Company presentation Baard Schumann, CEO Sverre Molvik, CFO June 2015
Selvaag Bolig is a residential developer that provides targeted housing concepts to suit aspirations of different households in and around the main cities: Oslo , Stavanger , Bergen and Trondheim 2
Norway’s leading homebuilder ! Sales in 2014: 886 units ! Sales in Q1 2015: 308 units Trondheim 349 units ! Industrial approach to homebuilding ! Land bank for 11 000 Bergen homes 156 units Greater-Oslo 8 362 units ! Housing concepts Stavanger Stockholm tailored to house buyer 1 813 units 103 units requirements Other 255 units Note: The numbers represent the size of the land portfolio as at 31. March 2015. All numbers are adjusted for Selvaag Bolig’s share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) 155 units at Tromsø (Troms county) and 100 units at Alfaz Del Sol (Spain), 3) The residential property development portfolio consists of land plots that are to be paid for when planning permission is received. These have a development potential of ~4 000 residential units, whereof the company has purchasing obligations for ~3 550 and purchasing options for ~550 units.
Housing for all Housing for all The Gullhaug House 2013 50 000 homes Pluss: Housing with completed extra service 2012 Modular construction 2011 Listed at Oslo Børs 2003 2000 Defjned housing concepts 1999 Løren district Terraced 1988 buildings «It is better to build 30 000 homes for 15 000 kroner than 15 000 1958 Industrial production homes for 30 000 kroner» 1951 Olav Selvaag 1948 Veitvet district The Ekeberg House 4
Value creation in Selvaag Bolig 6 – 36 MONTHS 12 – 24 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS development Residential Acquire and Marketing refine land for Project design Construction and sale development creation Value Zoning Sales start Construction start Deliveries optimization ! Plan and ! Buy (i) options on ! Target 60% pre-sale ! Fixed price contracts with prepare for unzoned land, or (ii) before start-up reputable and solid Project construction ready to build land (irrevocable purchase counterpart contracts) ! Lever acquired land ! Construction costs financed to improve ROE ! Prices on remaining 40% with construction loans increased gradually ! Target 100% sale at delivery during sell out phase 5
Norwegian housing market ! Good demand for new homes and persistent population growth in urban areas ! Low risk for housebuilders ! Advance sales: banks require that 50-70% of homes are sold before construction starts ! Binding offers: offer to purchase is a binding sales contract, and requires a 10% minimum cash deposit ! High level of home ownership ! 85% (one of the world’s highest) ! Economic benefits for home owners ! 27% of mortgage loan interest payments are tax-deductible ! Transfer stamp duty for new houses is lower than for second hand homes ! Attractive market outlook ! Strong population growth ! High level of purchasing power ! Favourable macro-economic climate and low interest rates 6 Source: Source Selvaag Bolig and Eurostat
Selvaag Bolig – value proposition Selvaag Bolig ASA is a Norwegian residential property developer with no in-house construction arm, which controls the entire value chain from the acquisition of land to the sale of homes. ! Low risk business model 60 per cent presale before construction starts ! Only present in fast growing urban regions with high demand and large market depth ! Very competitive prices ensure a broad customer base ! ! No in-house construction arm Low building costs ! Fixed construction price ! Reduced risk ! Smaller exposure to market fluctuations ! ! Defined housing concepts Aimed at broad consumer categories ! Profit maximisation in all projects ! Large projects with more than 150 apartments ! ! Large land bank Several thousand homes under development in Norway’s four fastest growing urban regions ! 7
Three well defined and robust concepts ! Affordable apartments based on a "no frills" model ! Low cost land plots situated in fringe zones of large cities ! Mostly modular based construction ! Young people in the start-up phase ! Apartments/small houses situated in high density areas ! Established housing solutions, solid quality and well planned living environment ! Modular and on site construction ! Single people/couples in all ages, with/without children ! Apartments with attractive, central location in large cities ! High quality standard coupled with a service concept ! On site construction ! Affluent customers who value comfort and convenience 8
