Oslo - Selvaag Bolig

Company presentation
Baard Schumann, CEO
Sverre Molvik, CFO
November 2015
Selvaag Bolig is a residential developer
that provides targeted housing concepts
to suit aspirations of different households
in and around the main cities:
Oslo, Stavanger, Bergen and Trondheim
2
Norway’s leading homebuilder
 Sales in Q3 2015: 208 units
 Sales YTD 2015: 726 units
Trondheim
501 units
 Land bank for 11 800
homes
 Focus on fast growing
urban regions
 Housing concepts
tailored to house buyer
requirements
Bergen
156 units
Greater-Oslo
9 121 units
Stavanger
1 805 units
Stockholm
103 units
Other
155 units
Note: The numbers represent the size of the land portfolio as at 30. September 2015. All numbers are adjusted
for Selvaag Bolig’s share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold,
2) 155 units at Tromsø (Troms county), 3) 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 ~4 950
residential units, whereof the company has purchasing obligations for ~4 300 and purchasing options for ~650
units
Housing for all
Housing for all
The Gullhaug House
2013
50 000 homes
completed
Pluss: Housing with
extra service
2012
e
Modular construction
2011
Listed at Oslo Børs
2003
2000
Defind hous i ng concept s
1999
Terraced
buildings
Løren district
1988
«It’s better to build 30 000 homes
for 15 000 kroner than 15 000
homes for 30 000 kroner»
1958
Industrial
production
1951
1948
Olav Selvaag
Veitvet district
The Ekeberg
House
4
Value creation in Selvaag Bolig
Acquire and
refine land for
development
Project
optimization
Value
creation
Residential
development
6 – 36 MONTHS
6 – 12 MONTHS
3 – 9 MONTHS
Project design
Marketing
and sale
Zoning
 Buy (i) options on
unzoned land, or (ii)
ready to build land
Sales start
 Plan and
prepare for
construction
 Prices on remaining
40% increased
gradually during sell out
phase
5
Construction
Construction start
 Target 60% pre-sale
before start-up
(irrevocable purchase
contracts)
 Lever acquired land
to improve ROE
12 – 24 MONTHS
Deliveries
 Fixed price contracts with
reputable and solid
counterpart
 Construction costs financed
with construction loans
 Target 100% sale at delivery
Norwegian housing market
 Good demand for new homes and persistent population growth in urban areas
 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
 26% 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
Source: Source Selvaag Bolig and Eurostat
6
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
7
Three well defined and robust concepts




Small and affordable apartments
In and around large cities
Close to public transportation
Young people in the start-up phase
 Apartments/small houses situated in high density areas
 Established housing solutions, solid quality and well
planned living environment
 Single people/couples in all ages, with/without children
 Apartments with attractive, central location in large cities
 High quality standard coupled with a service concept
 Affluent customers who value comfort and convenience
8
Market update
9
OPERATIONAL UPDATE Q3 2015
Continued high sales activity in Q3
Total sales value and value per sold unit
Residential units sold
NOKm
Units
1 011
1 021
915
886
795
693
3.5
3.4
3.3
3.3
750
740
790
679
3.6
487
Q3 14
Q4 14
Q1 15
Q2 15
Q3 15
2012
443
394
2013
Q1
Note: All numbers are adjusted for Selvaag Bolig’s ownership in joint ventures.
653
208
2014
Q2
Q3
2015
Q4
* Includes 95 student residences with an average value of NOK 0.7 million (dotted area)
10
726
OPERATIONAL UPDATE Q3 2015
Majority of construction starts in Oslo area
Construction starts per quarter
No of units
280
 104 apartments in Oslo area
284

203
199
Expected revenue NOK 441 million
204
 67 apartments units in Trondheim area

Expected revenue NOK 216 million
 33 apartments in Bergen area
Q3 14
Q4 14
Q1 15
Q2 15

