Selvaag Bolig ASA

Investor Presentation • Feb 15, 2016

Oslo 15 February 2016 Baard Schumann, CEO Sverre Molvik, CFO

Highlights Q4 and FY 2015 HIGHLIGHTS

• Strong sales: High demand/low supply in key markets
• Strong results and margins
• Land purchase in core markets
• Proposed H2'15 dividend of NOK 0.8 per share, total FY'15 dividend of NOK 1.5

Nyhavn, Bergen

Key financials Q4 and FY 2015

HIGHLIGHTS

Q4 2015 Full year 2015

882 NOK million

Equity ratio

40.8 per cent

Adjusted EBITDA margin

15.1

per cent

EBITDA margin (NGAAP)

14.6 per cent

Operating revenues

3 246 NOK million

Units under construction

1 339

Continued high sales activity in Q4

OPERATIONAL UPDATE

Total sales value and value per sold unit Residential units sold

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)

Units

Majority of construction starts in Oslo area

OPERATIONAL UPDATE

Construction starts per quarter

Expected revenue NOK 517 million

37 apartments in Bergen area

Expected revenue NOK 186 million

No of units

Q4 2015: 79% sold, 69% of construction volume in Greater Oslo

High number of units under construction OPERATIONAL UPDATE

YE 2016: ~85% of construction volume in Greater Oslo

Note: Projects are included when construction start is decided. All numbers are adjusted for Selvaag Bolig's ownership share in joint ventures.

88% of 2016 completions sold by Q4 2015

• Independent land bank valuation by Akershus Eiendom in Q4 2015
• Valuation mainly based on a calculated profit from sales of fully developed housing units
• For projects under development, remaining costs are split on developer and buyer, affecting value distribution
• DCF valuation method is applied on residents for lease

Land bank valuation from Q4 2015

OPERATIONAL UPDATE

NOK million

Book value vs. external valuation

11

Income statement highlights Q4 2015 (IFRS)

Delivery of 235 units (266) Revenues NOK 882m (1 126) Units delivered NOK 870m (1 111) Other revenues NOK 12m, mainly lease income Project costs NOK 716m (865) Of which NOK 38m are interests Other costs NOK 65m (86) Salaries, sales and marketing key components EBITDA adjusted 133m (222) Adjusted for financial expenses included in project costs EBITDA NOK 95m (182) EPS in the quarter NOK 0.73, FY'15 NOK 3.01 NOKm 765 1 126 12% 16%

FINANCIAL UPDATE

Revenues and EBITDA margin (IFRS)

• Revenues NOK 3 246m (2 945)
• EBITDA adjusted 539m (489)
• Adjusted for financial expenses included in project costs
• EBITDA NOK 428m (387)
• Earnings per share full year NOK 3.01

FINANCIAL UPDATE

Revenue and EBITDA margin (IFRS)

Income statement highlights FY 2015 (IFRS)

Operating revenues EBITDA margin

Income statement highlights Q4 2015 (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)*

Cash flow development Q4 2015

FINANCIAL UPDATE

interests in subsidiaries

• Cash flow from operating activities NOK 149m
• H1 2015 dividend of NOK 66m (NOK 0.7 per share) paid in the quarter

Balance sheet highlights Q4 2015

	Book value per share NOK 27.1 (41%)	NOKm
	NOK 27.2 in Q3 2015 (40%) 	7 000
	Changes since Q3 2015:	6 000	Non-current assets Non-current assets Non
	Inventories increased by NOK 52m 	5 000
	Trade receivables decreased by 	4 000	Current assets
	NOK 71m	3 000	Current assets
	Cash decreased by NOK 132m 	2 000
	Prepayments from customers	1 000
	account for NOK 298m of other	0	Cash Cash
	current non interest-bearing liabilities

FINANCIAL UPDATE

Balance sheet composition

Current liabilities Current liabilities

Non-current liabilities Non-current liabilities

Assets Equity and Liabilities

Inventories (property) Q4 2015

Land (undeveloped) Work in progress Finished projects

FINANCIAL UPDATE

Q4'15 vs Q3'15	Inventory value development
	NOKm
Land value up NOK 155m 	5 000
Mainly due to land acquisitions 	374 4 000	359
NOK 881m in added value on the land  bank	3 000 2 360
Work in progress down NOK 273m 	2 000
Finished goods up NOK 171m 	1 000
Mainly due to unsold units 	-

Sound debt structure

FINANCIAL UPDATE

Drawn per 31 Dec (NOKm)	Interest rate margin
500	4.75%
0	2.00%
0	2.00%
1 094	2.00% - 2.65%
1 030	1.90% - 2.65%

Total Q4 2015 net interesting bearing debt NOK 1 946 million

Total Q3 2015 net interesting bearing debt NOK 2 006 million

Interest bearing debt as at 31 December 2015

Note: Top-up loan of NOK 500m in the table differs form the summed up top up loan in the pie chart (NOK 494m). The difference is due to NOK -6m in amortized cost which is not actual debt.

