Selvaag Bolig ASA

Investor Presentation • May 21, 2015

Oslo 21 May 2015 Baard Schumann, CEO Sverre Molvik, CFO

Agenda

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

Highlights Q1 2015 HIGHLIGHTS

• All time high sales
• Continued strong market sentiment
• High construction activity
• Strengthened land bank with three acquisitions
• The board has proposed to pay dividend twice a year (up to 50 per cent of net profit)

Nybyen Økern, Oslo

Key financials Q1 2015

HIGHLIGHTS

Agenda

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

Record sales level with 308 units sold

OPERATIONAL UPDATE

Total sales value and value per sold unit Residential units sold

1 011 NOKm Units 483 856 915 795 1 021 3.5 3.4 3.5 3.4 3.3 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

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)

Construction starts reflecting market momentum

Construction start on nine projects Jaasund, Rogaland Strandkanten, Tromsø Moss Glassverk, Greater Oslo Skårerødegården, Greater Oslo (two projects) Vestparken, Greater Oslo (two projects) Økern Torgvei 30, Oslo (two projects)

OPERATIONAL UPDATE

Construction starts per quarter

Increase in units under construction

• Sales value of units under construction NOK 4 968 million
• 65% of production volume in Greater Oslo
• 81% of the units are sold

OPERATIONAL UPDATE

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

Development units under construction

Production split

NSKA	VEIDEKKE

Selvaag Bolig competitively positioned

OPERATIONAL UPDATE

Units under construction vs. peers (net figures)

No of units

Expected deliveries per quarter

1 051 units for delivery next five quarters

• 90% of 2015 completions were sold by the end of Q1 2015
• Net changes in expected deliveries since the previous quarter
• Q4 2015: -10
• Q1 2016: +11

No of units

Expected deliveries, wholly owned units

Acquisitions

OPERATIONAL UPDATE

Three new projects

• Project at Lørenvangen 22 in Oslo
• Approximately 200 apartments
• Acquired for NOK 137 million
• Sinsenveien 45-49 in Oslo 50/50 JV with Veidekke
• Approximately 400 apartments in total
• Acquired for NOK 375 million
• Kilenveien and Arnstein Arnebergsvei at Fornebu
• Approximately 160 apartments
• Acquired for NOK 156 million

Kilenveien Fornebu, Greater Oslo

Disclosure of acquisition from Q4 2014

OPERATIONAL UPDATE

Announced last quarter as "Project in central Oslo"

• Plot for development at Valle Hovin
• Approximately 400 apartments
• Acquired for NOK 220 million
• Agreement signed in Q4 2014
• Expected sales start in Q4 2015
• About the location:
• Central Oslo
• Attractive situation next to the new football stadium of Vålerenga - one of Norway's most profiled football clubs
• Close to the subway and other public transportation
• Transaction subject to ESA-approval

Valle Hovin, Oslo

Agenda

• Highlights Operational update
• Financial update
• Outlook and summary

Income statement highlights Q1 2015 (IFRS)

FINANCIAL UPDATE

Income statement highlights Q1 2015 (NGAAP)

FINANCIAL UPDATE

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

Cash flow development Q1 2015

FINANCIAL UPDATE

• Positive cash flow from operating activities
• Changes in inventory a result of land acquisitions, construction and deliveries
• Net change in borrowings positive due to new land and construction loans, offset by down payment of credit facility

Condensed cash flow

Assets Equity and Liabilities

Balance sheet highlights Q1 2015

			Balance sheet composition
	Book value per share NOK 26.7 (40%)
	NOK 26.0 in Q4 2014 	NOKm 7 000
	Changes since Q4 2014:	6 000	Non-current assets
	Trade receivables decreased by NOK 	5 000
195 million	4 000
	Inventories increased by NOK 214 million 	3 000	Current assets
	Net increase of NOK 49 million in interest 	2 000
	bearing liabilities	1 000
	Prepayments from customers count	0	Cash
	for NOK 290 million of other current non interest-bearing liabilities

FINANCIAL UPDATE

Inventories (property) Q1 2015

FINANCIAL UPDATE

Sound debt structure FINANCIAL UPDATE

Drawn per 31 Mar (NOKm)	Interest rate margin
500	4.75%
0	2.50%
0	2.00%
1 124	2.00% - 2.50%
1 145	1.90% - 2.50%

Interest bearing debt as at 31 March 2015

Note: Top-up loan of NOK 500m in the table differs form the summed up top up loan in the pie chart (NOK 492m). The difference is due to NOK -8m in amortized cost which is not actual debt.

