FINANCES AND ADDED VALUE
- Introduction
- Finances and Added Value
- Corporate Social Responsibility
- The Environment
- The Global Reporting Index (GRI)
KONGSBERG aspires to achieve a good balance between financial results and corporate social and environmental responsibility. We will do this through strong profitability, growth, efficient organisation and ethically, environmentally and socially responsible operations.
Our operations add value in the areas and countries in which we operate. This is done directly by paying dividends to our owners and wages to our employees, and indirectly by purchasing goods and services from suppliers. Moreover, value is added by virtue of our emphasis on research and development.
KONGSBERG's operations affect a large number of stakeholders. Many of them are direct or indirect participants in the Group's value added. Added value is reflected by all our global activities.
The following list shows the cash flows generated by our operations and a breakdown of values, by our main stakeholders.
Value added and distribution of profit
| Amounts in MNOK | 2006 | 2005 |
| Operating revenues | 6 720 | 5 791 |
| Payroll and social security expenses | 2 326 | 2 043 |
| Payments to subcontractors | 3 500 | 2 300 |
| Interest to lenders | 51 | 54 |
| Support for organisations and public utility causes | 1.8 | 1.6 |
| Pre-tax operating profit and yield | 390 | 314 |
| Tax expense | 138 | 99 |
| Profit for the year | 252 | 262 |
| Dividends paid to the shareholders | 75 | 65 |
| Retained earnings | 177 | 19 |
Operating revenues
Consolidated operating revenues, by geographical area:
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| Amounts in MNOK | 2006 | 2005 | 2004 | |||
| Norway | 1 892 | 28% | 1 920 | 33% | 1 820 | 31% |
| Rest of Europe | 1 764 | 26% | 1 402 | 24% | 1 854 | 31% |
| America | 1 512 | 23% | 1 180 | 20% | 1 155 | 20% |
| Asia | 1 415 | 21% | 1 181 | 20% | 990 | 17% |
| Other | 137 | 2% | 108 | 2% | 82 | 1% |
| Total | 6 720 | 100% | 5 791 | 100% | 5 901 | 100% |
Based on the above, we see that a growing percentage of our operating revenues is coming from North America and Asia. This trend is expected to continue.
Payroll and social security expenses
In 2006, payroll and social security expenses aggregated NOK 2.3 billion. That was an increase of MNOK 0.3 compared with 2005. Payroll and social security expenses account for 38 per cent of the total operating expenses, which is similar to the figures from 2005.
Procurement of goods and services
KONGSBERG spent approx. NOK 3.5 billion on procurements in 2006. That was an increase of NOK 1.2 billion from 2005. The procurements are distributed among approx. 3 000 suppliers, and approx. 75 per cent of them are with or through Norwegian companies. Nonetheless, the products are largely manufactured abroad. Procurements from outside Norway accounted for about 30 per cent in 2006. One goal is to buy more from local suppliers.
Tax expense
The Group's total taxes for 2006 came to MNOK 138. This is an increase of about 39 per cent compared with the previous year. Costs by geographical area:
| Amounts in MNOK | 2006 | 2005 |
| Norway | 99 | 91 |
| Rest of Europe | 9 | 1 |
| North America | 4 | 3 |
| Asia | 26 | 4 |
| Total | 138 | 99 |
Dividends
The Board of Directors proposes to the AGM a dividend for 2006 of NOK 2.50 per share. If the proposal is adopted at the AGM on 8 May 2007, dividends will be paid as follows, provided the ownership structure at 1 March does not change:
| Amounts in MNOK | 2006 | 2005 |
| The Norwegian state | 37.5 | 30.2 |
| Organisations/enterprises | 17.2 | 14.2 |
| Securities funds | 9.0 | 10.3 |
| Insurance/pension funds | 4.5 | 3.8 |
| Private individuals | 3.8 | 3.2 |
| Foreign owners | 3.0 | 0.6 |
| A total of | 75.0 | 64.5 |
Climatic changes
The UN's Intergovernmental Panel on Climate Change (IPCC) has never been more certain that climatic changes are primarily ascribable to man-made emissions of greenhouse gases. According to researchers on the climate panel, thus far we have seen only the very beginning of climatic changes.
Climate-related challenges have not previously figured on the Group's agenda.
Given the major challenges facing the world as described in the UN's fourth report on the earth's climate situation, the consequences for KONGSBERG will be considered. In 2007, a project will be organised to evaluate climate-related risks and possibilities for KONGSBERG in the short and the long term.
This report presents KONGSBERG's direct CO2 accounts for the first time. Read more about this on the section "Environmental Accounts – CO2 Accounting".
Through the Group's aerospace activities, KONGSBERG contributes to conveying satellites into outer space, downloading data from the satellites to Earth and supplying virtually real-time satellite data and services to its customers. The satellites provide important information for studying the global environment and monitoring environmental changes. Read more about this on the section "KONGSBERG helps provide faster, better information on climate change".
Financial support
KONGSBERG receives no financial support from the government authorities.
