Selvaag Bolig ASA

Earnings Release • May 22, 2017

Oslo 22 May 2017 Baard Schumann, CEO Sverre Molvik, CFO

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Highlights Q1 2017 HIGHLIGHTS

• Strong margins and high sales value
• Record high value of units under construction
• 86% of units under construction sold at 31 March
• Record high Oslo market levelling out, pressure continues around Oslo, Stavanger recovering
• Acquisition of land in Trondheim and Greater Oslo with 750 units potential for Selvaag Bolig

Key financials Q1 2017

HIGHLIGHTS

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

High sales values OPERATIONAL UPDATE

Total sales value and value per unit sold Residential units sold per quarter, per year

NOK million

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

Units

Increased average sales values

OPERATIONAL UPDATE

12 months rolling sales values 12 months rolling units sold

Note: Sales values are adjusted for Selvaag Bolig's ownership in joint ventures *Total columns include Selvaag Bolig's gross sales

**Total columns minus dotted areas includes Selvaag Bolig's net sales

Majority of construction starts in Greater Oslo

OPERATIONAL UPDATE

Construction starts per quarter

• 98 apartments in Lørenskog
• 79 apartments in Oslo
• 9 apartments in Bærum

Tiedemannsfabrikken, Oslo

Units

High percentage of completions sold

• Q1 2017: 86% of units under constructions sold by Q1 2017
• Q1 2017: 92% of construction volume in Greater Oslo

OPERATIONAL UPDATE

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

Sales value, units under construction

Expected completions per quarter

Expected completions for 2017 as of Q1 17: 690 units

• 99% of 2017 completions sold by Q1 2017
• 87% of 2018 completions sold by Q1 2017

NOK million Units 5 031 5 075 5 775 5 709 6 340 1 386 1 344 1 464 1 356 1 479 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Sales value (NOK million) Number of units under construction

Units 210 81

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Income statement highlights Q1 2017 (IFRS)

FINANCIAL UPDATE

Income statement highlights Q1 2017 (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)*

NOK million

Cash flow development Q1 2017

FINANCIAL UPDATE

• Cash flow from operations mainly explained by land acquisitions, construction activity and taxes paid
• Cash flow from financing activities positive with NOK 93m
• Net change in borrowings of NOK 127m, partially offset by share buy back and share programs for employees of NOK 34 million

Note: Numbers under NOK 5m are excluded from the cash flow overview

NOK million

Assets Equity and Liabilities

Balance sheet highlights Q1 2017

	Book value increased by NOK 0.5 to		Balance sheet composition
	NOK 29.2 per share
		NOK million
	 Equity ratio 43.0%	7 000
	Changes from Q4 2016:	6 000	Non-current assets
	Inventories increased by NOK 468m and  cash decreased by NOK 512m mainly due	5 000
	to land acquisitions and construction activity	4 000
	Current liabilities increased mainly due to 	3 000	Current assets
	exercise of call option for early redemption of NOK 500m bond	2 000
	Prepayments from customers accounts	1 000
	for NOK 528m of other current non	0	Cash
	interest-bearing liabilities

FINANCIAL UPDATE

Inventories (property) Q1 2017

Land (undeveloped) Work in progress Finished projects

FINANCIAL UPDATE

Inventory value development

• Land value up NOK 248m
• Mainly due to land acquisitions
• Work in progress up NOK 237m
• Due to high construction activity
• Finished goods down NOK 18m

Q1'17 vs Q4'16

Sound debt structure

FINANCIAL UPDATE

Drawn per 31 Mar. (NOKm)	Interest rate margin
500	4.75%
0	2.00%
0	2.00%
844	2.00% - 2.50%
1 300	1.75% - 2.70%

Total Q1 2017 net interesting bearing debt NOK 2 267 million

Total Q4 2016 net interesting bearing debt NOK 1 687 million

Interest bearing debt as at 31 March 2017

Note: Top-up loan of NOK 500m in the table differs form the summed up top up loan in the pie chart (NOK 498m). The difference is due to NOK -2m in amortized cost which is not actual debt. ¹Selvaag Bolig has elected to exercise its call option for early redemption in full of its NOK 500 million senior unsecured callable bond, maturing on 27 June 2018, at 102% of par value. The early redemption of the bond will occur on 27 June 2017.

