FINANCIAL AFFAIRS AND ADDED VALUE INTRODUCTION
- Introduction
- Financial affairs and added value
- Corporate social responsibility
- The environment
- The Global Reporting Initiative index (GRI)
KONGSBERG aspires to strike a good balance between financial results and corporate social and environmental responsibility.
KONGSBERG creates values 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 created through 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 in all our global activities.
The tables below show 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 | 2007 | 2006 | 2005 |
| Operating revenues (excluding non-recurring items) | 8 306 | 6 720 | 5 791 |
| Payroll and social security expenses | 1 338 | 1 206 | 1 060 |
| Payments to subcontractors | 6 968 | 3 400 | 2 300 |
| Interest to lenders | 59 | 51 | 54 |
| Support for organisations and public utility causes | 1,9 | 1,8 | 1,6 |
| Earnings before tax and dividends | 1 279 | 390 | 314 |
| Taxes | 293 | 138 | 99 |
| Profit for the year | 986 | 252 | 262 |
| Dividends paid to the shareholders | 150 | 75 | 65 |
| Retained earnings | 836 | 177 | 197 |
Transparency International
KONGSBERG has joined Transparency International (TI), a non-profit, nonpartisan
organisation intended to fight corruption at the national and international
levels. The organisation was established in 1993 and is based in Berlin.
Through national chapters in 90 countries, government authorities are encouraged
to implement efficient legislation and policies against corruption. Along
with international organisations, TI aspires to ensure transparency in
international business transactions.
TI also strives to increase the general public's awareness of corruption,
and the organisation's corruption indices are recognised as being systematic
and verifiable. Membership in TI is open to everyone who supports
initiatives to reduce corruption.
Transparency International-Norway (TI-Norway) is the Norwegian chapter of
Transparency International. Founded in 1999, TI-Norway has the same paramount
objectives as the rest of the organisation. The Norwegian chapter is funded
by membership dues, support from the State and support from business
and industry.
Consolidated operating revenues, by geographical area
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| Amounts in MNOK | 2007 | 2006 | 2005 | 2004 | ||||
| Norway | 2 417 | 29% | 1 892 | 28% | 1 920 | 33% | 1 820 | 31% |
| Rest of Europe | 1 981 | 24% | 1 764 | 26% | 1 402 | 24% | 1 854 | 31% |
| America | 2 038 | 25% | 1 512 | 23% | 1 180 | 20% | 1 155 | 20% |
| Asia | 1 762 | 21% | 1 415 | 21% | 1 181 | 20% | 990 | 17% |
| Other | 108 | 1% | 137 | 2% | 108 | 2% | 82 | 1% |
| Total | 8 306 | 100% | 6 720 | 100% | 5 791 | 100% | 5 901 | 100% |
Payroll and social security expenses
In 2007, payroll and social security expenses aggregated NOK 2.8 billion, up NOK 0.5 billion compared with 2006. Payroll and social security expenses accounted for 38 per cent of total operating expenses, which is on a par with the figures from previous years.
Procurement of goods and services
KONGSBERG spent approx. NOK 7.0 billion on procurements in 2007. This was an increase of about 100 per cent from 2006. The procurements are distributed among approx. 3 000 suppliers, and approx. 75 per cent of the orders are placed with or through Norwegian companies, even though the products are largely manufactured abroad. Procurements from outside Norway accounted for about 70 per cent. The Group aspires to buy more from local suppliers.
Taxes
The Group's total taxes came to MNOK 293 for 2007. This is an increase of about 110 per cent from the previous year. Tax expenses by geographical area:
| Amounts in MNOK | 2007 | 2006 | 2005 |
| Norway | 261 | 99 | 91 |
| Rest of Europe | 12 | 9 | 1 |
| North America | 10 | 4 | 3 |
| Asia | 10 | 26 | 4 |
| Total | 293 | 138 | 99 |
Dividends
The Board of Directors proposes to the AGM a dividend for 2007 of NOK 5.00 per share. If the proposal is adopted at the AGM on 24 April 2008, dividends will be paid as follows, provided the ownership structure at 28 February remains unchanged:
| Amounts in MNOK | 2007 | 2006 | 2005 |
| The Norwegian state | 75.0 | 37.5 | 30.2 |
| Organisations/enterprises | 36.3 | 17.25 | 14.2 |
| Securities funds | 16.5 | 0.9 | 10.3 |
| Insurance/pension funds | 9.9 | 4.5 | 3.8 |
| Private individuals | 6.6 | 3.75 | 3.2 |
| Foreign owners | 5.7 | 3.0 | 0.6 |
| Total | 150.0 | 75 | 64.5 |
Climate change
The UN Intergovernmental Panel on Climate Change (IPCC) has never been more certain that climatic change is primarily ascribable to man-made emissions of greenhouse gases. According to researchers on the IPCC, we have only seen the tip of the climate change iceberg thus far. In the wake of the UN report, new research indicates that the changes may be coming more quickly than previously anticipatedt.
In view of the serious global challenges described in the UN's 2007 report, we must consider the consequences for KONGSBERG. As a first step, the Group has included the climate in its environment-related objectives when it comes to the Group's internal conditions as well as in connection with product development.
Tax rebate
KONGSBERG received some MNOK 2 in tax refunds from the Norwegian tax authorities. The tax refund is related to tax schemes associated with development projects.