Kongsberg Automotive ASA

Reported Q2 revenue was EUR 193.8 million, slightly above the same quarter last year and almost 8% higher than Q1. EBIT was EUR 12 million, or a 6.2% EBIT margin, versus negative EUR 2.9 million in Q2 last year; net profit was EUR 5.2 million versus a EUR 2 million loss last year. Net cash flow was EUR +4.3 million versus EUR -0.9 million a year earlier, return on capital employed was 10.2% versus 0.5%, and last-12-month cash flow reached EUR 17.7 million. Management also said contract awards were estimated at EUR 135 million. For the rest of 2026, they expect underlying profitability improvement to continue, and they reiterated a long-term EBIT target of 6.5%.

Trond Fiskum framed the quarter as evidence that the company’s operational actions are working, pointing to better profitability, stronger cash generation, and a declining leverage profile. He said revenues have increased for three consecutive quarters and called the market “stable or improving,” with particular support from North America and signs of improvement in Europe. He also stressed that Kongsberg Automotive is taking additional steps to reduce its cost base, simplify manufacturing, and pursue profitable growth rather than volume alone.

Erik Magelssen emphasized that the improvement was driven by structural cost actions, lower overhead, lower warranty expense, and improved financial discipline rather than a demand rebound alone. He noted that the company’s net interest-bearing debt has fallen by EUR 23.2 million from Q1 2025, the net interest-bearing debt-to-EBITDA ratio is 1.7x, and the bond-term leverage ratio is 1.6x versus a 4.0x covenant. He also highlighted that equity ratio improved to 33.2% and said net working capital was about 19% of revenue in Q2 2026, roughly unchanged from year-end 2025.

Analysts pressed management on the timing and potential size of warranty-related resolutions; management said they cannot provide a timeline because the matters are complex and not fully within their control, but they are actively pursuing settlement discussions and have started legal proceedings on one insurance recovery. On working capital, management said higher revenue naturally requires more working capital, while the ratio stayed around 19% of revenue. They also said the lower leverage profile improves financial flexibility, including possible funding options and selective M&A, though no specific deals were discussed.