Annual accounts 2005 (preliminary)

Annual accounts 2005 (preliminary) WORLD CLASS through people, technology and dedication KONGSBERG February 14, 2006 1

General summary Improved performance EBIT margin up from 3.8% to 6.3% Delays in new orders for military communication products, resulting in a weaker Q4 than usual. Strong second half nonetheless Good markets for Offshore & Merchant Marine Sale of yachting activities - concentration on core activities Earnings per share of NOK 9.93. The Board proposes a dividend of NOK 2.15 per share Delays in orders Defence & Aerospace Remote weapons system (RWS) progressing well Strengthening of international activities Setting up operations in USA Acquisition of Gallium Software Inc. in Canada Acquisition of Norcontrol IT Offshore & Merchant Marine Continued profit growth EBIT margin over 10% in latter half of 2005 Good influx of new orders backlog up 29% in 2005 Reorganisation of Fisheries after the sale of Yachting activities KONGSBERG, February 26 August 14, 2006 2003 2

Agenda Financial status at Q4 2005 The business areas status and prospects for the future The group current situation Shareholders and investor relations Appendix KONGSBERG, February 26 August 14, 2006 2003 3

Financial status preliminary figures 2005 Income statement Operating revenues Operating expenses EBITDA Ordinary depreciation and write-downs EBIT Net financial items Associated companies after tax EBT Tax expense Ordinary earnings after tax Profit/loss from discontinued operation, net after tax Earnings after tax and discontinued operation Minority share Majority share Q4-05 1 448 (1 290) 158 (37) 121 (4) 2 119 (27) 92 74 166-166 Q4-04 1 894 (1 687) 207 (35) 172 (19) 11 164 (65) 99 (12) 87 (3) 90 At Q4-05 5 705 (5 188) 517 (157) 360 (57) 8 311 (96) 215 84 299 2 297 At Q4-04 5 814 (5 427) 387 (166) 221 (59) 17 179 (70) 109 9 118 (2) 120 Ordinary earnings per share (NOK) Earnings per share (NOK) 3.07 5.55 3.33 3.03 7.19 9.93 3.66 4.03 Earnings per share, diluted (NOK) 5.55 3.03 9.93 4.03 New orders () 1 219 1 439 5 597 5 323 KONGSBERG, February 26 August 14, 2006 2003 4

Historical trends in operating revenues and the EBIT By segment 3 300 3 100 2 900 2 700 2 500 2 300 2 100 1 900 1 700 1 500 Operating revenues 3) EBIT 1)2)3) 300 3084 3084 262 3013 3034 249 254 253 2963 242 250 2819 2704 2622 200 2564 178 2388 150 138 117 93 100 50 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005-50 -31 Offshore & Merchant Marine Defence & Aerospace High volume and better profitability for Offshore & Merchant Marine Military communications sales at Defence & Aerospace down by 363 1) 2001-2003 not adjusted for IFRS 2) 2004 includes one-off effects due to the delay in the NSM development programme (operating revenues 70 and EBIT 150) 3) As from 2004, Fishery is reported as part of Offshore & Merchant Marine KONGSBERG, February 26 August 14, 2006 2003 5

Financial status preliminary figures 2005 Balance sheet Fixed assets Intangible assets Other lang-term assets Total long-term assets Short-term assets Assets in discontinued operation Bank deposits and cash equivalents Total current assets Total assets 31 Dec. 05 IFRS 928 1 081 283 2 292 3 272-684 3 956 6 248 30 Sept. 05 IFRS 919 1 043 289 2 251 3 061 553 176 3 790 6 041 1 Jan. 05 IFRS 1 041 1 249 189 2 479 3 691-162 3 853 6 332 Paid-in capital Retained earnings Minority interests Total equity Long-term interest-bearing liabilities Other long-term liabilitys Total long-term liabilities Prepayments from customers Short-term interest-bearing liabilities Short-term liabilities in discontinued operation Other short-term liabilities Total short-term liabilities Total equity and liabilities 981 559 8 1 548 1 005 1 178 2 183 1 123 2-1 392 2 517 6 248 981 665 17 1 663 1 106 1 005 2 111 764 2 102 1 399 2 267 6 041 981 627 18 1 626 1 261 975 2 236 766 2-1 702 2 470 6 332 KONGSBERG, February 26 August 14, 2006 2003 6

