Selvaag Bolig ASA

Earnings Release • Feb 28, 2014

Oslo 28 February 2014 Baard Schumann, CEO Haavard Rønning, CFO

Agenda

Highlights

• Operational update
• Financial update
• Outlook and summary

Operational highlights fourth quarter

• Several construction starts and increased building activity
• Weaker sales pace than in previous quarters
• Acquisition of land at Økern in Oslo and in Ski
• NOK 690 million added value on land bank
• Proposed dividend of NOK 0.5 per share for 2013

Financial highlights HIGHLIGHTS

Operating revenues 2 197 million NOK

Units under construction 1 474

Q4 2013 Full year 2013

Agenda

Highlights Operational update

• Financial update
• Outlook and summary

Only one sales start due to market conditions

Sales start postponed due to market

• conditions
• Sales start on one project

Terraced homes in Greater Oslo – 9 units

OPERATIONAL UPDATE

Sales pace slowing down

OPERATIONAL UPDATE

Q1 Q2 Q3 Q4

Construction start on existing projects

OPERATIONAL UPDATE

Note: all figures in NOKm are expected revenue

Modular

Onsite

Growth in production activity OPERATIONAL UPDATE

• Sales value of units in production NOK 5 421 million
• 75% of the units are sold

78% of production volume in Greater Oslo

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

No of units

Production split

Continued strong commenced/completion ratio

OPERATIONAL UPDATE

Lørenskog Stasjonsby, Oslo

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

Commenced and finalized units

1 044 units for delivery next five quarters

OPERATIONAL UPDATE

Expected deliveries, partly owned units

Expected deliveries, wholly owned units

• 85% of the 2014 deliveries sold
• Delivery of Øya Lervig Brygge advanced two quarters
• 80 units expected to be delivered in Q4 2014. Initially scheduled for Q2 2015

Acquisitions

OPERATIONAL UPDATE

Two new projects

• Acquisition of project at Økern in Oslo
• Approximately 360 apartments
• NOK 195 million, implies a price of NOK 7 800 per saleable square metre
• Completion of transaction in Q4 2014
• Project in Ski a 50/50 JV with AF-Gruppen
• Approximately 120 apartments
• NOK 70 million
• Corresponds to NOK 7 200 per saleable square metre, given the same utilisation as other nearby projects
• Transaction completed in Q4 2013

Økern, Oslo

Disposals OPERATIONAL UPDATE

Four new sales

• Sale of commercial property at Løren
• Sales price NOK 15.7 million
• Accounting loss of NOK 1.2 million
• Sale of plots in Tromsø, Stavanger and Tønsberg
• Sales price NOK 54.3 million
• Accounting loss of NOK 1.4 million

14

New core area - Trondheim

• Demographics similar to current core areas
• Geographical portfolio diversification
• Available plots support corporate strategy
• Local organization established
• First employee recruited
• Already one project under development
• Plot at Lade in current land bank
• First units for sale in Q2 2014
• An important contributor to increasing deliveries per year

OPERATIONAL UPDATE

2) 260 units at Stord (Hordaland county) and 50 units at Alfaz Del Sol (Spain), 3) The residential property development portfolio consists of land plots that are to be paid for when planning permission is received.

Agenda

• Highlights Operational update Financial update
• Outlook and summary

Income statement highlights Q4 2013 (IFRS)

• Revenues of NOK 376 million (1 252)
• Delivery of 118 units (309)
• Sale of properties NOK 70 million (213)
• Project cost of NOK 316 million (968)
• Other OPEX NOK 63 million (75)
• Bonus for 2013 booked in Q3 13. Bonus for 2012 booked in Q4 2012

FINANCIAL UPDATE

Revenue and EBITDA margin (IFRS)

Operating revenues EBITDA margin

Revenues NOK 2 197 million (2 812)

• Delivery of 687 units (776)
• Net contribution from sale of properties NOK 33 million (124)
• Project cost NOK 1 710 million (2 141)
• Other OPEX NOK 231 million (236)

FINANCIAL UPDATE

Income statement highlights FY 2013 (IFRS)

Income statement highlights Q4 2013 (NGAAP)

• Margin negatively affected by low sales in Q4 2013
• High production
• Good margins in projects under construction
• EBITDA-margin adjusted for sales of plots and one-offs was 13.2% in Q4
• Q4 2012 positively affected by a gain of NOK 57.0 million from sale of land to the Oslo Municipality

