Selvaag Bolig ASA

Earnings Release • Aug 17, 2017

Oslo 17 August 2017 Baard Schumann, CEO Sverre Molvik, CFO

Agenda

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

Key financials Q2 and 1H 2017

HIGHLIGHTS

Q2 2017 1H 2017

Operating revenues
--------------------	--

1 135 NOK million

Equity ratio

45.0 per cent

Adjusted EBITDA margin

21.6

per cent

EBITDA margin (NGAAP)

28.0 per cent

Operating revenues

1 591 NOK million

Under construction

1 857

units (SBO' share 1 586)

Highlights Q2 2017 HIGHLIGHTS

• Continued strong margins
• Record high value of units under construction
• 78% sold at 30 June
• Redemption of NOK 500 million bond one year before maturity
• 1H 2017 dividend of NOK 1.20 per share

Agenda

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

Sales value and units sold

OPERATIONAL UPDATE

Total and average sales value Sales value and units sold

NOK million

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

NOK million

Rolling sales value and units sold OPERATIONAL UPDATE

Sales value: 12 months rolling Units sold: 12 months rolling

NOK million

Note: Sales values are adjusted for Selvaag Bolig's ownership in joint ventures *Total columns show Selvaag Bolig's gross sales

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

Construction starts

OPERATIONAL UPDATE

Construction starts per quarter

• 253 apartments in Oslo
• 57 apartments in Greater Oslo
• 8 apartments in Stavanger area

Units

Hovinenga, Oslo

Units under construction and completions

• Value of units under construction at all time high
• Q2 2017: 78% of units under construction sold by Q2 2017
• Q2 2017: 92% of construction volume in Greater Oslo

OPERATIONAL UPDATE

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

Sales value: Units under construction

Expected completions per quarter

Units

▪ Expected completions for 2017 as of Q2 17: 690 units

• 99% of 2017 completions sold by Q2 2017
• 87% of 2018 completions sold by Q2 2017

NOK million Units 5 075 5 775 5 709 6 340 7 074 1 344 1 464 1 356 1 479 1 586 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Sales value (NOK million) Number of units under construction

81 336

Agenda

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

Income statement highlights Q2 2017 (IFRS)

• 222 units delivered (307)
• Revenues NOK 1 135m (1 104)
• Units delivered NOK 860m (1 088)
• Sale of property NOK 265m
• Other revenues NOK 10m (16), mainly lease income
• Project costs NOK 840m (919)
• Of which NOK 19m are interests (34)
• Other costs NOK 60m (61)
• Salaries, sales and marketing key components
• Adjusted EBITDA NOK 245m (161)
• Adjusted for financial expenses included in project costs
• EBITDA NOK 225m (127)
• EPS in the quarter NOK 1.58 (0.90)

FINANCIAL UPDATE

Revenues and adjusted EBITDA margin (IFRS)

• Delivery of 307 units (486)
• Revenues NOK 1 591m (1 728)
• EBITDA adjusted 338m (252)
• Adjusted for financial expenses included in project costs
• Earnings per share 1H 2017 NOK 2.39 (1.35)
• Dividend of NOK 1.20 per share for 1H 2017

FINANCIAL UPDATE

Revenues and adjusted EBITDA margin (IFRS)

Income statement highlights 1H 2017 (IFRS)

NOKm

Income statement highlights Q2 2017 (NGAAP)

FINANCIAL UPDATE

Revenues and EBITDA margin (NGAAP)*

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP)

12 months rolling revenues (NGAAP)*

NOK million

Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Operating revenues EBITDA margin

3 167 3 283 16% 18% 808 941 947 818 967 17% 22% 23% 25% 28% Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Operating revenues EBITDA margin

NOK million

Cash flow development Q2 2017

FINANCIAL UPDATE

• Cash flow from operations of NOK 540m mainly explained by units delivered and sale of property
• Cash flow from financing activities negative with NOK 501m
• Mainly due to redemption of NOK 500m bond and dividend of NOK 88m paid
• Partly offset by new land loans and construction loans

