Slides
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BREAKFAST MEETING DECEMBER 17, 2024
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FORWARD-LOOKING STATEMENTS This presentation contains certain “forward-looking statements”. These statements are based on management’s current expectations and are subject to risks, uncertainty and changes in circumstances, which may cause actual results, performance, financial condition or achievements to differ materially from anticipated results, performance, financial condition or achievements. All statements contained herein that are not clearly historical in nature are forward-looking and the words “anticipate,” “believe,” “expect,” “estimate,” “plan,” and similar expressions are generally intended to identify forward-looking statements. We have no intention and are under no obligation to update or alter (and expressly disclaim any such intention or obligation to do so) our forward-looking statements whether as a result of new information, future events or otherwise, except to the extent required by law. The forward-looking statements in this presentation include statements addressing our future financial condition and operating results. Examples of factors that could cause actual results to differ materially from those described in the forward-looking statements include, among others, business, economic, competitive and regulatory risks, such as conditions affecting demand for products, particularly in the automotive industries; competition and pricing pressure; fluctuations in foreign currency exchange rates and commodity prices; natural disasters and political, economic and military instability in countries in which we operate; developments in the credit markets; future goodwill impairment; compliance with current and future environmental and other laws and regulations; and the possible effects on us of changes in tax laws, tax treaties and other legislation. More detailed information about these and other factors is set forth in the 2023 Kongsberg Automotive Annual Report and the Kongsberg Automotive Quarterly Reports. NON-IFRS MEASURES Where we have used non-IFRS financial measures, reconciliations to the most comparable IFRS measure are provided, along with a disclosure on the usefulness of the non-IFRS measure, in this presentation. FORWARD-LOOKING STATEMENTS AND NON-IFRS MEASURES KONGSBERG AUTOMOTIVE // 2
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AGENDA AND TODAY’S PRESENTERS LINDA NYQUIST -EVENRUD PRESIDENT & CEO CHRISTIAN AMSEL CHIEF TECHNOLOGY OFFICER DAVID REDFEARN CHIEF SALES OFFICER CHRISTIAN JOHANSSON CHIEF FINANCIAL OFFICER INTRODUCTION AND STRATEGIC DIRECTION CUSTOMER AND MARKET UPDATE PRODUCT UPDATE FINANCIAL UPDATE KEY TAKEAWAYS Q&A KONGSBERG AUTOMOTIVE // 3
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Executive summary SUPPLYING GLOBALLY RECOGNIZED INDUSTRY BRANDS KONGSBERG AUTOMOTIVE // 4
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PRODUCTS THAT HIT THE ROAD IN 2024 GEAR CONTROL UNIT ARC ROTARY ACTUATOR FLUID TRANSFER ASSEMBLIES LIFETIME VALUE: 523M€ CUSTOMER: AMERICAN TIER1 POWER MANAGEMENT COMPANY VEHICLE: SEMI -TRUCK FOR AMERICAN AND CHINESE MARKET LIFETIME VALUE: 26M€ CUSTOMER: CHINESE ELECTRIC CAR OEM VEHICLE: ELECTRIC PASSENGER CAR LIFETIME VALUE: 34M€ CUSTOMER: EUROPEAN OFF -ROAD OEM VEHICLE: OFF- ROAD UTILITY VEHICLE Executive summary KONGSBERG AUTOMOTIVE // 5
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Executive summary 814€M LTM Q3 2024 REVENUE S LOCATIONS IN 17 COUNTRIES GLOBAL PROVIDER OF AUTOMOTIVE AND INDUSTRIAL APPLICATIONS OVER 65 YEARS OF ENGINEERING EXCELLENCE 2 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS BUSINESS AREAS: AMERICAS: CANADA USA MEXICO BRAZIL EUROPE: NORWAY SWITZERLAND SWEDEN UK GERMANY POLAND SLOVAKIA THE NETHERLANDS SPAIN FRANCE ASIA: CHINA INDIA SOUTH KOREA HEADQUARTERED IN KONGSBERG LISTED ON THE OSLO STOCK EXCHANGE HEADQUARTERS: KONGSBERG, NORWAY 32 KONGSBERG AUTOMOTIVE // 6
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BUILDING A COST-EFFICIENT PLATFORM ✓ Cost reductions with EUR <17 M in annual savings ✓ Headquarter reestablished in Kongsberg, Norway ✓ Refinancing and issuance of new Nordic bond SECURING THE ORDERBOOK ✓ New Business Wins (NBW) of EUR 1.64 bn last 12 months ✓ Growth in higher-margin products – shift towards commercial vehicles SETTING NEW LONG-TERM GOALS > Revenues of above EUR 1 bn in 2028 > EBIT margin at or above 8.5% Executive summary STRATEGIC TURNAROUND WELL UNDERWAY 1) Last Twelve Months (LTM), per Q3 2024 2028 KONGSBERG AUTOMOTIVE // 7
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Executive summary AND MORE TO COME 2028 FURTHER OPTIMIZATION > New cost initiatives with annual savings of MEUR ~10 > Ongoing assessment of global footprint FOCUSED PRODUCT PORTFOLIO > Prioritizing based on margins and KA’s competitive advantages > Separate focus on industrial area BUILDING A WINNING TEAM > Strengthening the commercial mindset > Cross functional team approach > Driving continuous improvement KONGSBERG AUTOMOTIVE // 8
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Executive summary UNDERLYING DEMAND GROWTH FOR COMMERCIAL VEHICLES 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E Global commercial vehicles production, million Source: LMC Global Commercial Vehicle Forecast (November 2024) KONGSBERG AUTOMOTIVE // 9 4.5% CAGR, 2024-2028
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Executive summary WE HAVE THE RIGHT PRODUCTS TO MEET THE MARKET TRENDS ELECTRIFICATION The global vehicle fleet is being transformed from ICE to electricity-powered powertrains. AUTONOMIZATION Vehicles are becoming more advanced and increasingly autonomous with new software, sensors and AI technologies. SAFETY Safety continues to be a key concern amongst end- customers and regulators. SUSTAINABILITY Legislation is forcing the whole supply chain to to find new ways to reduce ICE vehicles’ CO 2 emission. KONGSBERG AUTOMOTIVE // 10