In compliance with financial covenants

FINANCIAL UPDATE

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

Agenda

• Highlights Operational update
• Financial update
• Outlook and summary

Optimal geographic spread COMPANY OUTLOOK

• Ideal land bank spread in current market situation
• Strongly positioned in the fast growing Greater-Oslo area

22 155 units at Tromsø (Troms county) and 100 units at Alfaz Del Sol (Spain), 3) The residential property obligations for ~3 550 and purchasing options for ~550 units.

development portfolio consists of land plots that are to be paid for when planning permission is received. These have a development potential of ~4 000 residential units, whereof the company has purchasing

Source: Eiendomsverdi

Selected areas: Oslo, Lørenskog, Ski ,Oppgård, Bærum, Asker Selected areas: Stavanger, Sola, Randaberg, Sandnes

MARKET OUTLOOK Oslo and Akershus, April 2007-2015 Units Stavanger area, April 2007-2015 Units Second-hand market: Very strong in Oslo, high inventory in Stavanger 9000 1400

Source: Eiendomsverdi

MARKET OUTLOOK Bergen, April 2007-2015 Trondheim, April 2007-2015 Second-hand market: Strong market in Trondheim and Bergen

Same price for second hand and new homes

• Historical price premium for new homes vs. secondary homes is +20% per m²
• 55 0001) per m²vs. 57 0002) m²
• Selvaag Bolig 53 400 per m²
• A consequence of supply shortage

1) Average price secondary homes in Oslo Source: Eiendom Norge

2) Average price new homes in Oslo ex Tjuvholmen and Bjørvika (ex garage where applicable) Source: ECON

Available new homes in Oslo Q1 14 vs Q1 15

COMPANY OUTLOOK Strong position

• Solid sales development for Selvaag Bolig
• Company strategy support market position:
• Low-cost strategy:
  • Selvaag Bolig average price in Q1 2015*: NOK 3.3m
  • Total market average price in Q1 2015*: flats NOK 4.1m, terraced NOK 3.8m
• No in-house construction arm
• Defined housing concepts
• Large land bank

* Selected markets: Oslo, Akershus, Hordaland, Rogaland, Troms and Sør-Trønderlag Housing types Selvaag Bolig: flats, semi-detached and terraced homes

Source: Selvaag Bolig and Eiendomsverdi

Positive outlook for Selvaag Bolig

COMPANY OUTLOOK

Nybyen Økern, Oslo

• Well positioned in core markets
• Increased land bank in attractive Greater-Oslo area
• Competitive housing prises for broad consumer groups
• Macro indicators are positive
• Strong housing demand and low market inventory
• Strong urbanisation and low interest rates

Summary

• Record sales level driven by high demand and low supply in Greater-Oslo area
• Continued strong market sentiment
• High construction activity
• Proposed to pay out dividend twice a year (up to 50 per cent of net profit) Startskuddet Lørenskog Stasjonsby,

Greater Oslo

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Norwegian housing market

• Good demand for new homes and persistent population growth in urban areas
• 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
• 27% of mortgage loan interest payments are tax-deductible
• Transfer stamp duty for new houses is lower than for second hand homes
• Attractive market outlook
• Strong population growth
• High level of purchasing power
• Favourable macro-economic climate and low interest rates

Source: Source Selvaag Bolig and Eurostat

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.

• Proven low-cost strategy
• Very competitive prices ensure a broad customer base
• No in-house construction arm
• low 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 land bank
• Several thousand homes under development in Norway's four fastest growing urban regions

	Construction start										Scheduled	completion
	Q1 2015	Q2 2015	Q3 2015	Q4 2015	Q1 2016	Q2 2016	Q3 2016	Q4 2016	Q1 2017	Q2 2017	Q3 2017	Q4 2017
Jaasund	7 Apartments			NOK 26m							Note: all figures in NOKm are expected revenue
Skaarer ødegaarden	16 Apartments				NOK 61m						Modular Onsite
Skaarer ødegaarden	35 Apartments				NOK 121m
Strandkanten	32 Apartments					NOK 124m
Moss Glassverk	15 Apartments					NOK 46m
Vestparken	36 Apartments					NOK 100m
Vestparken	30 Apartments						NOK 93m
Økern Torgvei 30	35 Apartments						NOK 127m
Økern Torgvei 30	78 Apartments									NOK 290m

Total units: 284

Construction starts in the quarter

2014	Q1 2014	1 2015
2945.2	244.6	755.6
(2371.8)	(193.1)	(609.5)
(215.5)	(41.3)	(54.4)
(3.5)
32.4	(1.2)	6.9
386.917	9.005	98.6
(21.2)	(5.2)	(5.8)
365.7	3.8	92.8
(17.0)	(6.3)	(8.0)
348.7	(2.5)	84.9
(94.2)	0.7	(23.0)
254.5	(1.9)	61.9

Income statement IFRS

(figures in NOK million)	Q1 2015	Q1 2014	2014
Total operating revenues	755.6	244.6	2 945.2
Project expenses	(609.5)	(193.1)	(2 371.8)
Other operating expenses	(54.4)	(41.3)	(215.5)
Other gains (loss)	-	-	(3.5)
Associated companies and joint ventures	6.9	(1.2)	32.4
EBITDA	98.6	9.005	386.917
Depreciation and amortisation	(5.8)	(5.2)	(21.2)
EBIT	92.8	3.8	365.7
Net financial expenses	(8.0)	(6.3)	(17.0)
Profit/(loss) before taxes	84.9	(2.5)	348.7
Income taxes	(23.0)	0.7	(94.2)
Net income	61.9	(1.9)	254.5

