Turning the corner on the road to growth
Hans Peter Havdal, President & CEO
In 2015 Kongsberg Automotive began turning the corner on the road to growth. During the year we secured a record level of new business wins with an annualized value of EUR319 million. Our focus on developing tomorrow’s world-class products for the global vehicle industry remains strong, while we also continue to optimize our product portfolio.
Creating growth is important for Kongsberg Automotive to maintain long-term profitability and critical mass as our customers require strong global suppliers, and key industry trends – such as autonomous cars, improved efficiency, comfort and connectivity – drive a faster pace of innovation. Indeed, as the technology content of current and future vehicles is soaring, new systems, solutions and services are becoming ever more important. Increased effort in R&D is therefore key to introducing new technology and strengthening our position with our customers.
To remain a valuable partner to our customers we are transitioning Kongsberg Automotive to be able to capture future growth opportunities in new and existing market segments. This involves directing R&D spend and investments to higher-growth segments, whilst optimizing our current conventional product range to help fund these efforts.
Following the global financial crises, Kongsberg Automotive focused on restructuring its business, repaying debt and stepping up efforts to renew the product portfolio. Without these actions, we could have improved our margins short-term, but with a clear sacrifice to long-term growth opportunities. Shortcuts seldom pay off in the automotive industry. Instead, Kongsberg Automotive has focused on building a platform for growth, and at our Capital Markets Day in December we outlined our strategy which involves:
- Strategic growth focus on: Seat Comfort, Efficient Powertrains & Advanced Fluid Handling
- Optimizing the conventional product portfolio to streamline our offering
- Growing in emerging markets with our manual transmission portfolio
- Securing a robust financial platform with dividend potential in the medium term
With commercial success in several areas the growth outlook is encouraging. The proportion of new business wins related to growth platforms increased from about 35% last year to 54% in 2015. Kongsberg Automotive has won significant contracts for AMT (Automated Manual Transmissions), Shift-by-Wire, On Board Charging systems for plug-in hybrids, innovative Seat Comfort solutions and air brake Couplings as a result of our increased efforts. We will continue to work hard to be at the forefront of innovation and industry developments to remain a true technology partner for our customers.
We are convinced our strategy is consistent with maximizing long-term shareholder value. It sets a framework where we focus on core products to match customer needs and future technology trends while building a platform for financial strength with strong dividend potential.
2016 will be a year with a laser sharp focus on getting our new product families ready for production in 2017. This involves hard work by our employees, but also strong support from our valued suppliers. I look forward to leading this journey together with the very committed people in Kongsberg Automotive!
HANS PETER HAVDAL
PRESIDENT & CEO
We are convinced our strategy is consistent with maximizing long-term shareholder value. It sets a framework where we focus on core products to match customer needs and future technology trends while building a platform for financial strength with a strong dividend potential