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KONGSBERG AUTOMOTIVE // 11 Executive summary STRATEGY FOR PROFITABLE GROWTH 2021 2024E 1.170 760-790 DRIVELINE INTERNAL WIND DOWN CORE BUSINESS DIVESTMENTS>50% 2028E >1,000 CORE BUSINESS FCS DCS FCS DCS REVENUES, MEUR NON-CORE 2.4-2.9% ≥8.5%2.1%EBIT MARGIN 15-20% >65% 15-20%2028E REVENUE PASSENGER VEHICLES OTHER*COMMERCIAL VEHICLES ~31% ~53% ~16%2024E REVENUE *Industrial & Off-Highway KONGSBERG AUTOMOTIVE // 11
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NEW BUSINESS WINS SUPPORTING LONG-TERM AMBITIONS TOTAL REVENUES BY STATUS, 2025 – 2028 (ILLUSTRATIVE) Executive summary ~ 80% coverage of anticipated 2028 revenues2 1) % of anticipated revenues from on-going contracts and awards KONGSBERG AUTOMOTIVE // 12 2025 2026 2027 2028 EXPECTED WINS ONGOING CONTRACTS 2) Sum of anticipated revenues from on-going contracts and upcoming contract extensions deemed highly likely < 90%1
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KONGSBERG AUTOMOTIVE // 13 CUSTOMER AND MARKET UPDATE
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KONGSBERG AUTOMOTIVE // 14 MARKET DEVELOPMENT COMMERCIAL VEHICLE AND PASSENGER CAR MARKET ARE PRESENTLY WEAK GLOBAL PASSENGER CAR PRODUCTION, million units 21.5 21.9 21.4 22.3 22.6 24.2 21.4 22.2 21.4 23.5 -5.4% Source: LMC Global Commercial Vehicle Forecast (September 2024); IHS Light Vehicle Production Base (September 2024) Customer and market update GLOBAL COMMERCIAL VEHICLES PRODUCTION, thousand units Q3 2022 Q4 Q1 Q2 Q3 2023 Q4 Q1 Q2 Q3 2024 Q4 706 767 873 857 815 858 892 863 759 786 -6.8% CHINA GLOBAL EXCL CHINA Q3 2022 Q4 Q1 Q2 Q3 2023 Q4 Q1 Q2 Q3 2024 Q4 CHINA GLOBAL EXCL CHINA CHINA Q vs. Q ’24 vs. ‘23 CV* -5.0% +2.1% LV* -3.9% +0.8% APAC W/O CHINA Q vs. Q ’24 vs. ‘23 CV* -4.1% -4.2% LV* -5.8% -4.6% EUROPE Q vs. Q ’24 vs. ‘23 CV* -17.8% -13.9% LV* -6.7% -4.4% NORTH AMERICA Q vs. Q ’24 vs. ‘23 CV* -11.3% -5.5% LV* -6.1% -1.3% SOUTH AMERICA Q vs. Q ’24 vs. ‘23 CV* +40.6% +30.9% LV* +8.3% -1.9% GLOBAL Q vs. Q ’24 vs. ‘23 CV* -6.8% -3.0% LV* -5.4% -2.1% 554 512-7.6% 15.1 14.1-6.1% * CV: Commercial vehicles; LV: Passenger cars KONGSBERG AUTOMOTIVE // 14
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KONGSBERG AUTOMOTIVE // 15 Customer and market update MARKET FORECASTS FOLLOWING NEGATIVE DEVELOPMENT IN 2024, KA KEY MARKETS WILL REMAIN FLAT IN 2025, THERAFTER UNDERLYING GROWTH IN THE COMMERCIAL VEHICLE MARKET WILL RETURN Source: LMC Global Commercial Vehicle Forecast (September 2024); IHS Light Vehicle Production Base (September 2024) CV: Commercial vehicles; LV: Passenger cars 23 1,140 29.3 24 1,288 30.1 25 26 27 1,470 32.3 2823 585 17.2 24 598 17.3 25 26 27 744 18.2 2823 590 15.5 24 533 15.4 25 26 27 590 15.7 28 23 161 2.9 24 168 3.1 25 26 27 190 3.7 28 23 815 21.5 24 840 22.0 25 26 27 932 22.8 28 NORTH AMERICA CHINA SOUTH AMERICA EUROPE APAC W/O CHINA COMMERCIAL VEHICLES [THOUSAND UNITS] PASSENGER CARS [MILLION UNITS] 23 3,300 88.5 24 3,437 90.1 25 26 27 3,937 95.3 28 GLOBAL
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Customer and market update REGIONAL GROWTH AND MARKET DRIVERS/KEY TRENDS 5% CAGR 7,5% CAGR 17% CAGR 20% CAGR > COU portfolio remains strong and KA is market leader in Europe > TMS and E-Actuators show strong growth towards 2029 > FCS new and existing product portfolio gaining market share in CVS and OFH areas > PV topline stable with growth in 2025 and 2026 in NA with growth in SA in out years > Growing business with FTS assemblies to several customers with new applications on ICE and EV > Several growth opportunities for clutch and gear actuation as well as FCS products for TMS > Strong focus on product solutions to AMT transmissions have brought significant opportunities > Agri Con :very difficult market in which to be a ‘me too’. Best opportunities for KA reside where product quality/performance is key > PV topline growth driven by actuator and HPC new business wins / opportunities in Korea and Japan > FCS portfolio growing within all vehicle segments in Korea and more opportunities in India THE AMERICAS EUROPE APAC W/O CHINA CHINA KONGSBERG AUTOMOTIVE // 16
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SELECTED CUSTOMERS Customer and market update KONGSBERG AUTOMOTIVE // 17
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GROWING AND WINNING KONGSBERG AUTOMOTIVE // 18
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1009 27,4 28,4 125,7 40,4 TRUCK, TRAILER, BUS & COACHES AFTERMARKET PASSENGER CARS AGRICULTURE & CONSTRUCTION INDUSTRIAL Growing and winning NEW BUSINESS WINS Q1-Q2-Q3 2024 LIFETIME REVENUES, MEUR 959.8 271.1 DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS 1230.9 MEUR PER BUSINESS SEGMENT PER AREA 1230.9 MEUR KONGSBERG AUTOMOTIVE // 19
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Growing and winning > NYLON COOLANT SYSTEM ASSEMBLIES USED IN EV > STRATEGICALLY IMPORTANT PRODUCT FOR KA > OUTSTANDING SERVICEABILITY > WEIGHT SAVINGS > EASY ROUTING (TIGHT PACKAGING) The product shown is only a visual representation for reference. Actual product developed may slightly vary . ANNOUNCED ON DECEMBER 13, 2024 Q4 2024 NEW BUSINESS WIN ON THERMAL MANAGEMENT SYSTEMS OVER MEUR 24 IN ESTIMATED LIFETIME REVENUE KONGSBERG AUTOMOTIVE // 20
