Selvaag Bolig ASA

Earnings Release • May 23, 2018

Oslo 23 May 2018 Baard Schumann, CEO Sverre Molvik, CFO

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Highlights Q1 2018 HIGHLIGHTS

• Strong results driven by healthy margins, reflecting value focus
• Market improving as expected
• Positioned with competitive housing offering and substantial capacity

SBO's units under construction

Key financials Q1 2018

HIGHLIGHTS

572 NOK million

20.5 per cent

* EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is excluding financial expenses included in project costs

** EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Sales value and units sold

OPERATIONAL UPDATE

NOK million

Units

Total and average sales value Number of units sold per quarter

Note: All numbers are adjusted for Selvaag Bolig's share in joint ventures

Rolling sales value and units sold

OPERATIONAL UPDATE

Note: Sales value is adjusted for Selvaag Bolig's share in joint ventures

*Total columns show Selvaag Bolig's gross sales **Columns excluding dotted areas show Selvaag Bolig's net sales

8

Construction starts

OPERATIONAL UPDATE

Construction starts per quarter

Oslo

Trondheim

Stavanger

Units under construction and completions

OPERATIONAL UPDATE

• High value of units under construction
• Q1 2018: 73% of units under construction sold by Q1 2018
• Q1 2018: 80% of construction volume in Greater Oslo
• Of which 80% in Oslo. Remaining in Bærum, Lørenskog, Moss and Tønsberg

▪ Expected completions for 2018 as of Q1 18: 854 units

• 88% of 2018 completions sold by Q1 2018

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Income statement highlights Q1 2018 (IFRS)

FINANCIAL UPDATE

Note: EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is excluding financial expenses included in project costs

Income statement highlights Q1 2018 (NGAAP)

FINANCIAL UPDATE

Revenues and EBITDA margin (NGAAP)* 12 months rolling revenues (NGAAP)*

818 967 498 689 572 25% 28% 21% 15% 20% Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Operating revenues EBITDA margin NOK million NOK million 3 514 3 672 21% 24% 25%

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP) Note: EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies

Operating revenues EBITDA margin

Cash flow development Q1 2018

FINANCIAL UPDATE

Note: Amounts below NOK 5m are excluded from the cash flow overview

• Cash flow from operations negative at NOK 312m mainly explained by high construction activity
• Cash flow from investment activities positive at NOK 34m mainly explained by repayment of loans and dividend from associated companies
• Cash flow from financing activities positive at NOK 132m mainly due to net increase in loans

Balance sheet highlights Q1 2018

FINANCIAL UPDATE

Balance sheet composition

▪	Book value increased by NOK 0.6	NOK million
	to NOK 31.0 per share	7 000
	Equity ratio 45.3% ▪	6 000	Non-current assets
▪	Changes from Q4 2017:	5 000
	Inventories increased by NOK 269m ▪ Trade receivables decreased by NOK 40m ▪	4 000
	Cash decreased by NOK 146m ▪	3 000	Current assets
▪	Prepayments from customer's accounts	2 000
	for NOK 394m of other current non interest-bearing liabilities	1 000
		0	Cash

Assets Equity and Liabilities

Inventories (property) Q1 2018

FINANCIAL UPDATE

Q1 18 vs Q4 17 Inventory value development

• Land value down NOK 46m
• Mainly due to construction starts
• Work in progress up NOK 341m
• Due to high construction activity
• Finished goods down NOK 27m
• Due to units delivered

Land (undeveloped) Work in progress Finished projects

Interest-bearing debt as at 31 March 2018

	Loan facility	Drawn at 31 Mar. (NOKm)	Interest rate margin
1	NOK 500 million revolving credit facility from DNB maturing in 2022	0	3.40%
2	NOK 150 million working capital facility from DNB maturing in 2018	0	2.00%
3	Land loan facilities from a range of Nordic credit institutions	1 252	2.00% - 2.50%
4	Construction loan facilities from a range of Nordic credit institutions	1 107	1.75% - 2.60%