Dividend FINANCIAL UPDATE

		Annual	dividend per share
	Dividend policy	NOK
	Up to 50 percent of net profit 	2.00
	Dividend pay-out twice a year form H1 2015 	1.75
		1.50
	FY'15 EPS NOK 3.01	1.25		1.2
	FY'15 dividend of NOK 1.50 per share	1.00
		0.75
	H1 2015 dividend of NOK 0.70 per share 	0.50	0.5
	distributed	0.25
	H2 2015 dividend of NOK 0.80 per share  proposed	0.00
	To be paid after approval by the AGM on 29 April 

Oslo and Akershus, January 2007-2016

Source: Eiendomsverdi

Selected areas: Oslo, Lørenskog, Ski ,Oppgård, Bærum, Asker

Second-hand inventory in Oslo at historical low…

MARKET

21

…supply of new projects rapidly consumed

MARKET

Total Oslo new projects market per half year

Historically high market activity and

959 units available for sale in upcoming projects per January 2016

• liquidity
• January 2016

Total volumes of second-hand and new projects in Oslo at ~2100 units per

Average market price Oslo new housing January 2016: NOK ~64k per m² , Selvaag Bolig NOK ~61.5k per m²

Selvaag Bolig coming to market with large new projects in H1 2016

~153 units | 1-4 rooms | 35-111 sq. m

Time from acquisition to sales start: 7 months

NOK 156m acquisition March '15 Sales start Oct. '15

Sales update Kilenkollen, Fornebu 100 of 153 units sold per 10.02.16

Sales update Nybyen, Økern 202 of 403 units sold per 20.02.16

~403 units | 3-4 rooms | 58-127 sq. m

Time from acquisition to sales start: 9 months

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

Bergen January 2007-2016

Source: Selvaag Bolig, Eiendomsverdi and Røisland & Co

Low in Bergen and Trondheim, high in Stavanger

MARKET – SECOND-HAND AND NEW PROJECTS INVENTORY

Stavanger area January 2007-2016

	Trondheim January 2007-2016
2 000
1 600
1 200
800
400
0

Selected areas: Stavanger, Sola, Randaberg, Sandnes

• Market inventory second-hand homes 31 January

• Sold units January

• Market inventory second-hand homes 31 January

• Sold units January

• Market inventory second-hand homes 31 January

• Sold units January

• Second-hand inventory ~ 400 Inventory of new projects ~850

• Total inventory ~1250

Second-hand inventory ~ 630

Inventory of new projects ~1000

Total inventory ~1630

Second-hand inventory ~ 1400 Inventory of new projects ~ 850 Total inventory ~ 2250

January 2016 sum-up January 2016 sum-up January 2016 sum-up

• Targeting additional land acquisitions
• delivering ~150-200 units/year

• Ambition to become leading player in the region

Photo: Roger Hardy, Scanpix

Expanding in Bergen, Norway's 2nd largest city

• New office established in 2015 to enable growth
• 98 of 144 units sold at Nyhavn per 10.02.16, acquired site at Torvmyra with ~68 units and sales start Q2 '16

26

• Portfolio development adapted to local market demand
• Last 12 months: Acquired land in core areas for ~2 000 units

MARKET – SELVAAG BOLIG LAND BANK DISTRIBUTION

Note: The numbers represent the size of the land portfolio as at 31. December 2015. All numbers are adjusted for Selvaag Bolig's share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) 80 units at Tromsø (Troms county), 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 ~4 550 residential units, whereof the company has purchasing obligations for ~3 900 and purchasing options for ~650 units

Core markets sales distribution

MARKET – SALES DISTRIBUTION

• Fragmented activity in 2012-2014
• Land purchases in core markets only

Marginal sales in Rogaland

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

Core markets outside Greater Oslo

MARKET – SELVAAG BOLIG POSITION

• 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 Q4 2015: NOK 3.6m
• Total market (second-hand) average price in H2 2015*: flats NOK 3.4m, terraced NOK 4.4m, semi-detached NOK 5.3m

Strong sales compared to peers

Sales activity vs. peers last 4 quarters

* Selected markets: Greater-Oslo, Tromsø, Trondheim, Bergen and Stavanger Housing types Selvaag Bolig: flats, semi-detached and terraced homes

Source: Selvaag Bolig and Eiendomsverdi

Positive overall outlook for Selvaag Bolig OUTLOOK

• High sales activity and number of sold units give high future revenues
• Strong demand in core markets, inventory at historical low
• Proven business strategy

Nybyen Økern, Greater Oslo

Summary

Hovingenga, Valle Hovin, Greater Oslo

• Strong sales: High demand/low supply in key markets
• Strong results and margins
• Land purchase in core markets
• Proposed H2'15 dividend of NOK 0.8 per share, total FY'15 dividend of NOK 1.5

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Next event: 1 st quarter 19 May 2016