Q3 15
11
Expected revenue NOK 152 million
OPERATIONAL UPDATE Q3 2015
High number of units for delivery
Development units under construction
Expected completions per quarter
Units
No of units (net figures)
1 347
5 159
NOK million
1 308
4 689
1 384
1 394
1 426
4 968
4 909
5 077
280
258
183
169
118
Q3 14
Q4 14
Q1 15
Number of units under construction
Q2 15
Q3 15
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Sales value (NOK million)

Q3 2015: 78% sold, 57% of construction volume in Greater Oslo

95% of 2015 completions sold by Q3 2015

YE 2016: ~80% of construction volume in Greater Oslo

87% of 2016 completions sold by Q3 2015
Note: Projects are included when construction start is decided. All numbers are adjusted for Selvaag Bolig’s ownership share in joint ventures.
12
Q4 2016
MARKET – SELVAAG BOLIG POSITION
Strong sales compared to peers
Sales activity vs. peers last 5 quarters
 High sales reflect Selvaag Bolig’s
competitive prices and defined
housing strategy


Units, net figures
1 600
1 400
All construction activity put out to competitive
tender
Large land bank in fast growing urban areas
1 200
1 000
 Selvaag Bolig average price in Q3
2015: NOK 3.6m
800
600
400
 Total market (second-hand) average
price in YTD 2015*: flats NOK 3.4m ,
terraced NOK 4.4m, semi-detached
NOK 5.3m
200
0
(Ex BWG Homes)
* Selected markets: Greater-Oslo, Tromsø, Trondheim, Bergen and Stavanger
Housing types Selvaag Bolig: flats, semi-detached and terraced homes
Q3 2014
Source: Selvaag Bolig and Eiendomsverdi
13
Q4 2014
Q1 2015
Q2 2015
Q3 2015
OPERATIONAL UPDATE Q3 2015
Selvaag Bolig competitively positioned
Units sold vs. peers last five quarters (net figures)
Units
400
347
350
308
300
250
200
233
286
306
210 208
207
146
150
203
197
179
201
166
161
127
100
82
106 100
128
88
59
107
59
50
0
Selvaag Bolig
OBOS
BWG Norge
Q4 2014
Q1 2015
JM Norge
Q2 2015
Q3 2015
Skanska Norge
Veidekke Norge
OPERATIONAL UPDATE Q3 2015
Maintaining strong market position
Units under construction vs. peers (net figures)
Antall boliger
2000
1800
1737
1628
1600
1400
1830
1308
1384 1394
1426
1360
1200
1000
942 931 942
825
800
1001
896
1070
845
561
600
399
400
441
310
412 416
330
413
200
0
Selvaag Bolig
OBOS
BWG Norge
Q4 2014
Q1 2015
JM Norge
Q2 2015
Q3 2015
Veidekke Norge
Skanska Norge
MARKET UPDATE – SECOND-HAND INVENTORY
Low in Bergen and Trondheim, high in Stavanger
Bergen
October 2007-2015
Trondheim
October 2007-2015
Stavanger area
October 2007-2015
Units
Units
Units
3000
2000
2000
1750
1750
1500
1500
1250
1250
1000
1000
750
750
500
500
250
250
0
0
2500
2000
1500
1000
500
0
Market inventory second-hand homes 31
October
Sold units October
Selected areas: Bergen
Source: Eiendomsverdi
Market inventory second-hand homes 31
October
Sold units October
Market inventory second-hand homes 31
October
Sold units October
Selected areas: Stavanger, Sola, Randaberg, Sandnes
MARKET UPDATE – SECOND-HAND INVENTORY
Inventory in Oslo at historical low
Oslo and Akershus, October 2007-2015
Units
9 000
7 500
6 000
4 500
3 000
1 500
0
2007
2008
2009
2010
2011
Market inventory second hand homes 31 October
Selected areas: Oslo, Lørenskog, Ski ,Oppgård, Bærum, Asker
Source: Eiendomsverdi
17
2012
2013
Sold units October
2014
2015
MARKET UPDATE – PRICE DEVELOPMENT
Price development in Oslo reflects tight market
New-build vs second-hand last 12 months
Price per square meter, NOK
80 000
 Rising prices for second-hand homes in Oslo
70 000
 Up 11% last 12 months, up 4% in Q3
 Prices for new-built homes have increased less
 Up 6% last 12 months, up 1% in Q3
+6%
61 698
65 400
+11%
60 000
56 500
50 901
50 000
40 000
 Low reaction/sales time: 35 days in Norway /
17 days in Oslo
30 000
20 000
10 000
0
Newbuild
Q3 2014
*Source: DNB Eiendom Nybygg Oslo og Akershus. Nr 3 2015
18
Second hand
Q3 2015
MARKET UPDATE – NEWBUILD
Gap between supply and demand in Oslo
>50 000 next five years
Annual newbuild supply at ~4k units vs. demand at ~6.4k next years
Forecasted population growth Oslo
Statistics Norway base case
Number of newbuilding units in Oslo - historical and forecasted
Statistics Norway and Prognosesenteret
575,475
634,463
689,647
Demand at ~6.4* units
733,648
4,504
3,069
1,810
2009
2014
2019
2024
2007
2008
1,171
2009
3,777
3,668
4,210
2016e
2017e
1,732
1,560
2010
3,550
4,100
2011
2012
2013
2014
2015e
 Annual demand for new house units in Oslo next five years ~6 400*
 Oslo land bank with housing planning permission adjusted for completed projects ~13 000**
 Selvaag Bolig has large Oslo projects with short time to market
19
*Prognosesenteret, based on Statistics Norway mid alternative
** Oslo kommune numbers adjusted by OBOS and Selvaag Bolig
MARKET UPDATE – NEWBUILD
High momentum, but drop in supply expected
Total Oslo market per half year
 High recent market activity and
liquidity with historically high
newbuild supply rapidly consumed
Number of units, H2 2015-H1 2016 forecast
Source: Røisland & Co
2,000
1,800
 Forecasted drop in newbuild supply
in H2 2015
1,600
1,400
 Selvaag Bolig coming to market with
large new projects in Q4 2015 and
H1 2016
1,200
1,000
800
600
400
200
0
H1 2013 H2 2013 H1 2014 H2 2014 H1 2015 H2 2015 H1 2016
Offered for sale
Sold
Vacant
20
MARKET – SELVAAG BOLIG PROJECTS
New projects with prime locations
Sales start
Valle Hovin,
Oslo area
Land acquired
Kjelsåsveien,
Oslo area
Sales start
Kilenkollen,
Greater Oslo
21
Sales start October
Valle Hovin - growth area in Oslo
~375 units | 2-4 rooms | ~40-100 sq. m
Sales start phase 1 October 2015
40 of the first 70 units sold first week
Time from acquisition to sales start: 8 months
22
NOK 220m acquisition in Feb. ‘15
Sales start Oct. ‘15
Sales start October
Kilenkollen, Fornebu - growth area in
Greater Oslo
~160 units | 1-4 rooms | 35-111 sq. m
Sales start phase 1 24 October 2015
45 of the first 80 units sold first week
Time from acquisition to sales start: 7 months
23
NOK 156m acquisition March ‘15
Sales start Oct. ‘15
MARKET – SELVAAG BOLIG ACQUISITION
New prime development project in Oslo
Acquistion of site at Frysja, Oslo
 Situated in city outskirts,
in one of Oslo’s most
attractive residential
areas
 Seeking permission for
~22 000 square metres of
housing, up to 350
apartments – all sizes
S
24
N
ACQUISITIONS
Acquisitions in Oslo-area since Q4 2014
Six new projects
 Oslo: Valle Hovin

