Selvaag Bolig ASA

Earnings Release • Feb 15, 2017

Oslo 15 February 2017 Baard Schumann, CEO Sverre Molvik, CFO

Agenda

Highlights

• Operational update
• Financial update
• Market
• Outlook and summary

Highlights Q4 and FY 2016 HIGHLIGHTS

• All-time high results and sales values reflect market and business model
• SBO's average 1 bedroom apartment increased by 30% in 2016
• High percentage of 2017/18 completions sold
• Proposed H2'16 dividend of NOK 0.95 per share, total FY'16 dividend of NOK 1.60

Fornebu centre: Land purchased in Q4 2016, will give approximately 2 000 units with expected revenue of NOK 10 billion

Key financials Q4 and FY 2016

HIGHLIGHTS

Q4 2016 Full year 2016

Operating revenues

886 NOK million

Equity ratio

42.1 per cent

Adjusted EBITDA margin

19.2

per cent

EBITDA margin (NGAAP)

Operating revenues 3 000

NOK million

Units under construction

1 469

Net number: 1 356

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Outlook and summary

High sales values reflect business model OPERATIONAL UPDATE

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

Increased sales value per unit sold

OPERATIONAL UPDATE

12 months rolling sales values 12 months rolling units sold

NOKm

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

**Total columns minus dotted areas includes Selvaag Bolig's net sales

Units

Majority of construction starts in Oslo area

OPERATIONAL UPDATE

Construction starts per quarter

• 154 apartments in Oslo area
• 42 apartments in Trondheim area

Units

High percentage of 2017/18 completions sold

Q4 2016: 85% of units under constructions sold by Q4 2016

Q4 2016: 90% 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 Q4 16: 685 units 98% of 2017 completions sold by Q4 2016 87% of 2018 completions sold by Q4 2016

NOK million Units 4 740 5 031 5 075 5 775 5 709 1 339 1 386 1 344 1 464 1 356 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Sales value (NOK million) Number of units under construction

63

188

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

Agenda

• Highlights Operational update
• Financial update
• Market
• Outlook and summary

12

Income statement highlights Q4 2016 (IFRS)

• 254 units delivered (235)
• Revenues NOK 886m (882)
• Units delivered NOK 808m (870)
• Other revenues NOK 22m, mainly lease income
• Sale of commercial property NOK 55
• Project costs NOK 677m (716)
• Of which NOK 36m are interests (38)
• Other costs NOK 71m (65)
• Salaries, sales and marketing key components
• Adjusted EBITDA NOK 170m (133)
• Adjusted for financial expenses included in project costs
• EBITDA NOK 134m (95)
• EPS in the quarter NOK 1.24 (0.72)

FINANCIAL UPDATE

• Delivery of 869 units (893)
• Revenues NOK 3 000m (3 246)
• EBITDA adjusted 514m (539)
• Adjusted for financial expenses included in project costs
• EBITDA NOK 414m (428)
• Earnings per share full year NOK 3.21 (3.00)

FINANCIAL UPDATE

Revenues and adjusted EBITDA margin (IFRS)

Income statement highlights FY 2016 (IFRS)

3 246

Income statement highlights Q4 2016 (NGAAP)

FINANCIAL UPDATE

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

Cash flow development Q4 2016

FINANCIAL UPDATE

• Cash flow from operations positive with NOK 77m mainly due to units delivered
• Partially offset by taxes paid
• Net positive change in borrowings
• Strong cash balance maintained

share program for employees

equivalents at 31 December 2016

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

Assets Equity and Liabilities

Balance sheet highlights Q4 2016

			Balance sheet composition
	Book value increased by NOK 1.2 to NOK 28.7 per share	NOKm
	Equity ratio 42.1% 	7 000
	Changes from Q3 2016:	6 000	Non-current assets
	Inventories decreased by NOK 106m mainly 	5 000
	due to units delivered	4 000
	Trade receivables stable 	3 000	Current assets
	Cash increased by NOK 143m 	2 000
	Prepayments from customers accounts	1 000
	for NOK 468m of other current non	0	Cash
	interest-bearing liabilities

FINANCIAL UPDATE

Inventories (property) Q4 2016

Land (undeveloped) Work in progress Finished projects

FINANCIAL UPDATE

Sound debt structure

FINANCIAL UPDATE

Drawn per 31 Dec. (NOKm)	Interest rate margin
500	4.75%
0	2.00%
0	2.00%
946	2.00% - 2.50%
1 131	1.75% - 2.70%

Total Q4 2016 net interesting bearing debt NOK 1 687 million

Total Q3 2016 net interesting bearing debt NOK 1 704 million

Interest bearing debt as at 31 December 2016

Note: Top-up loan of NOK 500m in the table differs form the summed up top up loan in the pie chart (NOK 496m). The difference is due to NOK -4m in amortized cost which is not actual debt.