Return on Equity (IFRS)

FINANCIAL UPDATE

NOK million

12 months rolling net income (IFRS)* and Return on Equity**

* Net income attributable to shareholders in Selvaag Bolig ASA

** Based on equity attributed to shareholders in Selvaag Bolig ASA

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Regulation for residential mortgage loans

• 1. Loan-to-value ratio on secondary homes in Oslo at 85 per cent
• 1. Flexibility regarding gross annual income/collected debt
• 1. Instalment required for loans exceeding 70% of housing value

Old regulation New regulation Effects

• 1. Loan cap at 5x annual income
• 1. Loan cap at 60% for secondary homes in Oslo

The new regulation applies until 30 June 2018 Source: Ministry of Finance, Norway

1. Instalment required for loans exceeding 60% of housing value

2. Challenging in Oslo due to high housing prices

3. Continued price pressure in regions around Oslo where house prices are lower and purchase power is high

4. 60% loan cap has had little or no effect in Oslo

MARKET

Strong purchasing power in core markets

MARKET

Average gross annual income (household)

Debt limit based on 5x gross income

Source: Statistics Norway, NRK

Total household debt and homeownership MARKET

Source: OECD, Prognosesenteret

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Record high Oslo market levelling out

MARKET

Oslo, April 2008-2017 Units 0 1 000 2 000 3 000 4 000 5 000 6 000 7 000 8 000 9 000 Apr Jan Oct Jul Apr Jan Oct Jul Apr Jan Oct Jul Apr 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Inventory second-hand Units sold

• Second hand average Sales price: NOK 71 539 per m² Turnover time: 14 days Price increase April: 0.6% Price increase last 12 months: 20.7% Units available for sale (30.04): ~1 800 New homes (not built)

Units available for sale (30.04): ~1 200

Oslo, April 2017* sum-up

*April 2017 numbers include Easter (Easter 2016 in March)

Continued pressure around Oslo

MARKET

Source: Eiendomsverdi

24

NOK 56 200 per m²

Jun. 2016

NOK 59 100 per m²

Aug. 2016

NOK 62 400 per m²

Total: 430-500 units | 1-4 rooms | 35-119 m²

Time from acquisition to sales start: 11 months

Sales start May '16

14-month price growth 89 m2, 3 bedroom apartment Lørenporten, Oslo

Apr. 2017

NOK 74 400 per m2

Mind the gap MARKET

Number of units completed in Oslo, 2001-2016

Source: Oslo kommune, Statistics Norway (SSB)

Average of ~2 800 units completed from 2001-2016

Annual housing demand of >5 000 units until 2025 (Statistics Norway

Low demand alternative: 5 000 units

Medium demand alternative: 6 600 units

2016 population in Oslo: 658 400

In 1999 Statistics Norway forecasted a 2016 population of 542 000

Stavanger area, April 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Stavanger market recovering

MARKET

Second hand (Stavanger only) – average Sales price: NOK 38 661 per m² Apr. 16: NOK 35 839 per m² Turnover time: 40 days Price increase April: 0.1% Price decrease last 12 months: 1.2% Units available for sale (30.04): ~550 30.04.16: ~1 500

• Second hand sales April: 170 units (Apr. 16: 222 units)

New homes (not built)

Units available for sale (30.04): ~290

• • 30.04.16: ~700

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

Stavanger, April 2017* sum-up

*April 2017 numbers include Easter (Easter 2016 in March)

27

Successful sales start in Stavanger

MARKET – STAVANGER RECOVERING

Total: 61 units | 1-3 bedrooms | 50-120 m² 15 of 61 units sold per 19 May 2017

Lervig Brygge vest Sales start 10 May 2017

Bergen, April 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Sound supply/demand in Bergen