 Oslo: Lørenvangen 22
Approximately 400
apartments

 Oslo: Sinsenveien 45-49
 Oslo: Frysja

Approximately 350
apartments
 Bærum: Fornebu

Approximately 200
apartments

Approximately 400
apartments in total

50/50 JV
 Oslo: Lørenveien 55-65
Approximately 160
apartments
25

Up to 400 apartments

Conditional on DD
Financial update
26
Value creation and project cash flow
Acquire and
refine land for
development
Cash flow
example
Value
creation
Residential
development
6 – 36 MONTHS
Zoning
 E.g., total land cost:
MNOK 100 (50% equity
+ 50% loans)
 E.g., total revenues:
MNOK 550
6 – 12 MONTHS
3 – 9 MONTHS
Project design
Marketing
and sale
Sales start
 Development cost:
MNOK 5
 Total equity:
MNOK 55
 NGAAP: Profit in P&L
through percentage of
completion method
commences
27
Construction
Construction start
 50% of land loan
converted to
construction loan
 App. 1% of total
cost
12 – 24 MONTHS
Deliveries
 No more equity required
 Profit:
MNOK 77 (14% of project
turnover)
 IFRS: Average profit at
delivery: 14% of project
turnover
 NGAAP: Average
accumulated profit: 14% of
project turnover
Low-risk business model
Risk profile at start of a MNOK 550 project
De-risking in key stages of projects
10%
14%
=
MNOK
77
1
Land purchase
conditional on
zoning approval
=
MNOK
55
=
MNOK
550
2
Land purchase
price based on
market value at
time of zoning
approval
Sales price
3
Minimum sales
rate of 60% before
construction
100%
60%
=
MNOK
330
Minimum presale



76%
=
MNOK
418
Remaining
project cost
Project margin
Equity
investment
Selvaag’s equity investment in a project and project margin bring the
remaining project cost down to 74%-78%
4
Fixed price
construction
contract
With minimum 60% pre-sale there is limited remaining project risk. For the
the remaining 40% a price reduction of 35% would recover equity
78% of units in production are sold at end Q3’15
28
 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
FINANCIAL UPDATE
Income statement highlights Q3 2015 (IFRS)

Delivery of 202 units (279)

Revenues NOK 778m (765)


Sale of units NOK 763m (752)

Other revenues NOK 16m, mainly lease income
1 126
830
765
Of which NOK 23m are interests
756
778
Other costs NOK 59m (47)


NOKm
Project costs NOK 624m (628)


Revenues and EBITDA margin (IFRS)
Salaries, sales and marketing key components
16%
12%
EBITDA adjusted 134m (125)

13%
15%
14%
Q2 2015
Q3 2015
Adjusted for financial expenses included in project costs

EBITDA NOK 111m (95)