Financial status preliminary figures 2005 Equity - IFRS 31 Dec. 05 1 Jan. 05 1 Jan. 04 Equity, opening balance 1 626 1 445 1 830 Unrecognised actuarial gains/losses, pensions (227) (58) (424) Earnings after tax 299 118 - Dividends (60) (39) 39 Fair value adjustment, financial instruments (96) 155 - Other items (translation difference, treasury shares, etc.) 6 5 - Total equity 1 548 1 626 1 445 KONGSBERG, February 26 August 14, 2006 2003 7

Net interest-bearing debt 1 400 1 200 1 000 800 600 400 Net interest-bearing debt 1164 1101 776 795 3,0 2,5 2,0 1,5 1,0 Net interest-bearing debt was reduced from 1 101 to 323 during the year The cash effect from the sale of yachting activities totalled 470 Good cash flow from operations Debt-equity ratio down to 0.6 200 323 0,5 0 2001 2002 2003 2004 2005 0,0 Net interest-bearing debt Debt/EBITDA KONGSBERG, February 26 August 14, 2006 2003 8

Financial status at Q4 2005 New orders and order backlog The order backlog at Defence & Aerospace was reduced while the backlog increased at Offshore & Merchant Marine. The Group's aggregate order backlog has remained stable in recent years 7000 6000 5000 4000 3000 2000 1000 0 Q1-02 Q3-02 Kongsberg Gruppen Q1-03 Q3-03 Q1-04 Q3-04 Q1-05 Q3-05 Order backlog New orders Offshore & Merchant Marine Defence & Aerospace 5000 5000 4000 4000 3000 3000 2000 2000 1000 1000 0 0 Q1-02 Q3-02 Q1-03 Q3-03 Q1-04 Q3-04 Q1-05 Q3-05 Q1-02 Q3-02 Q1-03 Q3-03 Q1-04 Q3-04 Q1-05 Q3-05 KONGSBERG, February 26 August 14, 2006 2003 9

Key figures Q4-05 Q4-04 At Q4-05 At Q4-04 EBIT margin: Group 8.4 % 9.1 % 6.3 % 3.8 % Offshore & Merchant Marine 10.0 % 9.2 % 8.6 % 8.0 % Defence & Aerospace 8.9 % 8.3 % 4.6 % -1.1 % Ordinary earnings per share NOK *) 3.07 3.33 7.19 3.66 Earnings per share NOK 5.55 3.03 9.93 4.03 Debt-gearing ratio (Net debt/ EBITDA) 0.6 2.5 Equity ratio 24.8 % 25.7 % Net interest-bearing debt () 323 1 101 Number of employees 3 372 4 017 *) before discontinued operation KONGSBERG, February 26 August 14, 2006 2003 10

Defence & Aerospace Volume trend 1 200 1 000 Quarterly operating revenues 3 000 New orders and operating revenues 800 2 000 600 400 200 0 627 483 508 1086 621 593 664 686 1 000 0 2 704 2 564 2 000 1 894 2004 2005 Q1 Q2 2004 Q3 Q4 Q1 Q2 Q3 2005 Operating revenues Delayed new orders for communications products brought a decline in operating revenues in Q4 2005 (compared with Q4 2004) Q4 Most important contracts and highlights Acquisitions (Gallium Software Inc., Norcontrol IT) Contracts for remote weapons systems (RWS) with Finland and Canada New orders Operating revenues Underlying trend in new orders Delayed new orders Steadily increasing interest in personnel protection products Order status Q4 Shortfall of Penguin orders, large backlog of orders for remote weapons systems (RWS) KONGSBERG, February 26 August 14, 2006 2003 12

Defence & Aerospace Performance trends 100 Quarterly EBIT Large-scale RWS deliveries 80 60 Good execution of projects at Naval Systems 40 20 0-20 -40 Q1-04 6 Q2-04 -149 Q3-04 22 Q4-04 90 Q1-05 -5-9 Q2-05 Q3-05 70 61 Q4-05 Postponed orders reduced the contribution margin for communications in Q4 2005 4.6% operating margin in 2005 KONGSBERG, February 26 August 14, 2006 2003 13