MARKET

Second hand – average

• Sales price: NOK 43 459 per m²
• Turnover time: 21 days
• Price decrease April: 0.3%
• Price increase last 12 months: 2.4%
• Units available for sale (30.04): ~700

New homes (not built)

Units available for sale (30.04): ~825

Bergen, April 2017* sum-up

*April 2017 numbers include Easter (Easter 2016 in March)

Trondheim, April 2008-2017

Source: Eiendomsverdi, Eiendom Norge and Selvaag Bolig

Balanced market in Trondheim

MARKET

Second hand – average

• Sales price: NOK 46 104 per m²
• Turnover time: 17 days
• Price decrease April: 0.2%
• Price increase last 12 months: 6.7%
• Units available for sale (30.04): ~500

New homes (not built)

Units available for sale (30.04): ~625

Trondheim, April 2017* sum-up

*April 2017 numbers include Easter (Easter 2016 in March)

30

Adding 4 acquisitions to land bank

MARKET – SELVAAG BOLIG ACQUISITIONS

• Haakon VIIs gate 4, Trondheim
• ~400 units, sales start expected in H1 2019
• 50/50 joint venture with NHP Eiendom
• Travbanevegen 6, Trondheim
• ~150 units, sales start expected in H2 2019
• 100% owned by Selvaag Bolig
• Pottemakerveien 10-14, Kalbakken Oslo
• ~300 units, sales start expected in H2 2019
• 50/50 joint venture with Ragde Eiendom
• Langhussenteret 3B, Ski, Akershus
• ~250 units, sales start expected in H1 2019
• 100% owned by Selvaag Bolig

2 in Trondheim, 2 in Greater Oslo area

Note: The numbers represent the size of the land portfolio as at 31. March 2017. 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 ~5 600 residential units, whereof the company has purchasing obligations for ~5 100 and purchasing options for ~500 units

Agenda

• Highlights
• Operational update
• Financial update
• Market
• Summary

Summary

• Strong margins and high sales value
• Record high value of units under construction
• 86% of units under construction sold at 31 March
• Record high Oslo market levelling out, pressure continues around Oslo, Stavanger recovering
• Acquisition of land in Trondheim and Greater Oslo with 750 units potential for Selvaag Bolig

Kaldnes Brygge, Tønsberg

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Next event: 2 nd quarter 17, 17 August 2017

Share performance since IPO in June 2012

SHARE INFORMATION

5.6%
3.0%
2.7%
2.2%
$1.7\%$
1.3%
$1.3\%$
1.3%
1.1%
$1.1\%$
1.0%
$0.9\%$
$0.8\%$
$0.8\%$
0.7%
$0.7\%$
$0.6\%$
$0.6\%$
$0.5\%$
$\pmb{81.5\%}$
18.5%
00.0%

Largest shareholders at 31 March 2017

Shareholder	# of shares	% share
SELVAAG GRUPPEN AS	50 180 087	53.5%
SKANDINAVISKA ENSKILDA BANKEN AB *)	5 268 003	5.6%
MORGAN STANLEY & CO. INT. PLC. *)	2 774 433	3.0%
FLPS - ALL SECTOR SUB	2 577 000	2.7%
PARETO AS	2 065 624	2.2%
VERDIPAPIRFONDET PARETO INVESTMENT	1 596 000	1.7%
HOLBERG NORGE	1 243 439	1.3%
SELVAAG BOLIG ASA **)	1 232 989	1.3%
HOLTA INVEST AS	1 200 000	1.3%
VERDIPAPIRFONDET ALFRED BERG GAMBA	1 061 201	1.1%
REGENTS OF THE UNIVERSITY OF MICHI	1 045 000	1.1%
EVERMORE GLOBAL VALUE FUND	892 805	1.0%
JPMORGAN CHASE BANK, N.A., LONDON *)	862 364	0.9%
MP PENSJON PK	762 872	0.8%
SEB PRIME SOLUTIONS SISSENER CANOP	760 000	0.8%
STATE STREET BANK AND TRUST COMP *)	681 053	0.7%
STOREBRAND NORGE I VERDIPAPIRFOND	638 778	0.7%
BANAN II AS	555 190	0.6%
JPMORGAN CHASE BANK, N.A., LONDON *)	534 073	0.6%
J.P. MORGAN SECURITIES LLC *)	502 403	0.5%
Total 20 largest shareholders	76 433 314	81.5%
Other shareholders	17 332 374	18.5%
Total number of shares	93 765 688	100.0%

