Kongsberg Automotive’s Earnings Call: Mixed Sentiment and Strategic Moves

Kongsberg Automotive Holding ASA ((NO:KOA)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Kongsberg Automotive Holding ASA presented a mixed sentiment, highlighting both achievements and challenges. On the positive side, the company reported significant improvements in EBIT and cash flow, alongside successful cost reduction measures and strategic acquisitions. However, the call also underscored challenges such as a decline in revenue, ongoing warranty liabilities, and fewer business wins due to market conditions.

Improved EBIT

Kongsberg Automotive reported a substantial improvement in EBIT, which rose to EUR 4.9 million in Q3 2025, compared to EUR 1.1 million in the same quarter last year. This growth reflects the company’s effective financial management and strategic initiatives.

Positive Cash Flow

The company achieved a positive cash flow of EUR 6.6 million, marking an improvement of EUR 11.8 million from Q3 of the previous year. This positive cash flow is a testament to the company’s robust financial health and operational efficiency.

Cost Reductions on Track

Kongsberg Automotive’s cost reduction programs are progressing as planned, with expected improvements of EUR 40 million in the cost base. These measures are anticipated to enhance EBIT by 4% to 5% on stable revenues, demonstrating the company’s commitment to financial optimization.

No Major Contract Losses

Despite a slowdown in market activity, Kongsberg Automotive did not lose any major contract opportunities in 2025. This stability in contract retention is crucial for maintaining the company’s market position.

Tariff Cost Mitigation

The company successfully mitigated tariff costs, achieving a net impact of zero for Q3, with agreements in place for future compensation. This strategic approach helps protect the company’s margins against external economic pressures.

Acquisitions and Strategic Developments

Kongsberg Automotive completed the acquisition of Chassis Autonomy, which had a positive cash effect. Additionally, the company secured full ownership of a joint venture in China with Dongfeng and Nissan, expanding its strategic options in the region.

Revenue Decline

Revenues declined by approximately 10% compared to Q3 last year, primarily due to challenges in the automotive market. This decline highlights the external pressures faced by the company in maintaining its revenue streams.

Warranty Liabilities

Warranty costs remain a concern for Kongsberg Automotive, with EUR 2.7 million reported in Q3 2025. The company faces additional risks of future liabilities, which could impact its financial performance.

Currency Impact

A weaker dollar resulted in a EUR 5.4 million negative impact on revenue, illustrating the challenges posed by currency fluctuations on the company’s financial results.

Lower Business Wins

Business wins in Q3 2025 were lower than both the previous quarter and the year 2024, partly due to market conditions and a focus on tariffs. This decline in new business acquisitions poses a challenge for future growth.

Forward-Looking Guidance

Despite a 10% decline in revenues, Kongsberg Automotive demonstrated strong EBIT growth and positive cash flow. The company plans to enhance its cost base by EUR 40 million and has effectively mitigated tariff impacts. While warranty costs remain a concern, strategic acquisitions and a renewed loan facility position the company for cautious optimism about future growth and profitability. A new strategic direction is expected to be unveiled at their Capital Markets Day in December.

In summary, Kongsberg Automotive’s earnings call reflects a balanced sentiment, with notable financial improvements and strategic advancements countered by revenue challenges and warranty liabilities. The company’s proactive measures and strategic acquisitions provide a foundation for cautious optimism moving forward.