Selvaag Bolig ASA

Earnings Release • May 19, 2016

Oslo 19 May 2016 Baard Schumann, CEO Sverre Molvik, CFO

Highlights Q1 2016 HIGHLIGHTS

• All time high sales value
• Strong results and margins
• Extraordinary strong Oslo market, low supply/high demand
• Gives earlier construction starts than planned
• SBO has 30% share of all new homes available for sale at 1 May

Hovinenga, Oslo

Key financials Q1 2016

HIGHLIGHTS

Increased sales value in Q1

OPERATIONAL UPDATE

Total sales value and value per unit sold 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)

Construction starts at 12 month high

OPERATIONAL UPDATE

Construction starts per quarter

All construction starts in Greater Oslo in Q1

• • 230 apartments

Expected revenue NOK 891 million

Increased value of units under construction

OPERATIONAL UPDATE

Expected completions for 2016 as of Q1 16: 805 units Expected completions for 2016 as of Q4 15: 754 units 183 (Q1 16), 280 (Q2 16), 118 (Q3 16), 173 (Q4 16)

Income statement highlights Q1 2016 (IFRS)

• Delivery of 179 units (224)
• Revenues NOK 624m (756)
• Units delivered NOK 608m (730)
• Other revenues NOK 15m, mainly lease income
• Project costs NOK 501m (610)
• Of which NOK 22m are interests
• Other costs NOK 58m (60)
• Salaries, sales and marketing key components
• EBITDA adjusted NOK 91m (121)
• Adjusted for financial expenses included in project costs
• EBITDA NOK 69m (99)
• EPS in the quarter NOK 0.45

FINANCIAL UPDATE

Revenues and adjusted EBITDA margin (IFRS)

Income statement highlights Q1 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

^{827 858 826} 718 815 17% 15% 15% 15% 16% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Operating revenues EBITDA margin

Cash flow development Q1 2016

FINANCIAL UPDATE

• Cash flow from operating activities NOK 119m
• Net cash outflow due to repayment of debts
• Strong cash balance maintained

Balance sheet highlights Q1 2016

FINANCIAL UPDATE

	Book value NOK 27.6 per share	NOKm
	NOK 27.1 per share at YE 2015 	7 000
	Equity ratio 42.5%, up from 39.8% in Q1 2015 	6 000	Non-current assets Non-current assets Non
	Changes from Q4 2015:	5 000	Non-current assets
	Inventories decreased by NOK 73m 	4 000
	Trade receivables decreased by NOK 16m 	3 000	Current assets Current assets Current assets
	Cash decreased by NOK 65m 	2 000
	Prepayments from customers account	1 000
	for NOK 309m of other current non	0	Cash Cash Cash
	interest-bearing liabilities

Balance sheet composition

Assets Equity and Liabilities

Inventories (property) Q1 2016 FINANCIAL UPDATE

Land (undeveloped) Work in progress Finished projects

Sound debt structure FINANCIAL UPDATE

Drawn per 31 March (NOKm)	Interest rate margin
500	4.75%
0	2.00%
0	2.00%
1 027	2.00% - 2.65%
927	1.90% - 2.95%

Total Q1 2016 net interesting bearing debt NOK 1 841 million

Total Q4 2015 net interesting bearing debt NOK 1 946 million

Interest bearing debt as at 31 March 2016

Note: Top-up loan of NOK 500m in the table differs form the summed up top up loan in the pie chart (NOK 495m). The difference is due to NOK -5m in amortized cost which is not actual debt.

Oslo, January 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Extraordinary low supply in Oslo

MARKET

• April 2016 Oslo sum-up
• SECOND HAND AVERAGE
• Sales price: NOK 61 477 per m²
• Turnover time: 15 days
• Price increase April: 2.0%
• 10.5%
• Units available for sale: ~1 250
• NEW HOMES (NOT BUILT)
• Units available for sale: ~1 000

Price increase last 12 months:

SELVAAG BOLIG HAS MORE THAN 300 UNITS AVAILABLE FOR SALE (~30% MARKET SHARE)

18

Total: 403 units | 2-4 rooms | 41-127 m² 237 of 316 units sold per 17 May 2016

Time from acquisition to sales start: 9 months

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

18-month price growth Nybyen, Økern Example: 44 m² , 1 bedroom apartment

Total: ~380-400 units | 2-4 rooms | ~40-100 m² Sales start phase 1 April 2016: 158 units

Tiedemannsbyen (JV) – Oslo

Total: ~375 units | 2-4 rooms | ~40-100 m² Sales start phase 1 October 2015: 49 units Sales start phase 2 May 2016: 64 units