Note: Numbers under NOK 5m are excluded from the cash flow overview

Assets Equity and Liabilities

Balance sheet highlights Q2 2017

			Balance sheet composition
▪	Book value increased by NOK 0.4 to NOK 29.6 per share	NOK million
	Equity ratio 45.0% ▪	7 000
▪	Changes from Q1 2017:	6 000	Non-current assets
	Inventories decreased by NOK 133m mainly ▪	5 000
	due to units delivered and sale of property	4 000
	Trade receivables decreased by NOK 32m ▪	3 000	Current assets
	▪ Cash decreased by NOK 33m	2 000
▪	Prepayments from customers accounts for NOK 494m of other current non	1 000
	interest-bearing liabilities	0	Cash

FINANCIAL UPDATE

Inventories (property) Q2 2017 FINANCIAL UPDATE

Land (undeveloped) Work in progress Finished projects

Sound debt structure

FINANCIAL UPDATE

Drawn per 30 June (NOKm)	Interest rate margin
0	2.90%
0	2.00%
1 161	2.00% - 2.50%
1 109	1.75% - 2.70%

Total Q2 2017 net interesting bearing debt NOK 1 929 million

Total Q1 2017 net interesting bearing debt NOK 2 267 million

Interest bearing debt as at 30 June 2017

¹Selvaag Bolig elected to exercise its call option for early redemption in full of its NOK 500 million senior unsecured callable bond, maturing on 27 June 2018, at 102% of par value. The early redemption of the bond occured on 27 June 2017.

Return on Equity (IFRS)

FINANCIAL UPDATE

NOK million

12 months rolling net income (IFRS)* and Return on Equity**

* Net income attributable to shareholders in Selvaag Bolig ASA

** Based on equity attributed to shareholders in Selvaag Bolig ASA

Dividend FINANCIAL UPDATE

		Dividend per share
	NOK
	2.00
	1.75
▪ 1H'17 EPS NOK 2.39	1.50
1H'17 dividend of NOK 1.20 per share ▪	1.25		1.20
	1.00
50% of EPS ▪	0.75	0.50
Dividend to be paid 1 September 2017 ▪	0.50
	0.25
	0.00

Agenda

• Highlights
• Operational update
• Financial update
• Market

• Summary

• Loan cap at 5x annual income challenging for one-person households

• Gives increased demand in the rental market
• Oslo rental market prices up ~6.5 % the recent year
• Price increase caused by entry of one-person households unable to obtain mortgage loan
• More profitable rental markets could increase investments in secondary homes

Effects of new mortgage regulations MARKET – REGULATION FOR RESIDENTIAL MORTGAGE LOANS

The new regulation applies until 30 June 2018 Source: NTB

Strong population growth in Greater Oslo

MARKET

Greater Oslo as % of total completions and population growth in Norway

• Continued population growth and low degree of completions in Greater Oslo
• 2016 population growth of ~44 000 in Norway
• ~41% of this growth was in Greater Oslo in 2016
• ~27 000 housing completions in Norway in 2016
• ~24% of these completions

Sales and construction starts in Oslo

MARKET

Source: Prognosesenteret, Eiendomsverdi and Selvaag Bolig

Less income spent on housing

MARKET

New and second hand apartment prices

MARKET

New and second hand apartments in Oslo

Average price per m²

Source: Røisland & Co, Eiendomsverdi

▪ No price drop on new homes

▪ Price premium for new homes vs. second hand homes historically at ~15% per m²

▪ Normalising premium in 1H' 17 and

July

Mind the gap MARKET

Number of units completed in Oslo, 2001-2016

▪ Average of ~2 800 units completed from 2001-2016

▪ Annual housing demand of more than 5 000 units until 2025 (Statistics Norway estimate)

▪ Well above estimated completions for the 2017-19 period

▪ Low demand alternative: 5 000 units

▪ Medium demand alternative: 6 600 units

▪ 2016 population in Oslo: 658 400

▪ In 1999 Statistics Norway forecasted a 2016 population of 542 000

Source: Eiendomsverdi, Eiendom Norge, Finn.no and Selvaag Bolig

Oslo market levelling out

MARKET

Oslo, July 2008-2017 Units 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inventory second-hand Units sold

