Nordic Credit Rating (NCR) has affirmed its 'A-' long-term issuer rating on Norway-based defence technology supplier Kongsberg Gruppen ASA. The outlook is stable. The 'N2' short-term issuer rating and the 'A-' senior unsecured issue rating have also been affirmed. The rating was removed from watch developing, where it was placed on 31 Oct. 2025 following announcement of the plan to separate its Maritime division into a standalone company.
Rating rationale
The affirmation reflects greater clarity on the financial impact of Kongsberg Gruppen's separation of its Maritime division into a standalone company. Existing external debt and most of the company's significant cash position will remain with Kongsberg Gruppen, supporting a continued net cash position, which we expect to persist through the 2026–2028 forecast period. The company ended 2025, with EBITDA from remaining operations up 41% to NOK 5.6bn (EBITDA margin near 18%) and FFO of NOK 5.1bn.
The separation will result in the loss of nearly half of revenues and 37% of Kongsberg Gruppen's previous EBITDA, significantly reducing scale. Diversification will also decline, as Kongsberg Maritime is a global player with broad geographic reach and a diverse customer base. The split will further weaken diversification, as the two distinct operations (maritime and defence and aerospace) have historically shown low cyclical correlation. The remaining Kongsberg business retains a strong niche position in an industry currently experiencing robust demand. However, it is small compared with most peers, though it benefits from high local importance and support from its controlling owner, the Kingdom of Norway.
We have revised our view of operating efficiency to account for increased investment requirements needed to meet strong market demand, which we expect will weigh on cash flow over the 2025-2028 period.
Figure 1. Proforma credit metrics, 2023–2028e
| NOKm | 2023* | 2024* | 2025 | 2026e | 2027e | 2028e |
|---|---|---|---|---|---|---|
| Revenues | 40,617 | 48,872 | 31,562 | 37,243 | 42,830 | 46,256 |
| EBITDA | 5,724 | 7,743 | 5,608 | 6,701 | 7,741 | 8,486 |
| EBITDA margin (%) | 14.1 | 15.8 | 17.8 | 18.0 | 18.1 | 18.3 |
| FFO | 4,709 | 6,082 | 5,073 | 5,313 | 6,248 | 6,867 |
| Net debt | 305 | -7,991 | -9,054 | -4,247 | -825 | -377 |
| Total assets | 53,222 | 69,414 | 78,202 | 61,501 | 65,747 | 70,000 |
| Net debt/EBITDA (x) | 0.1 | -1.0 | -1.6 | -0.6 | -0.1 | 0.0 |
| EBITDA/net interest (x) | 26.1 | 46.4 | -200.3 | 26.9 | 38.9 | 42.6 |
| FFO/net debt (%) | 1542 | n.m. | n.m. | n.m. | n.m. | n.m. |
| FOCF/net debt (%) | 1213 | n.m. | n.m. | n.m. | n.m. | n.m. |
Source: company and NCR. e–estimate. FFO–funds from operations. FOCF–free operating cash flow. All metrics adjusted in line with NCR methodology. *2023 and 2024 refer to earlier Kongsberg Gruppen including Maritime.
We expect the strong relationship with Norway to continue, both as majority owner (50.004%) and as the company's largest customer, as Norway and most European countries increase defence spending in response to regional security concerns. We also note a shift in investor sentiment towards the defence sector, with more funds expanding their mandates to include these companies. In addition, the EU Commission recently updated its definition of controversial weapons to align with EU regulations for sustainable investments, which is expected to allow more defence companies to be included by fund managers and banks. As a result, we no longer believe the company has a negative ESG profile.
Stable outlook
The stable outlook reflects our expectation of continued strong demand for defence products and advanced technologies. We also anticipate solid growth in the smaller Discovery business, which accounts for approximately 15% of Kongsberg Gruppen and benefits from increasing demand from commercial, public sector and defence customers. We expect credit metrics to remain strong with net debt/EBITDA maintained below 0x over 2026-2028, supported by the company's net cash position during a period of elevated capital expenditure and sustained margins. Our assessment also incorporates a financial policy that permits additional debt and generous owner distributions.
We could raise the rating if the company achieves greater scale and diversification, and if operating efficiency improves from lower capex and an EBITDA margin approaching 20% together with continued strong cash flow metrics.
We could lower the rating if economic conditions worsen, resulting in an EBITDA margin below 12% or if financial leverage increases, with net debt/EBITDA above 1.0x, both on a sustained basis. The rating could also be lowered if investor aversion to defence-related funding increases or if there is evidence of reduced government support.
| Rating list | To | From |
|---|---|---|
| Long-term issuer credit rating: | A- | A- |
| Outlook: | Stable | |
| Watch: | Watch Developing | |
| Short-term issuer credit rating: | N2 | N2 |
| Senior unsecured issue rating: | A- | A- |
Contacts:
Elisabeth Adebäck, analyst, +46700442775, elisabeth.adeback@nordiccreditrating.com
Geir Kristiansen, analyst, +4790784593, geir.kristiansen@nordiccreditrating.com
Sean Cotten, chief rating officer, +46735600337, sean.cotten@nordiccreditrating.com
The methodology documents used for this rating are NCR's Corporate Rating Methodology published on 8 May 2023, NCR's Rating Principles published on 14 Feb. 2024 and NCR's Group and Government Support Rating Methodology published on 14 Feb. 2024. For the full regulatory disclaimer please see the rating report.