Sales update as of 17 May 2016 Valle Hovin – Oslo 72 of 113 units sold

Time from acquisition to sales start: 8 months

NOK 220m acquisition in Feb. '15 Sales start Oct. '15

Bergen, January 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Sound supply/demand in Bergen

MARKET

• April 2016 sum-up
• SECOND HAND AVERAGE
• Sales price: NOK 41 174 per m²
• Turnover time: 20 days
• Price increase April: 0.7%
• Price increase last 12 months: 3.2%
• Units available for sale: ~750

NEW HOMES (NOT BUILT)

Units available for sale: ~600

Stavanger area, January 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

High supply and low demand in Stavanger

MARKET

• April 2016 sum-up
• SECOND HAND AVERAGE
• Sales price: NOK 35 839 per m²
• Turnover time: 77 days
• Price decrease April: 0.1%
• 7.2%
• Units available for sale: ~1 500

Price decrease last 12 months:

NEW HOMES (NOT BUILT)

Units available for sale: ~700

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

Trondheim, January 2007-2016

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Sound supply/demand in Trondheim

MARKET

• April 2016 sum-up
• SECOND HAND AVERAGE
• Sales price: NOK 42 991 per m²
• Turnover time: 25 days
• Price increase April: 1.0%
• Price increase last 12 months: 4.1%
• Units available for sale: ~400
• NEW HOMES (NOT BUILT)
• Units available for sale: ~650

Selected projects in Oslo 2016 MARKET – SELVAAG BOLIG PROJECTS

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 Q1 2016: NOK 3.8m

Strong overall sales

Sales activity vs. peers last 4 quarters

Housing types Selvaag Bolig: flats, semi-detached and terraced homes

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Positive overall outlook for Selvaag Bolig OUTLOOK

• Strong demand in core markets
• SBO well positioned
• High sales activity indicates high future revenues
• 1 386 units under construction
• Sales value NOK ~ 5 billion
• Focus on acquiring new land and refining existing land for development

Tiedemannsbyen, Oslo

Summary

Heimdal Stasjonsby, Trondheim

• All time high sales value
• Strong results and margins
• Extraordinary strong Oslo market, low supply/high demand
• Gives earlier construction starts than planned
• SBO has ~30% share of all new homes available for sale at 1 May

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31

Focus on growing urban areas

MARKET – SELVAAG BOLIG LAND BANK DISTRIBUTION

Note: The numbers represent the size of the land portfolio as at 31. March 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

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

80% of units in production are sold at end Q1'16

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

Dividend FINANCIAL UPDATE

Dividend policy Up to 50 percent of net profit Dividend pay-out twice a year form H1 2015 FY'15 EPS NOK 3.01 FY'15 dividend of NOK 1.50 per share H1 2015 dividend of NOK 0.70 per share distributed H2 2015 dividend of NOK 0.80 per share distributed NOK 0.5 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2013 2014 2015

Annual dividend per share

Paid dividend

Independent land bank valuation from Q4 2015

OPERATIONAL UPDATE

Book value vs. external valuation

2016	Q1 2015	2015
523.5	755.6	3 2 4 6 .0
01.1)	(609.5)	(2,608.5)
52.0	(54.4)	(217.4)
(1.3)	6.9	8.3
69.1	98.6	428.4
(6.2)	(5.8)	(24.1)
62.9	92.8	404.3
(6.9)	(8.0)	(33.1)
56.0	84.9	371.2
14.2)	(23.0)	(91.8)
41.8	61.9	279.4
0.0	(0.0)	(1.8)
40.6	61.9	284.2

Income statement IFRS

(figures in NOK million)	Q1 2016	Q1 2015	2015
Total operating revenues	623.5	755.6	3 246.0
Project expenses	(501.1)	(609.5)	(2 608.5)
Other operating expenses	(52.0)	(54.4)	(217.4)
Other gains (loss)	-	-	-
Associated companies and joint ventures	(1.3)	6.9	8.3
EBITDA	69.1	98.6	428.4
Depreciation and amortisation	(6.2)	(5.8)	(24.1)
EBIT	62.9	92.8	404.3
Net financial expenses	(6.9)	(8.0)	(33.1)
Profit/(loss) before taxes	56.0	84.9	371.2
Income taxes	(14.2)	(23.0)	(91.8)
Net income	41.8	61.9	279.4
Net income for the period attributable to:
Non-controlling interests	0.0	(0.0)	(1.8)
Shareholders in Selvaag Bolig ASA	40.6	61.9	284.2

