Selvaag Bolig ASA

Investor Presentation • Nov 13, 2019

Oslo 13 November 2018 Rolf Thorsen, CEO Sverre Molvik, CFO

2

Agenda

• Highlights and sales

• Operational and financial update

• Market

• Outlook and summary

Highlights Q3 2019 HIGHLIGHTS AND SALES

• Record high Q3 results
• Stable market conditions and good sales
• Well positioned with competitive housing offering and capacity in growth regions

Completed, ongoing and upcoming projects

Key financials Q3 2019

Operating revenues 810

NOK million

Operating revenues (NGAAP)

650

NOK million

EBITDA** margin (NGAAP)

Adjusted EBITDA* margin

* EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is excluding financial expenses included in project costs

** EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies

HIGHLIGHTS AND SALES

Sales value and units sold

HIGHLIGHTS AND SALES

Q1 Q2 Q3 Q4

Note: Sales value and number of units are adjusted for Selvaag Bolig's share in joint ventures

Rolling sales value and units sold

HIGHLIGHTS AND SALES

Note: Sales value is adjusted for Selvaag Bolig's share in joint ventures

7

Agenda

• Highlights and sales

• Operational and financial update

• Market

• Outlook and summary

Construction starts and completions

OPERATIONAL AND FINANCIAL UPDATE

Units

Construction starts and completions per quarter

Note: Number of units are adjusted for Selvaag Bolig's share in joint ventures

Units under construction and completions OPERATIONAL AND FINANCIAL UPDATE

• Q3 2019: 72% of units under construction sold by Q3 2019
• Q3 2019: 88% of construction volume in Greater Oslo Area*

▪ Expected completions for the full year 2019: 776 units

• 90% of 2019 completions sold by Q3 2019
• Expected completions 2020: 745 units

Note: Sales value and number of units are adjusted for Selvaag Bolig's share in joint ventures * Includes: Oslo, Lørenskog, Follo, Tønsberg, Asker

Income statement highlights Q3 2019 (IFRS)

OPERATIONAL AND FINANCIAL UPDATE

Note: EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA adjusted is excluding financial expenses included in project costs

Income statement highlights Q3 2019 (NGAAP)

OPERATIONAL AND FINANCIAL UPDATE

* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP) Note: EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies

holders of Selvaag Bolig ASA

Cash and cash equivalents at 30 September 2019

Cash flow development Q3 2019

• Cash flow from operations positive at NOK 528m mainly explained by high number of units delivered and units delivered in June with payment in July
• Cash flow from investment activities positive at NOK 24m mainly due to sale of associated company
• Cash flow from financing activities negative at NOK 664m mainly due to dividend payment of NOK 186m and net decrease in loans

Note: Amounts below NOK 25m are excluded from the cash flow overview

OPERATIONAL AND FINANCIAL UPDATE

Balance sheet highlights Q3 2019

OPERATIONAL AND FINANCIAL UPDATE

Balance sheet composition

Book value of equity unchanged at ▪	NOK million
NOK 32.7 per share	7 000
Equity ratio up to 45.4% ▪	6 000	Non-current assets
Changes from Q2 2019: ▪	5 000
Inventories decreased by NOK 147m ▪ Trade receivables decreased by NOK 177m ▪	4 000
Cash decreased by NOK 112m ▪	3 000	Current assets
Prepayments from customer's accounts ▪	2 000
for NOK 222m of other current non interest-bearing liabilities	1 000
	0	Cash

Assets Equity and Liabilities

Inventories (property) Q3 2019 OPERATIONAL AND FINANCIAL UPDATE

NOK million

Q3 19 vs Q2 19 Inventory value development

• Due to land acquisitions, partly offset by constructions starts
• Work in progress down NOK 296m
  • Mainly due to units delivered
• Finished goods down NOK 119m
  • Due to units delivered
  • 25% of finished projects sold

