A very good morning to you all this Friday, and welcome to the presentation of our third quarter results. We are broadcasting live from Oslo, and we have this program for you. First, CEO Lisa Edvardsen Haugan will take you through a high-level overview of the current status for our company, before CFO Jan Erik Hoff will talk you through the third quarter financial details. Following that, we would like to give you some extra insight into a crucial part of our business, the global customer support. EVP Bård Bjørløw will talk you through how we deal with the life cycle offerings in Kongsberg Maritime. As always, you are welcome to ask questions. Please post them in the chat to the right, and we will return to them at the end of the program. With that, the microphone is yours, Lisa.
Good morning, everyone. We delivered a strong third quarter with continued new build momentum and high order intake. This performance reflects the dedication and hard work of colleagues across Kongsberg Maritime, and I want to thank every one of them for their contribution. Geopolitical uncertainty continues to influence trade patterns and customer decisions. It also reinforces the strategic importance of maritime transport, energy security, and capable naval fleets. Energy efficiency also remains high on the agenda. An aging global fleet and tighter emission requirements are driving fleet renewal and demand for more efficient technology. At the same time, vessels are becoming more complex, with greater requirements for energy management, automation, and propulsion. This plays directly to our strength. Our domain expertise and broad portfolio allow us to integrate systems, reduce risk, and improve vessel performance. Just as importantly, we support our customers throughout the vessel life cycle.
We are also seeing a clear shift from globalization towards regionalization. Geopolitics, trade policy, and the need for more resilient supply chains are increasingly shaping investment decisions. For the maritime industry, this is changing trade patterns and increasingly the need for flexible, efficient, and secure maritime transport. At the same time, shipbuilding capacity is expanding, particularly in Asia. China is moving further into sophisticated vessel segments, while other countries are investing to strengthen their domestic capabilities. In this more regional and complex market, our global presence, strong local relationships, and broad technology portfolio are important advantages and position us well to support our customers as their needs evolve. Before addressing the quarter's highlights, let me briefly mention an important milestone just after quarter end. On October 1st, we formally welcomed Berg Propulsion into Kongsberg Maritime.
I visited Berg in August at their site outside Gothenburg and met most of our new colleagues. They bring world-class propulsion technology, deep expertise, strong customer relationships, and a culture that fits naturally with our own. Berg is a strong strategic fit. The same is true of our announced acquisition of Steerprop, a Finnish specialist in azimuth propulsion for high ice-class and Arctic vessels. Together, they strengthen our position in advanced propulsion, broaden our addressable market, and create new life cycle opportunities. This makes us an even stronger partner for our customers and creates further opportunities for innovation and growth. Turning to the quarter, activity remained strong. Order intake was high, and new build deliveries continued to grow. Revenue increased by 5% and delivered an EBITDA margin of 15.7%. New build profitability continued to improve, supported by efficient scaling, solid execution, and cost discipline.
We continue to strengthen our competitiveness as the business grows. At our Capital Markets Day, we introduced the Competitiveness Improvement Program. This program is progressing according to plan and remains a clear operational priority. In new build, orders continue to exceed deliveries, supporting visibility for the coming years. The book-to-bill for new build was 1.39 in the quarter. Offshore energy was the largest contributor year to date, supported by several major contracts in the third quarter. Cargo also performed well alongside solid order volumes in gas carriers and naval and governmental. Offshore remains an important market for us. We have a strong position, and our offering addresses the need for capable vessels, reliable operations, and greater efficiency. Energy security and fleet renewal continue to support the long-term opportunity. Recent contract wins shows the strength of our integrated solutions and lifecycle offering.
Over time, close collaboration and proven technology have helped us build long-term customer relationships. The Solstad contract is a good example. It draws on the full breadth of our portfolio and introduces innovations such as electric permanent magnet anchor handling winches. These are integrated with electrical and energy management system to improve operational performance. The aftermarket remains a structurally attractive part of our business. Our customer relationships continue long after the original equipment is delivered, creating opportunities throughout the vessel lifecycle. Because this is a short-cycle business, activity can vary between quarters with customer timing and operating conditions. Bård Bjørløw will shortly provide more insight into our aftermarket operation. The long-term fundamentals remain strong. Vessels need maintenance and upgrade while customers continue to invest in efficiency and asset life extension. Our focus is to stay close to them and respond when those needs translate into activity.