*) Updated shareholder list and further information regarding nominee accounts is presented at: http://sboasa.no/en/Aksjeinformasjon/Aksjonarer.aspx **) The shares were purchased for the company's share programmes for employees

Dividend FINANCIAL UPDATE

			Dividend per share
	Dividend policy	NOK
	Up to 50 percent of net profit 	2.00
	Dividend pay-out twice a year from H1 2015 	1.75
	FY'16 EPS NOK 3.21	1.50
		1.25
	FY'16 dividend of NOK 1.60 per share	1.00
	50% of EPS 	0.75 0.50		0.50
	1H'16 dividend of NOK 0.65 per share 	0.25	0.00
	distributed	0.00
	 2H'16 dividend of NOK 0.95 per share distributed

Book value and valuation - increased gap

OPERATIONAL UPDATE

NOK million

Q4 15: Book value vs. external valuation Q4 16: Book value vs. external valuation

NOK million

Selected projects in Oslo 2017 MARKET – SELVAAG BOLIG PROJECTS

*The numbers are not adjusted for Selvaag Bolig's share in joint ventures

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

86% of units in production are sold at end Q1'17

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

Income statement IFRS

(figures in NOK million)	Q1 2017	Q1 2016	2016
Total operating revenues	456.1	623.5	3 000.3
Project expenses	(312.0)	(501.1)	(2 379.7)
Other operating expenses	(58.0)	(52.0)	(231.2)
Other gains (loss)	-	-	31.7
Associated companies and joint ventures	(4.2)	(1.3)	(7.1)
EBITDA	81.8	69.1	414.0
Depreciation and amortisation	(1.1)	(6.2)	(20.1)
EBIT	80.7	62.9	393.9
Net financial expenses	(9.2)	(6.9)	(29.3)
Profit/(loss) before taxes	71.4	56.0	364.6
Income taxes	4.8	(14.2)	(63.7)
Net income	76.2	41.8	300.9
Net income for the period attributable to:
Non-controlling interests	0.2	0.0	(0.3)
Shareholders in Selvaag Bolig ASA	76.1	41.8	301.2

2016	Q1 2016
440.3	118.6
(14.8)	(3.0)
(211.5)	(180.2)
213.9 672.3 886.2	(64.5) 672.3 607.7

Cash Flow statement

(figures in NOK million)	Q1 2017	Q1 2016	2016
Net cash flow from operating activities	(579.2)	118.6	440.3
Net cash flow from investment activities	(25.8)	(3.0)	(14.8)
Net cash flow from financing activities	93.3	(180.2)	(211.5)
Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period	(511.7) 886.2 374.5	(64.5) 672.3 607.7	213.9 672.3 886.2

(figures in NOK million)	Q1 2017	Q1 2016	2016
Intangible assets	383.4	392.6	383.4
Property, plant and equipment	9.9	19.1	10.9
Investments in associated companies and joint ventures	285.6	180.4	289.8
Other non-current assets	288.8	120.3	261.1
Total non-current assets	967.7	712.3	945.1
Inventories (property)	4 751.5	4 642.8	4 284.0
- Land	1 685.7	1 653.3	1 437.3
- Work in progress	2 816.3	2 630.3	2 579.7
- Finished goods	249.5	359.3	267.1
Other current receivables	303.0	140.8	293.3
Cash and cash equivalents	374.5	607.7	886.2
Total current assets	5 429.0	5 391.3	5 463.5
TOTAL ASSETS	6 396.7	6 103.7	6 408.7
Equity attributed to shareholders in Selvaag Bolig ASA	2 741.1	2 584.6	2 689.9
Non-controlling interests	9.5	9.6	9.3
Total equity	2 750.6	2 594.2	2 699.2
Non-current interest-bearing liabilities	1 795.7	1 478.3	2 038.7
Other non-current non interest-bearing liabilities	167.2	260.3	167.1
Total non-current liabilities	1 962.9	1 738.6	2 205.8
Current interest-bearing liabilities	845.9	970.3	534.7
Other current non interest-bearing liabilities	837.3	800.6	969.1
Total current liabilities	1 683.2	1 770.8	1 503.7
TOTAL EQUITY AND LIABILITIES	6 396.7	6 103.7	6 408.7

