Capital Markets Day Kongsberg Defence & Aerospace 21 September WORLD CLASS through people, technology and dedication

Transcription

1 Capital Markets Day Kongsberg Defence & Aerospace 21 September 2006 WORLD CLASS through people, technology and dedication KONGSBERG Sep-06 August

2 KDA s Outlook September 2006 KDA's spheres of activity and markets Growth opportunities Air defence Weapon stations Naval Strike Missile Long-term opportunities Fighter craft KONGSBERG Sep-06 August

3 The defence market from KONGSBERG's point of view Politically driven, very competitive market Considerable protectionism in the U.S. and Europe Requirements for sales to local customers prior to export Trend towards fewer, but larger units -Sometimes an advantage to be small and responsive The Norwegian defence market is small Good platform for establishing cost-efficient solutions Usually open international competition Not much willingness to take risks on the part of Norwegian customers Political support for national activity and offset requirements for international procurements KONGSBERG Sep-06 August

4 Most important product areas in Defence & Aerospace Command and weapons control systems Naval Defence Systems Air defence systems Combat management systems Dynamic systems Communications solutions Anti-ship missiles Surveillance Different types of command and control systems for land-based, airbased and sea-based defence This also includes command and weapon control systems for naval vessels, air defence systems and information systems for aircraft Weapons control systems for armoured personnel carriers The systems was developed to protect personnel in armoured personnel carriers. Weapons and sensors are mounted on the outside of the vehicle, while the operator remotely controls the system from a protected position inside the vehicle Different types of tactical radio and communications systems Solutions generally developed and supplied for land-based defence Develop and manufacture Penguin and NSM anti-ship missiles Penguin missile operational in Norway and other countries' naval defence for many years The development programme for the new NSM anti-ship missile to be completed in early NSM will be one of the main weapons on the new Norwegian frigates and MTBs Emphasis on safety leads to more demand for surveillance and the protection of civilian and military installations and borders Expertise related to command and control systems 4

5 KDA's market strategy Norway Systems integrator for CCI solutions The development of unique products based on Norwegian needs (Naval Strike Missile, Multi Role Radio, Remote Weapon Station) International USA Sale of niche products and smaller system solutions on selected markets and NATO programmes -Southern and Eastern Europe -Gulf States -Asia Collaboration with US enterprises KONGSBERG Sep-06 August

6 Defence & Aerospace Volume trend MNOK 1,200 Quarterly operating revenues MNOK Operating revenues and new orders 1,000 3, , , Q Q1 Q2 Q Q4 Q1 Q2 Q3 Q Q1 Q New orders Operating revenues Operating revenues Fluctuating new orders and varying project lengths can have formidable quarterly effects on operating revenues Most important changes Acquisitions (Gallium Software Inc, Norcontrol IT) Opportunities continue to unfold for RWS Low operating revenues in missiles until the NSM is put into the production Underlying trend in new orders Delays in planning processes in many countries cause delays in new orders Steadily growing interest in personnel protection products and installations (RWS and air defence) 6

7 Four core technologies form the basis for all product areas at Defence & Aerospace Command and weapons control systems 4 core technologies Signal processing Processing and application of different physical and electronic signals Dynamic systems Hydroacoustics Processing and application of acoustic signals in water Communications solutions Cybernetics / automatic control Regulation and stabilisation of dynamic systems Anti-ship missiles Surveillance Software development/integration Development and design of tailormade software Integration of different types of software 7

8 Defence & Aerospace Strategic initiatives Objectives: The strengthening of international activities Acquisition of Gallium Software Inc. Canadian software company that manufactures advanced graphics systems for maps Positioning relative to modern defence trends for the processing large volumes of data in real time Main market among American defence customers Screen images from Gallium's chart system InterMAPhics Established Kongsberg Defense Corporation Upgrading of remote weapons systems delivered to the U.S. Army Strengthening relations and improving the grade of service available to customers in the USA Improved profitability Norcontrol IT is a leading enterprise within coastal and harbour surveillance Objectives: Establish Kongsberg as a key player within surveillance Acquisition of Norcontrol IT Leading enterprise in coastal and harbour surveillance Intensifying KONGSBERG's efforts within surveillance in civilian and military markets alike Remote Weapon Station (RWS) Objectives: In-house cost objectives Reduce procurement costs by MNOK 50 from the 2004 level. 8