EPS in the quarter NOK 0.76, YTD NOK 2.28
Q3 2014
Q4 2014
Q1 2015
Operating revenues
29
EBITDA margin
FINANCIAL UPDATE
Income statement highlights Q3 2015 (NGAAP)
Revenues and EBITDA margin (NGAAP)*
12 months rolling revenues (NGAAP)*
NOKm
NOKm
871
827
858
2 997
826
3 113
3 252
3 280
3 382
Q1 2015
Q2 2015
Q3 2015
724
17%
Q3 2014
15%
Q4 2014
17%
Q1 2015
Operating revenues
15%
15%
Q2 2015
Q3 2015
Q3 2014
EBITDA margin
* Construction costs are exclusive of financial expenses in the segment reporting (NGAAP)
30
Q4 2014
FINANCIAL UPDATE
Cash flow development Q3 2015
Condensed cash flow
NOKm
 Cash flow from operating
activities NOK 280m
 Proceeds from sale of
associated companies
NOK 24m
85
29
26
805
56
95
46
6
(9)
470
 Acquisitions, tax and
dividend payments reduce
cash level in Q4
Cash and cash
Profit (loss)
equivalents at before income
30 June 2015
taxes
31
Depreciation
Share of
and
profits/(losses)
amortisation from associated
companies
Changes in
inventories
(property)
Changes in
trade
receivables
Other changes
in working
capital
CF from
investment
activities
Net change in Cash and cash
borrowings
equivalents at
30 September
2015
FINANCIAL UPDATE
Balance sheet highlights Q3 2015
Balance sheet composition
 Book value per share NOK 27.2 (40%)
NOKm
 NOK 26.4 in Q2 2015 (40%)
7 000
 Changes since Q2 2015:
6 000
 Inventories decreased by NOK 32m
Non-current
Non-current assets
assets
Equity
Equity
5 000
 Trade receivables decreased by
NOK 56m
4 000
3 000
 Cash increased by NOK 334m
Current assets
Current assets
Non-current
Non-current
liabilities
liabilities
2 000
 Prepayments from customers
account for NOK 282m of other
current non interest-bearing liabilities
1 000
0
Cash
Cash
Assets
32
Current liabilities
liabilities
Current
Equity and Liabilities
FINANCIAL UPDATE
Inventories (property) Q3 2015
Inventory value development
Q3’15 vs Q2’15
NOKm
5 000
 Land value down NOK 57m
136
4 000
 Due to construction starts
 Work in progress up NOK 96m
3 000
 Finished goods down NOK 71m
2 000
 Due to delivered units
1 000
2 741
374
2 360
278
207
2 359
2 546
2 642
359
1 673
1 614
1 845
1 871
1 814
Q3 2014
Q4 2014
Q1 2015
Q2 2015
Q3 2015
-
Land (undeveloped)
33
Work in progress
Finished projects
FINANCIAL UPDATE
Sound debt structure
Interest bearing debt as at 30 September 2015
Loan facility
493
NOK
1,326
2 811
million
992
Top-up loan
Land Loan
Drawn per
30 Sep
(NOKm)
Interest rate
margin
1
NOK 500 million senior unsecured
bond loan maturing in 2018
500
4.75%
2
NOK 150 million revolving credit
facility from DNB maturing in 2015
0
2.50%
3
NOK 150 million working capital
facility from DNB maturing in 2015
0
2.00%
4
Land loan facilities from a range
of Nordic credit institutions
992
2.00% - 2.50%
5
Construction loan facilities from a
range of Nordic credit institutions
1 326
1.90% - 2.50%
Total net interesting bearing debt NOK 2 006 million
Construction loan
Note: Top-up loan of NOK 500m in the table differs form the summed up top up loan in the pie
chart (NOK 493m). The difference is due to NOK -7m in amortized cost which is not actual debt.
34
FINANCIAL UPDATE
New dividend policy implemented
Dividend policy
Approved by
bondholders
H1 2015 dividend
 To pay dividend twice a year
 Up to 50 per cent of net profit
 The bondholders of the NOK 500m Senior Unsecured Bond 2013/2018
approved amendments to the dividend covenant to allow
payments more than once a year
 H1 2015 EPS NOK 1.52
 H1 2015 dividend of NOK 0.7 per share paid in October
