Selvaag Bolig ASA

Good morning, and welcome to the second quarter's results presentation for Selvåg Bolig. My name is Sverre Målvik, and together with finance director Kristoffer Brunvold, we will go through today's agenda. We will start by looking at some highlights, including the operational aspects. Then Kristoffer will go through the financial aspects, before we look at the market and future prospects, and some Q&A at the end. The second quarter was a very good quarter, a solid quarter, I would say, result-wise, given that we had quite few deliveries. We had fixed costs at the bottom, so we delivered well given that. The first quarter sold very well, and the first half of the year was very good, 38% better than the same period last year. Det gode salget har medført at vi har økt antall enheter under produksjon, som er positivt. Vi har kommet oss videre i Stockholm igen, får jeg si. Vi har fått tak i en ny tomt, en ny marktildeling i Stockholm. som er færre regulert, som vi skal begynne å selge på allerede neste år. Vi betaler et utbytte for første halvår på 2 kroner per aksje, på grunn av godt resultat og gode fremtidsutsikter. The key figures are not going to be very detailed, but I will just conclude by saying that the adjusted EBITDA margin on IFRS is good. It is over 22% per quarter. It is 23% on the first half of the year. Looking at the current calculation, we are at 17% per quarter, the same as in the first half of the year. The project margin is roughly 22%. If we look at the operational side, we have talked in the last few quarters about our plus concept, both plus... Selvvåg Plus and Selvvåg City, which is a daughter of the Plus concept. This gives us a great advantage in relation to the fact that it is a brand that is very sought after among our customers, and not least of the municipalities, both in Norway and in Sweden. That has also been very much involved in the fact that we now got a new site, a so-called land allocation in Stockholm. The outskirts, the outskirts of Stockholm. Barkaby, as it is called, is a large conversion area where you have 18,000 units under development and construction. New T-Bahn station. It's a bit like Lørenskog compared to Oslo. A lot of ordinary housing and rental units are being built there, and then we come up with a plus project, which we have also done at Lønnskog. This plus concept gives us a very comparative view, and that is much because we have, among other things, service personnel, those who run these centers, 20 PT. We operate in-house in Selvåg. We have about 20 employees now. We have over 3,000 employees. And only over 600 in Stockholm, which will be a plus. We have succeeded, so we are far ahead of the plan to establish ourselves in Stockholm and grow organically. We have already had a good foothold, and we are working on it, and we have a lot of current tokens that we are still trying to land, and we will hopefully land more in the future. It will be exciting. If we look at the sales, as I said earlier, we sold well in the quarter, 173 units for a value of 870 million, which is much better than in the same period last year. The first half of the year, 421 units against 306 in the same period last year. If we count up what we have sold in the last 12 months, it is over 4 billion. So the speed is increasing, so we'll see what happens in the future. When it comes to the good sales, I have indicated that we now start building from the second quarter in a row, more units than we finish, 142 against 120, which means that we increase the speed a little bit in the company from 6,627 to 6,749, 1371 units under production. 82% of this was sold at the beginning of the quarter. som er mye, og mer nå naturligvis. 87% er i Østlandsregionen. Vi har jo startet både prosjekter både i Bergen og i Stavanger i det siste halvåret, så vi har i hvert fall fått vannet ut litt, og vi regner med at vi skal komme i gang med mer, blant annet i Trondheim, og mer i Stavanger og Bergen. Det kommer jeg tilbake til litt etterpå. If we look at the future financial statements, we see the same as last quarter, 867 units sold this year. 94% was sold at the beginning of the quarter from what is delivered this year. So the results for this year are more or less certain. Then Kristoffer will take us through the financials.