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Growing and winning > NYLON LINES AND CONNECTORS > PLAYING A CRUCIAL ROLE IN DISTRIBUTING AND REGULATING AIR WITHIN THE AIR SUSPENSION SYSTEM > ENSURING OPTIMAL COMFORT AND DRIVING QUALITY, PERFORMANCE, AND SAFETY IN ELECTRIC VEHICLES > ADVANCED PRODUCTION METHODS ALLOW MULTIPLE FORMED BENDS AND LONG LENGTHS WHILST MEETING THE HIGHEST CLEANLINESS STANDARDS > CHOICE OF MATERIALS TO SUIT CUSTOMER REQUIREMENTS, I.E. TEMPERATURE RESISTANCE AND COLOR-CODING The product shown is only a visual representation for reference. Actual product developed may slightly vary . Q4 2024 NEW BUSINESS WIN ON AIR SUSPENSION LINES OVER MEUR 25.5 IN ESTIMATED LIFETIME REVENUE ANNOUNCED ON DECEMBER 17, 2024 KONGSBERG AUTOMOTIVE // 21
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KONGSBERG AUTOMOTIVE // 22 NEW BUSINESS WINS OF EUR 1.23BN YEAR TO DATE SUPPORTING LONG-TERM AMBITIONS BOOK -TO -BILL PERFORMANCE, MEUR 1.Lifetime sales assumptions are based on IHS and LMC production estimates at the time of the booking 368 316 406 348 379 378 358 470 979 967299 281 354 371 343 423 631 785 677 839 894 906 918 915 889 868 853 814 Q3 2022 Q4 Q1 Q2 Q3 2023 885 Q4 771 Q1 Q2 Q3 2024 667 597 760 719 Q2 801 989 1,241 1,765 1,644 0.8 0.7 0.8 0.8 0.8 0.9 1.1 1.4 2.1 2.0 723 Revenues (LTM) NBW Incremental (lifetime sales, LTM) NBW Extensions (lifetime sales, LTM) Book-to-bill ratio Growing and winning
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KONGSBERG AUTOMOTIVE // 23 NEW BUSINESS WINS SUPPORTING LONG-TERM AMBITIONS TOTAL REVENUES BY STATUS, 2025 – 2028 (ILLUSTRATIVE) Growing and winning ~ 80% coverage of anticipated 2028 revenues2 1) % of anticipated revenues from on-going contracts and awards 2025 2026 2027 2028 EXPECTED WINS ONGOING CONTRACTS 2) Sum of anticipated revenues from on-going contracts and upcoming contract extensions deemed highly likely < 90%1
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Growing and winning NEW BUSINESS WINS LIFECYCLE / SALES PROCESS START OF PRODUCTION END OF PRODUCTION DEVELOPMENT PHASE 1-3 YEARS TESTING PHASE 1 -2 YEARS RAMP UP PHASE 1 YEAR 4-10 YEARS PRODUCT RETIREMENT NBW AWARD NBW / ORDER PRODUCTION OR OFF THE SHELF PRODUCTS 1 -8 WEEKS INVOICE COMMERCIAL VEHICLES AND PASSENGER CARS 1 WEEK DELIVERY INDUSTRIAL AND AFTERMARKET START -UP REPLACEMENT PROGRAM KONGSBERG AUTOMOTIVE // 24
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Growing and winning PRODUCT RANGE COMMERCIAL VEHICLES AIR SUSPENSION AIR BRAKE SYSTEMS CLEAN POWERTRAIN FLUID ASSEMBLIES TMS CHASSIS COOLANT BATTERY COOLANT FUEL CELL COOLANT AIR MANAGEMENT FLUID AND THERMAL MANAGEMENT POWERTRAIN AND CHASSIS SOLUTIONS GEAR CONTROL UNITS SHIFT- BY-WIRE SHIFTERS VEHICLE DYNAMICS ELECTRIC ACTUATORS KONGSBERG AUTOMOTIVE // 25
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Growing and winning PRODUCT RANGE COMMERCIAL VEHICLES > FOCUS MARKET AREA FOR KA > TRANSITION TO CLEAN ENERGY = MORE CONTENT FOR FCS AND DCS PORTFOLIO > WORLD CLASS PRODUCT TECHNOLOGIES > GLOBAL CUSTOMER REACH WITH MAIN PRODUCTS > MANUFACTURING ACROSS FOUR CONTINENTS KONGSBERG AUTOMOTIVE // 26
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Growing and winning PRODUCT RANGE PASSENGER CARS AIR SUSPENSION CLEAN POWERTRAIN FLUID ASSEMBLIES TMS CHASSIS COOLANT BATTERY COOLANT LINES FUEL CELL COOLANT LINES AIR MANAGEMENT FLUID AND THERMAL MANAGEMENT POWERTRAIN AND CHASSIS SOLUTIONS ELECTRIC ACTUATORS KONGSBERG AUTOMOTIVE // 27
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Growing and winning PRODUCT RANGE PASSENGER CARS > STRONG ACTUATOR GROWTH IN CHINA > KA PRODUCTS MEET E TRANSITION NEEDS > HPC SUPPORT GROWTH IN AIR SUSPENSION APPLICATION AREA > KA FOCUS IN HIGHER MARGIN / NICHE AREAS > BEST IN CLASS FUEL LINES SUPPORT “CLEAN” ICE DEVELOPMENT AND HYBRIDS KONGSBERG AUTOMOTIVE // 28
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Growing and winning PRODUCT RANGE OFF-HIGHWAY VEHICLES AIR BRAKE SYSTEMS CLEAN POWERTRAIN FLUID ASSEMBLIES TMS COOLANT LINES AIR MANAGEMENT FLUID AND THERMAL MANAGEMENT OFF -HIGHWAY SOLUTIONS STEERING COLUMNS PEDALS AND THROTTLE CONTROLS ELECTRIC ACTUATORS OTHER APPLICATION EXAMPLES KONGSBERG AUTOMOTIVE // 29
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Growing and winning PRODUCT RANGE OFF-HIGHWAY VEHICLES > MARKET LEADERS ARE KA CUSTOMERS > FUTURE PROOFED FOR E TRANSITION > CROSS SELLING GROWTH OVER 5-YEAR FRAME > MATERIAL HANDLING - NEW SEGMENT > MARKET RECOVERY EXPECTED MID 2025 KONGSBERG AUTOMOTIVE // 30
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Growing and winning PRODUCT RANGE INDUSTRIAL APPLICATIONS CHEMICAL, OIL, GAS FOOD AND BEVERAGE BREATHING EQUIPMENT MARINESEMICONDUCTOR AND POWER PHARMA, MEDICAL, COSMETICS FLUOROPOLYMER HOSES Fluoropolymer hoses are an ideal problem solver for fluid transfer applications involving aggressive chemicals, extremes of temperature and pressure, extreme movement and vibration, or where hygiene is paramount. KONGSBERG AUTOMOTIVE // 31
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Growing and winning PRODUCT RANGE INDUSTRIAL APPLICATIONS > GROWING SEGMENT IN ALL REGIONS > DIVERSE PRODUCT OFFERING > ASSEMBLY GROWTH OVER 5-YEAR FRAME > NEW PRODUCTS SUPPORT PHARMA AND SEMI-CON MARKETS > ASIA DEVELOPMENT HIGH FOCUS KONGSBERG AUTOMOTIVE // 32
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Growing and winning KEY TAKEAWAYS FORWARD ORDER BOOK REFLECTS GROWTH IN THE KEY STRATEGIC AREAS ENVIABLE CUSTOMER LIST / HEADROOM FOR MARKET SHARE EXPANSION IN ALL REGIONS INDUSTRIAL AREA AND AFTERMARKET PRIMES FOR GROWTH OVER THE SHORT / MIDTERM EFFICIENT SALES FORCE TRAINED TO CROSS SELL FULL KA PORTFOLIO WHILE REFLECTING A LOW OVERALL COST AS % OF TURNOVER STRONG BUSINESS WINS WITH AMBITION FOR DOUBLE DIGIT % REVENUE GROWTH CAGR FROM 2024 TO 2028, RESULTING IN EXPECTED REVENUES OF > MEUR 1 BILLION BUSINESS WINS TRENDING AT RECORD LEVELS WITH SPECIFIC WINS IN ACTUATION, GEAR CONTROL AND FLUID TRANSFER ASSEMBLIES KONGSBERG AUTOMOTIVE // 33