Land (undeveloped) Work in progress Finished projects

Interest-bearing debt as at 30 September 2019

	Loan facility	Drawn at 30 Sep. (NOKm)	Interest rate margin
1	NOK 500 million revolving credit facility from DNB maturing in 2022	0	3.40%
2	NOK 150 million working capital facility from DNB maturing in 2019	0	2.00%
3	Land loan facilities from a range of Nordic credit institutions	1 483	2.00% - 2.50%
4	Construction loan facilities from a range of Nordic credit institutions	1 018	1.75% - 2.60%

Total Q3 2019 net interest-bearing debt NOK 2 013 million

Total Q2 2019 net interest-bearing debt NOK 2 365 million

Debt structure OPERATIONAL AND FINANCIAL UPDATE

NOK million

Return on equity (IFRS) OPERATIONAL AND FINANCIAL UPDATE

12 months rolling net income (IFRS)* and return on equity**

NOK million

* Net income attributable to shareholders in Selvaag Bolig ASA

** Based on equity at the start of the period (attributed to shareholders in Selvaag Bolig ASA)

Margin development through project stages*

▪ Delivery in accordance with expectations

Delivery to customers

OPERATIONAL AND FINANCIAL UPDATE

OPERATIONAL AND FINANCIAL UPDATE

Project margin development

2 929 3 038 3 239 3 179 28%

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

** Project margins are exclusive of overhead costs

• Land acquired: Q4 2013
• ~ 400 units
• Sales start: Q4 2014
• Project completion: Jun 2019
• Sales value project: NOK 1.9 bn

OPERATIONAL AND FINANCIAL UPDATE Ongoing projects

Nybyen Økern

Tiedemannsfabrikken

Hovinenga

Lørenporten

• Land acquired: Q1 2015
• ~ 350 units
• Sales start: Q4 2015
• Project completion: Dec 2019

• Sales value project: NOK 1.8 bn

• Land acquired: Q1 2014

• ~ 380 units
• Sales start: Q2 2016
• Project completion: Mar 2020
• Sales value project: NOK 1.7 bn
• Land acquired: Q2 2015
• ~ 450 units
• Sales start: Q2 2016
• Project completion: Dec 2020
• Sales value project: NOK 2.4 bn

20

Agenda

• Highlights and sales

• Operational and financial update

• Market

• Outlook and summary

Increasing share of population growth in Oslo and Akershus

Source: Statistics Norway

MARKET

Note: In 2017 Greater Oslo had 23% of housing completions in Norway Source: Statistics Norway

MARKET

Source: Statistics Norway (Actual completions), Prognosesenteret (Forecasted housing need based on Statistics Norway low immigration alternative), Econ Nye Boliger (Forecasted completions)

Note: Housing need includes parameters such as number of persons per household, lag on housing development, housing demolition Note: Completions exclusive of student- and senior housing

Number of units completed in Oslo and Akershus, 2006-2018

Forecasted housing need of 9 400 units per year until 2023 (medium alternative)

Expected completions lower than forecasted housing demand in Oslo and Akershus

Second-hand market update Oslo

MARKET

Sources: Eiendomsverdi, Eiendom Norge and finn.no

Jan – Oct 2019 (Oslo)

Newbuild market update

Jan – Oct 2019 (Akershus)

Source: SA - ECON Nye Boliger

MARKET

Second-hand market update other core markets

MARKET

Sources: Eiendomsverdi, Eiendom Norge and finn.no

* Stavanger-area include: Stavanger, Sola, Randaberg and Sandnes

• Price increase January-October: 0.9% (3.6%)
• New homes available for sale at 5 November 2019: 1 178 units
  • 49% of total inventory
• Price increase January-October : 6.4% (4.7%)
• New homes available for sale at 5 November 2019: 1 162 units
  • 58% of total inventory

▪ Price increase January-October : 4.5% (3.5%)