2015	Q1 2015	2016
465.9	97.7	118.6
(15.5)	(37.7)	(3.0)
(344.1)	37.4	80.2
106.4	97.3	64.5
565.9	565.9	572.3
672.3	663.3	507.7

Cash Flow statement

(figures in NOK million)	Q1 2016	Q1 2015	2015
Net cash flow from operating activities	118.6	97.7	465.9
Net cash flow from investment activities	(3.0)	(37.7)	(15.5)
Net cash flow from financing activities	(180.2)	37.4	(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	(64.5) 672.3 607.7	97.3 565.9 663.3	106.4 565.9 672.3

(figures in NOK million)	Q1 2016	Q1 2015	2015
Intangible assets	392.6	411.0	397.2
Property, plant and equipment	19.1	17.3	20.3
Investments in associated companies and joint ventures	180.4	200.2	183.4
Other non-current assets	120.3	123.0	114.6
Total non-current assets	712.3	751.5	715.5
Inventories (property)	4 642.8	4 563.1	4 715.4
- Land	1 653.3	1 845.1	1 968.8
- Work in progress	2 630.3	2 358.8	2 368.5
- Finished goods	359.3	359.2	378.1
Other current receivables	140.8	350.3	147.9
Cash and cash equivalents	607.7	663.3	672.3
Total current assets	5 391.3	5 576.7	5 535.5
TOTAL ASSETS	6 103.7	6 328.2	6 251.1
Equity attributed to shareholders in Selvaag Bolig ASA	2 584.6	2 504.5	2 539.6
Non-controlling interests	9.6	14.7	9.6
Total equity	2 594.2	2 519.2	2 549.2
Non-current interest-bearing liabilities	1 478.3	1 685.6	1 846.7
Other non-current non interest-bearing liabilities	260.3	308.3	262.2
Total non-current liabilities	1 738.6	1 993.9	2 108.9
Current interest-bearing liabilities	970.3	1 075.4	771.3
Other current non interest-bearing liabilities	800.6	739.7	821.7
Total current liabilities	1 770.8	1 815.1	1 593.0
TOTAL EQUITY AND LIABILITIES	6 103.7	6 328.2	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 31 March 2016

Units

balance sheet

Maintaining strong market position

Units under construction vs. peers (net figures)

• Fragmented activity in 2012-2014

• Land purchases in core markets only

• Bergen and Trondheim key markets

• Marginal sales in Rogaland

Stronger presence in all markets MARKET – SALES DISTRIBUTION All core markets 2015 (actual)

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

Core markets outside Greater Oslo

Construction starts in the quarter

Construction starts, scheduled completion and expected revenue

Quarterly, expected revenues (IFRS) in NOK million

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

Lørenskog Stasjonsby (Modular)	28 apartments	NOK 108m
Frøyatun (Modular)	22 terraced	NOK 87m
Moss (Onsite)	33 apartments	NOK 95m NOK 197m
Kilenkollen (Onsite)	99 apartments	NOK 399m
Løren Stasjon (Onsite)	48 apartments	NOK 202m

Operational highlights – key operating figures

				Q1 16
				280
				230
				183
				179
				1 386
				80%
				58
4 968	4 909	5 077	4 740	5 031
99	99	99	99	100
	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	Q4 15 209 171 258 235 1 339 79% 65

(32.7)	69.1
	(1.3)
(37.7)	(52.0)
(1.1)	(501.1)
6.0	623.5
Other	Total

IFRS EBITDA Q1 2016

(figures in NOK million)	Property development	Other	Total
IFRS EBITDA for the quarter, per segment
Operating revenues	617.5	6.0	623.5
Project expenses	(500.0)	(1.1)	(501.1)
Other operating expenses	(14.4)	(37.7)	(52.0)
Share of income (losses) from associated companies and joint ventures	(1.3)	-	(1.3)
Other gain (loss), net	-	-	-
EBITDA	101.8	(32.7)	69.1

Operational reporting Q1 2016

(figures in NOK million)	Property development	Other	Total
Operating revenues	809.1	6.0	815.1
Project expenses	(630.4)	(1.1)	(631.5)
Other operating expenses	(14.4)	(37.7)	(52.0)
EBITDA (percentage of completion)	164.3	(32.7)	131.6

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

Land loan interests on the P&L

• Total land loans are NOK 1 027 million of which NOK 618 million are loans where interest cost are activated
• Land loan interests activated at regulation
• At 31 March interests connected to land loans of NOK 409 million was charged on the P&L

Loans recognised in profit and loss at 31.03.2016

NOKm

Norway: A robust economy

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