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KONGSBERG AUTOMOTIVE // 34 PRODUCT PORTFOLIO UPDATE
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-100% -90% -80% -70% -60% -50% -40% -30% -20% -10% 0% 2015 2020 2025 2030 2035 2040 2045 2050 ←CO2 reduction from baseline Proposal amending EU 2019/ 1242 EPA HD GHG Phase 2 + Phase 3 Proposal amending EU 2019/ 631 – 30 % Product portfolio update Updated regulations for passenger vehicle (PV) and commercial vehicle (CV) markets drive further enhancements in conventional ICE engines and increase pressure on OEMS to accelerate introduction of CO2 neutral vehicles. Consumer behavior and development of needed infrastructure to support certain technologies (electrification, hydrogen ) is challenging, forcing to deploy a diverse range of technologies. New legislations period REGULATIONS INFLUENCING MARKET DEVELOPMENT EU CV US CV EU PV US PV EPA LDV/ MDV MY 2023-2026 and MY 2027 – 20232 2019 2021 2021 2022 > CV won’t achieve 100% reduction within the next 20 years > As BEV penetration is too slow, many OEMS are forced to go for additional technologies short- term to close the gap > Alternatives are synthetic-, bio-fuels and fuel cell vehicles KONGSBERG AUTOMOTIVE // 35
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2% 4% 5% 7% 10% 12% 15% 18% 21% 24% 27% 29% 32% 98% 96% 95% 93% 90% 88% 85% 81% 79% 76% 73% 71% 68% 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 GLOBAL COMMERCIAL VEHICLES TOTAL PRODUCTION IN MILLIONS AND FITMENT OF ELECTRIFICATION TYPE IN % BEV + FCEV ICE + HEV 3,7 Mio 4,2 Mio 4,4 Mio 2/3 1/3 Current prognosis shows approximately 1/3 of the global trucks in 2035 being BEV or FCEV driven. High pressure on improvements in conventional ICE systems (e.g. Euro 7). KA continues harvesting and is growing market share in ICE Cooling Systems. Product portfolio update MANAGING ALL THE TRANSFORMATION PHASES IN COMMERCIAL VEHICLES KONGSBERG AUTOMOTIVE // 36
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KONGSBERG AUTOMOTIVE // 37 Product portfolio update STRATEGY FOR PROFITABLE GROWTH FLEXIBLE PRODUCT MIX WITH THREE PILLARS Products for modern ICE and HICE (hydrogen ICE) vehicles, compliant with strict requirements and sustainability legislation, e.g. > Gear control > Powertrain fluid assemblies Products related to the newest and emerging megatrends, like electric and hydrogen electric powertrains, autonomous and smart mobility, e.g. > Electric actuation > Thermal management RESILIENT ICE-RELATED GROWTH 2021 2024E 1.170 760-790 DRIVELINE INTERNAL WIND DOWN CORE BUSINESS DIVESTMENTS>50% 2028 >1,000 CORE BUSINESS FCS DCS FCS DCS REVENUES, MEUR NON-CORE 2.4-2.9% ≥8.5%2.1%EBIT MARGIN >10% CAGR ~18% ~65% ~17% PASSENGER VEHICLES OTHER*COMMERCIAL VEHICLES ~ 2028 REVENUE KONGSBERG AUTOMOTIVE // 37 > Products that are independent from the type of powertrain in a vehicle (ICE, EV, hydrogen etc.) , e.g. » Air management » Driver interface » Vehicle dynamics > Industrial products (non-automotive market)
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*PHEV mainly PV related Product portfolio update KA HAS A HEALTHY MIX OF RESILIENT, HARVESTING AND NEW PRODUCTS Content per vehicle Sales potential INDUSTRIAL FLUID APPLICATIONS ICE+HEV AIR MANAGEMENT VEHICLE DYNAMICS FLUID MANAGEMENT ICE STEERING COLUMNS + PEDALS GEAR CONTROL + CLUTCH ACTUATION SYSTEMS ELECTRIC ACTUATORS Higher content per vehicle PHEV* FLUID MANAGEMENT ICE THERMAL MANAGEMENT ELECTRIC ACTUATORS GEAR CONTROL + CLUTCH ACTUATION SYSTEMS AIR MANAGEMENT VEHICLE DYNAMICS STEERING COLUMNS + PEDALS BEV + FCEV ELECTRIC ACTUATORS THERMAL MANAGEMENT AIR MANAGEMENT VEHICLE DYNAMICS STEERING COLUMNS + PEDALS GROWTH PRODUCTS RESILIENT PRODUCTS ICE-RELATED PRODUCTS Extend Harvesting NON -VEHICLE KONGSBERG AUTOMOTIVE // 38
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KONGSBERG AUTOMOTIVE // 39 PRODUCT PORTFOLIO DEEP DIVES
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KONGSBERG AUTOMOTIVE // 40 KA’S CORE PRODUCT GROUPS Product portfolio update POWERTRAIN AND CHASSIS SOLUTIONS ELECTRIC ACTUATORS GEAR CONTROL UNIT SHIFT -BY-WIRE SHIFTERS VEHICLE DYNAMICS OFF -HIGHWAY SOLUTIONS PEDALS AND THROTTLE CONTROLS STEERING COLUMNS AIR MANAGEMENT AIR SUSPENSION AIR BRAKE SYSTEM FLUID AND THERMAL MANAGEMENT CLEAN POWERTRAIN FLUID ASSEMBLIES TMS CHASSIS COOLANT BATTERY COOLANT FUEL CELL COOLANT INDUSTRIAL FLUID APPLICATIONS HIGH PERFORMANCE HOSES DRIVE CONTROL SYSTEMS FLOW CONTROL SYSTEMS ELECTRIC ACTUATORS MEGA TRENDS: REGULATIONS: MEGA TRENDS: REGULATIONS: MEGA TRENDS: REGULATIONS: MEGA TRENDS: REGULATIONS: MEGA TRENDS: REGULATIONS: N/ANO CONTRIBUTION MEDIUM LEVEL CONTRIBUTION HIGH LEVEL CONTRIBUTION
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KONGSBERG AUTOMOTIVE // 41 HIGHER-MARGIN PRODUCTS DRIVING PROFITABILITY EXAMPLES POWERTRAIN ACTUATORS Scaling the existing know-how to PV, CV and Off-highway applications. Unique expertise to design customized products based on proven building blocks. GEAR CONTROL UNITS Proven track record and very successful order intake. Technology quickly scalable to emerging markets. Competitive technology and implementation quick enough to outperform Chinese competitors. AIR COUPLINGS Safe, flexible and sustainable system. Expanding the technology to other applications like air suspension and thermal management. Next generation under development. New fir-tree product line growing in emerging markets. RESILIENT ICE -RELATED GROWTH Product portfolio update >40% OF 2028 REVENUE Products shown are only a visual representation for reference. Actual product developed may slightly vary .
