Kongsberg Gruppen ASA (KOG.OL) | Investment Case

1. Company Snapshot

1.a. Company Description

Kongsberg Gruppen ASA, together with its subsidiaries, provides high-tech systems and solutions primarily to customers in the maritime and defense markets.The company operates through three segments, Kongsberg Maritime (KM), and Kongsberg Defence & Aerospace(KDA), and Kongsberg Digital (KDI).The KM segment offers solutions and systems for bridge and control systems, which include dynamic positioning, propulsion control, and navigation, as well as automation systems; energy solutions and ship design services; and propellers, thrusters, water jet systems, and systems for offshore manoeuvring of maritime vessels.

This segment also provides winches for mooring, anchor handling, and special systems for offshore vessels, tugs, marine vessels, and various other classes of vessel, as well as cranes; hydro-acoustics; autonomous underwater vessels and solutions for autonomous maritime vessels; and products related to fisheries, systems for underwater mapping, and sensors and solutions for specialist vessels.The KDA segment offers various systems and services to the defense industry.It offers air defense and combat systems, sonars, and navigation for marine vessels and submarines, as well as integrated command and control systems; remote tower solutions for airports; remote control weapon stations for land-based vehicles and marine vessels; products for military tactical communication; naval strike and air-to-surface missiles; and lightweight composite and titanium components for F-35 combat aircraft.

This segment also provides components and services to the space industry, as well as port monitoring systems; and maintenance, repair, and overhaul services.The KDI segment focuses on digitalization within the oil and gas, wind, and merchant marine markets.The company operates primarily in Norway, Europe, North America, South America, Asia, Australia, and Africa.

Kongsberg Gruppen ASA was founded in 1814 and is headquartered in Kongsberg, Norway.

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1.b. Last Insights on KOG

Kongsberg Gruppen ASA faced negative drivers over the recent three months. A diplomatic push for a Ukraine peace conference led to weakness in European defense stocks. Furthermore, the company was likely impacted by a slowdown in growth, as the defense industry faced uncertain market conditions. On a positive note, Kongsberg Defence & Aerospace made a strategic investment in SpinLaunch's Meridian Space Constellation, indicating a push into space technology. Additionally, the company was recognized by MarketsandMarkets' 360Quadrants report for its excellence in space cybersecurity.

1.c. Company Highlights

Last Price	246.2
Change Percentage	0.16%
Open	246.4
Previous Close	245.8
Market Cap ( Millions)	216556
Volume	701144
Year High	402
Year Low	216.2
M A 50	274.28
M A 200	312.7

FCF Yield	4.92%
Dividend Yield	1.79%
ROE	35.84%
Debt / Equity	28.94%
Net Debt / EBIDTA	-88.53%
Price To Book	11.77
Price Earnings Ratio	32.19
Price To FCF	20.31
Price To sales	4.07
EV / EBITDA	20.25

2. Kongsberg Delivers Strong Q1 2025 Results with 19% Revenue Growth and Solid Margins

Kongsberg reported a robust Q1 2025 performance, with revenues reaching NOK 14.62 billion, marking a 19% year-over-year increase when adjusted for the sale of the steering gear and rudder business. The company also delivered an impressive earnings per share (EPS) of NOK 1.23, significantly surpassing analyst estimates of NOK 0.759. This strong financial performance was driven by solid execution across all business segments, with operating margins improving to NOK 2.89 billion. As CEO Geir Haoy noted, "Kongsberg remains well-positioned to lead in energy efficiency and decarbonization, while also playing a key role in European and Transatlantic defense." The company’s ability to balance growth in both its maritime and defense portfolios underscores its strategic agility in a rapidly changing global landscape.