▪ New homes available for sale at 5 November 2019: 1 099 units

59% of total inventory

Peers

Source: Company reporting

MARKET

• ~ 600 units
• Sales start: 2019
• Sales value: NOK 3.0 bn

MARKET Ongoing projects

Landås (Asker)

Skårerbyen

Lørenskog stasjonsby

Lervig Brygge

• ~ 1 100 units remaining
• Sales start: 2013

• Sales value: NOK 5.0 bn

• ~ 1 000 units

• Sales start: Q4 2018
• Sales value: NOK 4.5 bn

• Sales start: 2010
• Sales value: NOK 1.8 bn

• ~ 1 800 units (50/50 JV)
• Expected sales start: 2021
• Expected sales value: NOK 12 bn

MARKET Upcoming projects

Fornebu

Sandnesvågen

Fredrikstad

Bjerke

• ~ 2 000 units (50/50 JV)
• Expected sales start: 2022
• Expected sales value: NOK 8.5 bn

• 650 units (50/50 JV)
• Expected sales start: 2021
• Expected sales value: NOK 2.6 bn
• ~ 1 200 units
• Expected sales start: 2021
• Expected sales value: NOK 6.5 bn

29

Agenda

• Highlights and sales

• Operational and financial update

• Market

• Outlook and summary

• Continued positive market sentiment in Q4
• Attractive projects for sale in all the markets where we operate
• Positioned with competitive housing offering and substantial capacity

Outlook OUTLOOK AND SUMMARY

• Record high Q3 results
• Stable market conditions and good sales
• Well positioned to realize large projects in growing urban areas

Thank you for your attention – follow us online!

@SelvaagAksjen

Next event: 4 th quarter 2019 12 February 2020

33

Appendix

Share performance since IPO in June 2012 APPENDIX

Source: Oslo Børs

Selvaag Bolig's ambition is to pay high and stable dividends to its owners.

The company aims to pay dividends of minimum 40 per cent of net annual profit, paid in two instalments over the year. However, the size of the dividend will be weighed against the company's liquidity forecasts and capital adequacy.

The company will maintain an equity ratio of minimum 30 per cent

Dividend policy APPENDIX

Earnings and dividend per share since IPO

APPENDIX

Accumulated earnings and earnings per share

# of shares	% share
50 180 087	53.5%
5 653 788	6.0%
2 741 751	2.9%
2 063 876	2.2%
1 588 000	1.7%
1 500 000	1.6%
1 174 982	1.3%
1 000 000	1.1%
934 500	1.0%
880 000	0.9%
837 068	0.9%
751 619	0.8%
729 340	0.8%
712 052	0.8%
700 000	0.7%
601 069	0.6%
600 000	0.6%
565 127	0.6%
560 515	0.6%
500 000	0.5%
74 273 774	79.2%
19 491 914	20.8%
93 765 688	100.0%

Largest shareholders at 30 September 2019

APPENDIX

* Further information regarding shareholders is presented at: http://sboasa.no/en

** The shares were purchased for the company's share programmes for employees

Shareholder # of shares % share SELVAAG AS 50 180 087 53.5% LANDSFORSAKRINGAR FASTIGHETSFOND 5 653 788 6.0% TAIGA INVESTMENT FUNDS PLC-TAIGA F 2 741 751 2.9% PARETO INVEST AS 2 063 876 2.2% VERDIPAPIRFONDET PARETO INVESTMENT 1 588 000 1.7% SEB PRIME SOLUTIONS SISSENER CANOP 1 500 000 1.6% VERDIPAPIRFONDET ALFRED BERG GAMBA 1 174 982 1.3% JPMorgan Chase Bank, N.A., London *) 1 000 000 1.1% FLPS - GL S-M SUB 934 500 1.0% HOLBERG NORGE 880 000 0.9% SELVAAG BOLIG ASA **) 837 068 0.9% HOLTA INVEST AS 751 619 0.8% MUSTAD INDUSTRIER AS 729 340 0.8% State Street Bank and Trust Comp *) 712 052 0.8% Landkreditt Utbytte 700 000 0.7% STOREBRAND NORGE I VERDIPAPIRFOND 601 069 0.6% BANAN II AS 600 000 0.6% Baard Schumann 565 127 0.6% Morgan Stanley & Co. International 560 515 0.6% SANDEN AS 500 000 0.5% Total 20 largest shareholders 74 273 774 79.2% Other shareholders 19 491 914 20.8% Total number of shares 93 765 688 100.0%