FINANCIAL UPDATE

Revenue and EBITDA margin (NGAAP)*

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

Operating revenues EBITDA margin

Payment for residential units delivered in Q3 2013

• Løren 7 (NOK 120 million)
• Nesttun (NOK 120 million)
• Lervik Brygge (NOK 98 million)

Increased volume of units under construction

Cash flow development

FINANCIAL UPDATE

Condensed cash flow

NOKm

Assets Equity and Liabilities

Balance sheet highlights

	Book value per share NOK 23.9	NOKm
	Trade receivables down NOK 338 million	6 000	Non-current assets
	Inventory increased NOK 419 million	5 000 4 000	Current
	Net decrease of NOK 86 million in current interest-bearing liabilities	3 000	assets
	Prepayments from customers count for NOK 278 million of other current	2 000 1 000
	non interest-bearing liabilities		Cash
	BoD propose dividend of NOK 0.50 per share	0

FINANCIAL UPDATE

Balance sheet composition

Inventories (property)

Land (undeveloped) Work in progress Finished projects

FINANCIAL UPDATE

NOKm

• Land value decreased
• Acquisition at Løren completed in Q4
• Disposal of plot in Tromsø completed in Q4
• Work in progress increased
• High activity in projects under construction
• Finished goods decreased by NOK 73 million
• Due to sale of commercial property at Løren and units been finalized in previous quarters being delivered to buyers

Sound debt structure

FINANCIAL UPDATE

Drawn per 31 Dec (NOKm)	Interest rate margin
500	4.75%
0	2.50%
0	2.50%
236	2.25%
942	2.20% - 3.15%
1 120	2.20% - 3.00%

Interest bearing debt as at 31 Dec 2013

Note: Bond loan of NOK 500m differs form the summed up top up loan in the table (NOK 488m). The difference is due to NOK -12m in amortized cost which is not actual debt.

In compliance with financial covenants

FINANCIAL UPDATE

Note: Selvaag Bolig has a NOK 150m working capital facility (NOK 0 m drawn) with maturity in 2018 or later will mature in 2014 if either of the parties cancels the facility. If the facility is not cancelled, it will be extended on an annual basis.

Agenda

Highlights Operational update Financial update Outlook and summary

Rigged for strengthened market position

MARKET OUTLOOK

Solid production level for all players

Selvaag Bolig reached a record high number of units in production

• in 2013
• • and growth

1.6 commenced units per completed unit in 2013

Positioned for further value creation

MARKET OUTLOOK

Secondary market: strong sales, high inventory level

Source: Estimates based on figures from Eiendomsmeglerforetakenes Forening (EFF) and Eiendomsverdi

Focus on value creation

• Continued focus on:
• Sales starts and project initiations
• Cost control
• Acquisition of land in core areas

COMPANY OUTLOOK

Sjøsia, Tromsø

Summary

• Housing market affected by high inventory level in secondary market
• Selvaag Bolig positioned for growth
• Strategic land acquisitions
• Trondheim defined as new core area
• Large volumes under construction
• Solid financial position
• Proposed dividend of NOK 0.5 per share

Lørenpynten, Oslo

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@SelvaagAksjen /SelvaagAksjen

Q1 2014: 22 May 2014

26.0	21.4	68.0
138.3	165.3	278.4

Income statement IFRS

FINANCIAL UPDATE

(figures in NOK million)	Q4 2013	Q4 2012	2013	2012
Total operating revenues	375.6	1 252.1	2 197.0	2 812.0
Project expenses	(316.1)	(967.7)	(1 709.6)	(2 141.3)
Other operating expenses	(57.7)	(68.3)	(208.8)	(212.7)
Other gains (loss)	(0.5)	(0.0)	(0.4)	0.1
Associated companies and joint ventures	0.4	13.2	10.9	53.4
EBITDA	1.6	229.2	289.1	511.5
Depreciation and amortisation	(5.3)	(7.0)	(22.1)	(21.9)
EBIT	(3.7)	222.2	267.0	489.6
Net financial expenses	(2.8)	(2.3)	(30.0)	(41.5)
Profit/(loss) before taxes	(6.6)	219.9	237.0	448.1
Income taxes	14.1	(55.6)	(50.2)	(101.8)
Net income	7.5	164.3	186.8	346.3