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

Value creation in Selvaag Bolig

Construction costs financed

Target 100% sale at delivery

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

The median valuation is used as purchase price

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

• 1 Land purchase conditional on zoning approval 2 Land purchase price based on market value at time of zoning approval 3 Minimum sales rate of 60% before construction 4 Fixed price construction contract approval
• remaining project cost down to 74%-78%
• With minimum 60% pre-sale, there is limited remaining project risk
• 79% of units in production are sold per Q4'15

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

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

Income statement IFRS

Q4 2015	Q4 2014	2015	2014
		3 246.0	2 945.2
		(2 608.5)	(2 371.8)
		(217.4)	(215.5)
		-	(3.5)
		8.3	32.4
		428.4	386.9
		(24.1)	(21.2)
		404.3	365.7
		(33.1)	(17.0)
		371.2	348.7
		(91.1)	(94.2)
		280.1	254.5
(0.1)	(0.0)	(1.8)	1.2
69.1	128.8	286.1	253.2
	(716.0) (59.2) - (11.4) (12.3)	882.0 95.4 (6.2) 89.2 (8.6) 80.6 68.3	1 126.5 (864.6) (80.4) (3.5) 4.4 182.4 (5.7) 176.7 (0.3) 176.4 (47.5) 128.9

Cash Flow statement

(figures in NOK million)	Q4 2015	Q4 2014	2015	2014
Net cash flow from operating activities	149.3	171.1	464.4	187.3
Net cash flow from investment activities	5.4	(35.9)	(15.5)	(5.7)
Net cash flow from financing activities	(287.0)	(346.3)	(344.1)	(202.7)
Net change in cash and cash equivalents	(132.3)	(188.1)	104.8	(21.1)
Cash and cash equivalents at start of period Cash and cash equivalents at end of period	804.6 672.3	754.0 565.9	565.9 670.7	587.0 565.9

40

(figures in NOK million)	2015	Q3 2015	2014
Intangible assets	397.2	401.8	415.6
Property, plant and equipment	20.3	21.4	17.4
Investments in associated companies and joint ventures	183.4	192.3	156.7
Other non-current assets	114.6	122.2	121.8
Total non-current assets	715.5	737.8	711.5
Inventories (property)	4 715.4	4 663.3	4 348.8
- Land	1 938.0	1 814.1	1 614.4
- Work in progress	2 399.3	2 641.9	2 360.3
- Finished goods	378.1	207.4	374.1
Other current receivables	147.9	280.3	588.0
Cash and cash equivalents	672.3	804.6	565.9
Total current assets	5 535.5	5 748.2	5 502.8
TOTAL ASSETS	6 251.1	6 486.0	6 214.2
Equity attributed to shareholders in Selvaag Bolig ASA	2 541.6	2 547.1	2 442.6
Non-controlling interests	9.6	13.1	14.7
Total equity	2 551.1	2 560.2	2 457.3
Non-current interest-bearing liabilities	1 846.7	2 470.1	1 752.4
Other non-current non interest-bearing liabilities	308.0	309.1	293.6
Total non-current liabilities	2 154.7	2 779.2	2 046.0
Current interest-bearing liabilities	771.3	340.4	959.5
Other current non interest-bearing liabilities	773.9	806.2	751.4
Total current liabilities	1 545.2	1 146.6	1 710.9
TOTAL EQUITY AND LIABILITIES	6 251.1	6 486.0	6 214.2

Balance sheet

* Corresponding to a book value of NOK 27.1 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 31 December 2015

No of units

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 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018

Lørenskog Stasjonsby (Onsite)	28 apartments	NOK 106m
Nyhavn (Onsite)	37 terraced		NOK 186m
Løren 5 (Onsite)	52 apartments			NOK 197m
Kilenkollen (Modular)	54 apartments				NOK 214m

Operational highlights – key operating figures

				Q4 15
				209
				171
				258
				235
				1 339
				79%
				65
4 689	4 968	4 909	5 077	4 740
99	99	99	99	99
	Q4 14 233 280 319 266 1 308 77% 39	Q1 15 308 284 208 224 1 384 81% 40	Q2 15 210 199 190 232 1 394 80% 31	Q3 15 208 204 172 202 1 426 78% 25

IFRS EBITDA Q4 2015

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	877.4	4.6	882.0
Project expenses	(714.6)	(1.4)	(716.0)
Other operating expenses	(15.9)	(43.4)	(59.2)
Share of income (losses) from associated companies and joint ventures	(11.4)	-	(11.4)
Other gain (loss), net	-	-	-
EBITDA	135.5	(40.1)	95.4

Operational reporting Q4 2015

(figures in NOK million)	Property development	Other	Total
Operating revenues	713.6	4.6	718.2
Project expenses	(552.9)	(1.4)	(554.4)
Other operating expenses	(15.9)	(43.4)	(59.2)
EBITDA (percentage of completion)	144.8	(40.1)	104.7

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

Land loan interests on the P&L

• Total land loans are NOK 1094 million of which NOK 684 million are loans where interest cost are activated
• Land loan interests activated at regulation
• At 31 December interests connected to land loans of NOK 410 million was charged on the P&L

Loans recognised in profit and loss at 31.12.2015

NOKm

Norway: A robust economy

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