-

Low-risk business model creates healthy profits

APPENDIX

Competitive housing offering, targeting growth regions

Efficient and flexible cost structure

Capital-efficient business model backed by strong balance sheet

Large, actively-managed land bank

- Presence in fast-growing urban regions with high demand and large market depth ▪ Competitive prices, addressing large customer base

• Defined housing concepts, aimed at wide range of consumers
• Value appreciation through refinement of land for housing development
• Flexibility to develop thousands of homes in growing urban regions
• Active asset management
• No in-house construction arm; improves flexibility and cost optimisation
• Project-based business model improves flexibility and reduces risk
• Economies of scale through large projects
• Lean organisation reduces overhead
• 60% pre-sale before construction start lowers project financing need and inventory risk
• Sound debt structure and financial flexibility

Strategy Value drivers

Low-risk business model

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

• Selvaag's equity investment in a project and project margin bring the remaining project cost down to 74%-78%
• With minimum 60% pre-sale there is limited remaining project risk. For the the remaining 40% a price reduction of 35% would recover equity
• 70% of units in production are sold at end Q1'19

▪ 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

Efficient and flexible value chain

- Target 100% sale at delivery

Delivery to customers

Margin development through project stages*

▪ Delivery in accordance with expectations

Delivery to customers

APPENDIX Project margin development

2 929 3 038 3 239 3 179 28%

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

** Project margins are exclusive of overhead costs

Positioned to realize large projects in Norway's four largest growing urban areas

APPENDIX

• Acquire the right mix of zoned and unzoned land in suitable locations
• Land acquisitions in defined core areas
• High degree of site utilisation and strategic land development
• Substantial land bank to accommodate targets/growth in core areas
• Good infrastructure and public transport
• Joint ventures (JVs)

Land bank exposure

Geographical spread

Stockholm 40 units

Land-bank strategy

Note: The numbers represent the size of the land portfolio as at 30 September 2019. 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. The portfolio has a development potential of ~5 400 residential units, whereof the company has purchasing obligations for ~4 900 and purchasing options for ~500 units.

Land bank in Oslo and Greater Oslo

APPENDIX

Lørenskog 2 297 units Lørenskog Stasjonsby 764 units Skårer bolig 945 units LSV 300 units

Luhrtoppen 288 units

2 297 units

Oslo South 315 units Gjertsrud Stensrud 315 units

Follo/Østfold 1 910 units Langhus 255 units Solberg 195 units Ski 75 units Grenseveien 385 units Fredrikstad 1000 units

Lillestrøm

Bjerke 1 000 units

Land bank in Stavanger area APPENDIX

Land bank in Bergen, Trondheim and Stockholm APPENDIX

Substantial portfolio for development APPENDIX

Total land bank portfolio at 30 September 2019

Units

Income statement IFRS

(figures in NOK million)	Q3 2019	Q3 2018	9M 2019	9M 2018	2018
Total operating revenues	810.0	473.2	1 954.4	1 717.4	3 342.1
Project expenses	(568.1)	(372.0)	(1 342.8)	(1 294.3)	(2 421.6)
Other operating expenses	(68.4)	(56.9)	(185.3)	(186.0)	(268.1)
Other gains (loss)	-	-	-	-	-
Associated companies and joint ventures	58.2	30.5	75.9	45.0	101.8
EBITDA	231.730	74.853	502.232	282.2	754.187
Depreciation and amortisation	(3.3)	(0.9)	(9.9)	(2.8)	(3.7)
EBIT	228.4	73.9	492.3	279.4	750.5
Net financial expenses	(3.4)	(4.0)	(13.0)	(15.9)	(18.0)
Profit/(loss) before taxes	225.0	69.9	479.3	263.5	732.5
Income taxes	(42.1)	(13.4)	(103.4)	(59.9)	(165.6)
Net income	182.9	56.5	375.9	203.6	566.8