35
Appendix
36
Income statement IFRS
(figures in NOK million)
Total operating revenues
Project expenses
Other operating expenses
Other gains (loss)
Associated companies and joint ventures
EBITDA
Depreciation and amortisation
EBIT
Net financial expenses
Profit/(loss) before taxes
Income taxes
Net income
Net income for the period attributable to:
Non-controlling interests
Shareholders in Selvaag Bolig ASA
Q3 2015
778.4
(623.9)
(53.1)
9.4
110.9
(6.1)
104.7
(9.4)
95.4
(25.9)
69.5
Q3 2014
764.7
(628.3)
(41.6)
0.5
95.3
(5.1)
90.1
(5.9)
84.3
(23.4)
60.9
9M 2015
2 364.1
(1 892.5)
(158.3)
19.7
333.0
(17.9)
315.1
(24.5)
290.6
(78.8)
211.8
9M 2014
1 818.8
(1 507.2)
(135.1)
28.0
204.5
(15.5)
189.0
(16.7)
172.3
(46.7)
125.6
2014
2 945.2
(2 371.8)
(215.5)
(3.5)
32.4
386.9
(21.2)
365.7
(17.0)
348.7
(94.2)
254.5
(1.4)
74.5
0.1
60.8
(1.7)
217.1
1.2
124.4
1.2
253.2
37
Cash Flow statement
(figures in NOK million)
Q3 2015
Q3 2014
9M 2015
9M 2014
2014
Net cash flow from operating activities
279.7
56.6
316.6
16.1
187.3
Net cash flow from investment activities
28.7
23.1
(20.8)
30.2
(5.7)
Net cash flow from financing activities
26.0
(56.7)
(57.1)
143.6
(202.7)
334.4
470.2
804.6
23.0
754.0
777.0
238.7
565.9
804.6
189.9
587.0
777.0
(21.1)
587.0
565.9
Net change in cash and cash equivalents
Cash and cash equivalents at start of period
Cash and cash equivalents at end of period
38
Balance sheet
(figures in NOK million)
Intangible assets
Property, plant and equipment
Investments in associated companies and joint ventures
Other non-current assets
Total non-current assets
Q3 2015
401.8
21.4
192.3
122.2
737.8
Q2 2015
406.4
22.6
209.0
123.5
761.5
Q3 2014
420.3
7.9
144.0
125.5
697.7
2014
415.6
17.4
156.7
121.8
711.5
Inventories (property)
- Land
- Work in progress
- Finished goods
Other current receivables
Cash and cash equivalents
Total current assets
4 663.3
1 814.1
2 641.9
207.4
280.3
804.6
5 748.2
4 695.3
1 871.2
2 546.0
278.1
350.1
470.2
5 515.6
4 550.1
1 673.4
2 740.6
136.0
291.9
777.0
5 618.9
4 348.8
1 614.4
2 360.3
374.1
588.0
565.9
5 502.8
TOTAL ASSETS
6 486.0
6 277.1
6 316.6
6 214.2
Equity attributed to shareholders in Selvaag Bolig ASA
Non-controlling interests
Total equity
2 547.1
13.1
2 560.2
2 472.6
14.5
2 487.1
2 313.8
23.9
2 337.7
2 442.6
14.7
2 457.3
Non-current interest-bearing liabilities
Other non-current non interest-bearing liabilities
Total non-current liabilities
2 470.1
309.1
2 779.2
2 018.5
308.4
2 326.9
2 295.0
302.9
2 598.0
1 752.4
293.6
2 046.0
Current interest-bearing liabilities
Other current non interest-bearing liabilities
Total current liabilities
340.4
806.2
1 146.6
748.9
714.2
1 463.1
728.1
652.8
1 380.9
959.5
751.4
1 710.9
TOTAL EQUITY AND LIABILITIES
6 486.0
6 277.1
6 316.6
6 214.2
39
* Corresponding to a book value of NOK 27.2 per share
Operational highlights – key operating figures
Number of units sold
Number of construction starts
Number of units completed
Number of units delivered
Number of units under construction
Proportion of sold units under construction
Number of completed unsold units
Sales value of units under construction (NOK million)
Number of employees
40
Q3 14
259
203
274
279
1 347
76%
18
5 159
Q4 14
233
280
319
266
1 308
77%
39
4 689
Q1 15
308
284
208
224
1 384
81%
40
4 968
Q2 15
210
199
190
232
1 394
80%
31
4 909
Q3 15
208
204
172
202
1 426
78%
25
5 077
100
99
99
99
99
In compliance with financial covenants
Sales ratio covenant (minimum 60.0%)
76%
77%