Total Q1 2018 net interest-bearing debt NOK 2 019 million

Total Q4 2017 net interest-bearing debt NOK 1 732 million

Debt structure FINANCIAL UPDATE

NOK million

Increased financing capacity and flexibility

Revolving credit facility from DNB extended to NOK 500 million from NOK 400 million

Return on equity (IFRS) FINANCIAL UPDATE

12 months rolling net income (IFRS)* and return on equity**

NOK million

* Net income attributable to shareholders in Selvaag Bolig ASA

** Based on equity at the start of the period (attributed to shareholders in Selvaag Bolig ASA)

18

Agenda

• Highlights

• Operational update

• Financial update

• Market
• Summary

Market improving as expected

While the media sentiment was negative in H2 2017… …SBO expected improving market in 2018

Low number of estimated completions for 2020 in Oslo…

Forecasted annual housing and medium) alternatives

Number of units completed in Akershus, 2006-2017

…and in areas surrounding Oslo

Newbuild effect on total second-hand market in Oslo

76.5% buying to live

17% buying to rent out

6.5% buying to sell

43% will sell their own home in secondary market before moving into a newbuild unit

2018e 2019e Second-hand sales generated from newbuild completions

Why customers buy newbuilds

Completion of 3 900 newbuild units in 2019 will add ~1 550 units to the secondhand market in Oslo

Newbuild sales has limited effect on second-hand market

Prices in NOK per m2

Resilient SBO newbuild prices

Price development SBO newbuild project at Lørenporten (Oslo) vs. second-hand market in Oslo

Increasing average sales value for SBO

MARKET

NOK million

Average sales value for SBO units

Housing market update - April 2018

MARKET

+1.8%

Nominal price increase, April 2018

0.9% Price change in April adjusted for seasonal variations

Price decrease last 12 months

+2.4%

Nominal price increase, April 2018

-3.8% Price decrease last 12 months

Norway

Oslo

Stronger second-hand market in Oslo

MARKET

*Unsold units that have been withdrawn from the market are marked as inventory for 6 months before being removed Sources: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Average monthly %-gap between initial asking price and final sales price, Oslo second-hand market

Price pressure returning to the Oslo market

Newbuild market update - Oslo

MARKET

Q1 2017 Q1 2018

Second-hand market update other core markets

MARKET

* Unsold units that have been withdrawn from the market are marked as inventory for 6 months before being removed Sources: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Strong Q1 2018 sales versus peers

MARKET

Housing types Selvaag Bolig: flats, semi-detached and terraced homes Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Summary

• Strong results driven by healthy margins, reflecting value focus
• Market improving as expected
• Positioned with competitive housing offering and substantial capacity

SBO's units under construction

Thank you for your attention – follow us online!

Next event: 2 nd quarter 2018 15 August 2018

Appendix

Selvaag Bolig's ambition is to pay high and stable dividends to its owners.

The company aims to pay dividends of minimum 40 per cent of net annual profit, paid in two instalments over the year. However, the size of the dividend will be weighed against the company's liquidity forecasts and capital adequacy.

The company will maintain an equity ratio of minimum 30 per cent

Dividend policy

Selvaag Bolig's aim is to manage the group's resources so that shareholders secure a return in the form of dividend and the rise in the share price. This return will be competitive with other investments.

The company's goal is to pay dividends twice a year totalling up to 50 per cent of its net profit

Previous dividend policy New dividend policy

Share performance since IPO in June 2012

SHARE INFORMATION

Source: Oslo Børs

53.5%
5.7%
$2.9\%$
2.2%
$2.1\%$
1.8%
1.7%
1.4%
1.3%
1.2%
1.1%
$0.9\%$
0.9%
$0.8\%$
$0.7\%$
$0.7\%$
$0.6\%$
$0.6\%$
$0.6\%$
$0.6\%$
81.5%
18.5%
100.0%