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AIR COUPLINGS KONGSBERG AUTOMOTIVE // 42
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Product portfolio update AIR BRAKE SYSTEMS BACKGROUND KONGSBERG AUTOMOTIVE // 43 SYSTEMS SUCH AS SUSPENSION, ACCESSORIES AND AUXILIARY SYSTEMS IN THE CHASSIS, CABIN AND ENGINE ARE DRIVEN BY AIR AS WELL TRUCKS SUPPLY COMPRESSED AIR TO CONTROL THE BRAKING SYSTEM OF THE TRAILER BRAKES IN TRUCKS AND TRAILERS USE COMPRESSED AIR TO ACTUATE SERVICE AND PARKING BRAKES FUNCTIONALITY AGRICULTURAL VEHICLES USE AIR BRAKES IN SOME WEIGHT / SPEED CLASSES DUE TO REGULATION CHANGES MARKET > Compressed air-based braking technology is being transferred from ICE to electric vehicles > Technology part of homologation of vehicle > Very high entrance barrier for new technology and/or competitors due to long validation cycles > Two major technologies shape the market: Firtree and Push-in > Low-cost solutions for emerging markets is needed > Local production and technical support is required COMPETITIVE POSITIONING SAFETY REGULATIONS CO2 EMISSION LEGISLATIONS FOR ICE VEHICLES MARKET DYNAMICS GLOBAL FOOTPRINT SUSTAINABILITY
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Product portfolio update KA’S RAUFOSS® ABC SYSTEM PRODUCT VISION NEW MARKETS IN AGRICULTURE VEHICLES DUE TO HIGH -PERFORMANCE BRAKING REQUIREMENTS FIRTREE TECHNOLOGY STILL PLAYS A ROLE IN MARKETS WHERE PUSH -IN IS NOT YET ESTABLISHED PUSH -IN TECHNOLOGY WILL BECOME THE GLOBAL STANDARD IN ALL DEVELOPED AND EMERGING MARKETS FUNCTIONS SUCH AS PLATES WITH INTEGRATED COUPLINGS WILL BE A VERY ATTRACTIVE SOLUTION FOR BRAKE VALVE SUPPLIERS > KA is a market leader in Europe for push-in technology > We will grow with our current customer base in new markets as they are further localizing their production > Entering new markets allows us to attract further local customers > KA continues to diversify the product portfolio to become a full-service supplier in all compressed air applications Products shown are only a visual representation for reference. Actual product developed may slightly vary . KONGSBERG AUTOMOTIVE // 44
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Products shown are only a visual representation for reference. Actual product developed may slightly vary . KA’S RAUFOSS® ABC SYSTEM FEATURES AND BENEFITS Product portfolio update ASSEMBLY SECURITY INTEGRATED ASSEMBLY SIGNAL AND SAFETY FEATURE FOR EOL-TEST OPTIMIZED AIR FLOW > LOWER BRAKE STOPPING DISTANCE > REDUCED BRAKE RESPONSE TIME DESIGN FLEXIBILITY AND MODULARITY LEAKAGE-FREE SAVES ENERGY AND ELIMINATES START-UP TIME OF BY 3-6 MIN SUSTAINABILITY 100% RECYCLABLE COMPOSITE MATERIALS ASSEMBLY TIME REDUCTION > NO PREASSEMBLY OF TUBE > MORE EFFICIENT THAN FIXED BLOCKS REDUCED TOTAL SYSTEM COST > REDUCED ASSEMBLY COST > REDUCED LOGISTIC COST > MAINTENANCE-FREE OPTIMIZED WEIGHT UP TO 6 KG SAVING COMPARED TO METAL SYSTEMS EASE OF DISASSEMBLY > EASY RELEASE > RE-USE OF TUBE AND COUPLING KEY CHARACTERISTICS OF KA’S PUSH -IN TECHNOLOGY KONGSBERG AUTOMOTIVE // 45
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Product portfolio update NEW PRODUCTS TO SUPPORT SUCCESS IN TARGET MARKETS > ABC Firtree family > ABC Inch family > Hose module with Twistlock > Drain valve 2.0 SECURE AND FURTHER GROW IN ESTABLISHED MARKET > ABC 2.0 (new generation) - 2028 > ABC KArtridge 2.0 – 2025 > ICM (Integrated Coupling Module) SECURE PRODUCT ATTRACTIVENESS > Fusion of push-in and firtree families for better modularity > New IP protected feature upgrades of our products > Weight and system cost reduction by reducing brass content and introducing new materials > Sustainable materials, 100% recyclable and energy saving features KA’S RAUFOSS® ABC SYSTEM FUTURE Products shown are only a visual representation for reference. Actual product developed may slightly vary . INNOVATIONS ABC INCH FAMILY ABC FIRTREE ABC 2.0 GENERATION TWISTLOCK HOSE MODULE HPC COUPLINGS HPC TREADED ABC KARTRIDGE 2.0 DRAIN VALVE 2.0 AIR BRAKE SYSTEM AIR SUSPENSION KONGSBERG AUTOMOTIVE // 46
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Product portfolio update KEY TAKEAWAYS DESIGN-TO-COST SOLUTION ABC2.0 GENERATION UNDER DEVELOPMENT (LOWER COST, HIGHER PERFORMANCE, LESS WEIGHT) TECHNOLOGY: BEST IN CLASS PERFORMANCE, MARKET REFERENCE COST: BEST COST PER VALUE RECOGNIZED BY KEY CUSTOMERS SUSTAINABILITY: 100% RECYCLABLE KA WILL CONTINUE ITS PATH TO SUCCESS AND FURTHER EXPAND THE LEADING MARKET POSITION GLOBALLY MULTIPLE PATENTS RELATED TO NEXT GENERATION ABC COUPLINGS KONGSBERG AUTOMOTIVE // 47
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GEAR CONTROL UNIT KONGSBERG AUTOMOTIVE // 48
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5-10% REDUCED FUEL CONSUMPTION THROUGH INTELLIGENT SHIFTING STRATEGIES AND THE PREVENTION OF INEFFICIENT DRIVING BEHAVIOR HUMAN ERRORS ARE AVOIDED, WHICH INCREASE LIFETIME OF TRANSMISSION DRIVER BEHAVIOR AND ROUTE DATA CAN BE ANALYZED TO FURTHER OPTIMIZE SHIFTING STRATEGIES AMT SYSTEMS AUTOMATE GEAR SHIFTING AND CLUTCH CONTROL OF MANUAL TRANSMISSIONS FUNCTIONALITY Product portfolio update AUTOMATED MANUAL TRANSMISSION (AMT) SYSTEMS BACKGROUND MARKET > Early regulatory push in developed markets like Europe and Americas to lower emissions favoring efficient AMT transmission systems in the last 10-15 years > OEMs pushed AMT technology to the market to increase robustness and lifetime of transmission systems > Larger logistics companies globally have replaced older manual fleets with AMT to improve total cost of ownership (TCO) > Integration with advanced telematics and IoT systems for optimized fleet management COMPETITIVE POSITIONING SAFETY REGULATIONS CO2 EMISSION LEGISLATIONS FOR ICE VEHICLES MARKET DYNAMICS TOTAL COST OF OWNERSHIP DIGITALIZATION OF FLEET MANAGEMENT KONGSBERG AUTOMOTIVE // 49
