Selvaag Bolig ASA

Earnings Release • Aug 18, 2016

Oslo 18 August 2016 Baard Schumann, CEO Sverre Molvik, CFO

Agenda

Highlights

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

Highlights Q2 2016 HIGHLIGHTS

• Extraordinary strong Oslo market
• All time high sales
• Strong results and margins
• Proposed dividend of NOK 0.65 per share for 1H'16

Hovinenga, Oslo

Key financials Q2 2016

HIGHLIGHTS

Agenda

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

Continued increase in sales value

OPERATIONAL UPDATE

Note: All numbers are adjusted for Selvaag Bolig's ownership in joint ventures. * Includes 95 student residences with an average value of NOK 0.7 million (dotted area)

Oslo market driving construction starts

OPERATIONAL UPDATE

Construction starts per quarter

All Q2 construction starts in Greater Oslo

Units

Units under construction at high levels OPERATIONAL UPDATE

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

97% of 2016 completions sold by Q2 2016

Agenda

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

Income statement highlights Q2 2016 (IFRS)

• 307 units delivered (232)
• Revenues NOK 1 104m (830)
• Units delivered NOK 1 088m (818)
• Other revenues NOK 16m, mainly lease income
• Project costs NOK 919m (659)
• Of which NOK 34m are interests
• Other costs NOK 61m (57)
• Salaries, sales and marketing key components
• EBITDA adjusted NOK 161m (151)
• Adjusted for financial expenses included in project costs
• EBITDA NOK 127m (124)
• EPS in the quarter NOK 0.90, YTD NOK 1.35
• Proposed dividend of NOK 0.65 per share for 1H'16

FINANCIAL UPDATE

Revenues and adjusted EBITDA margin (IFRS)

NOKm

Income statement highlights Q2 2016 (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)*

NOKm NOKm

Cash flow development Q2 2016

FINANCIAL UPDATE

• Cash flow from operating activities NOK 469m
• Inventory decrease from deliveries and no purchase of land in Q2
• Borrowings reduced due to construction loan repayments

borrowings

equity holders of Selvaag Bolig ASA

equivalents at 30 June 2016

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

Balance sheet highlights Q2 2016

FINANCIAL UPDATE

	Book value NOK 27.6 per share		Balance sheet composition
	NOK 27.6 per share in Q1 2016 	NOKm
	Equity ratio 42.5% 	7 000
	Changes from Q1 2016:	6 000	Non-current assets Non-current assets Non Non-current assets Non-current assets
	Inventories decreased by NOK 356m due to 	5 000
	high number of deliveries	4 000
	Trade receivables increased by NOK 91m  due to deliveries in process – non-risk	3 000	Current assets Current assets Current assets Current assets
	Cash increased by NOK 273m 	2 000
		1 000
	Prepayments from customers account	0	Cash Cash Cash
	for NOK 323m of other current non interest-bearing liabilities

Assets Equity and Liabilities

Inventories (property) Q2 2016 FINANCIAL UPDATE

Land (undeveloped) Work in progress Finished projects

Q2'16 vs Q1'16		Inventory value development
	NOKm
Land value down NOK 110m  Due to construction starts 	5 000 4 000
Work in progress down NOK 260m  Due to completions 	3 000 2 000
Finished goods up NOK 14m 	1 000
	-

Sound debt structure

FINANCIAL UPDATE

Drawn per 30 June (NOKm)	Interest rate margin
500	4.75%
0	2.00%
0	2.00%
927	2.00% - 2.65%
912	1.90% - 2.95%

Total Q2 2016 net interesting bearing debt NOK 1 454 million

Total Q1 2016 net interesting bearing debt NOK 1 841 million

Interest bearing debt as at 30 June 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 policy	NOK
		2.00
	Up to 50 percent of net profit 	1.75
	Dividend pay-out twice a year from H1 2015 	1.50
		1.25
	1H'16 dividend of NOK 0.65 per share	1.00
	48% of EPS	0.75		0.50
		0.50
	1H'16 EPS NOK 1.35	0.25	0.00
		0.00

	Dividend per share

Agenda

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

Oslo, July 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Extraordinary low supply in Oslo