Largest shareholders at 31 March 2018

Shareholder	# of shares	% share
SELVAAG GRUPPEN AS	50 180 087	53.5%
LANDSFORSAKRINGAR FASTIGHETSFOND	5 323 017	5.7%
MORGAN STANLEY & CO. INT. PLC. *)	2 752 386	2.9%
PARETO AS	2 065 624	2.2%
SEB PRIME SOLUTIONS SISSENER CANOP	2 000 000	2.1%
HOLBERG NORGE	1 693 763	1.8%
VERDIPAPIRFONDET PARETO INVESTMENT	1 596 366	1.7%
SELVAAG BOLIG ASA **)	1 307 577	1.4%
FLPS - GL S-M SUB	1 172 900	1.3%
JPMORGAN CHASE BANK, N.A., LONDON *)	1 163 564	1.2%
HOLTA INVEST AS	1 000 000	1.1%
JPMORGAN CHASE BANK, N.A., LONDON *)	860 569	0.9%
STATE STREET BANK AND TRUST COMP *)	845 196	0.9%
BAARD SCHUMANN	777 127	0.8%
FIDELITY INT REAL ESTATE FUND	686 900	0.7%
REGENTS OF THE UNIVERSITY OF MICHI	657 218	0.7%
HOLBERG NORDEN	608 279	0.6%
STOREBRAND NORGE I VERDIPAPIRFOND	603 364	0.6%
STATE STREET BANK AND TRUST COMP *)	584 637	0.6%
BANAN II AS	555 190	0.6%
Total 20 largest shareholders	76 433 764	81.5%
Other shareholders	17 331 924	18.5%
Total number of shares	93 765 688	100.0%

* Further information regarding shareholders is presented at: http://sboasa.no/en

** The shares were purchased for the company's share programmes for employees

Earnings and dividend per share

• FY'17 EPS NOK 4.35 (3.21)
• FY'17 dividend of NOK 3.00
• H1'17 dividend of NOK 1.20 per share
• H2'17 dividend of NOK 1.80 per share

FINANCIAL UPDATE

Land bank book value vs. external valuation

Q4 2015	Q4 2016	Q4 2017
NOK million	NOK million	NOK million

FINANCIAL UPDATE

Note: Joint ventures and land options not included in the valuation

Substantial land bank in Norway's four largest growing urban areas

SELVAAG BOLIG LAND-BANK DISTRIBUTION

• Acquire the right mix of zoned and unzoned land in suitable locations
• Land acquisitions in defined core areas
• High degree of site utilisation and strategic land development
• Substantial land bank to accommodate targets/growth in core areas
• Good infrastructure and public transport
• Joint ventures (JVs)

Land bank exposure

Geographical spread

Stockholm 40 units

Land-bank strategy

Note: The numbers represent the size of the land portfolio as at 31 March 2018. All numbers are adjusted for Selvaag Bolig's share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) The residential property development portfolio consists of land plots that are to be paid for when planning permission is received. The portfolio has a development potential of ~6 100 residential units, whereof the company has purchasing obligations for ~5 600 and purchasing options for ~500 units.

Land bank in Oslo and Greater Oslo LAND BANK

Land bank in Stavanger area LAND BANK

Land bank in Bergen, Trondheim and Stockholm LAND BANK

Efficient and flexible value chain

▪ Target 100% sale at delivery

Delivery to customers

Margin development through project stages*

▪ Delivery in accordance with expectations

Delivery to customers

Norwegian housing market

• 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 minimum 10% cash deposit
• High level of home ownership
• 85% (one of the world's highest)
• Economic benefits for home owners
• 24% of mortgage loan interest payments are tax deductible
• Transfer stamp duty for new houses is lower than for second-hand homes
• Strong population growth
• Norway's urban areas are among the fastest growing in Europe
• Good demand for new homes

