Annual Report and Sustainability Report 2019

ABOUT KONGSBERG

Continuing to strengthen our position

Kongsberg Defence & Aerospace

Two decades of innovation, change and a focus on results have made Kongsberg Defence & Aerospace (KDA) a respected global technology leader and a leading supplier within defence, monitoring, space and aircraft structures, and within maintenance, repairs and service. We take great pride in developing advanced solutions and products of strategic importance, for markets around the world, with applications spanning from underwater to surface, land and air to space.

In 2019, alongside its ordinary operations, the business area continued to work on integrating the space environment and the acquired business Kongsberg Aviation Maintenance Services (KAMS), formerly Aerospace Industrial Maintenance Norway (AIM Norway). From 1 January 2020, the Protech Systems and Defence Communications divisions will be merged to form the Land Systems division.

Integrated Defence Systems

The Integrated Defence Systems division supplies the world’s most advanced air defence system in NASAMS (Norwegian-Advanced-Surface-to-Air-Missile-System), monitoring systems and artillery firepower, as well as land- and vessel-based combat systems. The division has a strategic cooperation agreement with Raytheon for NASAMS and with thyssenkrupp Marine Systems (tkMS) in kta naval systems SA, a joint venture company which supplies exclusive combat systems for tKMS submarines. NASAMS is the world's best-selling air defence system in its class, with 15 countries using NASAMS elements in their defence systems. The division will also supply mobile surface-to-air defence systems to the Norwegian Armed Forces.

Space & Surveillance

The Space & Surveillance division supplies a broad spectrum of systems and electronics for launch vehicles and spacecraft, as well as ground stations and services related to the processing of satellite data for space and maritime surveillance customers in over 40 countries. The division has over 500 employees and is Scandinavia’s largest operator within the space segment, in an expanding industry. The division works with key partners, including NASA (National Aeronautics and Space Administration), Rocket Lab (global player within the launch of small satellites) and Space Norway. KONGSBERG owns 50 per cent of Kongsberg Satellite Services (KSAT), a world-leading supplier of communication services for spacecraft and launch platforms and advanced monitoring services via satellites.

Pearl Harbor: The Independence variant littoral combat ship USS Gabrielle Giffords successfully demonstrates the capabilities of the Naval Strike missile 1 October 2019 during exercise Pacific Griffin.

Missile Systems

The Missile Systems division has over 50 years’ experience from a variety of missile programmes. Products include Penguin, the Naval Strike Missile (NSM) and the Joint Strike Missile (JSM) which is launched from surface ships, helicopters and fighter aircraft. KONGSBERG is the world’s only supplier of fifth generation long-range precision strike missiles with stealth capabilities. The U.S. Navy has chosen NSM for its OTH programme (Over-The-Horizon Weapon-System). An NSM missile was successfully launched from a U.S. Navy LCS-class warship during the year. The first contract for the delivery of JSM to Japan was also signed.

Aerostructures

The rapidly expanding Aerostructures division is a Centre of Excellence for complex composite structures and metallic alloy assemblies and details. Its core capabilities range from design, prototyping and industrialisation, to large-volume manufacturing for aerospace and other high-performing markets. Activities range from the manufacture of parts for the F-35 and helicopters to the mechanical production and maintenance of helicopter gear boxes.

Defence Communications

The Defence Communications division designs and manufactures robust radios and radio communication and other network components used in advanced tactical communication systems. The tactical communication solutions are used in more than 30 countries. In 2020, Defence Communications will be merged with the new Land Systems division.

Protech Systems

Protech Systems is a world leading supplier of remote weapons stations. The systems allow soldiers to operate from a protected position inside the vehicle. Since 2001, Protech Systems has delivered over 20,000 systems to 23 nations. 2017 saw the start of deliveries of the MCT-30 (Medium Calibre Turret), a tower system based on the same technology as the PROTECTOR RWS (Remote Weapon Station). The division also has a high level of activity linked to the U.S. CROWS programme, under which it has been supplying weapons stations worth over MNOK 23,000 since 2010. In 2020, Protech Systems will become part of the new Land division.

Patria

Patria is Finland’s leading supplier of defence maintenance services and covers all defence aspects within MRO (Maintenance, Repair and Overhaul). Patria is an international organisation with approximately 2,800 employees and owns 50 per cent of the shares in Nammo. KONGSBERG holds 49.9 per cent of the shares in Patria.

Kongsberg Aviation Maintenance Services

Kongsberg Aviation Maintenance Services (KAMS) was acquired by Kongsberg Defence & Aerospace in 2019. Through this acquisition, KONGSBERG has taken a strategic step into the maintenance market for aircraft and helicopters in the Nordic region and Northern Europe. KAMS is jointly owned by KDA, which owns 50.1 per cent, and by Patria, which owns 49.9 per cent, and has approximately 300 employees.



“The past year has seen exceptionally high levels of activity”

Eirik Lie – President, Kongsberg Defence & Aerospace

“The past year has seen exceptionally high levels of activity”

The past year has seen exceptionally high levels of activity. We have been well-rewarded for our strategic positioning work in previous years through the securing of delivery contracts for major defence programmes. This will help to ensure strong growth over the coming years within all KDA’s main segments.  Key events during 2019 have been significant air defence contracts with NASAMS for Qatar and Australia, the CROWS programme with a marked increase in activity, an NSM launch carried out by the U.S. Navy within the OTH programme, a contract for JSM for Japanese fighter aircraft, and the full-scale production of F-35 parts. The acquisition of the former AIM Norway was also a key element in KONGSBERG’s strategic positioning. In Norway, we have signed a strategic cooperation agreement with the Norwegian Armed Forces within maintenance services, which has already resulted in the signing of contracts. This is in line with our ambition to strengthen our position as a strategic partner for the Armed Forces linked to preparedness and operational requirements. Going forward, it will be vital for us to deliver on all programmes, and we must work to realise the considerable potential that we still have.

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