Q3 14
Q4 14
Sales ratio
Equity ratio covenant (minimum 25.0%)
81%
80%
78%
Q1 15
Q2 15
Q3 15
37%
Q3 14
40%
40%
40%
40%
Q4 14
Q1 15
Q2 15
Q3 15
Equity ratio
Covenant
41
Covenant
Operational highlights – key operating figures
Number of units sold
Number of construction starts
Number of units completed
Number of units delivered
Number of units under construction
Proportion of sold units under construction
Number of completed unsold units
Sales value of units under construction (NOK million)
Number of employees
42
Q3 14
259
203
274
279
1 347
76%
18
5 159
Q4 14
233
280
319
266
1 308
77%
39
4 689
Q1 15
308
284
208
224
1 384
81%
40
4 968
Q2 15
210
199
190
232
1 394
80%
31
4 909
Q3 15
208
204
172
202
1 426
78%
25
5 077
100
99
99
99
99
IFRS EBITDA Q3 2015
(figures in NOK million)
Property development
Other
Total
771.6
6.6
778.2
(622.6)
(1.0)
(623.6)
(16.1)
(37.0)
(53.1)
9.4
-
9.4
-
-
-
142.2
(31.4)
110.9
IFRS EBITDA for the quarter, per segment
Operating revenues
Project expenses
Other operating expenses
Share of income (losses) from associated companies and joint ventures
Other gain (loss), net
EBITDA
43
Operational reporting Q3 2015
(figures in NOK million)
Property development
Other
Total
819.0
6.6
825.6
(649.4)
(1.0)
(650.4)
Other operating expenses
(16.1)
(37.0)
(53.1)
EBITDA (percentage of completion)
153.5
(31.4)
122.2
Operating revenues
Project expenses
Note: Construction costs are exclusive of financial expenses in the segment reporting.
44
MARKET – SELVAAG BOLIG LAND BANK
Focus on growing urban areas
 Portfolio development adapted to local market demand
 YTD: Acquired land in Greater Oslo for ~1 700 new homes
 New office in Bergen strengthens local presence
Trondheim
501 units
Bergen Stockholm
2%
1% Other
Trondheim
1%
4%
Bergen
156 units
Stavanger
15%
11 800
Stavanger
1 805 units
Greater-Oslo
9 121 units
Stockholm
103 units
units
Greater-Oslo
77%
Other
155 units
45
Note: The numbers represent the size of the land portfolio as at 30. September 2015. All numbers are adjusted
for Selvaag Bolig’s share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold,
2) 155 units at Tromsø (Troms county), 3) 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 ~4 950
residential units, whereof the company has purchasing obligations for ~4 300 and purchasing options for ~650
units
Substantial portfolio for development
Total land bank portfolio at 30 September 2015
No of units
650
4,300
1,400
11,800
400
5,050
Total Land bank
Option
Obligation to acquire
46
In production
JV
Land bank included in
the balance sheet
Construction starts in the quarter
Construction starts, scheduled completion and expected revenue
Quarterly, expected revenues (IFRS) in NOK million
Q3 2015
Q4 2015
Lade Alle
67 apartments
Nyhavn
33 apartments
Økern Torgvei
104 apartments
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2018
Q2 2018
NOK 216m
NOK 152m
NOK 441m
47
Land loan interests on the P&L
Loans recognised in profit and loss at 30.09.2015
 Total land loans are NOK 992 million of
which NOK 573 million are loans where
interest cost are activated
NOKm
 Land loan interests activated at regulation
42
25
24
65
 At 3O September interests connected to
land loans of NOK 419 million was charged
on the P&L
69
195
48
419
Land bank valuation from Q4 2014
External valuation vs. book value
 Independent land valuation, by Akershus
Eiendom.
NOKm
 Valuation is mainly based on a calculated
profit from sales of fully developed housing
units

