Company presentation Baard Schumann, CEO Haavard Rnning, CFO - PowerPoint PPT Presentation

Company presentation Baard Schumann, CEO Haavard Rønning, CFO February 2014

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 Tromsø 155 units ¡ Sales in Q4: 61 units ¡ Sales as of Q4: 740 units Trondheim ¡ Industrial approach to 212 units homebuilding ¡ Land bank for 10 650 homes Bergen 163 units Greater-Oslo ¡ Housing concepts 7873 units tailored to house buyer Stavanger Stockholm requirements 1 854 units 79 units Other 310 units Note: The numbers represent the size of the land portfolio as at 31. December 2013. All numbers are adjusted for Selvaag Bolig’s share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) 260 units at Stord 3 (Hordaland county) and 50 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 ~3 300 residential units, whereof the company has purchasing obligations for ~2 800 and purchasing options for ~500. units.

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 4

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 ����������������������� 1999 Løren district Terraced 1988 buildings «You can't criticise things unless you can simultaneously present 1958 Industrial production an alternative or a solution which 1951 is better than the one you're criticizing» 1948 Veitvet district The Ekeberg Olav Selvaag House 5

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 6

Low-risk business model Risk profile at start of project De-risking in key stages of projects 100 % § Purchase and payment of land takes place after 10 % zoning plan approval. If this is not obtained, the 1 - Land purchase 90 % purchase is cancelled conditional on 12%-16% zoning approval 80 % § SBO is in charge of the zoning process 70 % 60 % § Purchase price is decided by a land appraisal 2 - Land purchase made by three external consultants at the time of price based on 50 % 100 % zoning approval market value at 40 % time of zoning 74%-78% § The median valuation is used as purchase price approval 30 % 60 % 20 % § Pre-sales of minimum 60% secures the majority of 10 % revenue before construction 3 – Minimum sales rate of 60% before § 10% of purchase price paid by the buyer at point 0 % Sales price Equity investment Project margin Remaining project cost Minimum pre-sale construction of sale, and proof of financing for the remaining amount is required § Selvaag’s equity investment in the project and project margin bring the remaining project cost down to 74%-78% § Construction contracts with solid counterparties are made with fixed price 4 – Fixed price § With minimum 60% pre-sale, there is limited remaining project risk construction § Project costs are secured before construction starts § 86% of units in production are sold per Q1’13 contract 7

Industrial approach ¡ Modular construction ¡ Profitable ¡ High quality ¡ Sub-contractors in ¡ Lower construction costs ¡ Reduced risk of faults Estonia and Poland ¡ Higher project margins ¡ Technically better homes ¡ Modern factories ¡ Sensible house prices ¡ Energy efficient homes ¡ 13 years of experience 8

Core business Organisation Employees: 82 Selvaag Bolig CEO Finance and Administration accounting Selvaag Bolig Sales and Property Portfolio Selvaag Pluss marketing investment management Service Modulbygg Customer SBO Rogaland support SBO Vestfold SBO Trondheim 9

FINANCIAL UPDATE Income statement highlights Q4 2013 (IFRS) Revenue and EBITDA margin (IFRS) ¡ Revenues of NOK 376 million (1 252) NOKm NOKm ¡ Delivery of 118 units (309) 1 252 ¡ Sale of properties NOK 70 million (213) ¡ Project cost of NOK 316 million (968) 677 ¡ Other OPEX NOK 63 million (75) 621 524 ¡ Bonus for 2013 booked in Q3 13. Bonus 376 20 % 18 % for 2012 booked in Q4 2012 15 % 13 % 0 % Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Operating revenues EBITDA margin 10

FINANCIAL UPDATE Income statement highlights FY 2013 (IFRS) Revenue and EBITDA margin (IFRS) ¡ Revenues of NOK 2 197 million (2 812) NOKm ¡ Delivery of 687 units (776) 2 812 ¡ Net contribution from sale of properties NOK 33 million (124) 2 197 ¡ Project cost of NOK 1 710 million (2 141) 18 % 13 % ¡ Other OPEX was NOK 231 million (236) 2012 2013 Operating revenues EBITDA margin 11

FINANCIAL UPDATE Income statement highlights Q4 2013 (NGAAP) Revenue and EBITDA margin (NGAAP)* ¡ Margin negatively affected by low NOKm sales in q4 2013 1 047 ¡ High production ¡ Good margins in projects under 755 construction 638 614 593 ¡ EBITDA-margin in Q4 adjusted for sales of 23 % plots and one-offs was 13.2% 17 % 17 % 15 % ¡ Q4 2012 positively affected by a gain 11 % of NOK 57.0 million from sale of land to the Oslo Municipality Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Operating revenues EBITDA margin * Construction cost are exclusive of financial expenses in the segment reporting 12

FINANCIAL UPDATE Cash flow development Condensed cash flow ¡ Payment for residential units NOKm delivered in Q3 2013 338 ¡ Løren 7 (NOK 120m) ¡ Nesttun (NOK 120m) ¡ Lervik Brygge (NOK 98m) 199 587 553 5 -9 -7 ¡ Increased volume of units under construction - 3 -489 ¡ Less units delivered Cash and cash Profit (loss) Depreciation Changes in Other changes CF from Net change in Payment of Cash and cash equivalents at before income and trade in working investment borrowings profit sharing equivalents at 30 September taxes amortisation receivables capital activities and dividends 31 December 13

FINANCIAL UPDATE Sound debt structure Interest bearing debt as at 31 Dec 2013 Drawn per 31 Dec Interest rate Loan facility (NOKm) margin 1 NOK 500 million senior 500 4.75% unsecured bond loan 2 NOK 150 million revolving credit 0 2.50% 488 facility from DNB maturing in 2015 3 NOK 150 million working capital 0 2.50% NOK 1 120 facility from DNB maturing in 2 785 2014 Million 4 NOK 500 million long term land 236 2.25% loan from DNB 5 Land loan facilities from a range 942 2.20% - 3.15% of Nordic credit institutions 1 177 6 Construction loan facilities from 1 120 2.20% - 3.00% a range of Nordic credit institutions Top-up loan Land Loan Construction loan Note: Bond loan of NOK 500m differs form the summed up top up loan in the table (NOK 488m). The difference is due to NOK -12m in amortized cost which is not actual debt. 14

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