HIGHLIGHTS Key financials Q1 2015 Operating revenues EBITDA margin 756 13.1 million NOK per cent Equity ratio EBITDA margin (NGAAP) 39.8 17.0 per cent per cent 9
Market update 10
OPERATIONAL UPDATE Record sales level with 308 units sold Total sales value and value per sold unit Residential units sold NOKm Units 1 011 1 021 915 886 856 795 * 740 483 308 3,5 3,5 3,4 3,4 3,3 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Note: All numbers are adjusted for Selvaag Bolig’s ownership in joint ventures. * Includes 95 student residences with an average value of NOK 0.7 million (dotted area) 11
OPERATIONAL UPDATE Increase in units under construction Development units under construction Production split Units NOK million 1 474 1 418 1 384 1 347 1 308 39 % Module 1 384 On-site Units 5 547 5 238 5 159 61 % 4 968 4 689 ! Sales value of units under construction NOK 4 968 million Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 ! 65% of production volume in Greater Oslo Number of units under construction Sales value (NOK million) ! 81% of the units are sold Note: Projects are included when construction start is decided. All numbers are adjusted for Selvaag Bolig’s ownership share in joint ventures. 12
OPERATIONAL UPDATE Selvaag Bolig competitively positioned Units under construction vs. peers (net figures) No of units 2 000 1 600 1 200 800 400 0 (Ex BWG Homes) Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 15 13
MARKET OUTLOOK Second-hand market: Very strong in Oslo, high inventory in Stavanger Oslo and Akershus, April 2007-2015 Stavanger area, April 2007-2015 Units Units 9000 1400 1200 7500 1000 6000 800 4500 600 3000 400 1500 200 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015 Market inventory secondary homes 30 April 2015 Market inventory secondary homes 30 April 2015 Sold units April 2015 Sold units April 2015 Selected areas: Oslo, Lørenskog, Ski ,Oppgård, Bærum, Asker Selected areas: Stavanger, Sola, Randaberg, Sandnes Source: Eiendomsverdi 14
MARKET OUTLOOK Second-hand market: Strong market in Trondheim and Bergen Bergen, April 2007-2015 Trondheim, April 2007-2015 Units Units 2000 3000 2500 1600 2000 1200 1500 800 1000 400 500 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 2012 2013 2014 2015 Market inventory secondary homes 30 April 2015 Market inventory secondary homes 30 April 2015 Sold units April 2015 Sold units April 2015 Selected areas: Bergen, Fjell og Askøy Source: Eiendomsverdi 15
MARKET OUTLOOK Same price for second hand and new homes Available new homes in Oslo Q1 14 vs Q1 15 ! Historical price premium for new homes vs. secondary homes is +20% per m 2 -29% ! 55 000 1) per m 2 vs. 57 000 2) m 2 487 723 143 206 ! Selvaag Bolig 53 400 per m 2 1 389 1 326 1 179 ! A consequence of supply shortage 943 1 January Listed new Sold new 31 March 1 January Listed new Sold new 31 March 2014 homes in homes in 2014 2015 homes in homes in 2015 Q1 2014 2014 Q1 2015 2015 Q1 2014 Q1 2015 1) Average price secondary homes in Oslo Source: Eiendom Norge Source: Røisland & Co 2) Average price new homes in Oslo ex Tjuvholmen and Bjørvika (ex garage where applicable) Source: ECON 16
COMPANY OUTLOOK Strong position Sales activity vs. peers (net figures) ! Solid sales development for Selvaag Bolig Units ! Company strategy support market position: Low-cost strategy: ! 400 Selvaag Bolig average price in Q1 2015*: ! NOK 3.3m 300 Total market average price in Q1 2015*: ! flats NOK 4.1m, terraced NOK 3.8m 200 No in-house construction arm ! Defined housing concepts ! 100 Large land bank ! 0 (Ex BWG Homes) * Selected markets: Oslo, Akershus, Hordaland, Rogaland, Troms and Sør-Trønderlag Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Housing types Selvaag Bolig: flats, semi-detached and terraced homes Source: Selvaag Bolig and Eiendomsverdi 17
Financial update 18
Value creation and project cash flow 6 – 36 MONTHS 12 – 24 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS development Residential Acquire and Marketing refine land for Project design Construction and sale development creation Value Zoning Sales start Construction start Deliveries ! E.g., total land cost: ! 50% of land loan ! No more equity required ! App. 1% of total example Cash flow MNOK 100 (50% equity converted to cost ! Profit: + 50% loans) construction loan ! Development cost: MNOK 77 (14% of project MNOK 5 ! E.g., total revenues: ! Total equity: turnover) MNOK 550 MNOK 55 ! IFRS: Average profit at ! NGAAP: Profit in P&L delivery: 14% of project through percentage of turnover completion method ! NGAAP: Average commences accumulated profit: 14% of project turnover 19
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