This has been another solid quarter where we further strengthen our position. Order intake was NOK 8.3 billion, 6% above the same quarter last year, giving a book-to-bill of 1.25. New builds were the main driver with a book-to-bill of 1.39. Our backlog reached a record NOK 29.8 billion. With 88% linked to new build deliveries, we have good visibility into 2027 and beyond. Overall, we enter the coming quarters with a stronger order position and continued growth in new build deliveries. Our focus is clear. Execute well, strengthen competitiveness, and remain a trusted partner for our customers.
That was the high-level overview from Lisa, who will be back with the outlook later in the program. Just to remind you viewers, you can ask questions and post them, leave them in the chat to the right. Now, with the third quarter financial details, here is CFO Jan Erik Hoff.
Thank you, Jon. Before I dive into the details, I would like to give you a touch on some financial highlights from the quarter. The positive development we have seen over the past quarters in our deliveries to new vessels continue. In 2026, we have also seen strong ordering on new tonnage from the yards. This, in combination with our solid market positions, pave a solid fundament going forward. Even though our operation towards the sailing fleet continued at a slower pace in Q3, the long-term fundamentals are strong. We experience high utilization of the existing fleet, lead times on new build deliveries are long, and the age of the fleet continues to increase. Regulations and focus on energy efficiency increases the need for modernizing the fleet, meaning the long-term tailwinds are in place. Lisa has already mentioned Berg Propulsion.
The acquisition was closed just after the quarter ended, and the EUR 308 million net settlement amount was financed through a combination of our own funds and the bonds issued in August. Cash flow in the first half of the year was somewhat challenged by increasing working capital. In Q3, we managed to turn this around, and we are entering Q4 with a solid cash position and a continued healthy balance sheet. Revenues in Q3 came in at NOK 6.6 billion, an increase of 5% compared with Q3 last year. Kongsberg Maritime generates approximately 50% of the revenues from legal entities outside Norway. When consolidating the figures into our presentation currency, Norwegian kroner, they are translated at the FX rate at the time of the transaction. Given the strengthening of Norwegian kroner over the past year, currency translation effects remain negative. When applying the same FX rate, year-on-year growth was 8.3%.
Growth was driven by new build deliveries, which increased by 16%, while aftermarket revenues were 5% below the corresponding quarter last year. Out of the revenues, new build accounted for 54% in the quarter compared to 49% in Q3 2025. Energy and Control delivered revenues of NOK 3.5 billion, up 10% compared with the same quarter last year. Deliveries to new builds had a continued solid development, building on strong order intake over the past years. In addition, increasing deliveries to the sailing fleet contributed to growing revenues. Propulsion and Handling delivered revenues of NOK 3 billion, up 2% compared to Q3 last year. Deliveries to the sailing fleet declined, but deliveries to new builds were solid, especially related to offshore projects and tug deliveries. Aftermarket has traditionally represented a larger share of revenues in Propulsion and Handling compared to Energy and Control.
In peak quarters, aftermarket has contributed with up to 70% of the division's revenues. In Q3 2026, the share was 52% compared to 62% the corresponding quarter last year. EBITDA came in at NOK 1.041 billion, corresponding to a margin of 15.7%. The quarter included NOK 72 million in restructuring costs related to our Competitiveness Improvement Program. The program is well underway and consists of several smaller and larger initiatives. It will benefit us in increasing our competitiveness even further going forward. In Energy and Control, EBITDA grew by 23% to NOK 652 million, corresponding to a margin of 18.9%. With a broadly stable aftermarket new build mix year over year, the improvement was driven by higher volumes and solid project execution. Propulsion and Handling delivered an EBITDA of NOK 470 million, corresponding to a margin of 15.5%. The decrease in margin was primarily driven by the mix shift from aftermarket to new builds.
Also in Q3, we see improved profitability on our deliveries to new builds. With the expected continued new build growth in combination with the long-term market tailwinds, this supports the direction towards the profitability ambition we launched at our Capital Markets Day this summer. Cash flow from operating activities was NOK 1.4 billion in the quarter. We ended Q3 with a net working capital of NOK 1.5 billion compared with NOK 2.1 billion at the end of Q2. Net working capital will fluctuate between quarters depending on project milestones and customer payment plans. It is also impacted by project mix. While larger new build contracts may have relatively cash-neutral payment profiles, shorter cycle activities such as spare part sales typically require higher inventory levels to ensure product availability and short delivery times. At the end of September, cash and cash equivalents were NOK 6.1 billion, and our net interest-bearing debt was NOK 1.7 billion.
The settlement of Berg Propulsion took place after the close of Q3 with EUR 308 million. Continuous improvement and operational efficiency are key to remaining competitive in the global maritime industry. We operate in highly competitive markets, facing competition from all regions, and our strong order intake over the recent years demonstrates our ability to compete successfully. At the same time, yards are experiencing historically high demand for new vessels this year, providing a supportive backdrop. Looking ahead, we see strong long-term market opportunities and remain focused on continuing to strengthen our competitiveness and delivering on these opportunities, both for the new build and the large install base already in operation.