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Product portfolio update GEAR CONTROL UNIT PRODUCT VISION > KA is a well-established AMT supplier with production locations in Mexico and China > KA has recently successfully acquired a new customer project in Asia based on our design-to-cost GCU generation with significantly shortened time-to-market outperforming local competitors > KA will continue to scale its mature AMT technology to emerging markets and serving upcoming hybrid drivetrains in developed markets STRICTER EMISSION AND EFFICIENCY REGULATIONS AS WELL AS GOVERNMENT INCENTIVES IN MAJOR MARKETS WILL PUSH MANUFACTURERS AND FLEETS TOWARD AMT SYSTEMS PRODUCTION SCALE AND ADVANCEMENTS IN TECHNOLOGY WILL LOWER COSTS, MAKING AMT A VIABLE CHOICE EVEN IN COST- SENSITIVE MARKETS LIKE CHINA, INDIA, AND LATIN AMERICA AMT WILL LIKELY BECOME THE STANDARD FOR HEAVY -DUTY TRUCKS GLOBALLY, REPLACING MANUAL TRANSMISSIONS IN MOST MARKETSNEW TREND: HYBRID DRIVETRAINS COMBINING TODAY’S DIESEL ENGINE AND ELECTRIC MOTORS FOR HIGHER EFFICIENCY KONGSBERG AUTOMOTIVE // 50
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Product portfolio update > ROBUST AND DURABLE DESIGN > MAXIMUM COMFORT AND PERFORMANCE FOR THE DRIVER > HIGH PERFORMANCE > LOW TOTAL COST OF OWNERSHIP > THE ONLY GCU IN THE MARKET WITH SELF- ADJUSTING CLUTCH ACTUATOR > OUTSTANDING SERVICEABILITY The product shown is only a visual representation for reference. Actual product developed may slightly vary . ANNOUNCED ON APRIL 26, 2024 Q2 2024 NEW BUSINESS WIN ON GEAR CONTROL UNIT (GCU) OVER MEUR 523 IN ESTIMATED LIFETIME REVENUE KONGSBERG AUTOMOTIVE // 51
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Product portfolio update KEY TAKEAWAYS TECHNOLOGY QUICKLY SCALABLE TO EMERGING MARKETS AND CUSTOMER SPECIFIC REQUIREMENTS COST: KEY SUCCESS FACTORS ARE PROVEN BUILDING BLOCKS WHICH SECURE BEST IN CLASS FUNCTIONALITY AT COMPETITIVE COST LEVEL KA WILL CONTINUE TO PLAY A SIGNIFICANT ROLE IN THE AMT MARKET CONTINUING HARVESTING THIS TECHNOLOGY MULTIPLE PATENTS RELATED TO GEAR ACTUATOR DESIGN, VALVE INTEGRATION AND SELF-ADJUSTING MECHANISM DESIGN-TO-COST SOLUTION FOR HYBRID AMT SYSTEMS AVAILABLE SPEED: FROM DESIGN FREEZE TO START OF PRODUCTION WITHIN 18 MONTHS – OUTPERFORMING EVEN LOCAL SUPPLIERS KONGSBERG AUTOMOTIVE // 52
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POWERTRAIN ACTUATORS KONGSBERG AUTOMOTIVE // 53
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Product portfolio update MULTI-SPEED CENTRAL DRIVE AND TRADITIONAL REAR AXLE E-AXLE WITH SEPARATE ELECTRIC MOTORS FOR BUS APPLICATIONS (LOW FLOOR) MULTI-SPEED ELECTRIC AXLE (E-AXLE) ELECTRIFIED POWERTRAIN PLATFORMS ELECTRIFIED DRIVETRAINS IN COMMERCIAL VEHICLES BACKGROUND FOR BETTER EFFICIENCY MULTI-SPEED GEARBOXES ARE INTRODUCED PROVIDING FLEXIBILITY FOR HIGH- PERFORMANCE APPLICATIONS BY REDUCING MECHANICAL COMPLEXITY, IT MINIMIZES ENERGY LOSSES, IMPROVING OVERALL EFFICIENCY. AN E-AXLE COMBINES ELECTRIC MOTORS, GEARBOXES, AND POWER ELECTRONICS INTO A SINGLE COMPACT UNIT FUNCTIONALITY KONGSBERG AUTOMOTIVE // 54
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Product portfolio update ELECTRIFIED DRIVETRAINS IN COMMERCIAL VEHICLES BACKGROUND FOR BETTER EFFICIENCY MULTI-SPEED GEARBOXES ARE INTRODUCED PROVIDING FLEXIBILITY FOR HIGH- PERFORMANCE APPLICATIONS BY REDUCING MECHANICAL COMPLEXITY, IT MINIMIZES ENERGY LOSSES, IMPROVING OVERALL EFFICIENCY. AN E-AXLE COMBINES ELECTRIC MOTORS, GEARBOXES, AND POWER ELECTRONICS INTO A SINGLE COMPACT UNIT FUNCTIONALITY COMPETITIVE POSITIONING SAFETY REGULATIONS CO2 EMISSION LEGISLATIONS FOR ICE VEHICLES MARKET DYNAMICSMARKET > Updated regulations for commercial vehicle (CV) market drive further enhancements in conventional ICE engines and increase pressure on OEMs to accelerate introduction of CO2 neutral vehicles. > Key focus areas of all OEMs around the globe will be the introduction of electrified powertrains which will replace diesel engines. > Hybrid systems combining diesel engines and electrified powertrains will enter the market to reduce emissions short-term. > All OEMs globally are currently working on the 3rd generation electrified trucks which require optimized solutions for fully electric powertrains KONGSBERG AUTOMOTIVE // 55
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> KA is a successful global player introduced in electric actuation systems for park-lock applications > Our electric actuation product portfolio is developed for new electric drivetrains > KA is first to market with a dual Dog Clutch Actuator in Asia launched in 2024 > Several bilateral customer projects running to prepare roll out of our newly developed unique eGSA technology POWERTRAIN ACTUATORS PRODUCT VISION MULTIPLE ACTUATORS ARE NEEDED FOR TRUCK APPLICATIONS: 1 TO 3 GEAR ACTUATORS, DIFFERENTIAL -LOCK -, PARK -LOCK - AND POWER DISENGAGE ACTUATOR SMART ACTUATORS PROVIDE SUPERIOR FUNCTIONS COMPARED TO TRADITIONAL SIMPLE ON/OFF PNEUMATIC ACTUATION SYSTEMS ELECTRIC ACTUATORS WILL COMPLEMENT EXISTING PNEUMATIC GEAR SHIFT (E.G. AMT SYSTEMS) AND CLUTCH ACTUATION SYSTEMS MID AND LONG TERM ASIA WILL BE THE FRONT RUNNER WHEN IT COMES TO NEW TECHNOLOGY – DEVELOPED MARKET REQUIRE STEPWISE NEW TECHNOLOGY INTRODUCTION Product portfolio update KONGSBERG AUTOMOTIVE // 56
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UNIQUE CAM AND SPRING DESIGN FOR EFFICIENT TEETH-TO-TEETH ALIGNMENT AND STRONG HOLDING FORCE IN THE GEAR MEACHNISM INTEGRATED SHIFT FORK COST EFFICIENT INTEGRATION TO TRANSMISSION MECHANISM BRUSHLESS MOTOR FOR HIGH POWER AND VIBRATION RESISTANCE FAST GEAR SHIFTS SPRING CHARGED SYSTEM ENABLES FAST RESPONSE TO FULL ENGAGEMENT FULL-FUNCTION 2- OR 3-POSITION PIVOTING ACTUATOR FOR GEAR SHIFT OR OTHER ENGAGE/DISENGAGE POWERTRAIN APPLICATIONS. DOG CLUTCH ACTUATOR FIRST-TO-MARKET Product portfolio update EFFICIENT, PRECISE AND SECURE GEAR ENGAGEMENT SIMPLE INSTALLATION DUE TO INTEGRATED SHIFT FORK INTEGRATED CUSTOMIZED CONTROL ELECTRONICS RESISTANT TO HEAVY DUTY LEVELS OF VIBRATION AND SHOCK 4-SPEED DCA VERSION COST EFFICIENT SOLUTION DUE TO SIMPLE INTEGRATION KONGSBERG AUTOMOTIVE // 57