Defence & Aerospace Strategic initiatives Objective: To strengthen international operations Acquisition of Gallium Software Inc. (closing is imminent) Canadian software company that manufactures advanced graphics systems for maps Positioning relative to modern defence trends for processing large volumes of data in real time Main market among American defence customers Screen images from Gallium's chart system InterMAPhics Established the Kongsberg Defense Corporation Upgrading of remote weapons systems delivered to US 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 Objective: To establish Kongsberg as a key player within surveillance Acquisition of Norcontrol IT Leading enterprise within coastal and harbour surveillance Intensifying KONGSBERG's efforts within surveillance in civilian and military markets alike Remote Weapon Station (RWS) Objective: To achieve in-house cost objectives Reduce procurement costs by 50 from the 2005 level. KONGSBERG, February 26 August 14, 2006 2003 14

Offshore & Merchant Marine Volume trend 1 000 Quarterly operating revenues New orders and operating revenues 800 600 400 200 0 713 789 725 786 781 790 741 722 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 Operating revenues A high level of activity Periodic fluctuations dependent on contract types Most important contracts and highlights Continued sales to new gas carriers (LNG) and supply boats More rig contracts signed 4 000 3 000 2 000 1 000 0 3 566 3 219 3 013 3 034 2004 2005 New orders Operating revenues Underlying trend in new orders Continued strong influx of new orders in an active offshore market Order status December 2005 The backlog of orders continues to grow within vessel automation Trends still positive in other areas The figures have been adjusted for the sale of Yachting KONGSBERG, February 26 August 14, 2006 2003 15

Offshore & Merchant Marine Performance trends Quarterly EBIT 90 80 70 60 50 40 30 20 35 66 69 72 47 61 82 72 A high level of activity resulted in good figures in all divisions Fisheries, currently under restructuring, is an exception 8.6% operating margin in 2005 10 0 Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05 Q3-05 Q4-05 KONGSBERG, February 26 August 14, 2006 2003 16

Offshore & Merchant Marine Strategic initiatives Sale of yachting activities The activities have been sold to the investment fund Altor and will continue under the name Simrad Yachting KONGSBERG has retained a 10% stake The transfer will take place on a debtfree basis for 586 The sale implies a net gain for KONGSBERG of 74 after tax KONGSBERG will continue to own the fishery activities The goal is to continue to be a world leader in advanced fish finding and fisheries research The Group has retained Simrad's fishery activities. Simrad Fishery primarily addresses commercial customers. Facts about Simrad (2004) Fishery Sales: 280 Number of employees: 127 Yachting Sales: 635 Number of employees: 555 KONGSBERG, February 26 August 14, 2006 2003 17

Offshore & Merchant Marine Paramount objective and improvement measures Paramount objective Strengthen KONGSBERG's position as a supplier to the offshore industry and the oil and gas industry Strengthen the company's position as the leading supplier of vessel-based systems for positioning and surveying, navigation and automation Implement joint improvement projects related to Operating expenses Tied-up working capital Improvement measures Strengthening of operations in Asia Reorganisation of fishery activities KONGSBERG, February 26 August 14, 2006 2003 18

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 Has a recognition system enabling it to distinguish the target from other 'disruptions' What happened and where do we stand? Successful test firing, June 2005 Firing attempt in December 2005 aborted due to launch pad malfunction Now in a technical evaluation phase completion scheduled for 2006 The missile system's performance and functionalities are now being verified against the contract specifications Development on schedule. The missile will be ready for deployment on the 4th of the new Nansen class frigates and on the new missile torpedo boats, as originally planned KONGSBERG, February 26 August 14, 2006 2003 20

The offshore market great opportunities KONGSBERG's position in the market KONGSBERG is well positioned in: - Dynamic positioning - Integrated control systems - Safety systems - Hydroacoustics - Riser management systems Expected strong influx of new orders in 2006 with the effects on the profit predominantly in 2007 and 2008 Scarabeo 5, owned by Saipem, recently installed Kongsberg Maritime's Class 3 Dynamic Positioning System. The system was installed while the rig was in full operation Objectives and possibilities The market is buoyant. KONGSBERG aspires to expand in the offshore, oil and gas industry KONGSBERG, February 26 August 14, 2006 2003 21