Net income for the period attributable to:

Non-controlling interests	-	(0.0)	-	(0.1)	(0.1)
Shareholders in Selvaag Bolig ASA	182.9	56.5	375.9	203.7	566.9

Cash flow statement

(figures in NOK million)	Q3 2019	Q3 2018	9M 2019	9M 2018	2018
Net cash flow from operating activities	528.4	202.8	42.2	(248.1)	427.0
Net cash flow from investment activities	24.5	47.4	73.8	79.8	20.6
Net cash flow from financing activities	(664.5)	(261.2)	(284.8)	104.9	(276.1)
Net change in cash and cash equivalents	(111.6)	(11.0)	(168.8)	(63.4)	171.5
Cash and cash equivalents at start of period	599.9	433.2	657.0	485.6	485.6
Cash and cash equivalents at end of period	488.3	422.1	488.3	422.1	657.0

(figures in NOK million)	Q3 2019	Q2 2019	Q3 2018	2018
Intangible assets	383.4	383.4	383.4	383.4
Property, plant and equipment	6.1	6.7	9.4	8.6
Investments in associated companies and joint ventures	418.7	393.5	305.2	415.3
Other non-current assets	496.6	489.1	348.3	445.4
Total non-current assets	1 304.7	1 272.7	1 046.3	1 252.6
Inventories (property)	4 654.4	4 801.2	4 944.8	4 306.3
- Land	1 924.0	1 656.5	1 905.9	1 600.3
- Work in progress	2 560.5	2 856.3	2 942.4	2 539.8
- Finished goods	169.9	288.4	96.5	166.2
Other current receivables	325.7	505.9	257.6	275.2
Cash and cash equivalents	488.3	599.9	422.1	657.0
Total current assets	5 468.4	5 907.0	5 624.5	5 238.5
TOTAL ASSETS	6 773.1	7 179.6	6 670.8	6 491.1
Equity attributed to shareholders in Selvaag Bolig ASA*	3 064.5	3 067.5	2 722.3	3 106.8
Non-controlling interests	7.9	7.9	9.3	9.4
Total equity	3 072.4	3 075.3	2 731.7	3 116.1
Non-current interest-bearing liabilities	1 741.1	1 932.7	1 897.1	1 795.8
Other non-current non interest-bearing liabilities	194.2	195.8	147.2	156.9
Total non-current liabilities	1 935.3	2 128.5	2 044.3	1 952.7
Current interest-bearing liabilities	759.9	1 032.3	797.9	520.5
Other current non interest-bearing liabilities	1 005.5	943.5	1 097.0	901.8
Total current liabilities	1 765.4	1 975.8	1 894.9	1 422.3
TOTAL EQUITY AND LIABILITIES	6 773.1	7 179.6	6 670.8	6 491.1

Balance sheet

* Corresponding to a book value of NOK 32.7 per share

Land bank book value vs. external valuation APPENDIX

Note: Joint ventures and land options not included in the valuation

Operational highlights – key operating figures

	Q3 18	Q4 18	Q1 19	Q2 19	Q3 19
Number of units sold	182	148	243	210	159
Number of construction starts	102	402	97	311	174
Number of units completed	117	441	12	307	203
Number of units delivered	126	421	29	246	243
Number of units under construction	1 488	1 449	1 534	1 538	1 510
Proportion of sold units under construction	74 %	66 %	70 %	71 %	72 %
Number of completed unsold units	12	26	13	48	34
Sales value of units under construction (NOK million)	6 908	6 712	7 097	7 039	7 192
Number of employees	91	91	91	91	91