709
For projects under development, remaining costs
are split on developer and buyer, affecting
value distribution
2,225
1,516
 DCF valuation method is applied on
residents for lease
Book value at time of
valuation (Nov 2014)
49
Added value
Valuation Akershus
Eiendom
PROJECT PORTFOLIO AND LAND BANK
Land bank - Stockholm
Location of plots in Stockholm
50
Concepts complement each other in creating
new urban neighbourhoods
Lervig Brygge (Stavanger)
Løren (Oslo)
Løren Start
No of apartments
Lørenpynten
88
No of apartments
Løren Torg
127
Hageby Start
No of apartments
Complimentary use of concepts gives benefits




108
No of apartments
Sjøkvartalet
36
No of apartments
Lervig Brygge Pluss
67
Broadens the customer base
Speeds up development
Helps optimise the sales and income profile of each project
Creates more attractive neighbourhoods
51
No of apartments
188
OPERATIONAL UPDATE
Nybyen Økern – project efficiency
Sales development Nybyen Økern, stage 1
 Land acquired in January 2014
Units
 Sales start in October 2014
Sales start
house A (78)
 60 percent of construction stage
1 (house A and B) sold by
January 2015
Sales start
house B (35)
> 60% sold
113
78
 Settlement 1 April 2015
66.5% sold
113
113
7
79
Feb '15
(house A+B)
Total units sold
per 26 Feb '15
18
54
Nybyen Økern, Oslo
Oct ‘14
Dec '14
(house A)
Jan '15
(house A+B)
Sold units
52
Units for sale
Demand exceeds supply
Housing shortage in Norway - annualized
forecast as of April 2015