9 Order income

10 Operating revenues current composition (average 05-06) Missiles and Space Naval Systems Integrated Air Defence Systems Land Systems and Surveillance Defence Communication Dynamic Systems Kongsberg Spacetec 10

11 Operating revenues - possible future composition Missiles & Space Naval Systems Integrated Air Defence Systems Land Systems and Surveillance Defence Communication Dynamic Systems Kongsberg Spacetec 11

12 Main product area: Dynamic systems Dynamic systems Geographic distribution of income, RWS PROTECTOR Remote Weapon Station (RWS) Income 2006: MNOK % 5 % 5 % 70 % Europa Australia USA Canada The U.S. is clearly the largest, most important customer Australia, Finland and, most recently, Canada have joined the ranks with a view to largescale contracts in recent years Kongsberg has supplied RWSs to the Norwegian Army and the Royal Norwegian Air Force Primary source of income Production and maintenance of advanced mechanical structures Direct export: All ongoing and recently signed contracts are based on direct export Offset agreements: Required in all countries in which RWS is marketed Development contracts for the Armed Forces: Equity-financed development project based on Norwegian concept. First contract concluded with the Armed Forces. 12

13 Growth opportunities Weapon stations Three classes of weapon stations Heavy Tower replacement Average Protector Light Smaller vehicles/large numbers We are currently the world leader of smaller weapon stations, but the Stryker the programme have limited duration Potential in 20 more countries Competition is on the rise, but there may be major new opportunities for deliveries to the US Army ( CROWS - Common RemOte Weapon Station) KONGSBERG Sep-06 August

14 Light weapon stations a good opportunity, despite keen competition Be based on existing modules from Protector Rapid progress is essential for limiting competition Large series necessitate local generation Cooperates with Rheinmetall for the German market - samples delivered for testing KONGSBERG Sep-06 August

15 Integrated Air Defence Systems Command and weapon control systems Air defence systems HAWK Medium Range Air Defence FDC Command Post Surface Launched AMRAAM (SL-AMRAAM) Geographic distribution of income USA Europa ekscl Norw ay Norw ay Norway has given a stable, but relatively low contribution in recent years Central Europe has been good in recent years. Good outlook Raytheon (USA) important alliance partner Asia and the Middle East can be even more interesting in future Primary source of income Very Short Range Air Defence (VSHORAD) Battalion Operations Center (BOC) Development contracts for the Armed Forces: Not much development in the past 10 years. NASAMS and GBADOC are examples of important development projects for the Armed Forces Offset agreements: Cooperation with Raytheon originally initiated as a result of an offset agreement, but has evolved into a long-term commercial collaboration agreement Direct exports: Direct exports through cooperation with Raytheon is clearly the most important source of income 15

16 Air defence, main strategy Be recognised as a leader in air defence command & control and interoperability Sell air defence solutions developed in house in collaboration with Raytheon Medium Range (AMRAAM, HAWK) Short Range (Mistral, Stinger) Sell battle command centres Sell AMRAAM launchers in selected markets Sell maintenance, support and integrated logistics to the established customer base KONGSBERG 2620-Sep-06 August

17 Our air defence command post is being well received KONGSBERG 2620-Sep-06 August

18 Product area: Command and weapon control systems - - Land Systems & Surveillance - Coastal and harbour surveillance systems Geographic distribution of income Coastal surveillance and AIS network (Automatic Identification System) 8 % 4 % 8 % 24 % 40 % 16 % Norge Skandinavia Europa Amerika Asia Øvrige More than 160 systems have been delivered to customers for more than 30 countries. Most important markets are Europe (UK, Spain, Portugal), Asia (South Korea, Singapore, China, India), America (Mexico, Canada, USA) and Scandinavia (Sweden, Denmark). Markets under development in future: Southern Africa, South America and China. Harbour traffic monitoring systems Primary source of income National: Development in the High North will be an exciting market for surveillance solutions. The first contract was signed in January 2006 for Vardø VTMIS. Direct exports: Maritime Domain Awareness systems, as new Vessel Traffic Management Information Systems, and also deliveries of AIS network solutions. 18

