THIS IS KONGSBERG

Paramount objectives

KONGSBERG's main objective is to promote the value of shareholders' assets over time by engaging in profitable, growth-oriented industrial development in a long-term perspective.

Growth is a key aspect of the Group's strategy. In 2006, KONGSBERG set a target for growth and profitability that implied a doubling of sales revenues in a three- to five-year perspective, based on the 2005 figures. KONGSBERG is well on its way to reaching that target. The Group's overall profitability target is an operating margin of 10 per cent and it is making strong headway here as well. The Group will reach its targets by focusing on knowledge-based products and services in selected market segments, and by engaging in ethical, environment-friendly and socially responsible operations.

Products

The Group is one of Norway's leading technology enterprises and has one of the country's largest industrial engineering communities.

KONGSBERG's range of products is characterised by a high technology content. The products must work under demanding conditions, from multibeam echosounders that survey the seabed at depths down to 11 000 metres, to control mechanisms for solar panels on space probes orbiting through outer space for several years at altitudes of 36 000 km. Consequently, the Group's reliability requirements are sky-high.

Markets

KONGSBERG has sales with good geographical distribution. Markets outside Norway account for an ever larger share of KONGSBERG's total operating revenues. In 1995, MNOK 807 (40 per cent) of KONGSBERG's operating revenues were generated abroad. In 2007, the figure was MNOK 5 889 (71 per cent).

Customer proximity is required to accommodate the needs of local markets and to be considered a local supplier. Business and growth abroad are expected to continue expanding.

Business areas

KONGSBERG's two business areas, Kongsberg Maritime and Kongsberg Defence & Aerospace, work in the same areas of technology. They both have their core competencies in signal processing, engineering cybernetics, software development services and systems integration. Both BAs deliver systems that help users take the right decisions.

Kongsberg Maritime

Kongsberg Maritime delivers products and systems for dynamic positioning, navigation and automation to merchant vessels and offshore installations, as well as for seabed surveying, surveillance, training simulators, and for fishing vessels and fisheries research. Important markets include countries with significant offshore and shipyard industries.

Kongsberg Maritime had operating revenues of NOK 4.9 billion and 2 510 employees in 2007. 73 per cent of its operating revenues originated outside Norway.

Kongsberg Defence & Aerospace

Kongsberg Defence & Aerospace is Norway's premier supplier of defence and aerospace-related systems. The Norwegian Armed Forces is the BAs most important customer. Solutions developed in collaboration with the Norwegian Armed Forces have proven competitive at the international level. In recent years, they have achieved a significant export share. All defence-related exports are contingent on the approval of the Norwegian authorities. One key element of the BA's market strategy is to form alliances with major international defence enterprises.

Kongsberg Defence & Aerospace delivers systems for command and RWS, weapons control and surveillance, as well as different types of communications solutions and missiles. Kongsberg Defence & Aerospace had operating revenues of NOK 3.3 billion and 1 595 employees in 2007. 73 per cent of its operating revenues originated outside Norway.

Expertise

KONGSBERG is a knowledge enterprise. Having the right expertise promotes added value and is decisive for the Group's competitiveness. Some 70 per cent of KONGSBERG's 4 205 employees have higher educations.

Shareholder policy

KONGSBERG's primary goal is to enhance shareholder value over time. KONGSBERG's corporate policy is that 30 per cent of the Group's annual profit from ordinary operations be returned to the owners in the form of dividends. A dividend of NOK 5.00 per share is proposed for 2007.

Ownership

Kongsberg Gruppen ASA is listed on the Oslo Stock Exchange. The State is the largest shareholder, with a 50.001 per cent interest. There were a total of 5 370 shareholders at 31 December 2007.