Net income for the period attributable to:

Non-controlling interests	(0.0)	1.1	1.2
Shareholders in Selvaag Bolig ASA	61.9	(3.0)	253.2

Cash Flow statement

(figures in NOK million)	Q1 2015	Q1 2014	2014
Net cash flow from operating activities	97.7	(413.7)	187.3
Net cash flow from investment activities	(37.7)	(2.6)	(5.7)
Net cash flow from financing activities	37.4	415.8	(202.7)
Net change in cash and cash equivalents	97.3	(0.4)	(21.1)
Cash and cash equivalents at start of period	565.9	587.0	587.0
Cash and cash equivalents at end of period	663.3	586.6	565.9

(figures in NOK million)	Q1 2015	Q1 2014	2014
Intangible assets	411.0	429.8	415.6
Property, plant and equipment	17.3	4.4	17.4
Investments in associated companies and joint ventures	200.2	152.1	156.7
Other non -current assets	123.0	170.7	121.8
Total non -current assets	751.5	756.9	711.5
Inventories (property)	4 563.1	4 661.3	4 348.8
- Land	1 845.1	1 720.7	1 614.4
- Work in progress	2 358.8	2 841.2	2 360.3
- Finished goods	359.2	99.4	374.1
Other current receivables	350.3	444.1	588.0
Cash and cash equivalents	663.3	586.6	565.9
Total current assets	5 576.7	5 692.1	5 502.8
1 TOTAL ASSETS	6 328.2	6 449.0	6 214.2
1112131 Equity attributed to shareholders in Selvaag Bolig ASA*	2 504.5	2 233.3	2 442.6
Non -controlling interests	14.7	23.8	14.7
Total equity	2 519.2	2 257.1	2 457.3
Non -current interest -bearing liabilities	1 685.6	2 330.7	1 752.4
Other non -current non interest -bearing liabilities	308.3	265.1	293.6
Total non -current liabilities	1 993.9	2 595.8	2 046.0
Current interest -bearing liabilities	1 075.4	887.0	959.5
Other current non interest -bearing liabilities	739.7	709.0	751.4
Total current liabilities	1 815.1	1 596.1	1 710.9
TOTAL EQUITY AND LIABILITIES	6 328.2	6 449.0	6 214.2

Balance sheet

* Corresponding to a book value of NOK 26.7 per share

Q3 14	Q4 14	Q1 15
259	233	308
203	280	284
274	319	208
279	266	224
1 347	1 308	1 384
76%	77%	81%
18	39	41
5 1 5 9	4 689	4968
100	99	99

Operational highlights – key operating figures

(number of residential units, unless otherwise stated)	Q1 14	Q2 14	Q3 14	Q4 14	Q1 15
Number of units sold	139	255	259	233	308
Number of construction starts	77	197	203	280	284
Number of units completed	77	253	274	319	208
Number of units delivered	80	236	279	266	224
Number of units under construction	1 474	1 418	1 347	1 308	1 384
Proportion of sold units under construction	76%	76%	76%	77%	81%
Number of completed unsold units	8	17	18	39	41
Sales value of units under construction (NOK million)	5 547	5 238	5 159	4 689	4 968
Number of employees	99	100	100	99	99

IFRS EBITDA Q1 2015

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	750.2	7.1	757.3
Project expenses	(609.9)	(1.3)	(611.2)
Other operating expenses Share of income (losses) from associated companies and joint	(17.3)	(37.2)	(54.4)
ventures	6.9	-	6.9
Other gain (loss), net	-	-	-
EBITDA	129.9	(31.3)	98.6

IFRS EBITDA for the quarter, per segment
Operating revenues	750.2	7.1	757.3
Project expenses	(609.9)	(1.3)	(611.2)
Other operating expenses Share of income (losses) from associated companies and joint	(17.3)	(37.2)	(54.4)
ventures	6.9	-	6.9
Other gain (loss), net	-	-	-
EBITDA	129.9	(31.3)	98.6

Operational reporting Q1 2015

(figures in NOK million)	Property development	Other	Total
Operating revenues	819.9	7.1	827.1
Project expenses	(631.0)	(1.3)	(632.3)
Other operating expenses	(17.3)	(37.2)	(54.4)
EBITDA (percentage of completion)	171.6	(31.3)	140.3

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

Land loan interests on the P&L

• Total land loans are NOK 1 124 million of which NOK 704 million are loans where interest cost are activated
• Land loan interests activated at regulation
• As at 31 March interests connected to land loans of NOK 420 million was charged on the P&L

Loans recognised in profit and loss at 31.03.2015

NOKm

Book value at time of valuation (Nov 2014)

• Independent land valuation, by Akershus Eiendom.
• Valuation is 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 2014

NOKm

External valuation vs. book value

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 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

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

Modules vs. on-site construction

Lervig Brygge – on-site

Approximate average value