MARKET

• July 2016 Oslo sum-up

SECOND HAND – AVERAGE

• Price increase last 12 months:

• Turnover time: 20 days

• Sales price: NOK 70 168 per m²

• Price increase July: 1.8%
• 15.2%
• Units available for sale (31.07): ~825

NEW HOMES (NOT BUILT)

• Units available for sale (31.07): ~375

SELVAAG BOLIG HAS MORE THAN 130 UNITS AVAILABLE FOR SALE (~35% MARKET SHARE)

Price development in Oslo

MARKET

Highest price increase for small apartments Highest price increase in Oslo East

Source: Eiendomsverdi and Eiendom Norge

Price development Price development 42% 37% 32% 29% 0% 10% 20% 30% 40% 50% 2012 2013 2014 2015 2016 <30 m2 30-50 m2 50-90 m2 >90 m2

All second hand apartments in Oslo, 2011-2016. Average prices per year (August-August) 15 Oslo districts, July 2011-July 2016

20

Total: 403 units | 2-4 rooms | 41-127 m² 264 of 316 units sold per 15 August 2016 Time from acquisition to sales start: 9 months

NOK 195m acquisition January '14 Sales start Oct. '14

22-month price growth Nybyen, Økern

Example: 44 m² , 1 bedroom apartment

Prices include underground parking

21

Total: 403 units | 2-4 rooms | 41-127 m² 264 of 316 units sold per 15 August 2016 Time from acquisition to sales start: 9 months

NOK 195m acquisition January '14 Sales start Oct. '14

22-month price growth Nybyen, Økern All apartments Prices include underground parking

Bergen, July 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Sound supply/demand in Bergen

MARKET

• July 2016 sum-up
• SECOND HAND AVERAGE
• Sales price: NOK 45 800 per m²
• Turnover time: 31 days
• Price increase July: 0.5%
• Price increase last 12 months: 4.0%
• Units available for sale (31.07): ~700
• NEW HOMES (NOT BUILT)
• Units available for sale (31.07): ~750

Stavanger area, July 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

High supply and low demand in Stavanger

MARKET

July 2016 sum-up

SECOND HAND (STAVANGER ONLY) – AVERAGE

• Sales price: NOK 38 346 per m²
• Turnover time: 130 days
• Price decrease July: 0.6%
• 6.3%
• Units available for sale (31.07): ~525

Price decrease last 12 months:

NEW HOMES (NOT BUILT)

Units available for sale (31.07): ~350

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

Trondheim, July 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Sound supply/demand in Trondheim

MARKET

• July 2016 sum-up
• SECOND HAND AVERAGE
• Sales price: NOK 46 810 per m²
• Turnover time: 30 days
• Price increase July: 1.0%
• Price increase last 12 months: 7.4%
• Units available for sale (31.07): ~350
• NEW HOMES (NOT BUILT)
• Units available for sale (31.07): ~700

Agenda

Positive overall outlook for Selvaag Bolig OUTLOOK

• Strong demand in core markets
• SBO well positioned
• High sales activity indicates high future revenues
• 1 344 units under construction
• Sales value NOK ~ 5 billion
• Focus on acquiring new land and refining existing land for development

Tiedemannsbyen, Oslo

Summary

Lørenporten, Oslo

• Extraordinary strong Oslo market
• All time high sales
• Strong results and margins
• Proposed dividend of NOK 0.65 per share for 1H'16

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Next event: 3 rd quarter 10 November 2016

Share performance since IPO in June 2012

SHARE INFORMATION

$\,$ share
53.5%
$6.8\%$
$3.0\%$
2.2%
1.7%
1.7%
1.5%
1.5%
1.3%
1.2%
1.1%
$1.0\%$
$0.9\%$
$0.9\%$
$0.8\%$
$0.8\%$
0.7%
0.6%
$0.6\%$
$0.5\%$
82.2%
17.8%
100.0%