Publication Date: May -12

                                    📋 Highlights
                                    Strong Order Intake:
                                                Kongsberg reported Q1 order intake above NOK 20 billion, with all business areas achieving a book-to-bill ratio above one.
Revenue Growth:
                                                Q1 revenues reached NOK 14.62 billion, a 19% year-on-year increase when adjusted for the sale of the steering gear and rudder business.
Improved EBIT:
                                                Operating results improved across all areas, with EBIT of NOK 2.89 billion, benefiting from the sale of the steering gear and rudder business.
Defense Backlog:
                                                Kongsberg Defense and Aerospace reported an order backlog above NOK 100 billion, with NOK 85 billion related to missiles and air defense.
Strategic Acquisitions:
                                                The company strengthened its portfolio through the acquisition of Naxys Technologies and the integration of Kongsberg Digital's maritime portfolio into Kongsberg Maritime.

                                

Segment Performance and Operational Highlights

Kongsberg Maritime stood out as a top performer, with revenues surging 25% to NOK 6.74 billion, fueled by strong demand in new building and aftermarket activities. The segment’s growth reflects the aging global fleet and increasing demand for energy-efficient solutions. Kongsberg Defense and Aerospace also delivered a 9% revenue increase to NOK 5.38 billion, supported by growth in air defense and missile projects. Meanwhile, Kongsberg Discovery reported a 29% revenue jump to NOK 1.36 billion, driven by autonomous underwater vehicles and drone detection systems. All segments reported a book-to-bill ratio above one, signaling strong future visibility with growing order backlogs.

Valuation and Future Outlook

With a price-to-earnings (P/E) ratio of 54.33 and a return on equity (ROE) of 29.73%, Kongsberg’s valuation reflects its strong growth prospects and market leadership. The company’s net debt-to-EBITDA ratio of -1.12 further highlights its solid financial health and ability to invest in strategic initiatives. Looking ahead, Kongsberg is poised to benefit from rising defense spending and the global push for decarbonization. The company’s order backlog, particularly in Defense and Aerospace, exceeds NOK 100 billion, providing a robust foundation for future growth. Analysts expect revenues to grow 16.7% next year, aligning with Kongsberg’s long-term ambition of reaching NOK 120 billion in revenues by 2033.

3. NewsRoom

$10.32 Bn Unmanned Underwater Vehicles Global Market Opportunities And Strategies To 2034 with Kongsberg, Boeing, Saab, Oceaneering International, and Lockheed Martin

Nov -27

Source:

How Kongsberg’s Global Drone Defense Expansion Could Impact Kongsberg Gruppen (OB:KOG) Investors

Oct -03

Source:

Kongsberg CEO: Drone Wall Should Augment Wider Air Defenses

Oct -02

Source:

Genasys Inc. Receives $9.0M LRAD Systems Order for CROWS - Common Remotely Operated Weapon Stations

Sep -29

Source:

How SpinLaunch's Revolutionary Centrifuge Could Slash Launch Costs And Upend The Space Industry

Sep -13

Source:

Galleon Awarded Multi-Million-Dollar NASAMS Contract by Kongsberg Defence & Aerospace

Sep -10

Source:

Kongsberg Maritime to equip India’s first fully electric tug

Sep -08

Source:

Does Morgan Stanley’s Split-Sector Outlook Reveal a Tipping Point for Kongsberg Gruppen (OB:KOG)?

Sep -06

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.24%)

6. Segments

Kongsberg Maritime

Expected Growth: 10%

Kongsberg Maritime's 10% growth is driven by increasing demand for sustainable and digitalized maritime solutions, expansion in emerging markets, and a strong backlog of orders. The company's focus on autonomous vessels, electrification, and digital twin technology also contributes to its growth. Additionally, Kongsberg Gruppen ASA's diversification strategy and investments in research and development further support the segment's growth.

Kongsberg Defence & Aerospace

Expected Growth: 11%

Kongsberg Defence & Aerospace's 11% growth is driven by increasing global defence spending, rising demand for autonomous underwater systems, and growing importance of cybersecurity in the defence industry. Additionally, the company's focus on innovation, strategic partnerships, and expansion into new markets contribute to its growth momentum.