Dividend FINANCIAL UPDATE

			Dividend per share
	Dividend policy
	Up to 50 percent of net profit 	NOK 2.00
	Dividend pay-out twice a year from H1 2015 	1.75
	FY'16 EPS NOK 3.21	1.50
		1.25
	FY'16 dividend of NOK 1.60 per share	1.00
	50% of EPS 	0.75 0.50		0.50
	1H'16 dividend of NOK 0.65 per share  distributed	0.25 0.00	0.00
	2H'16 dividend of NOK 0.95 per share  proposed

Agenda

• Highlights Operational update Financial update
• Market
• Outlook and summary

21

largest growing urban areas MARKET – SELVAAG BOLIG LAND BANK DISTRIBUTION

Note: The numbers represent the size of the land portfolio as at 31. December 2016. 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 ~5 400 residential units, whereof the company has purchasing obligations for ~4 900 and purchasing options for ~500 units

Land bank relative size

Oslo, January 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Extraordinary low supply in Oslo

MARKET

• Second hand average Sales price: NOK 73 184 per m² Turnover time: 15 days Price increase January: 2.6% Price increase last 12 months: 23.1% Units available for sale (31.01): ~1 050 New homes (not built)

Units available for sale (31.01): ~650

Oslo, January 2017 sum-up

New regulation for residential mortgage loans

• 1. Loan-to-value ratio on secondary homes in Oslo at 85 per cent
• 1. Flexibility regarding gross annual income/collected debt
• 1. Instalment required for loans exceeding 70% of housing value

Old regulation New regulation Possible effects

The new regulation applies until 30 June 2018 Source: Ministry of Finance, Norway

• 1. Caps loan-to-value ratio on secondary homes in Oslo at 60 per cent
• 1. Limiting borrower's collected debt to five times gross annual income
• 1. Instalment required for loans exceeding 60% of housing value

• Increased price pressure in regions around Oslo

• Increased demand for apartments under 5 million
• Increased price pressure on small apartments in Oslo

MARKET

Oslo price level vs. other European cities

MARKET

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

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

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

Selvaag Bolig to build ~2 000 units at Fornebu

centre

MARKET – SELVAAG BOLIG ACQUISITIONS

• Land acquired at Fornebu, Bærum
• 50/50 JV with Trond and Frederik Mohn
• SBO's largest land acquisition to date

• Expected sales value NOK 10 billion

• Approximately 2 000 units
• Sales start expected in 2020

Feb. 2016 NOK 68 000 per m² May. 2016 NOK 72 300 per m² Jun. 2016 NOK 74 700 per m² Jul. 2016 NOK 77 100 per m² Aug. 2016 NOK 79 500 per m²

Total: 430-500 units | 1-4 rooms | 35-119 m² 182 of 228 units sold per 03 February 2017

Time from acquisition to sales start: 11 months

Sales start May '16

11-month price growth 42 m2, 1 bedroom apartment Lørenporten, Oslo

29

Total: 430-500 units | 1-4 rooms | 35-119 m² 182 of 228 units sold per 03 February 2017

Time from acquisition to sales start: 11 months

Sales start May '16

11-month price growth 89 m2, 3 bedroom apartment Lørenporten, Oslo

Bergen, January 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Sound supply/demand in Bergen

MARKET

Second hand – average

• Sales price: NOK 42 041 per m²
• Turnover time: 33 days
• Price increase January: 1.7%
• Price increase last 12 months: 3.9%
• Units available for sale (31.01): ~600

New homes (not built)

Units available for sale (31.01): ~825

Bergen, January 2017 sum-up

Trondheim, January 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Balanced market in Trondheim

MARKET

• Second hand average
• Sales price: NOK 43 508 per m²
• Turnover time: 28 days
• Price increase January: 2.0%
• Price increase last 12 months: 9.2%
• Units available for sale (31.01): ~350

New homes (not built)

