Kongsberg Business Report FY2009

Business Highlights

Financial Overview

(in million euros)
  FY2009 FY2008 Rate of Change
Sales 622.8 905.9 (31.3) -
Operating (loss)/profit (46.3) (1.1) -
Operating revenues by business segment
Automotive Systems 385.4 528.6 (27.1) 1)
Commercial Vehicle Systems 147.9 267.7 (44.8) 2)

Automotive Systems
-The decline in vehicle sales during the second half of 2008 and through 2009 represented the biggest drop in vehicle sales ever. The 2008 to 2009 year over year sales drop per region for the division was 37% in North America and 30% in the EU; however, the Asian market held up quite well. Combined with the launch of new orders, a year over year increase of 30% was achieved.
-2009 also saw a major shift in the vehicle mix, with a significant drop in SUV and premium car sales in favor of more environment friendly small cars. After the acquisition of Global Motion Systems (GMS) in late 2007, the Company achieved a better balance between small cars and premium cars. Some of the small cars even increased in sales volume, partly driven by national incentives, which compensated to some extent for the drop in the premium segment. Overall, the shift in the vehicle mix still caused the Company a more significant sales reduction than what could be expected based on the general market developments.
-During the second half of 2009, the division began to see signs of market recovery in the customer production schedules. The “cash for clunkers”program in the US also helped clear out vehicle inventories at US dealers and boosted vehicle production.

Commercial Vehicle Systems (CVS)
-2009 has been a challenging year, with a 45% drop in revenue vs. 2008 due to the effects of the financial crisis. The CVS market segments experienced sales declines from 20 to 95% in 2009. The biggest hit was taken by trailer producers in Europe. The main focus of CVS customers has been reducing production capacity and inventory levels, which impacted CVS sales during 2009. Sales started to pick up slightly at the end of 2009.


Automotive Systems
-New products were launched in several product areas and the division succeeded in winning new contracts. Highlights included new contracts on advanced foldable head restraints in the North America, and a contract for a pneumatic lumbar support system on a major OEM platform in the high volume mid-size car segment. The pneumatic lumbar contract represents a significant breakthrough for this technology in the North America. Until now these systems had mainly been a product for EU customers.
On the European market, the division launched a modular comfort seat offering both pneumatic lumbar support and adaptive massage functions. Customer projects are already initiated and the target is to receive the first firm orders in 2010. A major contract was also secured in Europe for shift towers, including start/stop functionality to reduce fuel consumption.

Commercial Vehicle Systems

-New business was won within all main product areas. Highlights include new contracts for fuel systems and the second biggest contract ever for chassis and axle suspension products.


In Automotive Systems
-To compensate for the effect of a declining top line, the restructuring efforts initiated in 2008 continued in 2009. The Automotive plants in Van Wert, Ohio and Haysville, Kansas were completely closed and the production lines were moved to the Mexican plants. Mexico is now the country with the highest number of the Company's employees, with nearly 2,300 at year end.

In Commercial Vehicle Systems
-The restructuring initiatives in 2009 are fully completed and will be in place going forward. The main initiative was the closure of the production site in Enschede, The Netherlands. The products produced here were transferred to Epila in Spain, a move that was finalized in November 2009.


R&D Structure

-R&D facility is located in Kongsberg, Norway.

Product Development

-In June 2009, the Company announced to team with two other Norwegian companies to jointly develop driveline products for electric- and hybrid vehicles. The partners are Kongsberg Devotek, a developer of automotive products, and Kongsberg Innovation, a specialist in the field of renewable energy. (From a press release on Jun. 26, 2009)

Investment Activities

Capital Expenditures

(in million euros)
  FY2009 FY2008
Automotive Systems 7.8 18.7
Commercial Vehicle Systems 4.6 14.7
Power Products Systems 0.4 3.8
Eliminations 0.0 2.1
Total 12.8 39.3