No of units
Ambivalent macro environment

Historically low interest rates

Rising unemployment

Real income growth
10 600

37 800
27 100

Housing need
Housing construction
Housing shortage
Source: Prognosesenteret
53
Favourable demographic conditions

Moderate population growth and immigration

More small households

More young adults, more elders
Substantial housing need

Supply outpaced by population growth

Demand in cities especially strong

Strong sales in suburbs
Norway: A robust economy
GDP growth 2004 - 2015e
Unemployment 2004 - 2015e
6%
12%
4%
10%
2%
8%
0%
6%
-2%
4%
-4%
2%
-6%
2004
0%
2004
2005
2006
France
2007
2008
2009
2010
Germany
2011
UK
2012e
2013e 2014e
Sweden
2015e
Norway
2005
2006
2007
France
Population growth 2011 - 2030e
2008
2009
Germany
2010
2011
UK
2012e 2013e
2014e 2015e
Sweden
Norway
Public net debt/GDP 2004 - 2015e
100%
Norway
23.0%
Sweden
50%
0%
12.0%
UK
-50%
12.0%
-100%
France
Germany
8.0%
-150%
-200%
2004
-5.0%
2005
2006
France
Source: IMF, Statistics Norway, Statistics Sweden,
Statistics France, Statistics Germany, Statistics UK,
Eurostat
54
2007
2008
2009
Germany
2010
UK
2011
2012e
2013e
Sweden
2014e
2015e
Norway
MARKET OUTLOOK
Price increase deflated by purchasing power
Housing price development in Norway
 High gap between nominal and
real price development past ten
years
Index
700
600
 Price increase since 1985:
500
 Nominal: 6.4x
400
 Adjusted for CPI: 2.9x
300
 Adjusted for disposable income: 1.6x
200
 The increase in purchasing
power explains much of the
nominal growth in housing prices
100
0
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Nominal prices
CPI adjusted prices
Prices adjusted for disposable income per capita
Source: Eiendom Norge, Eiendomsverdi og Finn.no, FED Dallas, SSB.
55
Strong purchase power
Household interest payments after tax as a proportion of post-tax earned income 1993-2014
Single
40%
Young couple
Established couple
35%
30%
25%
20%
15%
10%
5%
0%
1993
1995
1997
1999
2001
2003
2005
Source: 1993-2013 EFF, Pöyry. 2014 NyAnalyse
2007
56
2009
2011
2013
Housing completions and population growth
70000
1.50%
60000
1.30%
50000
1.10%
40000
0.90%
30000
0.70%
20000
0.50%
10000
0.30%
0
0.10%
2000
2001
2002
2003
2004
2005
2006
2007
Housing completions
Source: SSB
57
2008
2009
Population growth
2010
2011
2012
2013
2014
Population growth 2014 - 2025
1,000,000
920 000
900,000
800,000
660 000
700,000
600,000
500,000
445 000
400,000
300,000
200,000
100,000
0
2014
2015
2016
2017
2018
Low
Source: Statistics Norway
2019
High
58
2020
Medium
2021
2022
2023
2024
2025
Breakdown for medium population growth
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
2014
2015
2016
2017
2018
2019
Immigration
Source: Statistics Norway
2020
Other growth
59
2021
2022
2023
2024
2025
Origin of current Norwegian immigrants
 There are 805 000 first or second
generation immigrants in Norway
 Immigrants account for 16 per
cent of the population
0%
2% 3%
28%
Europe
 Most represented countries are
Poland, Sweden and Lithuania
Africa
55%
 Labour immigrants settle in and
around the major cities
North Amerika
South America
Oceania
 Labour immigration fell by 9,2 per
cent between 2013-2014
Source: SSB
Asia
12%
60