Before we come to the outlook and answer your questions, we would like to give you some extra insight into a key area to us and to the global maritime sector as such, customer service. In Kongsberg Maritime, this work is led by Executive Vice President Bård Bjørløw, who now will talk us through the essentials of our life cycle offerings.
A useful starting point for understanding Kongsberg Maritime's aftermarket business is to look at its scale, capability, and global reach. We have equipment installed on more than 30,000 vessels and support customers around the globe. In each year, we serve more than 12,000 vessels with field service, vessel upgrades, and spare parts, supported by more than 2,200 engineers across service, critical engineering, and specialized support. This is a high-volume operation, handling more than 32,000 spare part orders and over 25,000 technical support sessions every year. The equipment we support is often mission-critical, while vessels operate globally and demanding schedules. Customers therefore depend on fast access to the right components, to the right parts, and to the right technical support to keep their vessel operating. Our global footprint, responsiveness, and reliability are important competitive strengths.
They allow us to support customers where and when needed, whether through spare parts, remote assistance, an engineer on board, or a larger intervention on the vessel. Our role in the aftermarket is to help customers sustain uptime, operability, and efficiency through the lifetime of their assets. The type of support customer need evolves with vessel age, operating profile, and immediate priorities. First, we secure access to spare parts and the logistics needed to deliver the right parts at the right place and to the right time. Some requirements are planned, but some require an immediate response. Second, we provide maintenance and repair, from troubleshooting and onboard maintenance to workshop repair and overhaul of their equipment. Remote support and diagnostics can also resolve or identify issues before a physical intervention is required. Third, we provide broader life cycle support and planning, including condition monitoring, health management, and service agreements.
Finally, upgrades and retrofits help customer modernize systems, adapt to new requirements, improve efficiency, maintain compliance of the vessel, or extend the asset life. These activities are often combined. A docking or maintenance may include parts, repairs, upgrades, supported by life cycle planning. The value of the aftermarket is therefore broader than individual transaction. It is about supporting performance throughout the vessel lifetime. Across these lifetime activities, lead times vary significantly. There is an important distinction between underlying aftermarket demand and when that will materialize. Compared with much of the new building business, a significant share of aftermarket activity moves quickly from customer need to order and execution. For spare parts, the period from a quotation to delivery can often be as short as days or maybe weeks. Service is a little bit similar. Some work is planned, and some work arises during vessel operation.
Larger projects typically require more engineering and planning, so they provide somewhat longer visibility. Overall, however, lead times vary significantly, but are generally short. The aftermarket business therefore combines strong long-term robustness with relatively limited short-term visibility. Five broad drivers shape aftermarket activity over time. The first is our installed base. Every new building delivery creates an installed base position that will require support for many years to come. Our large and diverse installed base provides robust foundation, although demand varies by vessel segment, equipment type, and life cycle stage. The second is docking activity. Intermediate and special surveys create natural windows for inspection, maintenance, or larger interventions. This is specifically relevant for equipment below the waterline, where work is difficult during normal operation. We also see that historical new building activity influences future timing of docking volumes. The third driver is fleet age.
As vessels and equipment age over time, the need for maintenance and overhaul generally increases. The fourth is owner economics. A vessel utilizes, creates maintenance needs, and healthy earnings support investment capacity. But strong utilization also raises the cost of downtime, which can delay non-critical work. Geopolitical and market disruption can further affect freight rates, trading routes, and customer investment decisions. A fifth driver is regulation, including requirements linked to emissions, energy efficiency, safety, and cybersecurity. While the delay in the Net-Zero Framework has affected somewhat momentum, demand remains solid for solutions with strong return on investments. Together, these drivers provide structurally robust base for long-term aftermarket demand. Thank you.
Thank you, Bård, for talking us through the aftermarket. We sincerely hope this gave some value to all of you following us. Bård will be available for questions later as well. Next on the program is our outlook. CEO Lisa Edvardsen Haugan is back on the podium to give you our forward thinking.
Let me close with the outlook. The new build market remains strong overall, although conditions vary by vessel segment. In some markets, large order books may put pressure on commercial returns over time. Our broad exposure across vessel types is therefore an important strength, reducing our reliance on any single shipping cycle. At the same time, the strong new build cycle is expanding our future installed base. Together with an aging global fleet, this supports long-term demand for maintenance, upgrades, and efficiency improvements. For the fourth quarter, NOK 5.5 billion of backlog is scheduled for delivery. This provides good visibility on new build revenue, although the timing of individual deliveries may create some variation between quarters. The aftermarket is less predictable in the short term. Customer spending can shift between quarters, and profitability is influenced by the mix of spare parts, service, and larger projects.