Low-risk business model

Risk profile at start of a MNOK 550 project De-risking in key stages of projects

• Selvaag's equity investment in a project and project margin bring the remaining project cost down to 74%-78%
• With minimum 60% pre-sale there is limited remaining project risk. For the the remaining 40% a price reduction of 35% would recover equity
• 73% of units in production are sold at end Q1'18

▪ Purchase and payment of land takes place after zoning plan approval. If this is not obtained, the purchase is cancelled

▪ SBO is in charge of the zoning process

▪ Purchase price is decided by a land appraisal made by three external consultants at the time of zoning approval

▪ The median valuation is used as purchase price

▪ Pre-sales of minimum 60% secures the majority of revenue before construction

▪ 10% of purchase price paid by the buyer at point of sale, and proof of financing for the remaining amount is required

▪ Construction contracts with solid counterparties are made with fixed price

▪ Project costs are secured before construction starts

Low-risk business model creates healthy profits

Competitive housing offering, targeting growth regions

Efficient and flexible cost structure

Capital-efficient business model backed by strong balance sheet

Large, actively-managed land bank

• Presence in fast-growing urban regions with high demand and large market depth ▪ Competitive prices, addressing large customer base
• Defined housing concepts, aimed at wide range of consumers
• Value appreciation through refinement of land for housing development
• Flexibility to develop thousands of homes in growing urban regions
• Active asset management
• No in-house construction arm; improves flexibility and cost optimisation
• Project-based business model improves flexibility and reduces risk
• Economies of scale through large projects
• Lean organisation reduces overhead
• 60% pre-sale before construction start lowers project financing need and inventory risk
• Sound debt structure and financial flexibility

Strategy Value drivers

Income statement IFRS

(figures in NOK million)	Q1 2018	Q1 2017	2017
Total operating revenues	380.6	456.1	3 228.8
Project expenses	(275.9)	(312.0)	(2 432.8)
Other operating expenses	(57.4)	(58.0)	(234.7)
Other gains (loss)	-	-	-
Associated companies and joint ventures	(1.9)	(4.2)	(13.6)
EBITDA	45.4	81.8	547.7
Depreciation and amortisation	(0.9)	(1.1)	(4.1)
EBIT	44.5	80.7	543.7
Net financial expenses	(3.6)	(9.2)	(39.9)
Profit/(loss) before taxes	40.9	71.4	503.8
Income taxes	(9.6)	4.8	(102.7)
Net income	31.3	76.2	401.1
Net income for the period attributable to:
Non-controlling interests	(0.0)	0.2	0.1
Shareholders in Selvaag Bolig ASA	31.3	76.1	401.0

Cash flow statement

(figures in NOK million)	Q1 2018	Q1 2017	2017
Net cash flow from operating activities	(311.7)	(579.2)	303.2
Net cash flow from investment activities	34.0	(25.8)	(114.1)
Net cash flow from financing activities	131.6	93.3	(589.8)
Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period	- (146.1) 485.6 339.5	- (511.7) 886.2 374.5	- (400.6) 886.2 485.6

Intangible assets 383.4 383.4 383.4 Property, plant and equipment 10.5 9.9 11.4 Investments in associated companies and joint ventures 300.3 285.6 316.2 Other non -current assets 318.0 288.8 337.0 Total non -current assets 1 012.2 967.7 1 048.1

(figures in NOK million) Q1 2018 Q1 2017 2017 Inventories (property) 4 912.8 4 751.5 4 643.9 - Land 1 892.4 1 685.7 1 938.1 - Work in progress 2 843.1 2 816.3 2 501.7 - Finished goods 177.3 249.5 204.2 Other current receivables 163.7 303.0 174.5 Cash and cash equivalents 339.5 374.5 485.6 Total current assets 5 415.9 5 429.0 5 304.0 TOTAL ASSETS 6 428.1 6 396.7 6 352.0 -bearing liabilities 1 998.8 1 795.7 1 836.8 -bearing liabilities 147.3 167.2 152.9 -current liabilities 2 146.1 1 962.9 1 989.7 -bearing liabilities 359.7 845.9 380.6 -bearing liabilities 1 010.1 837.3 1 123.5 TOTAL EQUITY AND LIABILITIES 6 428.1 6 396.7 6 352.0