Fully loaded with equipment from KONGSBERG Facts: The Norwegian Armed Forces has ordered five new Fridtjof Nansen Class frigates The delivery is part of the largest investment project for the Armed Forces since World War II KONGSBERG is a major supplier to the project Kongsberg Maritime is delivering Kongsberg Defence & Aerospace is delivering The vessel's navigation system - Bridge control systems - Integrated Navigation System - NavalArpaSystem The vessel's sonar system - Naval sensors Command and control systems for subsea, surface and navigation systems, as well as the vessel's main weapon - IDG illumination - Anti submarine warfare - Anti surface warfare - NSM KONGSBERG, February 26 August 14, 2006 2003 22

Prospects for the future KONGSBERG's maritime markets are booming Growing orders in the offshore market, especially rigs High capacity utilisation at the shipyards mean delivery times are longer than usual KONGSBERG expects a strong influx of new orders in the above-mentioned markets, although a large part of the new orders in 2005 and 2006 will be delivered in 2007 and 2008 More new orders are expected for Defence & Aerospace in 2006 All in all, operating revenues and the operating margin are expected to be somewhat better in 2006 than in 2005 KONGSBERG, February 26 August 14, 2006 2003 23

Ownership structure 20 largest shareholders (at 13 Feb. 2006) Shareholders # of shares Stake 2005 1Staten v/nærings- og handelsdeparteme 15 000 400 50,00 % - 2 Folketrygdfondet 2 666 860 8,89 % 1,21 % 3 Arendals Fossekompani ASA 2 055 822 6,85 % 2,79 % 4 Odin Norge 1 513 300 5,04 % 1,36 % 5 MP Pensjon 1 203 200 4,01 % - Total for the 5 largest shareholders 22 439 582 74,80 % 6 Skagen Vekst 945 100 3,15 % -0,05 % 7 Odin Norden 930 037 3,10 % 2,15 % 8 Ferd Invest AS 650 000 2,17 % - 9 Odin Offshore 385 000 1,28 % 0,65 % 10 Vicama AS 202 753 0,68 % New 11 Storebrand Livsforsikring 146 939 0,49 % New 12 Danske Fund Norge Vekst 135 800 0,45 % -0,17 % 13 Mustad Industrier 120 000 0,40 % -0,03 % 14 Vital Forsikring 119 957 0,40 % -0,26 % 15 Pactum AS 100 000 0,33 % New 16 Fondsavanse AS 100 000 0,33 % - 17 Trondheim Kommune 100 000 0,33 % - 18 Sparebanken Rogaland 99 524 0,33 % -0,18 % 19 Danske Fund Norge 1 92 000 0,31 % New 20 Nordea Avkastning 86 336 0,29 % New Total for the 20 largest shareholders 26 653 028 88,8 % Total number of shares 30 000 000 100,0 % Stake 1 1 000 In foreign hands 1 % Private individuals 5 % 1 000 10 000 10 000 100 000 100 000 1 000 000 1 000 000 < Distribution of shareholders Org./ Businesses 22 % No. of shareholders 3 250 417 56 9 5 Norwegian State 50 % % of shareholders Securities funds 16 % Insurance/ pension funds 6 % 86.97% 11.16% 1.50% 0.24% 0.13% % of total no. of shares 2.75% 3.31% 6.99% 12.15% 74.80% KONGSBERG, February 26 August 14, 2006 2003 25

Share price and liquidity Share price performance Liquidity trend GRI index 1) 170 Spread 8 % Shares traded (1 000) 700 150 130 110 90 OSE Industri OSEBX KONGSBERG 7 % 6 % 5 % 4 % 3 % 2 % 1 % Spread (15-day moving average) Number of shares traded (Daily) 600 500 400 300 200 100 70 0 % Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0 50 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2005 2005 The exchange rate of the share ended the year at NOK 124, up 25.3% since year-end 2004. Low liquidity and a high spread lead to high transaction costs In 2006, KONGSBERG will enhance its communication with the market. KONGSBERG aspires to make the values, potential and risks in the share more visible 1) Comparisons of KOG share price relative to OSEBX and the Industrial Index. Price equal to 100 on 1 January 2005 KONGSBERG, February 26 August 14, 2006 2003 26