Yes, good morning. We will then look at the financial highlights in the second quarter. We start with the results schedule according to IFRS, where the revenues and costs in the projects meet the results by delivering housing to our customers. We delivered 132 units in the quarter, of which 46 were from collaboration projects, mainly projects we have together with Ferd at Ensjø Tidemannsparken. Income was 394 million kroner. This includes other income of 13 million kroner, which is attributed to our DRIFTA plus service centers and factored project allocation to collaboration companies. Project costs were 305 million kroner. We have good project managers who manage our projects with strict cost control. and deliver enough a quarter with costs well within budget, which means that we manage to deliver good margins in the quarter despite relatively few annual deliveries. Other costs came in at 52 million, significantly lower than the same period last year. This is mainly due to one-time effects last year in connection with a lot of work with the fulfillment of the urban property transaction. We report an adjusted EBITDA of 88 million, where we have corrected out 9 million in financial costs, which is reported in the commodity cost after IFRS. This gives us a margin in the quarter of 22%. The result for the share is 60 euros compared to 52 euros in the same period last year. We have many collaboration projects in our portfolio, and in the official IFRS-project, this is reported on one line, net after tax. Here we have set up a pro forma result project, where we consolidate our share of income and costs, a brutificated result. Here we see that we have revenues of 645 million in the quarter, with a margin of 17%, in comparison with 670 million and a margin of 13% in the corresponding period last year. Of course, the same result at the bottom with 60 euros per share as a result. Furthermore, we have also made this pro forma result for half a year and delivered 256 units. Income of about 1.3 billion kroner and a margin of 19%. This is on the same level as the corresponding half year in 2020. We report a result per share of 1.42 kroner. Basically down from the same period last year, which was 12.60 kroner. But then we included the urban property transaction with 11 kroner per share. Then we will look at segment reporting, which follows Norwegian regulatory rules. We follow the running calculation method, which is the sales grade in the projects times the finish grade, which is the total sales grade. This means that we run the results in the project from the beginning to the end. We have a result in the quarter with a turnover of 881 million, and a margin of 17%. This is after overhead costs. If we look at the speed, the 12-month rolling income is 3.4 billion, and a margin of 18%. We still have good project margins. If we look at the turnover of the project, it is 3.3 billion, 12-month rolling. and a margin of 23%, which we are pleased with. Let's look at the cash law. We started the quarter with 698 million in the bank, and we have built a lot of stocks in the quarter, as a result of many start-ups and high accuracy. There is a net increase in stocks of 484 million. This is financed with an increase in the building tax. There is a net increase in the building loan of 538 million, and then we have paid an exchange rate of 208 million. In total, there is a decline of 118 million, and at the beginning of the quarter, 580 million in cash. Then we will look at the balance. We have a bookkeeping Income per share at 24.3 kroner. We have an equity share of 35.7%. This is something down from last quarter. This is due to the fact that we have paid the exchange rate and that the total balance is now up. We come back to the stock market, which is the largest increase at 509 million. The cash is down 180 million, as we were through on the cash flow. The revenue from our customers is 303 million, and is included in other short-term accounts. This is on the same level as before. Then we can look at the stock storage, which is up from last quarter. The cash holdings are up by 28 million, and this is due to the purchase of cash from Urban Property. The biggest increase is Vare i arbeid, opp med 560 millioner. Dette skyldes høy akutitet i byggeprosjektene. Vi har byggestartet fler enn vi ferdigstiller, som gjør at varelagret øker mye. Ferdigvarelagret er ned med 80 millioner til 102 millioner, som er på et rekordlavt nivå. Dette skyldes at vi har overlevert tidligere solgte og ferdigstilt tjener fra forrige kvartal. We now have 15 units that are unsold in the portfolio, and this is on a low and comfortable level. Then we will look at the yield. We had a yield of 3 billion at the beginning of the quarter. This is mainly due to a building loan of 2 billion, which is also increased due to the accuracy and several construction starts. We have yield to Urban Property at 739 million, which is attributed to purchase agreements and sales credits. And then we have some interest on the property we have in the balance, which was not sold to Urban Property at 250 million. There are no changes in the conditions for these, and we have not raised any of the TOF facilities at the end of the quarter. We have a net profit margin of 2.4 billion at the beginning of the quarter. Let's look at the exchange rate. Selve Bolie prioritises stable and good exchange rates for our shareholders. In the previous quarter, we revised our exchange policy, where we now say that we will pay out 60%, or at least 60% of the annual result, and then divide it by two payments this year. If we look at the graph on the left, we have shown the results on the stock and the exchange. We then pay two kroner for the first half of 2021. This is based on the result and good future prospects. If we look at the accumulated exchange rate against the result, we have paid 46 kroner for its exchange rate in 2012, and a result per share of 49 kroner. This gives out about 94% of the result, and of course includes these 22 kroner from the Urban Property transaction. We will continue to prioritize good exchange rates for our shareholders. In the end, we will look at the discount on the net capital. This is calculated with the result after the tax period in the last 12 months. Divided by the input balance on the net capital. We have 479 million in the result. And a net capital discount of 20%. Something we are very pleased with. Now we will move on to an update on the market.