Equity attributed to shareholders in Selvaag Bolig ASA 2 902.7 2 741.1 2 848.7 Non -controlling interests 9.4 9.5 9.4 Total equity 2 912.2 2 750.6 2 858.1

Non -current interest Other non -current non interest Total non

Current interest Other current non interest Total current liabilities 1 369.8 1 683.2 1 504.2

Balance sheet

* Corresponding to a book value of NOK 31.0 per share

Substantial portfolio for development

Units

Total land bank portfolio at 31 March 2018

balance sheet

Operational highlights – key operating figures

	Q1 17	Q2 17	Q3 17	Q4 17	Q1 18
Number of units sold	190	165	178	168	185
Number of construction starts	186	318	77	217	102
Number of units completed	63	210	81	336	54
Number of units delivered	85	222	75	355	59
Number of units under construction	1 479	1 586	1 582	1 463	1 511
Proportion of sold units under construction	86%	78%	78%	73%	73%
Number of completed unsold units	32	24	30	23	19
Sales value of units under construction (NOK million)	6 340	7 074	7 047	6 994	7 032
Number of employees	100	100	100	100	100

(34.2)	45.4
	(1.9)
(44.1)	(57.4)
(0.1)	(275.9)
10.1	380.6
Other	Total

IFRS EBITDA Q1 2018

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	370.5	10.1	380.6
Project expenses	(275.8)	(0.1)	(275.9)
Other operating expenses	(13.3)	(44.1)	(57.4)
Share of income (losses) from associated companies and joint ventures	(1.9)	-	(1.9)
Other gain (loss), net	-	-	-
EBITDA	79.6	(34.2)	45.4

Operational reporting Q1 2018

(figures in NOK million)	Property development	Other	Total
Operating revenues	561.8	10.1	571.9
Project expenses	(397.3)	(0.1)	(397.4)
Other operating expenses	(13.3)	(44.1)	(57.4)
EBITDA (percentage of completion)	151.3	(34.2)	117.1

Note: Construction costs are exclusive of financial expenses in the segment reporting.

Share of sale from joint ventures

OPERATIONAL UPDATE

Sales value of units sold

Sales value of sold units (net) Sales value of sold units (gross)

Share of sale from joint ventures

OPERATIONAL UPDATE

Number of units sold

*Greater Oslo = Oslo and Akershus Source: Statistics Norway, Akershus municipality, Oslo municipality

Stable population growth in Greater Oslo

Population in Greater Oslo* Estimated population in Greater Oslo*

Greater Oslo medium alternative

Greater Oslo low alternative

Estimated population 2031: (Low) ~ 1.43 million

Source: Statistics Norway

A larger share of Norway's population lives in Greater Oslo

Immigration increases demand over time

MARKET

of years in Norway

Homeownership rate among immigrants in Norway (per year living in Norway)

Source: Statistics Norway

Total household debt and homeownership

MARKET

Household debt in % of net disposable income (2015) Homeownership rate (2016)

Urbanisation in Greater Oslo towards 2040

Source: Statistics Norway Greater Oslo municipalities include: Ski, Ås, Oppegård, Bærum, Asker, Lørenskog, Skedsmo, Ullensaker

▪ Rapid population growth in Oslo followed by stable development

• 30% population growth expected from 2017 to 2040
• Stable population growth to municipalities surrounding Oslo
• 28% population growth expected from 2017 to 2040

> 80 000 next five years

MARKET

Norway – robust economic conditions

Population growth 2015 - 2030e and 2040e Interest rates 2010 - 2018e

GDP growth 2010 - 2019e Unemployment 2010 - 2019e 0% 2% 4% 6% 8% 10% 12% 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e Norway Sweden Germany UK France -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2010 2011 2012 2013 2014 2015 2016 2017e 2018e Norway Sweden EU UK