Annual Report and Sustainability Report 2021

YEAR 2021

“We are entering 2022 with a solid foundation for further growth.”

President and CEO Geir Håøy

After an eventful year, KONGSBERG ends 2021 with a record-high order backlog. We took significant steps in the development of new sustainable technologies and solutions for our customers, experienced solid growth and delivered increased profitability. We are entering 2022 with a solid foundation for further growth.

Like 2020, the year 2021 was substantially influenced by the COVID19 pandemic. In demanding and insecure situations, our top priority is to safeguard  our employees and follow government guidelines, while making every effort to maintain safe and efficient operations and deliver strategically important solutions to our customers.

At the time of writing this, we are witnessing a war and a humanitarian catastrophe, touching us all. I speak for everyone at KONGSBERG when expressing our deepest concern and compassion for the people involved in the Russian invasion of Ukraine.

The world is facing a number of challenges within security, climate and environment, transport, energy, and food, natural resources and biodiversity. Technology is central to solv­ing these challenges and KONGSBERG wants to make a difference. In particular, we can play a role in developing and establishing best sustainable practice in maritime energy solutions, advanced sensors, autonomy, and circular and materials technology.

KONGSBERG has the unique ability to further develop and deliver complete solutions within new and growing industries. This ability opens up great opportunities across sectors and industries as part of the green and digital transition.

We will develop existing positions and explore new markets. In 2021, we were awarded several projects within offshore wind, a rapidly growing global market. Our technologies encompass mapping and field development, operation and decommissioning, including environmental mapping and monitoring, applications and functions for smart data and decision support for wind farms and vessel concepts for operation and maintenance. KONGSBERG has the unique ability to further develop and deliver complete solutions within new and growing industries. This ability unlocks opportunities across sectors and industries in the green and digital transition.

In July we signed an agreement with our partners to deliver systems for six new submarines for Norway and Germany. We will also deliver the antiship Naval Strike Missile to the two countries’ navies. The two agreements, which have a total value for KONGSBERG of NOK 8.2 billion, were important milestones in terms of both our focus on defence technology and the German–Norwegian submarine collaboration.

KONGSBERG will create long­term value while contributing to solving the challenges of society. That is why sustainability is integrated into our strategy and the way that we work.

KONGSBERG is committed to supporting the aim of the Paris Agreement of net zero greenhouse gas emissions by 2050. By setting clear and ambitious targets for emissions reductions, both in our own operations and in our value chain, we want to be at the forefront of both market and regulatory requirements. We do this because it is the right thing to do, for the environment, our employees, customers and owners. We are a member of, and support the UN initiative UN Global Compact, and have implemented their ten principles for responsible business in each of the four areas of human rights, labor, environment and anti­corruption.

During the autumn of 2021, we updated our climate strategy and established a collaboration with the Science Based Targets initiative, which represents international best practice for the quality assurance of climate­related targets in line with the Paris Agreement. In order to address the climate challenge, business needs to engage, and we are working with both customers and suppliers to turn words into action. One of our ambitions is to aim for twothirds of our suppliers to set CO2 emission reduction targets in line with the Paris agreement within five years.

With our leading global positions within technology, we contribute to a number of international forums. As an advisor and partner to the UN’s Ocean Panel, we also advocate for sustainable marine management and healthy and productive oceans across the world.

Nature is under increased pressure. In order to achieve the UN Sustainability Goals by 2030, a transition to a circular economy is essential, and this is an important focus area throughout KONGSBERG’s business. Within our defence operations, we are working closely with our customers to develop solutions that reduce emissions and minimise the environmental impact of the production and life cycle of our products. In recent years, we have built up a significant business in aircraft and helicopter maintenance to extend the lifetime of systems and materials. In 2021, we also started collaboration on research with the Ministry of Defence to study materials technology and production processes that will contribute to more sustainable defence products.

With our portfolio of high-tech solutions, innovative DNA and agile organisation, we are ready to deliver on our ambitions and profitable growth.

We already supply a number of zeroemission solutions for shipping. In the autumn of 2021 the Yara Birkeland, the world’s first fully electrical and autonomous zeroemission container vessel, was launched. The ship has a combination of new technology and existing solutions, building on expertise from across the Group, including defence technology. I am optimistic about the future and 2022 will be a year in which KONGSBERG makes new progress. I am confident that our highly skilled colleagues, customers and suppliers we will succeed in making a difference in also in the future. With our portfolio of hightech solutions, innovative DNA and agile organisation, we are ready to deliver on our ambitions and profitable growth.

In the defence field, we have a significant order backlog to be delivered. We will secure new and important contracts that strengthen our position as a leading, responsible defence supplier in Northern Europe and the United States. Our products and positions in the space industry also have considerable opportunities in front of them, and we will work to improve and consolidate the breadth of our solutions, within the entire value chain of space operations.

Within the maritime sector, we are committed to sustainable innovation and pioneering concepts, including further development of our product and market positions within digitisation of the industry.

KONGSBERG has taken up an international leadership role within industrial digitisation. Kognitwin is established as a leading dynamic digital twin solution for the energy sector, including an agreement with Shell International for the rollout of digital twins for their global portfolio of facilities. In 2022 and beyond, we will continue to work to reach out to more companies with our digital solutions that increase efficiency, contribute to safer operations and reduce emissions.

A big thank you to shareholders, customers and all our partners. A particular thank you to our employees all over the world, who have shown great flexibility and not least dedication. Our values are stronger than ever and in the past year, we have developed KONGSBERG together to be in a position to make progress in 2022 and the years ahead.


Geir Håøy

President and CEO
March 2022

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