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ELECTRIC GEAR SHIFT ACTUATOR MODULAR, COMPACT PACKAGING WIDE RANGE OF TRANSMISSION APPLICATIONS (BEV, HEV, FCEV, ICE) EASY ADAPTATION OF FUNCTIONALITY TO MANY DIFFERENT APPLICATIONS (SYNCRONIZED / UN-SYNCRONIZED GEARSHIFT, DIFF-LOCK / PARK-LOCK ENGAGEMENT ETC.) VARIOUS INTEGRATION LEVELS MULTIPLE ACTUATORS CAN BE INTEGRATED IN ONE GCU (GEAR CONTROL UNIT) 3-POSITION LINEAR ELECTRIC ACTUATOR FOR GEAR SHIFT APPLICATIONS. Product portfolio update SMART CONTROL ALGORITHMS FOR OPTIMAL GEAR SHIFTS AND REDUCED TRANSMISSION WEAR, INCREASED RELIABILITY AND TRANSMISSION LIFETIME BY 10%-20% HIGH PERFORMANCE ACTUATION EXTREMELY RESPONSIVE AND ACCURATE GEAR ENGAGEMENT WITHOUT HIGH POWER CONSUMPTION DUE TO THE INTEGRATED SPRING- AND CAM MECHANISM PROTECTION OF TRANSMISSION ENGAGEMENT FORCE AND SPEED CAN BE ADAPTED TO FIT THE DRIVING CONDITIONS TO MINIMIZE WEAR AND OPTIMIZE COMFORT, BUT RETAIN PERFORMANCE INTEGRATED RIGID DETENT MECHANISM GEAR “JUMP-OUTS” AT HIGH SHOCK LEVELS ARE OMITTED BY THE PATENTED RIGID MECHANICAL LOCKING IN GEAR AND NEUTRAL POSITIONS SIMPLE INTEGRATION THE DESIGN IS MADE TO ENABLE INTEGRATION BOTH INSIDE AND OUTSIDE THE TRANSMISSION KONGSBERG AUTOMOTIVE // 58
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Product portfolio update KEY TAKEAWAYS KA IS READY TO MEET THE MARKET DEMAND WITH ELECTRIC ACTUATION SYSTEMS ENABLING FUTURE SUSTAINABLE MOBILITY COST: KEY SUCCESS FACTORS ARE PROVEN BUILDING BLOCKS WHICH SECURE BEST IN CLASS FUNCTIONALITY AT COMPETITIVE COST LEVEL KA WILL BE ONE OF THE MARKET LEADERS FOR CUSTOMIZED SMART ELECTRIC ACTUATION TECHNOLOGY FOR ELECTRIC DRIVETRAINS KA PROVIDES SIMPLIFIED CUSTOMER INTERFACE AND IMPROVED FUNCTIONALITY THROUGH INTEGRATED ELECTRONICS AND SMART SOFTWARE CONTROL ALGORITHMS KA IS ADDING SMARTNESS TO EXISTING TECHNOLOGY FOR IMPROVED FUNCTIONALITY BOTH FOR PNEUMATIC AND ELECTRIC ACTUATION SYSTEMS IP: MULTIPLE PATENT PENDING SOLUTIONS SPEED: FROM DESIGN FREEZE TO START OF PRODUCTION WITHIN 18 MONTHS – OUTPERFORMING EVEN LOCAL SUPPLIERS KONGSBERG AUTOMOTIVE // 59
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KONGSBERG AUTOMOTIVE // 60 FINANCIAL UPDATE
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KONGSBERG AUTOMOTIVE // 61 REVENUES 1, MEUR Financial update REVENUES LOWER DEMAND IN COMMERCIAL VEHICLE MARKET DAMPEN LAST YEARS GROWTH IN CORE BUSINESS 1. Revenues from discontinued operations (related to the divested business) were excluded in 2021 and 2022 accordingly. 2. Excludes Revenues from ordinary business with BRP in Q3 and Q4 2022 48 47 42 40 45 40 37 34 29 158 165 187 184 176 171 175 175 152 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024Q3 20222 Q3 2024 206 212 229 225 221 211 212 209 182 896.2 790.6 608.6 905.8 817.7 635.3 915.7 847.4 668.6 914.6 871.1 694.0 889.2 Q4 20222 711.7 884.9 717.8 868.2885.9 853.0 697.0 814.0 673.4706.1 CORE2 NON-CORE 12M Trend 12M Trend (excl. BRP) 12M Trend (CORE excl. BRP)
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KONGSBERG AUTOMOTIVE // 62 EBIT 1, MEUR Financial update EBIT EARNINGS IMPROVEMENT TREND REVERSED WITH A DIFFICULT Q3 AND ONE-TIME EFFECTS IN Q3 2023 1. EBIT from discontinued operations (related to the divested business) was excluded in 2021 and 2022 accordingly. 2. Excludes EBIT from ordinary business with BRP in Q3 and Q4 2022 as well as gain from sale of the Powersports business to BRP recorded in Q4 2022 2.4 4.5 3.9 5.7 5.0 0.9 1.9 -3.6 -0.7 -0.9 5.8 5.1 5.5 -0.8 -12.5 9.7 -20.5 0.2 6.4 1.1 Q3 20222 Q4 20222 Q1 2023 0.2 -12.7 Q2 2023 Q3 2023 -26.2 Q4 2023 Q1 2024 Q2 2024 Q3 2024 -3.4 1.7 3.6 10.1 CORE2 NON-CORE9.3 7.4 2.8 -10.6 2.5 -19.7 -13.2 5.7 -2.9 12M Trend (excl. BRP) [MEUR]
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KONGSBERG AUTOMOTIVE // 63 FREE CASH FLOW CASH FLOW FROM OPERATIONS STRONGLY IMPROVED NEGATIVE CURRENCY EFFECTS IMPACT Q3 FREE CASH FLOW 1, MEUR 1. Free Cash Flow is measured based on sum of cash flow from operating activities, investing activities, financial activities and currency effects on cash (together described as change in cash), excluding net draw-down/repayment of debt, net effects of repayment of old bond and issuing new bond, proceeds received from capital increase and purchase of treasury shares. Thus, it includes payments for interests. 2. Excludes proceeds of MEUR 82.0 received for the sale of the Powersports business to BRP in Q4 2022 3. 12M Trend for Q3-Q4 2022 and Q1-Q3 2023 excludes proceeds of MEUR 82.0 received for the sale of the Powersports business to BRP in Q4 2022, however includes the cash flow received from ordinary business with BRP Financial update -1.3 Q3 2022 -5.5 Q4 20222 Q1 2023 Q2 2023 Q3 2023 Q4 2023 -18.9 Q1 2024 Q2 2024 Q3 2024 -22.0 +2.5 -30.9 -25.6 +4.8 -24.9 -13.3 -36.9 +4.5 -34.9 -14.9 -4.3 -28.0 -5.2 -19.9 FREE CASH FLOW12M Trend3 Operating activities +18.7+11.9 Financing activities -83.8-7.6 Currency and translation effects on cash flow -4.8-4.7 Total -84.4-5.5 Refinancing related activities +57.6+0.4 Investing activities -14.5-5.1 YTD 2024Q3 2024 Free Cash Flow -24.5-5.2 Purchase of treasury shares and others +2.3-0.1 Add back / less: KONGSBERG AUTOMOTIVE // 63
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KONGSBERG AUTOMOTIVE // 64 > Be aware of your current situation and take proper action without delay > KA prompt action in summer 2024 – additional cost reduction activities and focus on improved cash flow management > KA are closely following orderbook, customer feedback, and external information, responding swiftly to new information > Maximum flexibility – local solutions > LMC indicate to start preparation for an upturn in later part of 2025 KONGSBERG AUTOMOTIVE // 64 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E 2025E 2026E 2027E 2028E BUSINESS CYCLE MANAGEMENT – A KEY SUCCESS FACTOR IN AUTOMOTIVE Source: LMC Global Commercial Vehicle Forecast (November 2024) GLOBAL COMMERCIAL VEHICLES PRODUCTION Financial update
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KONGSBERG AUTOMOTIVE // 65 > Innovation is key in Automotive – clear focus and sufficient resources > Growth > Profitability on new business in automotive are set well before start of production > Improve margin on existing business – cross functional responsibility (sales, purchasing, engineering, operations) > Increase capacity utilization – incl footprint optimization (make your assets sweat) > Cost optimization – lean and efficient organization Financial update IMPROVE PROFITABILITY – A STRUCTURED APPROACH OVER TIME – NO QUICK FIX KONGSBERG AUTOMOTIVE // 65
