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

Company presentation

Baard Schumann, CEO Haavard Rønning, CFO August 2013

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 and Bergen

Tromsø 243 units Trondheim 260 units Stockholm 79 units Greater-Oslo 7859 units Bergen 189 units Stavanger 1 891 units

Norway’s leading homebuilder

¡ Sales in 1H: 443 units ¡ Industrial approach to homebuilding ¡ Land bank for 10 800 homes ¡ Housing concepts tailored to house buyer requirements

Other 310 units

Note: The numbers represent the size of the land portfolio as at 30. June 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 (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 ~3 350 residential units, whereof the company has purchasing obligations for ~2 900 and purchasing options for ~450. 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

The Ekeberg House Industrial production Veitvet district Løren district Terraced buildings The Gullhaug House Modular construction

2003 1999 2000 1988 1958 1951 1948

Pluss: Housing with extra service Housing for all

2012 2011 2013

• 50 000 homes

completed Listed at Oslo Børs

«You can't criticise things unless you can simultaneously present an alternative or a solution which is better than the one you're criticizing»

Olav Selvaag

Housing for all

Value creation in Selvaag Bolig

Construction

6 – 36 MONTHS 6 – 12 MONTHS 12 – 24 MONTHS 3 – 9 MONTHS Zoning

§ Buy (i) options on unzoned land, or (ii) ready to build land § Lever acquired land to improve ROE § Fixed price contracts with reputable and solid counterpart § Construction costs financed with construction loans § Target 100% sale at delivery § Target 60% pre-sale before start-up (irrevocable purchase contracts) § Prices on remaining 40% increased gradually during sell out phase

Value creation Sales start Construction start Deliveries

§ Plan and prepare for construction

Acquire and refine land for development Project design Marketing and sale

Residential development Project

• ptimization

Industrial approach

¡ Modular construction

¡ Sub-contractors in Estonia and Poland ¡ Modern factories ¡ 13 years of experience

¡ Profitable

¡ Lower construction costs ¡ Higher project margins ¡ Sensible house prices

¡ High quality

¡ Reduced risk of faults ¡ Technically better homes ¡ Energy efficient homes

Organisation

Selvaag Bolig CEO Sales and marketing Property investment Portfolio management SBO Rogaland SBO Vestfold Customer support Selvaag Bolig Modulbygg Selvaag Pluss Service Administration Finance and accounting Core business

Employees: 80

Income statement IFRS

FINANCIAL UPDATE

(figures in NOK million) Q2 2013 Q2 2012 1H 2013 1H 2012 2012 Total operating revenues 620.9 494.4 1 144.6 686.4 2 812.0 Project expenses (479.9) (388.0) (857.8) (524.0) (2 141.3) Other operating expenses (56.9) (57.6) (100.4) (99.4) (212.7) Other gains (loss)

• 0.1 - 0.1 0.1

Associated companies and joint ventures 10.2 15.2 10.0 22.6 53.4 EBITDA 94.3 64.190 196.5 85.7 511.5 Depreciation and amortisation (5.7) (4.8) (11.2) (9.9) (21.9) EBIT 88.6 59.433 185.2 75.8 489.6 Net financial expenses (6.5) (17.0) (21.1) (33.6) (41.5) Profit/(loss) before taxes 82.1 42.4 164.2 42.2 448.1 Income taxes (23.4) (17.9) (44.0) (11.8) (101.8) Net income 58.7 24.6 120.2 30.4 346.3 Net income for the period attributable to: Minority interests 2.7 (0.4) 7.7 (0.5) 68.0 Shareholders in Selvaag Bolig ASA (majority interests) 56.0 25.0 112.4 31.0 278.4

Cash Flow statement

FINANCIAL UPDATE

(figures in NOK million) Q4 2012 Q4 2011 1H 2013 1H 2012 2012 Net cash flow from operating activities 152.4 28.1 471.9 (296.7) 464.3 Net cash flow from investment activities 17.8 19.3 38.1 13.4 18.0 Net cash flow from financing activities (39.1) 30.1 (361.0) 277.4 (319.5)

• - - -
• Net change in cash and cash equivalents

131.1 77.5 149.0 (5.8) 162.8 Cash and cash equivalents at start of period 575.9 311.8 558.0 395.2 395.2 Cash and cash equivalents at end of period 707.0 389.4 707.0 389.4 558.0

(figures in NOK million) Q2 2013 Q2 2012 2012 Intangible assets 449.9 470.3 459.6 Property, plant and equipment 6.2 6.8 6.5 Investments in associated companies and joint ventures 155.3 135.1 158.4 Other non-current assets 129.5 83.0 152.4 Total non-current assets 741.1 695.1 776.8 Inventories (property) 3 915.2 4 599.4 3 910.7