Yes, we are starting to look at the Oslo market as usual, I should say. This is what has been a bit controlling and unbalanced in the last couple of years, and seems to be the case in the future as well. In Oslo, roughly 3,000 units have been completed per year in the last 15 years. Prognosescentret has a medium case where they have estimated population needs in the future. A medium growth case of 4,000 units per year in the next three years. And it is actually completed 1800 years, 1650 in 22, and so far it looks to be around 1700 in 23. That can still increase a little depending on what is started this year. But still, this is a big gap between the need for demand and the offer side. This of course also means pressure on surrounding municipalities, Gamla Akershus, which is now called Viken, Eks, Buskerud and Østfold, sees the same trend there now. Quite a lot created due to poor supply side in Oslo. We now see a falling trend and an increasing gap between supply and demand here as well. In average, it has been completed 3,750, so the market is ballpark, the same as in Oslo, but a little bigger. And the need in the future lies at 4,900. And what is completed this year, 4,300, next year 3,004, and then we don't know completely in 2023, but it looks like it will be lower, much lower levels, that this will also be a gap. It is natural to look at these two, Oslo and Storoslo, together, and there will probably continue to be a pressure, that is to say, for a low supply side in relation to the need. If you look at the population growth in Norway, over 50% of the population growth occurs in this region, Oslo, while the number of new buildings is much lower. This indicates that the gap is increasing. As far as the rest of Norway is concerned, there is much more cohesion between the proportion of population growth and the proportion of new homes being built. If we look at the actual figures in Oslo now, first, then it was out of sale about 1,000 units at the end of the year. About 1,300 units have been sold in the year so far. Real to date, or even 36. And sold more than what has been sold, so we are at about 900 units now at the beginning of the quarter. So, the supply of new housing has gone further down. It is a very low level for Oslo. It is relatively stable in Akershus. It has been sold far more. It has been sold out a lot. It has been sold out about what has been sold out. But collectively, the supply side is declining and low in this region in relation to demand. If you look at Bergen, it has gone down. It has been released relatively little during this period and sold more than twice as much as what has been released. The supply side goes down to 7.80. Trondheim also sold more than what was released. 8.50 is available at the beginning of the quarter. Stavanger Sandnes is quite stable at 8.50. If you look at the sizes here, there are as many new homes available in Bergen, Trondheim, Stavanger and Røfløy, around 800 units, as there are in Oslo. And that says a little about how low the supply side is in Oslo, all the while the Oslo market is three times as big as these towns. If we look at the other hand market, We see record sales across the entire fleet, which is of course due to low interest rates, especially low interest rates in connection with Corona. We have had that effect, so there is a high turnover of homes, a record high for all cities. The warehouse in Oslo is quite stable, we are about the same as the last three years, not particularly low, but it is taken away. Bergen has been down for the last 3-4 years and is on a healthy, normal level. Also here, record high turnover, as I mentioned. Trondheim, likewise, a fairly low level, even though the supply side in Trondheim has been high, but it is a lot of interest driven. What is most noticeable, at least for us, is the Stavanger market, which has a very high turnover, and that we have brought down the huge stock market, which has been through many years, to a more normal level. There is still a good supply side, but it is at least down to the 2012-2013 level again, so that we may have come through the worst oil crisis, and we are beginning to see the tendency for things to go up. And that is further strengthened by price growth from year-to-date. Even with 31.7 here, the Oslo market went up by 3.1%. It's a broken market, of course. Bergen 9.5, 8.8 in Trondheim, and Snæve 8% in Stavanger, so good price growth. I tried to illustrate a little here that it's... You can read yourself a little blind on the percentage. In Oslo, the prices are already very high, the square meter prices, so 3.1% growth in Oslo corresponds to 2,700 kroner per square meter, while 7.8% in Stavanger corresponds to 3,100, so it is a very low average price in Stavanger for use. I wonder if it is around 46,000, then it is then over the double, or about the double in Oslo. Vi har jo tro på at prisene i Stavanger særlig, på grunn av at det ligger på såpass lavt nivå, kommer til å stige mer fremover enn de andre regionene. So what do we think about the future here? What we think is that the interest-driven balances will give themselves a boost. The interest will probably go up now. I don't know if it will come in September or later. But it will not go up so much that it will affect... In some degree, the sale of our ordinary housing, since the housing loan requirement actually stops the first-time establisher much more on five times the income than the service end does when the interest rate is so low. We therefore believe that there will be a very normalized market in the regions. Maybe, as I said, a little more growth in regions that come from low levels, for example Stavanger. We have a lot of good projects in our region. We have a lot of big projects in the Østland region, and we are just adding more. It is also included in the presentation, but we have a lot on Lørenskog, Lørenskog station town, Skårebyen. We have more on ski that is coming. We have at Langehus. We will soon bring projects to Fredrikstad. Many projects. We have more at Landås, also in Asker, and Tønsberg we will bring. What is new is that we now look forward to finally bringing a new project to Oslo. It is Sinsenveien, which we hope will finally be regulated during the quarter. There are 350 units that we have in a cooperative with Norddyr. We are calling and hoping to come out in Trondheim. It is a plus project. Everything is ready and ready. The only thing we lack is a go-ahead from the municipality in connection with a range of school requirements that must be met. But as I said, we have a lot more. Many construction trends, subsequent construction trends, have already established projects. Vi jobber jo med også nye områder som vi vurderer å gå inn i. Det er jo andre steder i Norge som kan være attraktive som vi ikke allerede er i, og i Sverige for den saks skyld. Vi er veldig fornøyd med at vi skal ut i salg neste år med vårt første heleideprosjekt i Stockholm. Vi har jo vært i Stockholm i mange år i samarbeid med Veidekke, men nå etablerer vi oss selv. It will be exciting. In summary, it was a good quarter in terms of results, especially given that we have few deliveries. We had very good sales in the first half year, up 38% compared to the first half year in the same period last year. Increased number of units under production. The establishment in Stockholm is going better than expected, and we are looking forward to selling a bus project there next year already. We have already established an empty bank of over 600 units, and we are paying an exchange rate of 2 kroner per share. That was all we were going to say this time. Can we ask some questions, if anyone has any? Ingen spørsmål. Ingen spørsmål, nej. Da takker vi for oppmerksomheten, og ønsker dere velkommen til 3. kvartal 11. november. Takk for i dag.