19 Kongsberg Norcontrol IT is well established Ports and Harbours Coastal and Exclusive Economic Zones Offshore Collision Avoidance KONGSBERG Sep-06 August

20 Product area: Command and weapon control systems Naval Defence Systems Command and weapon control systems Geographic distribution of income Naval Defence Systems Combat Management for Fast Attack Crafts 25 % 10 % 65 % Norway's extensive maritime investments of recent years have been critical Submarine Command and Weapons Control System Norge Skandinavia Europa Amerika Asia Øvrige Central Europe has brought a considerable volume in recent years Asia can be important in the long term Anti Submarine Warfare System (ASW) Mine Countermeasures Systems Primary source of income Development contracts for the Armed Forces: The Armed Forces' development projects have historically been profoundly important to activities related to Naval Defence Systems Offset agreements: The market for Naval Defence Systems is exceptionally protectionistic so offsetting is necessary to achieve market access Direct exports: Not much at the moment Assume that alliances will create more opportunities in the long term 20

21 Product area: Communications solutions Communications solutions Geographic distribution of income Tactical area communications system (EriTac) Light Multifunctional Radio + Multi- Role Radio (MRR) 35 % 10 % 15 % 40 % Norge Midtøsten Øst Europa Øvrige The Middle East and Eastern Europe are the most important markets, with communications deliveries in 12 countries Moreover, products have been delivered to 7 other European countries and 8 countries in Asia and other parts of the world. Several NATO countries are important users of KONGSBERG's communication technology Primary source of income Safe and robust networks and complete ICT solutions Development contracts for the Armed Forces: Norway has historically been important in the development of radio and safety products. Offset agreements: N/A Direct exports: Direct exports account for a growing percentage of the contracts. 21

22 Product area: Anti-ship missiles Anti-ship missiles Geographic distribution of income Naval Strike Missile (NSM) 15 % 20 % 15 % 5 % 45 % Norway greatest contributor with a view to development contracts. The export market most important in relation to production contracts. Norge Skandinavia Europa Amerika Asia Øvrige USA, Spain, Greece, Turkey and Australia all have chosen the Penguin missile for their helicopters. Penguin Anti-Ship Missile Primary source of income Primary sources of income : Will increasingly come from the export market Development contracts for the Armed Forces: The Armed Forces' development projects have laid the foundation for today's missile activities. Offset agreements: Offset requirements from customers must be satisfied. Direct exports: Direct exports only 22

23 Status NSM What is the NSM? NSM (Naval Strike Missile) is an advanced, long-range cruise missile The missile's design and advanced maneuverability options make it possible to fly around and over land masses, and make it extremely difficult to stop A recognition system enables it to distinguish the target from other 'disruptions' Where do we stand? The project is in a technical evaluation phase planned completion early in 2007 The missile system's performance and functionality are verified against the contract specifications Two very successful test firings in July 2006 Development is on schedule. As scheduled, the missile will be ready for use upon delivery of the 4th new Nansen class frigate, as well as on the new Skjold Class MTBs. 23

24 JSF/JSM Integration Feasibility Study Phase II RNoAF and RAAF Initiative KONGSBERG 2620-Sep-06 August

25 Opportunities related to New Fighter craft ( ) Three candidates (JSF, Gripen and Eurofighter) remain Integration and sale of NSM missiles has the highest priority JSF is in Phase 2 of the integration study The sale of the operative NSM missiles to new customers is our potential source of income ( ) Opportunities for direct production participation and for indirect offsetting vary from one fighter craft alternative to the next JSF: Possibility for considerable production of aircraft components made of composite Gripen: Will open the door to Scandinavian specialisation Eurofighter: Assume broad-based possibilities, but nothing concrete at present KONGSBERG 2620-Sep-06 August

26 WORLD CLASS through people, technology and dedication WORLD CLASS through people, technology and dedication KONGSBERG 2620-Sep-06 August