Second hand – average ▪ Sales price: NOK 68 182 per m² ▪ Turnover time: 34 days ▪ Price decrease July: 2.8% ▪ Price increase last 12 months: 6.4% ▪ Units available for sale (31.07): ~2 680 ▪ Second hand sales July: 765

▪ Units available for sale (31.07): ~1 500

New homes (not built)

Oslo, July 2017 sum-up

Stavanger area, July 2008-2017

Source: Eiendomsverdi, Eiendom Norge, Finn.no and Selvaag Bolig

Stavanger market recovery

MARKET

Second hand (Stavanger only) – average ▪ Sales price: NOK 41 251 per m² ▪ Jul. 16: NOK 38 346 per m² ▪ Turnover time: 85 days ▪ Price decrease July: 0.6% ▪ Price increase last 12 months: 1.3% ▪ Units available for sale (31.07): ~526 ▪ 31.07.16: ~529

▪ Second hand sales July: 117 units

• (Jul. 16: 98 units)

New homes (not built)

▪ Units available for sale (31.07): ~300

• • 31.07.16: ~350

Second hand market: Stavanger, Sola, Randaberg and Sandnes New homes market: Stavanger

Stavanger, July 2017 sum-up

29

Good sales in Stavanger MARKET – STAVANGER RECOVERY

Total: 61 units | 1-3 bedrooms | 50-120 m² 28 of 61 units sold per 14 August 2017

Lervig Brygge vest Sales start 10 May 2017

Source: Eiendomsverdi, Eiendom Norge, Finn.no and Selvaag Bolig

Sound supply/demand in Bergen

MARKET

Bergen, July 2008-2017 Units 0 500 1000 1500 2000 2500 3000 Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inventory second-hand Units sold

Second hand – average

• Sales price: NOK 48 015 per m²
• Turnover time: 26 days
• Price decrease July: 0.6%
• Price increase last 12 months: 0.0%
• Units available for sale (31.07): ~844

New homes (not built)

▪ Units available for sale (31.07): ~825

Bergen, July 2017 sum-up

Source: Eiendomsverdi, Eiendom Norge, Finn.no and Selvaag Bolig

Balanced market in Trondheim

MARKET

• Second hand average
• Sales price: NOK 48 006 per m²
• Turnover time: 26 days
• Price decrease July: 0.8%
• Price increase last 12 months: 4.1%
• Units available for sale (31.07): ~617

New homes (not built)

▪ Units available for sale (31.07): ~950

Trondheim, July 2017 sum-up

32

3 new land acquisitions MARKET – SELVAAG BOLIG ACQUISITIONS

• Solberg Øst, Ås, Akershus
• ~180 units, sales start expected in Q1 2018
• 100% owned by Selvaag Bolig
• Lørenskog, Akershus
• ~350 units, sales start expected in Q3 2017
• 100 % owned by Selvaag Bolig
• Site connected to Lørenskog Stasjonsby
• Tiedemannsfabrikken Felt G, Oslo
• ~320 units, sales start expected in Q3 2018
• 50/50 joint venture with Ferd Eiendom

2 in Akershus, 1 in Oslo

Note: The numbers represent the size of the land portfolio as at 30. June 2017. 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. These have a development potential of ~6 000 residential units, whereof the company has purchasing obligations for ~5 500 and purchasing options for ~500 units

Agenda

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

Summary

• Continued strong margins
• Record high value of units under construction
• 78% sold at 30 June
• Redemption of NOK 500 million bond one year before maturity
• 1H 2017 dividend of NOK 1.20 per share Hovinenga, Oslo

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Next event: Capital Markets Update and 3rd quarter 17 09 November 2017