Balance sheet

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 2017

Units

balance sheet

Construction starts in the quarter

Construction starts, scheduled completion and expected revenue

Quarterly, expected revenues (IFRS) in NOK million

Operational highlights – key operating figures

	Q1 16	Q2 16	Q3 16	Q4 16	Q1 17
Number of units sold	280	326	277	161	190
Number of construction starts	230	253	223	196	186
Number of units completed	183	295	103	255	63
Number of units delivered	179	307	129	254	85
Number of units under construction	1 386	1 344	1 464	1 356	1 479
Proportion of sold units under construction	80%	83%	90%	85%	86%
Number of completed unsold units	58	54	48	43	32
Sales value of units under construction (NOK million)	5 031	5 075	5 775	5 709	6 340
Number of employees	100	100	100	100	100

(37.5)	81.8
	(4.2)
(44.9)	(58.0)
(0.4)	(312.0)
7.8	456.1
Other	Total

IFRS EBITDA Q1 2017

(figures in NOK million)	Property development Other		Total
IFRS EBITDA for the quarter, per segment
Operating revenues	448.2	7.8	456.1
Project expenses	(311.6)	(0.4)	(312.0)
Other operating expenses	(13.1)	(44.9)	(58.0)
Share of income (losses) from associated companies and joint ventures	(4.2)	-	(4.2)
Other gain (loss), net	-	-	-
EBITDA	119.3	(37.5)	81.8

Operational reporting Q1 2017

(figures in NOK million)	Property development	Other
Operating revenues	809.7	7.8	817.5
Project expenses	(556.5)	(0.4)	(556.9)
Other operating expenses	(13.1)	(44.9)	(58.0)
EBITDA (percentage of completion)	240.1	(37.5)	202.6

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

Land loan interests on the P&L

• Total land loans are NOK 844 million of which NOK 503 million are loans where interest cost are activated
• Land loan interests activated at regulation
• At 31 March interests connected to land loans of NOK 341 million was charged on the P&L

Loans recognised in profit and loss at 31.03.2017

Growth areas in Greater Oslo

• Regional areas for labour intensive activities
• Priority areas for commercial and urban development
• Regional public transport hubs
• Public transport connecting regional cities and office locations

Source: Plansamarbeidet Oslo-Akershus, Selvaag Bolig Note: The numbers are not adjusted for Selvaag Bolig's share in joint ventures

MARKET – SELVAAG BOLIG PROJECTS

Oslo price level vs. other European cities

MARKET

Source: Ny Analyse, Global Property Guide, Eiendom Norge, Svensk Mäklarstatistik, OECD Selected European cities

Urbanisation in Greater Oslo towards 2040

Source: Statistics Norway Greater Oslo municipalities include: Ski, Ås, Oppegård, Bærum, Asker, Lørenskog, Skedsmo, Ullensaker

• Rapid population growth in Oslo followed by stable development
• 30% population growth expected from 2017 to 2040
• Stable population growth to municipalities surrounding Oslo
• 28% population growth expected from 2017 to 2040

> 80 000 next five years

MARKET

Norway: A robust economy

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

Increased disposable income

of disposable income

Source: 1993- 2013 Eff, Pöyry. 2014-2015 NyAnalyse. Interest payments on new home loans with the home as collateral is considered