KONGSBERG focuses on central product areas in the maritime and defence sector x Command and weapons control systems Different types of command and control systems for land-, air- and sea-based defence Defence & Aerospace x Offshore & Merchant Marine Dynamic systems Communications solutions Anti-ship missiles Surveillance Dynamic positioning systems Navigation systems Automation & surveillance systems Process automation Hydroacoustics Remote weapons systems for armoured personnel carriers Tactical radio and communications systems Develop and manufacture anti-ship missiles. The main products are currently the Penguin and NSM Systems for the surveillance of harbours and airspace Steering systems that keep a vessel in the same position under demanding conditions Systems for navigation and the identification of vessels Systems for monitoring and control of engines, cargo and propulsion Systems for control and coordination of different operations on oil platforms or prod. ships High-technology products using sound waves through water for seabed surveying, subsea communication, positioning and monitoring KONGSBERG, February 26 August 14, 2006 2003 28

One of Norway's largest engineering communities KONGSBERG employees 1988 KONGSBERG employees 2005 Other Graduate engineers 10 % 8 % 35 % Engineers Graduate engineers 25 % Engineers 47 % 16 % 47 % Other 12 % Operators Number of employees: 2 044 43% engineers and graduate engineers Sales per employee: 0.67 1) Operators Number of employees: 3 372 72% engineers and graduate engineers Sales per employee: 1.69 1) In 1988, then Norsk Forsvarsteknologi AS earned operating revenues of 1 371 KONGSBERG, February 26 August 14, 2006 2003 29

Historical development of operating revenues and EBIT 8 000 Operating revenues 2) EBIT 1)2) 600 7 000 6 000 5 000 4 000 3 000 3023 3674 4404 4412 5296 6176 6980 6651 5814 5705 500 400 300 200 173 192 278 249 287 437 485 383 221 360 2 000 1 000 100 0 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1) 2001-2003 not adjusted for IFRS 2) 2004 and 2005 have been adjusted for the sale of yachting activities. 2004 includes one-off effects due to the delay in the NSM development programme (operating revenues 70 and EBIT 150) KONGSBERG, February 26 August 14, 2006 2003 30

Financial status at Q4 2005 Operating revenues and EBIT per quarter - adjusted for Yachting 2 200 Operating revenues 220 EBIT 1 894 185 172 1 650 1 358 1 293 1 269 1 428 1 401 1 428 1 448 150 115 100 149 121 80 1 100 45 40 41 49 10 550-25 -60 0-95 -91 Q1 Q2 1) Q3 Q4 Q1 Q2 Q3 Q4 2004 2005 Q1 Q3 Q4 Q1 Q2 Q3 Q4 Q2 1) 2004 2005 All figures have been adjusted for the sale of Yachting activities Q2 2004 includes one-off effects due to the delay in the NSM development programme ( 150 in revenues and 150 in EBITA) KONGSBERG, February 26 August 14, 2006 2003 31

Currency hedges at 31 Dec. 2005 1 200 800 400 0 1 200 Offshore & Merchant Marine 2006 2007 2008 2009 Hedging USD Hedging EUR Defence & Aerospace Substantial foreign currency exposure more than 70% of sales outside Norway Procurements from abroad and own activities abroad moderate net exposure All contractual foreign currency flows are 100% hedged through forward contracts Other anticipated currency flows are hedged for up to 5 years within given percentage parameters Average hedging exchange rates are reflected in price trends over the past 2-3 years High hedging ratio for 2006 800 400 0 2006 2007 2008 2009 Hedging USD Hedging EUR KONGSBERG, February 26 August 14, 2006 2003 32

Financial calendar and investor relations contacts Financial calendar 2006 Publication of the quarterly figures Q1 results: 9 May Q2 results: 9 August Q3 results: 23 October Presentations Q1 results: 10 May Q2 results: 10 August Q3 results: 24 October Annual General Meeting 9 May Investor relations contacts Arne Solberg, Chief Financial Officer (CFO) Telephone: +47 322 89575 E-mail: arne.solberg@kongsberg.com Jan Erik Hoff Investor Relations Manager Telephone: +47 322 88330/+47 991 11916 E-mail: jan.erik.hoff@kongsberg.com Kongsberg Gruppen ASA Telephone: +47 322 88200 E-mail: office@kongsberg.com For more information, see: http://www.kongsberg.com/eng/kog/investor_information/ KONGSBERG, February 26 August 14, 2006 2003 33

WORLD CLASS through people, technology and dedication KONGSBERG February 14, 2006 34