Share performance since IPO in June 2012

SHARE INFORMATION

Largest shareholders at 30 June 2017

Shareholder	# of shares	% share
Selvaag Gruppen AS	50 180 087	53.5%
Skandinaviska Enskilda Banken AB *)	5 278 334	5.6%
Morgan Stanley & Co. Int. Plc. *)	2 766 231	3.0%
Selvaag Bolig ASA **)	2 150 794	2.3%
Pareto AS	2 065 624	2.2%
Verdipapirfondet Pareto Investment	1 696 000	1.8%
Holberg Norge	1 594 764	1.7%
Holberg Norden	1 500 000	1.6%
Flps - All sector sub	1 236 200	1.3%
Holta Invest AS	1 200 000	1.3%
Regents of the University of Michi	1 045 000	1.1%
Seb prime solutions Sissener Canop	1 000 000	1.1%
JPMorgan Chase Bank, n.a., London *)	858 932	0.9%
Verdipapirfondet Alfred Berg Gamba	811 201	0.9%
Mp Pensjon PK	612 872	0.7%
Storebrand Norge I Verdipapirfond	596 778	0.6%
Banan II AS	555 190	0.6%
State Street Bank and Trust Comp *)	538 270	0.6%
JPMorgan Chase Bank, n.a., London *)	524 073	0.6%
Baard Schumann	480 937	0.5%
Total 20 largest shareholders	76 691 287	81.8%
Other shareholders	17 074 401	18.2%
Total number of shares	93 765 688	100.0%

*) Updated shareholder list and further information regarding nominee accounts is presented at: http://sboasa.no/en/Aksjeinformasjon/Aksjonarer.aspx **) The shares were purchased for the company's share programmes for employees

Book value and valuation - increased gap

OPERATIONAL UPDATE

NOK million

Q4 15: Book value vs. external valuation Q4 16: Book value vs. external valuation

NOK million

Selected projects in Oslo 2017 MARKET – SELVAAG BOLIG PROJECTS

*The numbers are not adjusted for Selvaag Bolig's share in joint ventures

Value creation in Selvaag Bolig

▪ Construction costs financed

▪ Target 100% sale at delivery

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 10% minimum cash deposit
• High level of home ownership
• 85% (one of the world's highest)
• Economic benefits for home owners
• 25% 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

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
• All construction activity put out to competitive tender
• Lower 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

▪ 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

contract

▪ 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

▪ 78% of units in production are sold at end Q2'17

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

Income statement IFRS

(figures in NOK million)	Q2 2017	Q2 2016	2016
Total operating revenues	1 134.6	1 104.0	3 000.3
Project expenses	(840.5)	(918.9)	(2 379.7)
Other operating expenses	(59.0)	(55.2)	(231.2)
Other gains (loss)	-	-	31.7
Associated companies and joint ventures	(9.8)	(2.7)	(7.1)
EBITDA	225.4	127.2	414.0
Depreciation and amortisation	(1.0)	(6.0)	(20.1)
EBIT	224.4	121.1	393.9
Net financial expenses	(23.0)	(7.7)	(29.3)
Profit/(loss) before taxes	201.4	113.4	364.6
Income taxes	(55.1)	(29.3)	(63.7)
Net income	146.3	84.1	300.9
Net income for the period attributable to:
Non-controlling interests	(0.0)	(0.4)	(0.3)
Shareholders in Selvaag Bolig ASA	146.3	84.6	301.2

2016	Q2 2016
440.3	468.5
(14.8)	(7.5)
(211.5)	(188.2)
213.9 672.3 886.2	272.8 607.7 0.5

Cash Flow statement

(figures in NOK million)	Q2 2017	Q2 2016	2016
Net cash flow from operating activities	539.5	468.5	440.3
Net cash flow from investment activities	(72.1)	(7.5)	(14.8)
Net cash flow from financing activities	(500.8)	(188.2)	(211.5)
Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period	(33.4) 374.5 341.1	272.8 607.7 880.5	213.9 672.3 886.2

