Selvaag Bolig ASA

Investor Presentation • May 22, 2014

Oslo 22 May 2014 Baard Schumann, CEO Haavard Rønning, CFO

Agenda

Highlights

• Operational update
• Financial update
• Outlook and summary

Operational highlights first quarter

• Increased sales compared to previous quarter
• High construction activity
• Land acquisitions in Oslo and Trondheim

Financial highlights

HIGHLIGHTS

Agenda

Highlights

• Operational update
• Financial update
• Outlook and summary

Increase in sales starts

• Sales starts on four projects
• Løren
• Kornmoenga
• Sjøsia (two construction stages)
  • Stage I "Start" and stage II "Hjem" (see slide 27 for sales development)
• Aase Gård

OPERATIONAL UPDATE

Improved sales pace

OPERATIONAL UPDATE

Total sales value and value per sold unit Residential units sold

Construction starts in Q1 2014

OPERATIONAL UPDATE

Steady production activity OPERATIONAL UPDATE

• Sales value of units in production NOK 5 547 million
• 78% of production volume in Greater Oslo
• 76% of the units are sold

Note: All numbers are adjusted for Selvaag Bolig's ownership in joint ventures. Measure point: decision of construction start. Selvaag Bolig has two joint venture projects under construction. The joint venture partners' share amount to 71 residential units, implying that Selvaag Bolig currently manages 1545 residential units under construction

Quarterly development units in production

Units

70% 1 474 Units

Production split

Commenced units aligned with completion ratio

OPERATIONAL UPDATE

Kaldnes, Tønsberg

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

Commenced and finalized units

No of units

Expected deliveries per quarter

1 232 units for delivery next five quarters

• 89% of 2014 completions sold
• Advancements since last quarter
• 30 units at Bjørnåsen Nord and 32 units in Moss moved from Q4 to Q3 2014
• 12 units at Aase moved from Q2 to Q1 2015
• Postponed since last quarter
• Four units at Bo Emmaus postponed from Q4 2014 to Q1 2015
• 32 units at Kaldnes postponed from Q1 to Q2 2015
• Four units at Jaasund postponed from Q1 to Q3 2015

OPERATIONAL UPDATE

Acquisitions

• Agreement to purchase land at Tidemannsbyen , Ensjø in Oslo
• 50/50 JV with Ferd Real Estate
• NOK 206 million
• 320 units, 22 100 saleable square metre (100%)
• Completion of transaction and sales start expected in H2 2016
• Agreement to purchase two plots in Trondheim
• 50/50 JV with Heimdal Sag Invest AS
• 222 units, 14 430 saleable square metre (100%)
• First transaction completed in Q1 2014
  • NOK 17.4 million
• Second transaction expected in Q1 2016
  • To be sold at market value upon zoning

OPERATIONAL UPDATE

Two new projects

Ensjø, Oslo

Agenda

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

Income statement highlights Q1 2014 (IFRS)

• Revenues NOK 245 million (524)
• Delivery of 80 units (170)
• Project costs NOK 193 million (378)
• Low Sales & Marketing costs
• NOK 8.1 million (7.3)

Operating revenues EBITDA margin

Income statement highlights Q1 2014 (NGAAP)

• High production
• Good margins in projects under construction

FINANCIAL UPDATE

Revenue and EBITDA margin (NGAAP)*

* Construction cost are exclusive of financial expenses in the segment reporting

NOKm

Cash flow development Q1 2014

FINANCIAL UPDATE

• Payments for the majority of deliveries booked in Q1 2014 have cash effect in later quarters
• High activity in projects under construction

Condensed cash flow

Assets Equity and Liabilities

Balance sheet highlights Q1 2014

NOKm
7 000
6 000	Non-current assets
5 000
4 000	Current
3 000	assets
2 000
1 000
0	Cash

• Book value per share NOK 23.8
• Trade receivables increased NOK 90 million
• Inventory increased NOK 378 million
• Net increase NOK 215 million in non current interest-bearing liabilities
• Net increase NOK 218 million in current interest-bearing liabilities
• Prepayments from customers count for NOK 328 million of other current non interest-bearing liabilities

FINANCIAL UPDATE

Balance sheet composition

Inventories (property)

Land (undeveloped) Work in progress Finished projects

FINANCIAL UPDATE

Inventory value development

Land value decreased 	NOKm
Due to construction starts 	5 000
Work in progress increased by  NOK 442 million	4 000
High activity in projects under  construction	3 000
Finished goods decreased by  NOK 32 million	2 000 1 000
Delivered units finalized in previous  quarters	-

Sound debt structure FINANCIAL UPDATE

Drawn per 31 Mar (NOKm)	Interest rate margin
500	4.75%
0	2.50%
0	2.50%
1 175	2.20% - 3.15%
1 554	2.20% - 3.00%

Interest bearing debt as at 31 Mar 2014

Note: Bond loan of NOK 500m differs form the summed up top up loan in the table (NOK 489m). The difference is due to NOK -11m in amortized cost which is not actual debt.