We are therefore managing two different dynamics. In new builds, the priority is to convert the backlog into profitable growth. In the aftermarket, it is to stay close to customers and respond quickly as activity changes. Across both, our priorities remain the same: disciplined execution, continued cost control, and strong cash conversion. We have a solid market position, record visibility, and a growing installed base, and we remain focused on turning those advantages into sustainable, profitable growth.
That concludes our presentations today. Next up is the Q and A, and Lisa and Jan Erik will now take the stage together. The first question received, Jan Erik, goes to you, and that is regarding Berg Propulsion. Could you elaborate on the financials for 2026?
Yes, Jon. I can give you a short answer to that. Berg Propulsion will be included in our Q4 numbers under Propulsion and Handling. So far this year, Berg Propulsion has delivered revenues averaging around NOK 350 million each quarter, and in Q4, we expect pace to pick up slightly from that.
Good. To continue on Kongsberg Maritime as such, how do you see the overall margins for us develop from here?
Yes, I think on the profitability side, Q3 is normally a strong quarter due to lower cost. It paves a good road for delivering on the ambition that we stated this summer on our Capital Markets Day on increasing our EBITDA margin to above 16% during this period.
Thanks. The next one is actually regarding the Capital Markets Day in June, and looking back to that, Lisa, a question to you. The things you stated about the development and ambitions at the Capital Markets Day, how does that look now versus then?
I think it is important, again, to highlight that what we talked about at the Capital Markets Day are the same picture as we are seeing today. We see an industry and a market now where the importance of the maritime is getting higher on every nation's agenda. This is reinforcing the importance of our global presence. I just visited China and India. Again, I see this major driving coming now from globalization into regionalization. For us, this means that we need to put even more pressure on having local supply chains set up in each region to meet these new requirements, and this is high on our own agenda. Again, it is very also positive to see that the two Ds that we have talked about a lot, decarbonization and digitalization, are still on the agenda.
When we are talking with our customers, the dialogue that we are having with them are around energy efficiency and energy management. The breadth of our portfolio and how we are capable of creating integrated solutions that are addressing exactly this, we now see coming through in a really strong book-to-bill in the new build sector of 1.39. I think this directly shows how we can document and illustrate also that these integrated solutions makes a difference from the customer perspective.
I can see here that we also have a few more questions from the viewer. One of them goes on the losses that we report on the digital and other business. I can start comment on that, and you can fill in, Lisa.
Yeah.
Yes, we are reporting a loss on that side, but I think it is important also to see digital in Kongsberg Maritime as a part of the full Kongsberg Maritime. The investments we do on especially R&D within that area is something we do for the breadth of our total portfolio.
Yeah, to build on what you are saying, Jan Erik, digitalization plays an important role when we are talking about decarbonization and more in specific, energy management and energy efficiency. When we are talking about digitalization in Kongsberg Maritime, we are thinking about it, addressing it both from the digital life cycle, how the sensors on board can be used for preventative maintenance, how we can do condition monitoring, and so on. But also, how we can make sure that we have the spare part available in the next harbor when the vessel arrive to do quick maintenance and repair. It is also about integration with the broader value chain, and we see that is now coming more and more into play, especially with new fuel types.
You need to know what kind of fuels are available in the next harbor, how are the logistics working, and of course, also, how can you optimize the voyage using all the data that you are capturing on board a vessel to make sure that you optimize the vessel's operation. Again, I think this plays back also to the core products that we are having in Kongsberg Maritime. The automation system has so much access to data, and I see now how the convergence between IT and OT are giving real value proposition to our customers when it comes to digital. But this is like you are saying, Jan Erik, it is an integrated part of our offering. Of course, when we are into digital, I also need to mention what we are doing around remote and autonomy, which is somewhat a layer also of digital offerings.
Good. I can see that we also have questions on the declined EBITDA in Propulsion and Handling, and how that turns out. I can talk a little bit about that as well. As I mentioned in my presentation, the mix shift has been quite substantial in Propulsion and Handling from delivering up to 70% at peak quarters of the revenues coming from the aftermarket. Now, in Q3, that number was down to, or that share was down to 52%. This represents a major shift in deliveries. That said, in Propulsion and Handling, we also see a very positive development on the new building deliveries, and also with the strong order intake that we have experienced so far this year, it also pays well going forward. There were also some questions around capacity, Lisa.