(figures in NOK million)	Q2 2017	Q2 2016	2016
Intangible assets	383.4	388.0	383.4
Property, plant and equipment	9.4	17.4	10.9
Investments in associated companies and joint ventures	280.9	180.1	289.8
Other non-current assets	354.9	126.8	261.1
Total non-current assets	1 028.5	712.2	945.1
Inventories (property)	4 618.5	4 286.6	4 284.0
- Land	1 672.4	1 542.9	1 437.3
- Work in progress	2 761.3	2 370.6	2 579.7
- Finished goods	184.7	373.1	267.1
Other current receivables	203.1	232.9	293.3
Cash and cash equivalents	341.1	880.5	886.2
Total current assets	5 162.6	5 400.1	5 463.5
TOTAL ASSETS	6 191.2	6 112.3	6 408.7
Equity attributed to shareholders in Selvaag Bolig ASA	2 744.1	2 590.5	2 689.9
Non-controlling interests	9.4	9.2	9.3
Total equity	2 783.5	2 599.7	2 699.2
Non-current interest-bearing liabilities	2 062.7	1 648.6	2 038.7
Other non-current non interest-bearing liabilities	167.6	260.2	167.1
Total non-current liabilities	2 230.3	1 908.8	2 205.8
Current interest-bearing liabilities	207.1	686.2	534.7
Other current non interest-bearing liabilities	970.2	917.6	969.1
Total current liabilities	1 177.3	1 603.8	1 503.7
TOTAL EQUITY AND LIABILITIES	6 191.2	6 112.3	6 408.7

Balance sheet

* Corresponding to a book value of NOK 29.6 per share

Substantial portfolio for development

Total land bank portfolio at 30 June 2017

Units

balance sheet

Construction starts in the quarter

Construction starts, scheduled completion and expected revenue

Quarterly, expected revenues (IFRS) in NOK million

Operational highlights – key operating figures

	Q2 16	Q3 16	Q4 16	Q1 17	Q2 17
Number of units sold	326	277	161	190	165
Number of construction starts	253	223	196	186	318
Number of units completed	295	103	255	63	210
Number of units delivered	307	129	254	85	222
Number of units under construction	1 344	1 464	1 356	1 479	1 586
Proportion of sold units under construction	83%	90%	85%	86%	78%
Number of completed unsold units	54	48	43	32	24
Sales value of units under construction (NOK million)	5 075	5 775	5 709	6 340	7 074
Number of employees	100	100	100	100	100

(41.0)	225.4
	(9.8)
(49.1)	(59.1)
(0.4)	(840.5)
8.5	1 134.6
Other	Total

IFRS EBITDA Q2 2017

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	1 126.1	8.5	1 134.6
Project expenses	(840.0)	(0.4)	(840.5)
Other operating expenses	(9.9)	(49.1)	(59.1)
Share of income (losses) from associated companies and joint ventures	(9.8)	-	(9.8)
Other gain (loss), net	-	-	-
EBITDA	266.4	(41.0)	225.4

Operational reporting Q2 2017

(figures in NOK million)	Property development	Other	Total
Operating revenues	958.1	8.5	966.6
Project expenses	(636.3)	(0.4)	(636.7)
Other operating expenses	(9.9)	(49.1)	(59.0)
EBITDA (percentage of completion)	311.9	(41.0)	270.9

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

Growth areas in Greater Oslo

• Regional areas for labour intensive activities
• Priority areas for commercial and urban development
• Regional public transport hubs
• Public transport connecting regional cities and office locations

Source: Plansamarbeidet Oslo-Akershus, Selvaag Bolig Note: The numbers are not adjusted for Selvaag Bolig's share in joint ventures

MARKET – SELVAAG BOLIG PROJECTS

Oslo price level vs. other European cities

MARKET

Source: Ny Analyse, Global Property Guide, Eiendom Norge, Svensk Mäklarstatistik, OECD Selected European cities

Strong purchasing power in core markets

MARKET

Average gross annual income (household)

Debt limit based on 5x gross income

Source: Statistics Norway, NRK

Total household debt and homeownership MARKET

Source: OECD, Prognosesenteret

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: A robust economy

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

Increased disposable income

of disposable income

Source: 1993- 2013 Eff, Pöyry. 2014-2015 NyAnalyse. Interest payments on new home loans with the home as collateral is considered