In compliance with financial covenants

FINANCIAL UPDATE

Equity ratio covenant (minimum 22.5%)

Debt maturity profile (31 Mar 2014) Sales ratio covenant (minimum 70.0%) NOKm 86% 83% 80% 75% 76% 844 966 610 88 710 2014 2015 2016 2017 2018 --> Construction loan Land loan Corporate loan

Agenda

• Operational update
• Financial update
• Outlook and summary

Second-hand market:

MARKET OUTLOOK

Positive sales and inventory development Norway, total market, April 2007-2014

Source: Eiendomsverdi

MARKET OUTLOOK Oslo and Akershus, April 2007-2014 Rogaland, April 2007-2014 Second-hand market: Positive sales and inventory development

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

COMPANY OUTLOOK

Source: Selvaag Bolig

Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014

Positive sales trend from Q4 2014

Strong sales development at Nyhavn, Bergen

COMPANY OUTLOOK

• Successful sales start on projects in Q1 2014 and so far in Q2 2014
• Sales phase in both Bergen and Tromsø indicate market improvement

Sales development on 49 unit project

Units

Nyhavn, Bergen Sjøsia, Tromsø

Strong sales development at Sjøsia, Tromsø COMPANY OUTLOOK

Sales development on two construction stages (43 and 32 units)

Week number

Upcoming new projects

Lade

• Trondheim (new core area)
• 221 units
• Expected sales start on stage I with 40 units in Q2 2014
• Nyhavn, Bergen
• 156 units
• Expected sales start on stage I with 49 units in Q2 2014
• Tromsø
• 155 units
• Expected sales start on stage III with 48 units in Q2 2014

COMPANY OUTLOOK

Lade Allé, Trondheim

Nyhavn, Bergen

Focus on value creation

COMPANY OUTLOOK

Sjøsia, Tromsø

• Reaching sales levels which secures project initiations
• Cost control through exploiting competitive advantages
• Acquisition of land in core areas

Summary

• Improved sales
• Strategic land acquisitions
• High construction activity
• Solid financial position

Kaldnes, Tønsberg

Thank you for your attention – follow us online!

Q2 2014: 19 Aug 2014

Appendix

1 2014	Q1 2013	2013
244.6	523.8	2 197.0
(193.1)	(377.9)	(1709.6)
(41.3)	(43.6)	(208.8)
		(0.4)
(1.2)	(0.2)	10.9
9.0	102.2	289.1
(5.2)	(5.5)	(22.1)
3.8	96.7	267.0
(6.3)	(14.6)	(30.0)
(2.5)	82.1	237.0
0.7	(20.6)	(51.4)
(1.9)	61.5	185.6

Income statement IFRS

FINANCIAL UPDATE

(figures in NOK million)	Q1 2014	Q1 2013	2013
Total operating revenues	244.6	523.8	2 197.0
Project expenses	(193.1)	(377.9)	(1 709.6)
Other operating expenses	(41.3)	(43.6)	(208.8)
Other gains (loss)	-	-	(0.4)
Associated companies and joint ventures	(1.2)	(0.2)	10.9
EBITDA	9.0	102.2	289.1
Depreciation and amortisation	(5.2)	(5.5)	(22.1)
EBIT	3.8	96.7	267.0
Net financial expenses	(6.3)	(14.6)	(30.0)
Profit/(loss) before taxes	(2.5)	82.1	237.0
Income taxes	0.7	(20.6)	(51.4)
Net income	(1.9)	61.5	185.6

Net income for the period attributable to:

Non-controlling interests	1.1	5.0	21.4
Shareholders in Selvaag Bolig ASA	(3.0)	56.5	164.1

Cash Flow statement

FINANCIAL UPDATE

(figures in NOK million)	Q1 2014	Q1 2013	2013
Net cash flow from operating activities	(413.7)	319.5	104.0
Net cash flow from investment activities	(2.6)	20.3	48.8
Net cash flow from financing activities	415.8	(321.9)	(123.7)
Net change in cash and cash equivalents	(0.4)	17.9	29.1
Cash and cash equivalents at start of period	587.0	558.0	558.0
Cash and cash equivalents at end of period	586.6	575.9	587.0