• Land

1 870.9 2 425.4 1 961.0

• Work in progress

1 895.0 2 076.5 1 831.7

• Finished goods

149.3 97.5 118.0 Other current receivables 219.0 248.3 489.3 Cash and cash equivalents 707.0 389.4 558.0 Total current assets 4 841.2 5 237.0 4 958.0 TOTAL ASSETS 5 582.3 5 932.1 5 734.9 Equity attributed to shareholders in Selvaag Bolig ASA 2 184.6 1 813.1 2 072.2 Non-controlling interests 27.3 5.9 74.4 Total equity 2 211.9 1 819.0 2 146.6 Non-current interest-bearing liabilities 1 843.2 2 551.7 1 461.5 Other non-current non interest-bearing liabilities 257.2 139.0 213.1 Total non-current liabilities 2 100.4 2 690.7 1 674.6 Current interest-bearing liabilities 680.9 860.7 1 368.8 Other current non interest-bearing liabilities 589.0 561.8 544.8 Total current liabilities 1 269.9 1 422.4 1 913.7 TOTAL EQUITY AND LIABILITIES 5 582.3 5 932.1 5 734.9

Balance sheet

FINANCIAL UPDATE

* Corresponding to a book value of NOK 23.3 per share

12

Interest bearing debt

FINANCIAL UPDATE

Loan facility Drawn per 30 June (NOKm) Interest rate margin 1 NOK 500 million senior unsecured bond loan 500 4.75% 2 NOK 150 million revolving credit facility from DNB maturing in 2014 2.50% 3 NOK 150 million working capital facility from DNB maturing in 2014 2.50% 4 NOK 500 million long term land loan from DNB 432 2.25% 5 Land loan facilities from a range

• f Nordic credit institutions

808 2.20% - 3.15% 6 Construction loan facilities from a range of Nordic credit institutions 798 2.20% - 3.00%

Interest bearing debt as at 30 June 2013

Note: Bond loan of NOK 500m differs form the summed up top up loan in the table (NOK 486m). The difference is due to NOK -14m in amortized cost which is not actual debt.

486 1 240 798 Top-up loan Land loan Construction loan NOK

2 524

Million

Appendix

388 649 1 011 443 2010 2011 2012 2013 Q1 Q2 Q3 Q4

Sales according to plan

OPERATIONAL UPDATE

Residential units sold Sales value of sold units

No of units No of units 834 966 820 897 722 # units 243 # units 303 # units 221 # units 243 # units 200 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13

880 213 39 Greater Oslo Rest of Norway Other countries

Production volume upheld

OPERATIONAL UPDATE

Note: All numbers are adjusted for Selvaag Bolig’s ownership in joint ventures. Measure point: decision of construction start. Selvaag Bolig has a number of joint venture projects under construction. The joint venture partners’ share amount to 56 residential units, implying that Selvaag Bolig currently manages 1 187 residential units under construction

Quarterly development Segment distribution as at 30.06.2013 Sales status as at 30.06.2013

1 131

units

1 131

units

No of units 1 059 993 1 067 1 058 1 131 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 83 % 17 % Sold Unsold

Norway: A robust economy

Source: IMF, Statistics Norway, Statistics Sweden, Statistics France, Statistics Germany, Statistics UK, Eurostat

GDP growth 2004 - 2015e Unemployment 2004 - 2015e

Germany

• 5.0%

France 8.0% UK 12.0% Sweden 12.0% Norway 23.0%

Population growth 2011 - 2030e Public net debt/GDP 2004 - 2015e

• 6%
• 4%
• 2%

0% 2% 4% 6% 2015e 2014e 2013e 2012e 2011 2010 2009 2008 2007 2006 2005 2004

• 200%
• 150%
• 100%
• 50%

0% 50% 100% 2015e 2012e 2014e 2013e 2011 2010 2009 2008 2007 2006 2005 2004 UK Sweden Norway Germany France UK Sweden Norway Germany France 0% 2% 4% 6% 8% 10% 12% 2015e 2014e 2013e 2012e 2011 2010 2009 2008 2007 2006 2005 2004 UK Sweden Norway Germany France

Construction starts and population growth

(10 000)

• 10 000

20 000 30 000 40 000 50 000 60 000 70 000

1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010

Housing construction Population growth

Source: Prognosesenteret

Housing need derived from immigration by 2020

5000 10000 15000 20000 25000 30000 35000 40000 45000 Akershus Oslo Rogaland Hordaland Average for Norway Medium Low High

Population growth 2013 - 2024

50000 100000 150000 200000 250000 300000 350000 400000 450000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Low High Medium

Source: Statistics Norway

Breakdown for medium population growth

50000 100000 150000 200000 250000 300000 350000 400000 450000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Immigration Other growth

Source: Statistics Norway

Origin of current Norwegian immigrants

52 % 11 % 31 % 3 % 3 % 0 % Europe Africa Asia North America South America Oceania

Source: Statistics Norway

¡ There are 655 000 first

• r second generation

immigrants in Norway ¡ Immigrants account for 13 per cent of the population ¡ Most represented countries are Poland and Sweden ¡ Labour immigrants settle in and around the Major cities

Purchase power stronger than ten year average

0 % 10 % 20 % 30 % 40 % 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Single Young couple Established couple

Household interest payments after tax as a proportion of post-tax earned income

20 % Single 12 % Young couple

7 %

Established couple

Source: NEF, EFF, Fin.no and Pöyry

2012