Kongsberg Gruppen ASA

Kongsberg reported second-quarter revenue of NOK 10.4 billion, up 31% year over year, EBIT of NOK 1.7 billion, and an EBIT margin of 16.1% versus NOK 1.1 billion and 14.2% a year ago. Order intake was NOK 17.1 billion, taking backlog to a record NOK 158 billion; management said this did not include the $400 million Kuwait NASAMS contract. By division, Defense Systems revenue rose 53% to NOK 5.1 billion, Missiles & Aerostructures revenue rose 19% to NOK 2.9 billion, and Discovery revenue rose 21%. For the full year 2026, management reiterated that revenue growth is expected to be above the 2025 level, and said the company is on track with its long-term ambitions for 2029 and 2033.

Eirik Lie framed the quarter as evidence of broad-based demand and execution, citing high activity across production sites, significant contract wins, and key deliveries. He emphasized NATO’s push for stronger European defense capabilities, especially air defense, missiles, anti-drone systems, and high-volume missile production. He also positioned the Zone 5 acquisition, European manufacturing plans, and partnerships such as DevDroid as part of Kongsberg’s effort to combine scale, speed, and innovation.

Martin Wien Fjell described the quarter as another solid period and stressed that the company reports 50/50 JV contributions in order intake, backlog, revenue, and EBIT. He said EBIT reached NOK 1.7 billion with a 16.1% margin, versus NOK 1.1 billion and 14.2% last year, and noted the 49% EBIT increase outpaced the 31% revenue increase. Cash fell from NOK 16.4 billion to NOK 4.9 billion, mainly due to a NOK 5 billion dividend, NOK 3.7 billion Zone 5 payment, and NOK 1 billion bond repayment, while working capital remained strong at NOK -9.1 billion. He also said Zone 5 should carry single-digit profit margins for the next 12 to 24 months before normalizing, and that Discovery’s underlying EBIT margin was 16.5% after about a one-point adverse impact from new facilities.

Analysts pressed management on the margin decline in Defense Systems, especially the year-over-year drop, and management replied that it was mainly a natural product/project mix effect amid a successful production ramp-up. Questions on the proposed missile-production subscription model were met with confirmation that Kongsberg is in dialogue with several countries and sees strong interest, though no specific countries were named. Management also declined to quantify the IFRS impact from the revoked Malaysia export license or the offsetting one-offs, citing ongoing negotiations, and said the biggest risk to the growth plan remains securing the supply chain and building buffer capacity.