Units available for sale (31.01): ~575

Trondheim, January 2017 sum-up

Stavanger area, January 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Recovery in Stavanger market

MARKET

Second hand (Stavanger only) – average Sales price: NOK 36 981 per m² Jan. 16: NOK 36 099 per m² Turnover time: 69 days Price increase January: 2.1% Price decrease last 12 months: 2.8% Units available for sale (31.01): ~450 31.01.16: ~850

• Second hand sales January: 198 units (Jan. 16: 126 units)

New homes (not built)

• Units available for sale (31.01): ~275
• 31.01.16: ~400

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

Stavanger, January 2017 sum-up

Agenda

Summary

• All-time high results and sales values reflect market and business model
• SBO's average 1 bedroom apartment increased by 30% in 2016
• High percentage of 2017/18 completions sold
• Proposed H2'16 dividend of NOK 0.95 per share, total FY'16 dividend of NOK 1.60

Hovinenga, Oslo

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Share performance since IPO in June 2012

SHARE INFORMATION

% share

53.5%
5.6%
3.0%
$2.8\%$
$2.2\%$
1.7%
1.3%
$1.1\%$
$1.1\%$
$1.1\%$
1.0%
1.0%
$0.9\%$
$0.8\%$
0.8%
$0.7\%$
0.7%
$0.7\%$
0.6%
$0.6\%$
81.1%
18.9%
100.0%

Largest shareholders at 31 December 2016

Shareholder	# of shares	% share
SELVAAG GRUPPEN AS	50 180 087	53.5%
SKANDINAVISKA ENSKILDA BANKEN AB *)	5 268 003	5.6%
MORGAN STANLEY & CO. INTERNATIONAL *)	2 782 677	3.0%
FLPS - ALL SECTOR SUB	2 581 800	2.8%
PARETO AS	2 065 624	2.2%
VERDIPAPIRFONDET PARETO INVESTMENT	1 596 000	1.7%
HOLTA INVEST AS	1 200 000	1.3%
VERDIPAPIRFONDET ALFRED BERG GAMBA	1 061 201	1.1%
REGENTS OF THE UNIVERSITY OF MICHI	1 045 000	1.1%
STOREBRAND NORGE I VERDIPAPIRFOND	1 002 959	1.1%
MP PENSJON PK	962 872	1.0%
EVERMORE GLOBAL VALUE FUND	892 805	1.0%
JPMORGAN CHASE BANK, N.A., LONDON *)	862 364	0.9%
J.P. MORGAN SECURITIES LLC *)	785 000	0.8%
HOLBERG NORGE	724 667	0.8%
STATE STREET BANK AND TRUST COMP *)	658 639	0.7%
VERDIPAPIRFONDET DNB SMB	641 173	0.7%
SELVAAG BOLIG ASA **)	637 958	0.7%
JPMORGAN CHASE BANK, N.A., LONDON *)	564 073	0.6%
BANAN II AS	555 190	0.6%
Total 20 largest shareholders	76 068 092	81.1%
Other shareholders	17 697 596	18.9%
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

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

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

85% of units in production are sold at end Q4'16

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

Income statement IFRS

(figures in NOK million)	Q4 2016	Q4 2015	2016	2015
Total operating revenues	885.5	882.0	3 000.3	3 246.0
Project expenses	(677.0)	(716.0)	(2 379.7)	(2 608.5)
Other operating expenses	(69.1)	(59.2)	(231.2)	(217.4)
Other gains (loss)	0.1	-	31.7	-
Associated companies and joint ventures	(5.3)	(11.4)	(7.1)	8.3
EBITDA	134.2	95.4	414.0	428.4
Depreciation and amortisation	(1.8)	(6.2)	(20.1)	(24.1)
EBIT	132.4	89.2	393.9	404.3
Net financial expenses	(4.9)	(8.6)	(29.3)	(33.1)
Profit/(loss) before taxes	127.5	80.6	364.6	371.2
Income taxes	(11.7)	(13.1)	(63.7)	(91.8)
Net income	115.8	67.5	300.9	279.4
Net income for the period attributable to:
Non-controlling interests	0.1	(0.1)	(0.3)	(1.8)
Shareholders in Selvaag Bolig ASA	115.7	67.6	301.2	281.1

2015	2016	Q4 2015
465.9	440.3	149.3
(15.5)	(14.8)	5.4
(344.1)	(211.5)	(287.0)
106.4 565.9 672.3	213.9 672.3 886.2	(132.3) 804.6 672.3