Largest shareholders at 30 June 2016

Shareholder	# of shares	% share
SELVAAG GRUPPEN AS	50 180 087	53.5%
SKANDINAVISKA ENSKILDA BANKEN AB *)	6 404 003	6.8%
MORGAN STANLEY & CO. INTERNATIONAL *)	2 771 012	3.0%
PARETO AS *)	2 065 624	2.2%
MP PENSJON PK	1 609 820	1.7%
VERDIPAPIRFONDET PARETO INVESTMENT	1 596 000	1.7%
J.P. MORGAN CHASE BANK N.A. LONDON *)	1 442 874	1.5%
FLPS - ALL SECTOR SUB	1 424 140	1.5%
HOLTA INVEST AS	1 200 000	1.3%
THE BANK OF NEW YORK MELLON *)	1 092 671	1.2%
STOREBRAND NORGE I	1 016 944	1.1%
US BK EVERMORE GLO VAL FUND	892 805	1.0%
STATE STREET BANK AND TRUST CO. *)	889 439	0.9%
HOLBERG NORDEN	840 000	0.9%
FIDELITY SELECT PORTFOLIOS: FIDELI	759 800	0.8%
JPMORGAN CHASE BANK NA, LONDON *)	744 073	0.8%
UTHALDEN A/S	622 306	0.7%
BANAN II AS	555 190	0.6%
MUSTAD INDUSTRIER AS	531 500	0.6%
DELPHI KOMBINASJON	452 056	0.5%
Total 20 largest shareholders	77 090 344	82.2%
Other shareholders	16 675 344	17.8%
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

32

Focus on growing urban areas

MARKET – SELVAAG BOLIG LAND BANK DISTRIBUTION

Note: The numbers represent the size of the land portfolio as at 30. June 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 ~4 400 residential units, whereof the company has purchasing obligations for ~3 800 and purchasing options for ~600 units

Selected projects in Oslo 2016 MARKET – SELVAAG BOLIG PROJECTS

*Sales update August 2016

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

83% of units in production are sold at end Q2'16

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

Independent land bank valuation from Q4 2015

OPERATIONAL UPDATE

Book value vs. external valuation

2016	Q2 2015	2015
104.0	830.0	3 2 4 6 .0
18.9	(659.2)	(2,608.5)
55.2	(50.7)	(217.4)
(2.7)	3.4	8.3
127.2	123.5	428.4
(6.0)	(6.0)	(24.1)
121.1	117.5	404.3
(7.7)	(7.2)	(33.1)
113.4	110.4	371.2
29.3)	(29.9)	(91.8)
84.1	80.5	279.4
(0.4)	(0.2)	(1.8)
83.9	80.6	284.2

Income statement IFRS

(figures in NOK million)	Q2 2016	Q2 2015	2015
Total operating revenues	1 104.0	830.0	3 246.0
Project expenses	(918.9)	(659.2)	(2 608.5)
Other operating expenses	(55.2)	(50.7)	(217.4)
Other gains (loss)	-	-	-
Associated companies and joint ventures	(2.7)	3.4	8.3
EBITDA	127.2	123.5	428.4
Depreciation and amortisation	(6.0)	(6.0)	(24.1)
EBIT	121.1	117.5	404.3
Net financial expenses	(7.7)	(7.2)	(33.1)
Profit/(loss) before taxes	113.4	110.4	371.2
Income taxes	(29.3)	(29.9)	(91.8)
Net income	84.1	80.5	279.4
Net income for the period attributable to:
Non-controlling interests	(0.4)	(0.2)	(1.8)
Shareholders in Selvaag Bolig ASA	83.9	80.6	284.2

2015	Q2 2015	2016
465.9	(60.8)	468.5
(15.5)	(11.8)	(7.5)
(344.1)	(120.5)	88.2)
106.4	(193.1)	272.8
565.9	663.3	507.7
672.3	470.2	380.5

Cash Flow statement

(figures in NOK million)	Q2 2016	Q2 2015	2015
Net cash flow from operating activities	468.5	(60.8)	465.9
Net cash flow from investment activities	(7.5)	(11.8)	(15.5)
Net cash flow from financing activities	(188.2)	(120.5)	(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	272.8 607.7 880.5	(193.1) 663.3 470.2	106.4 565.9 672.3

