Creating a Nordic defence giant

April/18/2016
  • CURRENT

Creating a Nordic defence giant

In March KONGSBERG announced the procurement of 49.9 per cent of the shares in the Finnish defence supplier Patria Oyj, which owns half of the Norwegian Nammo. 

KONGSBERG, Patria and Nammo have, as a group, both complimentary and world-leading products, as well as key geographical areas that strengthen each other.

“This, combined with Patria’s strong position in Finland and KONGSBERG’s strong global alliances and position in Norway, makes us considerably stronger in a growing global defence market,” says CEO Walter Qvam.

The European defence industry is in a state of change. Large companies are combining their efforts and forming strong amalgamations. Now KONGSBERG, Patria and Nammo are building a joint platform to address this development.

“We see that small companies from small countries experience difficulties when they meet larger groups of defence companies. When we join together, our forces will be able to compete on and win European procurement programmes that each of us individually would have had problems positioning ourselves against,” says CEO Walter Qvam.


Patria is Finland’s leading defence supplier and it has a broad and modern product portfolio. Photo: Patria.

This view is shared by Eero Heliövaara, Director General, Ownership steering department in Finland.

“It is very important that the defence industry as a whole is consolidated, also in the Nordic countries. Patria is, in this context, too small and we must find new markets and collaboration partners. As such, KONGSBERG is the perfect match for Patria,” says Heliövaara.

- Will be a hands-on owner

Patria has approx. 2,800 employees and in 2015 had a turnover of NOK 3.8 billion. The company is Finland’s leading defence supplier and it has a broad and modern product portfolio. Nammo has approx. 2,200 employees and had a turnover of NOK 3.8 billion in 2015. The company develops and manufactures high technological products within ammunition and rocket engines for military and civilian purposes.

“We would like to be an active owner in Patria. We have plans for how we shall put our products together and create synergies by combining competence. We are entering a situation where we will put work groups together and work together on specific product areas between Patria and KONGSBERG in order to find new solutions and market these internationally,” says CEO Walter Qvam.



The group will be a larger and stronger supplier to the Norwegian and Finnish defence with more than 7,000 employees and a total gross turnover in 2015 of NOK 13.4 billion. KONGSBERG, Patria and Nammo already cooperate closely on, amongst other things, air protection and missiles.

“This cooperation will be further strengthened. Important possibilities for cooperation within other areas will also open up, such as maintenance and aircraft parts,” says Walter Qvam.

Nordic defence cooperation

KONGSBERG and Patria are both companies where the Norwegian and Finnish governments own the majority of the shares. The Norwegian government and Patria each have a 50 per cent ownership share in Nammo.

“KONGSBERG has succeeded in becoming a world- leader within a number of technologies. The consensus between the company and Finnish government is that this will create many possibilities for both KONGSBERG and Patria. This will strengthen the basis for further collaboration and further profitable growth for both parties. The agreement will strengthen the Nordic defence industry’s competitiveness in the European and international defence market,” says Minister of Industry Monica Mæland (H).


Patria takes care of the helicopter maintenance needs of the Finnish, Swedish and Norwegian Defence Forces. Photo: Matti Immonen.

“Norway and Finland already have good cooperation for defence and security policy in several areas. The agreement will further strengthen this for the benefit of both countries. From the Norwegian defence’s perspecive, we will take advantage of this agreement for both parties’ benefit in accordance with the revised bilateral cooperation agreement for defence assets and industrial cooperation from July 2015,” says Minister of Defence, Ine Eriksen Søreide (H).

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Patria

  • Patria is Finland’s leading defence supplier.
  • It also owns 50 per cent of shares in Norwegian Nammo.

Financial key figures Patria 2015* (MEUR, 100%):

  • Operating income: 427.7
  • EBITDA: 60.8
  • Annual result: 38.4
  • Property: 475.8
  • Debt: 261.9
  • Equity: 213.9

*Provisional figures

Contact

Ove Ronny Haraldsen

Corporate Communication Manager

MOBILE:
+47 99 15 59 20
E-MAIL:
ove.ronny.haraldsen@kongsberg.com

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