Cash Flow statement

(figures in NOK million)	Q4 2016	Q4 2015	2016	2015
Net cash flow from operating activities	77.0	149.3	440.3	465.9
Net cash flow from investment activities	(11.1)	5.4	(14.8)	(15.5)
Net cash flow from financing activities	77.0	(287.0)	(211.5)	(344.1)
Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period	142.9 743.3 886.2	(132.3) 804.6 672.3	213.9 672.3 886.2	106.4 565.9 672.3

(figures in NOK million)	2016	Q3 2016	2015
Intangible assets	383.4	383.4	397.2
Property, plant and equipment	10.9	11.8	20.3
Investments in associated companies and joint ventures	289.8	279.5	183.4
Other non-current assets	261.1	259.4	114.6
Total non-current assets	945.1	934.1	715.5
Inventories (property)	4 284.0	4 390.4	4 715.4
- Land	1 437.3	1 434.7	1 968.8
- Work in progress	2 579.7	2 653.5	2 368.5
- Finished goods	267.1	302.3	378.1
Other current receivables	293.3	139.7	147.9
Cash and cash equivalents	886.2	743.3	672.3
Total current assets	5 463.5	5 273.5	5 535.5
TOTAL ASSETS	6 408.7	6 207.6	6 251.1
Equity attributed to shareholders in Selvaag Bolig ASA	2 689.9	2 577.6	2 539.6
Non-controlling interests	9.3	9.2	9.6
Total equity	2 699.2	2 586.8	2 549.2
Non-current interest-bearing liabilities	2 038.7	2 145.4	1 846.7
Other non-current non interest-bearing liabilities	186.1	202.9	262.2
Total non-current liabilities	2 224.7	2 348.2	2 108.9
Current interest-bearing liabilities	534.7	301.7	771.3
Other current non interest-bearing liabilities	950.1	970.8	821.7
Total current liabilities	1 484.8	1 272.5	1 593.0
TOTAL EQUITY AND LIABILITIES	6 408.7	6 207.6	6 251.1

Balance sheet

In compliance with financial covenants

Sales ratio covenant (minimum 60.0%) Equity ratio covenant (minimum 25.0%)

Substantial portfolio for development

Total land bank portfolio at 31 December 2016

Units

balance sheet

Strong overall sales

Sales activity vs. peers last 5 years

Maintaining strong market position

Units under construction vs. peers (net figures)

Construction starts in the quarter

Construction starts, scheduled completion and expected revenue Quarterly, expected revenues (IFRS) in NOK million

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019

Heimdal Stasjon (Onsite)

Nybyen Økern (Onsite)

42 apartments	NOK 124m
69 apartments		NOK 359m
85 apartments		NOK 416m

Lørenporten (Onsite)

Operational highlights – key operating figures

	Q4 15	Q1 16	Q2 16	Q3 16	Q4 16
Number of units sold	209	280	326	277	161
Number of construction starts	171	230	253	223	196
Number of units completed	258	183	295	103	255
Number of units delivered	235	179	307	129	254
Number of units under construction	1 339	1 386	1 344	1 464	1 356
Proportion of sold units under construction	79%	80%	83%	90%	85%
Number of completed unsold units	65	58	54	48	43
Sales value of units under construction (NOK million)	4 740	5 031	5 075	5 775	5 709
Number of employees	99	100	100	100	100

IFRS EBITDA Q4 2016

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	877.6	8.0	885.6
Project expenses	(674.4)	(2.7)	(677.1)
Other operating expenses	(17.0)	(52.1)	(69.1)
Share of income (losses) from associated companies and joint ventures	(5.3)	-	(5.3)
Other gain (loss), net	0.1	-	0.1
EBITDA	180.9	(46.8)	134.2

Operational reporting Q4 2016

(figures in NOK million)	Property development	Other	Total
Operating revenues	938.8	8.0	946.9
Project expenses	(661.6)	(2.7)	(664.3)
Other operating expenses	(17.0)	(52.1)	(69.1)
EBITDA (percentage of completion)	260.2	(46.8)	213.5

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

Land loan interests on the P&L

• Total land loans are NOK 946 million of which NOK 539 million are loans where interest cost are activated
• Land loan interests activated at regulation
• At 31 December interests connected to land loans of NOK 408 million was charged on the P&L

Loans recognised in profit and loss at 31.12.2016

NOKm

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