(figures in NOK million)	Q2 2016	Q2 2015	2015
Intangible assets	388.0	406.4	397.2
Property, plant and equipment	17.4	22.6	20.3
Investments in associated companies and joint ventures	180.1	209.0	183.4
Other non-current assets	126.8	123.5	114.6
Total non-current assets	712.2	761.5	715.5
Inventories (property)	4 286.6	4 695.3	4 715.4
- Land	1 542.9	1 871.2	1 968.8
- Work in progress	2 370.6	2 546.0	2 368.5
- Finished goods	373.1	278.1	378.1
Other current receivables	232.9	350.1	147.9
Cash and cash equivalents	880.5	470.2	672.3
Total current assets	5 400.1	5 515.6	5 535.5
TOTAL ASSETS	6 112.3	6 277.1	6 251.1
Equity attributed to shareholders in Selvaag Bolig ASA	2 590.5	2 472.6	2 539.6
Non-controlling interests	9.2	14.5	9.6
Total equity	2 599.7	2 487.1	2 549.2
Non-current interest-bearing liabilities	1 648.6	2 018.5	1 846.7
Other non-current non interest-bearing liabilities	260.2	308.4	262.2
Total non-current liabilities	1 908.8	2 326.9	2 108.9
Current interest-bearing liabilities	686.2	748.9	771.3
Other current non interest-bearing liabilities	917.6	714.2	821.7
Total current liabilities	1 603.8	1 463.1	1 593.0
TOTAL EQUITY AND LIABILITIES	6 112.3	6 277.1	6 251.1

Balance sheet

* Corresponding to a book value of NOK 27.6 per share

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 30 June 2016

Units

balance sheet

• High sales reflect Selvaag Bolig's competitive prices and defined housing strategy
• All construction activity put out to competitive tender
• Large land bank in fast growing urban areas
• Selvaag Bolig average price in Q2 2016: NOK 4.2m

Strong overall sales

Maintaining strong market position

Units under construction vs. peers (net figures)

Market presence as of Q4 15 MARKET – SALES DISTRIBUTION

• Fragmented activity in 2012-2014

• Land purchases in core markets only

• Bergen and Trondheim key markets

• Marginal sales in Rogaland

Solid positions est. in Bergen/ Trondheim Rogaland expected to recover

Core markets outside Greater Oslo

All core markets

Construction starts in the quarter

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

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

Kaldnes Dockside C (Modular)	22.5 apartments	NOK 54m
Hovinenga (Onsite)	113 apartments		NOK 500m
Nybyen Økern (Onsite)	117 apartments		NOK 508m

Operational highlights – key operating figures

	Q2 15	Q3 15	Q4 15	Q1 16	Q2 16
Number of units sold	210	208	209	280	326
Number of construction starts	199	204	171	230	253
Number of units completed	190	172	258	183	295
Number of units delivered	232	202	235	179	307
Number of units under construction	1 394	1 426	1 339	1 386	1 344
Proportion of sold units under construction	80%	78%	79%	80%	83%
Number of completed unsold units	31	25	65	58	54
Sales value of units under construction (NOK million)	4 909	5 077	4 740	5 031	5 075
Number of employees	99	99	99	100	100

IFRS EBITDA Q2 2016

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	1 096.2	7.8	1 103.9
Project expenses	(918.0)	(0.9)	(918.9)
Other operating expenses	(16.4)	(38.8)	(55.2)
Share of income (losses) from associated companies and joint ventures	(2.7)	-	(2.7)
Other gain (loss), net	-	-	-
EBITDA	159.1	(31.9)	127.2

Operational reporting Q2 2016

(figures in NOK million)	Property development	Other	Total
Operating revenues	800.6	7.8	808.3
Project expenses	(616.8)	(0.9)	(617.7)
Other operating expenses	(16.4)	(38.8)	(55.2)
EBITDA (percentage of completion)	167.4	(31.9)	135.4

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

Land loan interests on the P&L

• Total land loans are NOK 927 million of which NOK 517 million are loans where interest cost are activated
• Land loan interests activated at regulation
• At 30 June interests connected to land loans of NOK 410 million was charged on the P&L

Loans recognised in profit and loss at 30.06.2016

NOKm

Norway: A robust economy

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