extreme conditions
EXTREME PERFORMANCE FOR EXTREME CONDITIONS We develop and deliver advanced systems and technology for people working under extreme conditions. Our solutions ensure efficiency, safety, security and high performance in operations ranging from deep sea to outer space. 2015 KONGSBERG – All rights reserv
Slide 7: The organisation
THE ORGANISATION KONGSBERG DEFENCE KONGSBERG PROTECH KONGSBERG MARITIME KONGSBERG DIGITAL SYSTEMS SYSTEMS Global market leader within Modern product portfolio in Unrivalled global market leader Provider of next generation digital offshore, subsea and merchant growing defence and in remote weapon sta
Slide 8: Global reach, local presence – in diverse markets
GLOBAL REACH, LOCAL PRESENCE – IN DIVERSE MARKETS NORWAY MNOK 2.904 4.773 EUROPE AMERICAS MNOK 3.762 ASIA & MNOK 4.798 OCEANIA 614 MNOK 5.568 909 1.392 © 2016 KONGSBERG – All rights reserved. Revenues and employees 2015
Slide 9: Agenda
AGENDA THIS IS KONGSBERG AMBITIONS TECHNOLOGY FINANCIAL STATUS © 2016 KONGSBERG – All rights reserved.
Slide 10: Development since CMD 2015
DEVELOPMENT SINCE CMD 2015 MARITIME DEFENCE SYSTEMS PROTECH SYSTEMS OIL & GAS / DIGITAL CHANGE IN GLOBAL UPSTREAM E&P SPENDING (%)1 GLOBAL DEFENCE PROCUREMENT (USD BILLION)2 22 374 350 354 356 15 19 340 340 340 14 11 321 320 320 2 -8 -10 -26 -27 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2011
Slide 11: A mixed market outlook
A MIXED MARKET OUTLOOK DEFENCE SPACE & SURVEILLANCE Global security challenges Increasing demand for KONGSBERG’s solutions Good outlook within KONGSBERG-niches MERCHANT MARINE SUBSEA TECHNOLOGY Mixed short/medium term outlook Increasing demand for KONGSBERG’s leading Very cyclical business underwate
Slide 12: Positioning for major opportunities – adapting to changing markets
POSITIONING FOR MAJOR OPPORTUNITIES – ADAPTING TO CHANGING MARKETS MARITIME DEFENCE SYSTEMS Launching new technology concepts World class program execution and solutions Pursuing several major opportunities, some Adjusting capacity expected to be concluded over the next 12 Streamlining organization
Slide 13: Ambitions 2016-2020
AMBITIONS 2016-2020 10 % AVERAGE ANNUAL ONGOING CONSOLIDATION PHASE – MAJORITY OF REVENUES GROWTH ORGANIC GROWTH IN LATTER HALF OF PERIOD • Oil and gas/maritime consolidation 10 % average Combination of organic • Defence order backlog build-up growth over the and acquired • New opportunities/segment
Slide 14: DeltaOne has secured our competitiveness
DELTAONE HAS SECURED OUR COMPETITIVENESS CMD 2013: All business areas have delivered on or above agreed targets Cost improvement efforts continue Q413 PRESENTATION: Continuous improvements, especially within: – Process innovation – Sourcing – Sharing best practices © 2016 KONGSBERG – All rights rese
Slide 15: Strategic priorities
STRATEGIC PRIORITIES PROFITABILITY Improvement and cost saving programs Scope Kongsberg expansion Digital Exploiting Defence new M&A market opportunities development GROWTH © 2016 KONGSBERG – All rights reserved.
Slide 16: Revenue development next five years
REVENUE DEVELOPMENT NEXT FIVE YEARS 2015 2016 2017 2018 2019 2020 2021 DEFENCE PROJECT EXECUTION • ORDER BACKLOG BUILD-UP FURTHER GROWTH AND WIDER DEPLOYMENT • F-35, MCT-30, NSM, NASAMS, JSM… ADAPTING AND EXECUTING LARGE OPPORTUNITIES, WIDER SCOPE, STRONG ALLIANCES, NEW APPLICATIONS MARITIME EXECUTI
Slide 17: Agenda
AGENDA THIS IS KONGSBERG AMBITIONS TECHNOLOGY FINANCIAL STATUS © 2016 KONGSBERG – All rights reserved.
Slide 18: Innovating through our core competencies
INNOVATING THROUGH OUR CORE COMPETENCIES CORE COMPETENCIES Integrating sensors and software Supporting human decision making, precision, safety, security Cybernetics, software, signal processing and system engineering Project and supplier management © 2016 KONGSBERG – All rights reserved.