Net income for the period attributable to:
Minority interests	4.7	26.0	21.4	68.0
Shareholders in Selvaag Bolig ASA (majority interests)	2.8	138.3	165.3	278.4

Cash Flow statement

FINANCIAL UPDATE

(figures in NOK million)	Q4 2013	Q4 2012	2013	2012
Net cash flow from operating activities	(152.9)	715.4	104.0	464.3
Net cash flow from investment activities	(2.6)	6.1	48.8	18.0
Net cash flow from financing activities	189.5	(589.2)	(123.7)	(319.5)
Net change in cash and cash equivalents Cash and cash equivalents at start of period	34.1 552.9	132.3 425.7	29.1 558.0	162.8 395.2
Cash and cash equivalents at end of period	587.0	558.0	587.0	558.0

Total non

(figures in NOK million)	2013	2012
Intangible assets	434.5	459.6
Property, plant and equipment	4.9	6.5
Investments in associated companies and joint ventures	150.7	158.4
Other non -current assets	166.6	152.4
Total non -current assets	756.7	776.8
Inventories (property)	4 283.9	3 910.7
- Land	1 753.4	1 961.0
- Work in progress	2 398.8	1 831.7
- Finished goods	131.6	118.0
Other current receivables	342.3	489.3
Cash and cash equivalents	587.0	558.0
Total current assets	5 213.2	4 958.0
TOTAL ASSETS	5 969.8	5 734.9
Equity attributed to shareholders in Selvaag Bolig ASA*	2 237.5	2 072.2
Non -controlling interests	22.7	74.4
Total equity	2 260.2	2 146.6
Non -current interest -bearing liabilities	2 116.2	1 461.5
Other non -current non interest -bearing liabilities	257.3	213.1
Total non -current liabilities	2 373.5	1 674.6
Current interest -bearing liabilities	669.0	1 368.8
Other current non interest -bearing liabilities	667.1	544.8
Total current liabilities	1 336.1	1 913.7
TOTAL EQUITY AND LIABILITIES	5 969.8	5 734.9

Balance sheet

FINANCIAL UPDATE

* Corresponding to a book value of NOK 23.9 per share

Operational highlights – key operating figures

OPERATIONAL UPDATE

(number of residential units, unless otherwise stated)	Q4 12	Q1 13	Q2 13	Q3 13	Q4 13
Residential units sold	221	243	200	236	61
Housing starts	383	168	284	335	296
Residential units completed	309	178	211	188	101
Residential units in production	1 067	1 058	1 131	1 279	1 474
% sold of residential units under construction	86%	86%	83%	80%	75 %
Unsold completed residential units	22	23	23	22	8
Sales value of projects under construction (NOKm)	3 572	3 747	4 163	4 657	5 421
Number of employees	99	100	101	97	98

IFRS EBITDA Q4 2013 FINANCIAL UPDATE

	Property development
(figures in NOK million)	Greater Oslo	Rest of Norway	Other countries	Other	Total
IFRS EBITDA third quarter per segment
Operating revenues	258.2	111.0	0.4	3.9	373.5
Project expenses	(222.9)	(90.5)	-	(0.6)	(314.1)
Other operating expenses	(14.0)	(5.0)	(0.7)	(38.0)	(57.7)
Share of income (losses) from associated companies and joint ventures	0.4	0.3	(0.2)	-	0.4
Other gain (loss), net	-	-	-	(0.5)	(0.5)
EBITDA	21.7	15.6	(0.5)	(35.2)	1.6

Operational reporting fourth quarter

FINANCIAL UPDATE

	Property development
(figures in NOK million)	Greater Oslo Rest of Norway Other countries		Other	Total
Operating revenues	571.0	179.8	0.4	3.9	755.2
Project expenses	(460.5)	(153.2)	-	(0.6)	(614.2)
Other operating expenses	(14.0)	(5.0)	(0.7)	(38.0)	(57.7)
EBITDA (percentage of completion)	96.6	21.6	(0.3)	(34.7)	83.2

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 1 177 million of which NOK 807 million are loans where interest cost are activated
• Land loan interests activated at regulation
• As at 31 December interests connected to land loans of NOK 370 million was charged on the P&L

Interest charged on the P&L as at 31.12.2013