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KONGSBERG AUTOMOTIVE // 66 Financial update PROFITABILITY ON NEW BUSINESS IN AUTOMOTIVE ARE SET WELL BEFORE START OF PRODUCTION A WELL MANAGED PROCESS IS A KEY SUCCESS FACTOR START OF PRODUCTION (SOP) END OF PRODUCTIONDEVELOPMENT & TESTING PHASE 2-5 YEARS RAMP UP PHASE 1 YEAR 4-10 YEARS PRODUCT RETIREMENT COMMERCIAL VEHICLES KEY DECISIONS AND COMMITMENTS MADE PRIOR TO SOP: > Pricing established for the contract duration > Product cost committed at SOP (80% of total costs) > Product-related CAPEX (depreciation) > Engineering and development expenses confirmed 80% 20% COST STRUCTURE Product related Non-product related RFQ PHASE NBW AWARD
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KONGSBERG AUTOMOTIVE // 67 COST REDUCTIONS ARE IMPLEMENTED – WHILE KEEPING OUR INNOVATION CAPACITY Cost reductions YTD 2024 have more than offset the lower market demand Engineering resources kept on appropriate level 0.8 10.0 9.2 YTD Q3 2023 Special items YTD Q3 2023 (excl. special items) -10.0 Volume, Price & Mix +22.0 Costs -3.7 Warranty expenses -0.6 Currency effects YTD Q3 2024 EBIT (YTD) , MEUR 17.6 35.5 34.9 34.9 93.3 92.7 83.5 4.3% 11.4% 2022 3.9% 10.5% 2023 4.3% 10.3% Q3 2024 (LTM) Engineering expenses SG&A expensesEngineering expenses % of revenue SG&A expenses % of revenueENGINEERING & SG&A EXPENSES , MEUR Financial update KONGSBERG AUTOMOTIVE // 67
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KONGSBERG AUTOMOTIVE // 68 > Improve profitability > Minimize capital employed IMPROVE CASH GENERATION 151 46 114 80 -67 Q3 2024 Intangible assets Property, plant & equipment Right-of-use assets Net working capital IFRS 16 lease liabilities (short- & long-term) 324 CAPITAL EMPLOYED, MEUR Financial update KONGSBERG AUTOMOTIVE // 68
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KONGSBERG AUTOMOTIVE // 69 REDUCE NET WORKING CAPITAL INVENTORY > Globally coordinated effort to adjust stock levels to reduced market demand > S&OP process improvement incl customer dialogue > Project to work on forecast process accuracy ACCOUNTS RECEIVABLES > Order-2-Cash Taskforce including new escalation processes and measures (example delivery stop and penalty interest) > Shortening of payment terms (PT) for late payers > Group Treasury approval of PT for new customers incl Credit Limits > Review & Adjustment of PT for existing customers as part of commercial analysis processes ACCOUNTS PAYABLES > Re-Negotiation of Minimum Order Quantity (MOQ) > Preference for regional / local suppliers (near- shoring) > Consignment stock for larger suppliers > Change of Incoterms -121.9 -116.6 141.1 146.4 150.8 96.5 166.5 2022 101.5 161.5 2023 93.6 149.2 -92.1 Q3 2024 (LTM) Inventory Account receivables Account payables Total NWC 17.3% 16.5% 18.5% % of revenue NET WORKING CAPITAL , MEUR Financial update KONGSBERG AUTOMOTIVE // 69
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KONGSBERG AUTOMOTIVE // 70 PROPERTY, PLANT & EQUIPMENT AND RIGHT OF USE ASSETS CAPEX needs > Stable level with growth related (customer project, capacity) as the dominant driver > Negotiation on capex funding responsibility in customer-specific projects > Review of existing machine park based on utilization (e.g. intercompany machine transfer) > Replacement capex < EUR 5m Funding of new CAPEX > Buy or lease decisions based on local cost of funds managed by Group Treasury (local funding sources v.s group resources) CAPEX , MEUR 4.0 0.8 22.2 26.1 26.5 3.2% 2022 2.5 3.2% 2023 3.3% Q3 2024 (LTM) 26.2 28.6 27.3 CAPEX (CORE) CAPEX (NON-CORE) % of revenue 11.6 12.5 12.2 0.90.5 1.6% 2022 1.00.6 1.6% 2023 1.00.5 1.7% Q3 2024 (LTM) 13.1 14.1 13.7 LEASING EXPENDITURES , MEUR Buildings Machinery Other Financial update
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KONGSBERG AUTOMOTIVE // 71 CAPITAL EMPLOYED 3, MEUR ROCE 2, %, LTMLEVERAGE RATIO, NIBD 1/ ADJUSTED EBITDA, LTM EQUITY RATIO, % 1. Net interest-bearing debt 2. EBIT (LTM) / Average capital employed; EBIT used to calculate ROCE in Q3 2023 does not include the gain on sale of the Powersports business to BRP recorded in Q4 2022 3.Capital employed consists of Intangible Assets, PPE’s, Right-of-use assets, Net Working Capital less Lease liabilities at quarter end 1.5 1.8 1.8 1.7 2.1 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 33.4 30.2 30.9 34.3 34.6 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 361 320 331 340 324 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 0.8 -5.9 -3.9 1.7 -0.8 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Incl. IFRS 16 effect FINANCIAL RATIOS Financial update
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AVAILABLE FINANCING > Nordic Bond NO0013260943: EUR 160m > EUR 110m issued in June 2024 > 4 years (June 2024, tenor June 2028) > Euribor 3m + 525 bps > Super Senior Revolving Credit Facility: EUR 15m > 3,5 years (June 2024, January 2028) > Pricing depending on leverage > Same collateral package as the Nordic Bond > Account Receivables Securitisation Facility: EUR 25m > Certain US / European Receivables > Currently capped at EUR 25m ANCILLARY INSTRUMENTSMAIN INSTRUMENTS > Customer Financing Solutions > From certain customers at right terms > Funding related to our receivables > Amounts between EUR 6-8m Financial update KONGSBERG AUTOMOTIVE // 72
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> Two brokers/investment banks with active coverage, up from one a year-ago > Ongoing dialogue with additional brokers/banks > Conducted Capital Markets Day in May and today’s second annual breakfast meeting Financial update INCREASING INVESTOR RELATIONS AND CAPITAL MARKETS FOCUS FEBRUARY 25 FINANCIAL CALENDAR FOR 2025 MARCH 27 MAY 7 MAY 23 AUGUST 12 NOVEMBER 5 Q4 2024 Annual report Q1 2025 AGM Q2 2025 Q3 2025 INCREASED MARKET VISIBILITY PLAN FOR 2025 > Initiating quarterly award announcement, starting in 2025 > Expect further analysts to start coverage KONGSBERG AUTOMOTIVE // 73
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KONGSBERG AUTOMOTIVE // 74 KEY TAKEAWAYS
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KEY TAKEAWAYS > Strong market position supplying globally recognized industry brands > Strategic turnaround well underway and more to come > Long-term underlying demand growth for commercial vehicles > Cost efficient platform for providing the right products to meet the market trends > On track for delivering on 2028 ambitions
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KONGSBERG AUTOMOTIVE // 76