EBITDA Q3 2018 APPENDIX

	Property
(figures in NOK million)	development	Other	Total
Operating revenues	636.3	13.2	649.5
Project expenses	(406.2)	(0.1)	(406.3)
Other operating expenses	(20.0)	(51.0)	(71.0)
EBITDA (percentage of completion)	210.1	(37.9)	172.2
Note: Construction costs are exclusive of financial expenses in the segment reporting.
IFRS EBITDA for the quarter, per segment
Operating revenues	796.9	13.2	810.0
Project expenses	(568.0)	(0.1)	(568.1)
Other operating expenses	(17.4)	(51.0)	(68.4)
Share of income (losses) from associated companies
and joint ventures	58.2	-	58.2
EBITDA	269.6	(37.9)	231.7
Note: EBITDA is operating profit before depreciation, gains (losses) and profit from associated companies

Value of units sold - gross and net

APPENDIX

Sales value of units sold

Number of units sold - gross and net APPENDIX

Number of units sold

Untis sold net Units sold gross

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 minimum 10% cash deposit
• High level of home ownership
  • 85% (one of the world's highest)
• Economic benefits for home owners
  • 23% 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

APPENDIX

Newbuild effect on total second-hand market in Oslo for 2018

Increase in newbuild completions has limited effect on second-hand market

- newbuild units)

• hand market in Oslo
• Second-hand sales generated from newbuild completions in an average year
• Second-hand sales generated from newbuild completions in 2018
• Additional second-hand sales generated from newbuild completions in 2018
• Total second-hand market in Oslo in 2018

▪ On average ~ 1 400 units are added to the second-hand market in Oslo (based on ~ 2 800 completed

▪ Completion of 3 800 newbuild units in 2018 will add ~ 1 900 units to the second hand market in Oslo

▪ The additional ~ 500 units in 2018 will have a limited effect on second-

Units

APPENDIX

Source: Statistics Norway (Actual completions), Prognosesenteret (Forecasted housing need based on Statistics Norway low immigration alternative), Econ Nye Boliger (Forecasted completions)

Note: Housing demand calculated on parameters such as number of persons per household, lag on housing development, housing demolition Note: Completions exclusive of student- and senior housing

* 810 units zoned in Oslo in 2018 and 1 410 units zoned by YTD Q3 2019

Number of units completed in Oslo, 2006-2018

Forecasted housing need of 4 900 units per year until 2023 (medium alternative)

Expected completions lower than forecasted housing demand in Oslo

APPENDIX

Source: Statistics Norway (Actual completions), Prognosesenteret (Forecasted housing need based on Statistics Norway low immigration alternative), Econ Nye Boliger (Forecasted completions)

0 1 000 2 000 3 000 4 000 5 000 6 000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019e 2020e Units Number of units completed in Akershus, 2006-2018 Average # of completions: ~3 600 units

Note: Housing demand calculated on parameters such as number of persons per household, lag on housing development, housing demolition Note: Completions exclusive of student- and senior housing

Actual completions

Expected completions lower than forecasted housing demand in Akershus

Forecast completions

Immigration increases demand over time APPENDIX

of years in Norway

Homeownership rate among immigrants in Norway (per year living in Norway)

Norway – robust economic conditions

Population growth 2018 - 2030e and 2040e Interest rates 2012 - 2021e

APPENDIX

GDP growth 2012 - 2021e Unemployment 2012 - 2021e 0% 2% 4% 6% 8% 10% 12% 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e Norway Sweden Germany UK France 2012 2013 2014 2015 2016 2017 2018 2019e 2020e 2021e Norway Sweden EU

Total household debt and homeownership APPENDIX