Slide 19: Our R&D focus reflects our belief in technology leadership
OUR R&D FOCUS REFLECTS OUR BELIEF IN TECHNOLOGY LEADERSHIP Total costs of product development and maintenance, including customer financed efforts, constitutes ~10% of operating revenues over time 1 500 EQUITY-FINANCED R&D 1 000 500 - 2012 2013 2014 2015 2016* R&D expensed R&D capitalised © 2016 KON
Slide 20: Innovation drives new opportunities
INNOVATION DRIVES NEW OPPORTUNITIES KEY OPPORTUNITY AREAS FOCUSES SUBSEA, AQUACULTURE AND CRITICAL INFRASTRUCTURE GROUP LONG-TERM EFFORTS SMART COMMUNITIES KONGSBERG technologies enabling and protecting the intelligent – but vulnerable – society. Optimizing, securing and protecting critical interest
Slide 21: Agenda
AGENDA THIS IS KONGSBERG AMBITIONS TECHNOLOGY FINANCIAL STATUS © 2016 KONGSBERG – All rights reserved.
Slide 22: From strong to modest growth
FROM STRONG TO MODEST GROWTH REVENUES 2005-2016* CAGR CAGR 9,2% EX. KPS 1,9% 18 16 14 CAGR 12 21,8% NOK billion 10 8 6 4 2 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016* KM KOGT Other KDS KPS © 2016 KONGSBERG – All rights reserved. * Last 12 months
Slide 23: Mixed profitability development
MIXED PROFITABILITY DEVELOPMENT EBITDA / MARGIN 2005-2016* 3,0 CAGR 30% −4,2% 2,5 25% CAGR 2,0 42,4% 20% NOK billion 1,5 15% 1,0 10% 0,5 5% 0,0 -0,5 0% 05 06 07 08 09 10 11 12 13 14 15 16* 05 06 07 08 09 10 11 12 13 14 15 16* KM KOGT Other KDS KPS © 2016 KONGSBERG – All rights reserved. * Last 12 mo
Slide 24: Pro forma consolidated revenues 2011-2016
PRO FORMA CONSOLIDATED REVENUES 2011-2016 INCLUDING ASSOCIATED COMPANIES +19,1 % 20 18 OWNERSHIP: 16 14 50% NOK billion 12 10 49,9% 8 6 4 25% 2 0 2011 2012 2013 2014 2015 2016 2 20163 KOG KSAT1 Patria Nammo 1) KSAT was proportionally consolidated in KOG’s accounts up to 2013. 2) Last 12 months. 3) L
Slide 25: Backlog still at a sound level
BACKLOG STILL AT A SOUND LEVEL SOMEWHAT LOWER VISIBILITY THAN IN 2015 BREAKDOWN BY DELIVERY YEAR 30% KDS KDS 25% BACKLOG KM 20% 15% KM KM KPS KDS KPS 10% KPS 5% 0% 21 020 2016 2017 2018+ 19 597 19% 44% 37% 17 858 16 523 15 687 REVENUE VISIBILITY 8,8 8,4 7,8 6,6 3,8 3,5 2012 2013 2014 2015 16Q3 YTG N
Slide 26: Net interest bearing debt development
NET INTEREST BEARING DEBT DEVELOPMENT Investments 2008 2009 2010 2011 2012 2013 2014 2015 16Q3 Investments Financial items EBITDA Other operating items Financial items ~40% hedge roll-over EBITDA Other operating items © 2016 KONGSBERG – All rights reserved.
Slide 27: Solid balance sheet
SOLID BALANCE SHEET KONGSBERG aims to maintain a strong balance sheet • Shall remain a solid credit EQUITY RATIO 39% 38% • Enables us to take advantage of attractive terms in debt 31% 32% 31% markets • Long-term customer relationships – a strong balance sheet is a competitive factor Capital structur
Slide 28: Robust debt structure
ROBUST DEBT STRUCTURE • Issued two bonds in May 2016 – 1 BNOK floating 5 yr, due in 2021 Bonds Bridge facility 250 – 1 BNOK fixed 10 yr, due in 2026 • Partly used to repay existing debt – 243 MNOK buy-back of KOG06 – 130 MEUR repayment of bridge facility, rest 160 MEUR falls due in 2019 1 435 1 000
Slide 29: Currency effects
CURRENCY EFFECTS KONGSBERG hedges all contracts in foreign currencies and a portion of anticipated future TEMPORARY EFFECTS DUE TO HEDGING order intake Hedging strategy: EQUITY PROGNOSIS • Reduce P/L fluctuations due to currency effects Fair value of hedging portfolio continuously adjusted against e
Slide 30: Dividend
DIVIDEND “ HISTORICAL PAYOUT RATIO Dividend shall over time constitute between 40 and 50 per cent of the company’s ordinary profit after tax. Expected future capital requirements will be considered. 127,1 % DIVIDEND FY 2015 TOTAL PAYOUT EXCL. 68,2 % Ordinary Extraordinary DIVIDEND RATIO IMPAIRMENT 5
Slide 31: Business update
BUSINESS UPDATE KONGSBERG KONGSBERG DEFENCE SYSTEMS PROTECH SYSTEMS KONGSBERG MARITIME KONGSBERG DIGITAL © 2016 KONGSBERG – All rights reserved.
Slide 32: KONGSBERG
KONGSBERG