(figures in NOK million)	Q1 2014	Q1 2013	2013
Intangible assets	429.8	454.8	434.5
Property, plant and equipment	4.4	6.3	4.9
Investments in associated companies and joint ventures	152.1	150.7	150.7
Other non -current assets	170.7	143.8	166.6
Total non -current assets	756.9	755.5	756.7
Inventories (property)	4 661.3	3 853.4	4 283.9
- Land	1 720.7	1 917.0	1 753.4
- Work in progress	2 841.2	1 830.0	2 398.8
- Finished goods	99.4	106.4	131.6
Other current receivables	444.1	287.7	342.3
Cash and cash equivalents	586.6	575.9	587.0
Total current assets	5 692.1	4 716.9	5 213.2
TOTAL ASSETS	6 449.0	5 472.5	5 969.8
Equity attributed to shareholders in Selvaag Bolig ASA*	2 233.3	2 128.7	2 236.3
Non -controlling interests	23.8	24.6	22.7
Total equity	2 257.1	2 153.3	2 259.0
Non -current interest -bearing liabilities	2 330.7	1 452.0	2 116.2
Other non -current non interest -bearing liabilities	265.1	233.7	258.1
Total non -current liabilities	2 595.8	1 685.6	2 374.3
Current interest -bearing liabilities	887.0	1 111.3	669.0
Other current non interest -bearing liabilities	709.0	522.2	667.5
Total current liabilities	1 596.1	1 633.5	1 336.6
TOTAL EQUITY AND LIABILITIES	6 449.0	5 472.5	5 969.8

Balance sheet

FINANCIAL UPDATE

* Corresponding to a book value of NOK 23.8 per share

Operational highlights – key operating figures

OPERATIONAL UPDATE

(number of residential units, unless otherwise stated)	Q1 13	Q2 13	Q3 13	Q4 13	Q1 14
Number of units sold	243	200	236	61	139
Number of commenced units	168	284	335	296	77
Number of units completed	178	211	188	101	77
Number of units in production	1 058	1 131	1 279	1 474	1 474
Proportion of sold units in production	86 %	83 %	80 %	75 %	76 %
Number of completed unsold units	23	23	22	8	8
Sales value of units in production (NOK million)	3 747	4 163	4 657	5 421	5 547
Number of employees	100	101	97	98	99

IFRS EBITDA Q1 2014 FINANCIAL UPDATE

	Property development
(figures in NOK million)	Greater Oslo Rest of Norway Other countries			Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	176.5	57.9	0.7	9.6	244.6
Project expenses	(142.6)	(49.7)	-	(0.6)	(193.0)
Other operating expenses	(6.6)	(2.9)	(0.6)	(31.4)	(41.4)
Share of income (losses) from associated companies and joint ventures	0.4	(1.4)	(0.2)	-	(1.2)
Other gain (loss), net	-	-	-	-	-
EBITDA	27.6	3.9	(0.1)	(22.5)	9.0

Operational reporting first quarter

FINANCIAL UPDATE

	Property development
(figures in NOK million)	Greater Oslo	Other	Total
Operating revenues	536.0	142.0	0.7	9.6	688.2
Project expenses	(409.7)	(112.7)	-	(0.6)	(523.0)
Other operating expenses	(6.6)	(2.9)	(0.6)	(31.4)	(41.4)
EBITDA (percentage of completion)	119.7	26.4	0.1	(22.5)	123.8

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

Land loan interests on the P&L

FINANCIAL UPDATE

• Total land loans are NOK 1 175 million of which NOK 806 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 369 million was charged on the P&L

Interest charged on the P&L as at 31.03.2014

	Production start								Scheduled completion
	Q1 2014	Q2 2014	Q3 2014	Q4 2014	Q1 2015	Q2 2015	Q3 2015	Q4 2015
Bo Emmaus	4 Terraced			NOK 22m					Note: all figures in NOKm are expected revenue
Aase Gård	12 Terraced			NOK 48m					Modular Onsite
Bjørnåsen Nord	38 Terraced				NOK 129m
Kornmo	9 Terraced				NOK 40m
Kaldnes	14 Apartments						NOK 78m

Total units: 77

Construction start on existing projects

OPERATIONAL UPDATE

Market inventory at 30 April – Norway SECOND HAND MARKET

Market inventory: Homes for sale, not sold the last nine months

Market inventory at 30 April – Oslo SECOND HAND MARKET

Market inventory: Homes for sale, not sold the last nine months

Market inventory at 30 April – Akershus SECOND HAND MARKET

Market inventory: Homes for sale, not sold the last nine months

Market inventory at 30 April – Rogaland SECOND HAND MARKET

Market inventory: Homes for sale, not sold the last nine months