Kongsberg Discovery

Expected Growth: 9%

Kongsberg Discovery's 9% growth is driven by increasing demand for seismic and hydrographic survey services, expansion into new markets, and strategic partnerships. Additionally, investments in digitalization and autonomous technologies enhance operational efficiency, reducing costs and increasing competitiveness. Growing E&P activities and infrastructure development in the energy sector also contribute to the segment's growth.

Other

Expected Growth: 8%

Kongsberg Gruppen ASA's 'Other' segment growth is driven by increasing demand for renewable energy solutions, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovation and R&D investments in areas like electrification and digitalization are contributing to its growth.

7. Detailed Products

K-Bridge

An integrated navigation and control system for vessels, providing a comprehensive overview of the vessel's operations.

K-Pos

A dynamic positioning system that enables precise control of a vessel's position and heading.

K-Chief

A machinery automation and control system for vessels, managing and monitoring onboard systems.

K-Thrust

A propulsion control system that optimizes vessel performance and reduces fuel consumption.

K-Master

A range of autopilot systems for vessels, providing advanced steering and navigation capabilities.

Kongsberg Maritime Simulation

A range of simulation-based training solutions for the maritime industry.

Kongsberg Defence & Aerospace

A range of defence and aerospace products, including communication systems, navigation systems, and missile systems.

8. Kongsberg Gruppen ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Kongsberg Gruppen ASA operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.

Bargaining Power Of Customers

Kongsberg Gruppen ASA has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's products and services are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

Kongsberg Gruppen ASA relies on a few key suppliers for critical components, which gives them some bargaining power. However, the company's size and reputation help to mitigate this risk.

Threat Of New Entrants

The barriers to entry in Kongsberg Gruppen ASA's industry are relatively high, due to the need for significant investments in research and development, as well as the requirement for specialized expertise.

Intensity Of Rivalry

The industry in which Kongsberg Gruppen ASA operates is highly competitive, with several established players competing for market share. The company must continually innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	17.69%
Debt Cost	5.56%
Equity Weight	82.31%
Equity Cost	5.56%
WACC	5.56%
Leverage	21.50%

11. Quality Control: Kongsberg Gruppen ASA passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Kongsberg Gruppen

A-Score: 5.9/10

Value: 1.4

Growth: 8.9

Quality: 8.0

Yield: 5.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

Dassault Aviation

A-Score: 5.7/10

Value: 2.3

Growth: 6.0

Quality: 6.5

Yield: 5.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

Accelleron

A-Score: 5.3/10

Value: 0.9

Growth: 4.7

Quality: 6.8

Yield: 3.1

Momentum: 9.5

Volatility: 7.0

1-Year Total Return ->

Leonardo

A-Score: 4.4/10

Value: 1.7

Growth: 6.8

Quality: 4.0

Yield: 1.2

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

QinetiQ

A-Score: 4.2/10

Value: 5.0

Growth: 4.4

Quality: 2.4

Yield: 2.5

Momentum: 7.5

Volatility: 3.7

1-Year Total Return ->

Elbit Systems

A-Score: 4.0/10

Value: 1.1

Growth: 6.2

Quality: 5.1

Yield: 1.9

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.72%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.56%

Kongsberg Gruppen ASA - NO0003043309

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on KOG

1.c. Company Highlights

Expensive

Strong Momentum

Higher Growth

Earnings Beats

Revenues Beats

Better Quality

Revenues Miss

Average Quality

Earnings Miss

More Volatile

Higher Yield

2. Kongsberg Delivers Strong Q1 2025 Results with 19% Revenue Growth and Solid Margins

Segment Performance and Operational Highlights

Valuation and Future Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.24%)

6. Segments

Kongsberg Maritime

Expected Growth: 10%

Kongsberg Defence & Aerospace

Expected Growth: 11%

Kongsberg Discovery

Expected Growth: 9%

Other

Expected Growth: 8%

7. Detailed Products

K-Bridge

K-Pos

K-Chief

K-Thrust

K-Master

Kongsberg Maritime Simulation

Kongsberg Defence & Aerospace

8. Kongsberg Gruppen ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Kongsberg Gruppen ASA passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

246.2$

Current Price

246.2$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA