Kongsberg ASA’s Q1 2025 Earnings Call Highlights

Kongsberg Gruppen ASA ((NO:KOG)) has held its Q1 earnings call. Read on for the main highlights of the call.

Kongsberg Gruppen ASA’s recent earnings call for Q1 2025 highlighted a robust financial performance, marked by significant growth and strategic expansions in its defense and maritime sectors. Despite facing geopolitical uncertainties and potential tariff impacts, the company demonstrated a positive outlook, supported by strong order intake and improved EBIT margins.

Strong Order Intake

Kongsberg reported an impressive order intake exceeding NOK20 billion for Q1 2025, with all business areas achieving a book-to-bill ratio above one. This indicates a healthy demand for Kongsberg’s offerings and positions the company well for sustained growth.

Revenue Growth

The company delivered NOK14.62 billion in revenues for Q1 2025, marking a 19% year-on-year increase after adjusting for the sale of its steering gear and rudder business. This growth underscores Kongsberg’s successful adaptation and strategic focus in its core markets.

Expansion in Defense and Aerospace

Kongsberg Defense and Aerospace’s order backlog has surpassed NOK100 billion, bolstered by significant contracts in air defense and missile projects. Notably, the company secured a new user for its Naval Strike Missile and expanded its contract with the U.S. Air Force, reinforcing its position in the defense sector.

Acquisition and Strategic Moves

The acquisition of Naxys Technologies and the divestment of Kongsberg’s steering gear and rudder business have strengthened its technology base and financial standing. These strategic moves are aimed at enhancing Kongsberg’s competitive edge and market presence.

Increased EBIT Margin

Kongsberg achieved a quarterly EBIT of NOK2.89 billion, with an underlying EBIT margin of 13.6%, up by 0.8 percentage points from the previous year. This improvement reflects the company’s operational efficiency and effective cost management.

Geopolitical Uncertainties

Ongoing geopolitical tensions, including wars in Europe, pose challenges and uncertainties for international trade and defense contracts. Kongsberg remains vigilant in navigating these complexities to safeguard its business interests.

Potential Impact of Tariffs

While Kongsberg’s global footprint currently mitigates tariff impacts, there is a potential risk to the competitiveness and pricing of its non-defense products. The company is closely monitoring these developments to adapt its strategies accordingly.

Reduced Reporting for Kongsberg Digital

Kongsberg Digital will no longer be reported as a separate segment due to reduced revenue following the transfer of parts of its maritime digital portfolio to Kongsberg Maritime. This move aligns with the company’s strategic restructuring efforts.

Forward-Looking Guidance

Kongsberg’s forward-looking guidance for 2025 is optimistic, with total revenue reaching NOK14.62 billion and a 19% year-on-year increase. The order intake exceeded NOK20 billion, reflecting strong market demand. Kongsberg Maritime achieved a 25% revenue growth, while Kongsberg Defense and Aerospace and Kongsberg Discovery saw 9% and 29% increases, respectively. The company is expanding its global footprint with new missile production facilities in the U.S. and Australia, underscoring its commitment to growth and adaptation to geopolitical changes.

In conclusion, Kongsberg Gruppen ASA’s Q1 2025 earnings call reflects a positive sentiment, driven by strong financial growth and strategic initiatives. The company’s robust order intake, revenue growth, and strategic expansions position it well for future success, despite the challenges posed by geopolitical uncertainties and potential tariff impacts.