We have a question here on our capacity towards the new build segments, delivering to the new building segments. How do you see that developing going forward? Is that a challenge?
At this point, we are not experiencing any capacity constraints. We are capable on delivering on the new builds that we have received so far. Again, coming back to Kongsberg Maritime is a widely spread organization.
You have been doing or completed two acquisitions recently. How do we see the M&A pipeline going forward? Do we expect any acquisitions to be made?
Coming back again to what is stated at the Capital Markets Day, we have growth ambitions, and it's natural for us to use M&A also as a tool to achieve that. We have so far done two acquisitions with strengthening the propulsion range. Extremely important acquisitions because we very often see when we are talking about energy efficiency and energy management, it starts with the propulsion, building onto electro and also automation and the bridge. When we are doing acquisitions within propulsion, it's also benefiting the other parts of our portfolio. I talked initially about the two Ds, decarbonization and digitalization. We will at all times look into how can we strengthen our portfolio. It can be both within electro, but also we will look into opportunities to strengthen our digital offerings, which we believe will be important also going forward.
I can see that we have a few questions on the aftermarket side as well, so I think we should invite Bård back on stage. Bård, there's a question here around the aftermarket and on aftermarket activity. How are freight rates and vessel utilization influencing customers' maintenance spending? Also, do you see any differences between segments like offshore and cargo and such?
The dynamic is a little bit back to what we talked about, that the market is influencing what the decisions on what owners is doing. It is very simple that what is said there is that when you have high utilization of the vessel combined with very high rates, you will want, as an owner, that vessel to sail as much as possible. It is regulated, if a vessel needs to go to dock, for example. We mentioned Propulsion and Handling, and these are also linked to docking of vessels. The owners naturally think that they will go to dock if they have to, and they will stay in dock as little as possible, so they will more likely to do what is required and then sail again. So, it is influencing decisions, both when and how long owners are in dock.
This compared with the geopolitical, where longer sailing routes, you have a closed Middle East right now, so these are influences, decisions that the owner are taking.
I see we have one more question, that just came in around aftermarket. "Would you classify the current aftermarket as weak? If so, what are the specific dynamics that you have really touched on here, around the current environment, and is the Strait of Hormuz situation having an impact on this?
Well, the aftermarket business itself, I wouldn't say it is weak. It is fluctuating with the decision that is taken, with availability of course, docking. It is what the decision of the owner do, as I said earlier. So it is not weak. We have more vessels sailing than ever before around on the sea, and they have demand. They have both their requirement, which is regulated by class, and they have the maintenance need. The more you use a vessel, of course, you will need aftermarket service. Also, age is increasing, and that is also influencing the need for the aftermarket. So the aftermarket is definitely not weak. It is as strong as ever, but it fluctuates with their decisions. Middle East is closed, and that is affecting the market, absolutely.
Thank you, Bård. I think the final question here, Lisa, is for you, and it goes on the Energy and Control and the very positive development we have seen within Energy and Control lately, with high margins and solid development. How much of this would you say is related to improved productivity and pricing and such? Or is it really just a favorable project mix that you're delivering on?
It's a combination of all elements. But first and foremost, I would say that we have done a thorough job actually looking into how we are operationalizing that business. We have been improving benefits both in the supply chain by establishing a more regional footprint that are beneficial for our supply chain, setup cost, and also, we have had efficiency gains in how we are delivering on the projects by utilizing more tools. Of course, like any other operation, we are at all time looking into also how can we further streamline the operation by utilizing AI as a tool. But this is a natural part of how we are doing business. Even though we introduced the Competitiveness Improvement Program, at all times, we are seeking operational excellence throughout our value chain.
This is a core culture in Kongsberg Maritime, and a systematic work over time that are now contributing in these increased margins coming through in Energy and Control.
One final question here, around the restructuring cost, and I think I can answer on that one. The question states, "How should we think about the restructuring costs for Q4 and next year?" We have reported 72 million restructuring costs now in Q3, and this is how we see it, the majority of what will be taken under this current situation. So, you shouldn't expect a high number on that going forward.
Okay. Bård, Jan Erik, and Lisa, thank you very much for taking us through the presentations and not least answering all the questions this morning. Thank you for following us this Friday morning, and as always, a recording of the broadcast will be published on our website later. I will leave you with a teaser, as we next week will reveal our new brand direction and, of course, a new company logo. The next time we will present our results, which is February 9th, 2027, we will stand here with a brand new wrapping. Welcome to that session as well. We wish you all a good day and a good weekend.