Selvaag Bolig ASA

Good morning, and welcome to the fourth quarter's presentation of Selvo Boli. My name is Sverre Mollvik, I am the managing director, and together with Kristoffer Brunevold, who is the financial director, we will go through today's presentation. Let's see. We'll just go through it. Today's agenda. I'll start by talking about it. First, we have the highlights from the quarter. Then we'll take a closer look at the operational part before Brunvold takes us through the financial part. Then I'll take the market, future prospects and a Q&A at the end. I can start anyway. The fourth quarter was the best in the company's history in terms of sales. Sold 256 homes, unfortunately. Sales value and number of units. The good sales meant that we were able to start building a record number of units. We have never in any quarter started building so many units, 456 units. This is under one consequence of good sales in Q3 and Q4. We had many finishes that have given a good volume with good margins, which gives good results. which again gives a good result for another half year, which means that we are investing on an exchange for another half year of 3 kroner per share. We paid 2 kroner for the first half year, a total of 5 kroner for the year. This corresponds to about 93% of the result per share. Vi har også gjennomgått tomtebanken, som vi gjør vanligvis i slutten av året. Det vil si den tomtebanken som vi ikke solgte til Urban Property. We still have some of these properties in Selvåg Boli. The properties are registered at 900 million, while they are valued at a market value of 1.4. So a value of a little over 500 million kroner, corresponding to 5.50 kroner per share. The key figures are not going to go into too much detail, but as I said, we had a lot of achievements, so after IFRS we get a turnover of 1.554 and an EBITDA margin of 20.4%, and for this year 3.4 billion, and a margin of 22%. The current calculation is 795, 14.2 for the quarter and 3.3 for the year. Kristoffer will come back to more details on the finances. Let's take a look at some highlights in terms of operations. As you know, we have established ourselves in Sweden. A few years ago, we decided to grow organically. We won a new project. We received a market share in a competition in Nacka in Stockholm a few weeks ago. which we are very pleased with, in competition with all the big swedish companies. This competition is based on different criteria, and we did not win on price, price is a criteria, but we won on concept, among other things because of our plus concept. We now have an auntie bank in Sweden, which we have built up during Halv another year's time on 800 units, which will be a very good foundation, a threshold volume for us to build further on our organization in Sweden, which will soon be the next largest region, at least in the company. As for Tomtebank, we have started building 880 units over the course of the year. We have bought roughly 1,000 units, or units that can be given about 1,000 units. It is divided about 50-50 in Norway and Sweden. When it comes to ESG, we have implemented climate forecasts for a couple of projects this year, and from now on all projects will follow climate forecasts. We have also made a lot of progress when it comes to sustainability in general, and we will get back to that in the annual report that will be released in April. As I said earlier, record sales, 276 units in Q4. Q4 is usually a quiet quarter due to Christmas and dark times. We have never sold 276 units before, not in the near future, to a value of 1,265,000,000 kroner. We can also say that the sale has continued very well, also now in Q1. We have about the same speed as in Q4. 12 months in a row, we are at over 4 billion. The unit price is a little lower due to the fact that we sold a lot of smaller units at Lørnskog. The sale in Q3 and Q4 means that we will start building from the whole 456 units in Q4. We are finishing at 334 units. This means that we are increasing the speed compared to last quarter. goes up from 1,201 units under production to 1,323, to a value of approximately 6.7 billion. Of this, we had sold 67% at the beginning of the quarter, and more now. 73% of this volume is now in Storoslo, and two years ago we were at 97%, so we have started all our regions now. Trondheim, Bergen and Stavanger. The only thing missing now is to start production in Stockholm, which we hope will happen in a year's time. We are starting to sell our first project there already in the summer. In the future, we will guide on the same as last quarter, 625 for 2022. 82% of that was sold, and more now, of course. Kristoffer will take us through the numbers.

Good morning. Let's take a look at the financial highlights. As usual, we start with the official IFRS results, where the revenue and costs meet the results by handing over the housing to our customers. 324 units were delivered in the quarter. 33 of them were from collaboration projects, mainly in Kaldens Brygge in Tønsberg. Income was roughly 1.6 billion. This included 14 million in other income from the operation of our plus-service centers and invoiced project management for collaboration projects. Project costs were 1.2 billion. This is well within the budget. Our project manager runs strict cost control, which of course contributes to good margins in the quarter. Of these 1.2 billion, there are 45 million in financial costs, which are presented as goods costs according to IFRS. Other costs amount to 81 million, which is the same level as last year. We report an adjusted EBITDA of 317 million, corresponding to a margin of 20%. This brings us down to the result per share at 2.34 kroner per share against 2.62 kroner in the same period last year. Then we will look at a pro forma result calculation. We have a lot of collaboration projects in the portfolio. They are presented in one line in the official calculation. Here we have made a brutto consolidated result, where we take in our share of the income and costs in these collaboration projects. Here we see that we deliver income of 1.7 billion and a margin of 19% against the same period last year, with a turnover of 1.4 billion, and a margin of 25%. The same result at the bottom, of course, at 2.32 euros per share. And then we have also created a pro forma for the year 2021. It exceeded 894 units, The total revenue will be 4.3 billion. Deliver an adjusted EBITDA of 827 million. Then the added margin is 19%. This is comparable to 2020, where we had 3.5 billion in revenue and a margin of 21%. The result for the stock in 2021 will be 5.40 kroner. compared to 5.32 in the same period of time, i.e. 2020. Then we have excluded these 11 kroner from the urban property transaction, so it becomes more comparable. Now we will look at the segment reporting, which follows Norwegian regulatory rules, and that is the running calculation method, which better shows the value creation that occurs in the company. The current calculation is sales degree times sales degree in the projects, where we take out the results in the project's lifetime. Here we have a turnover of 795 million. The supply and demand margin is 14%. This is after the wage and other operating costs. If we look at 12 months of rolling revenues, we are at approximately the same rate as before, at 3.3 billion in turnover and a rolling margin of 16%. If we look at the cash flow, we entered the quarter with 610 million in the bank. We have a positive operational cash flow of 721 million, linked to solid results and many deliveries, which makes the stock market go down a lot. The delivery of cash in from customers means that we have just paid 801 million in building loans. This brings us out to a balance cash balance of 527 million at the beginning of 2021. Let's look at the balance. Booked equity per share is 26.2 kroner. We have a solid equity share at 42.7%. This is due to many deliveries in the quarter and good results. The total balance is down as a result of all these deliveries and the down payment of Gjell. It is also important to mention here that the exchange rate of 281 million is not reflected in this balance. This first hits the balance with payments in the second quarter. The stock market is down, I will come back to that. Other conditions are down by 27 million. Cash down by 82 million, as we were talking about. And in other short-term terms, there are 234 million that are proceeds from our customers. As Sverre mentioned, we have done a valuation of Tomte Bank, which is in the level balance. Booked value at 907 million, and valuation from 60 degrees in business registration at 1.4 million. This gives a more value of 519 million, roughly 5.50 kroner per share. Let's look at the stock market, which is down from the previous quarter. If we look at the interest rate, it is now up with 79 million, and that is due to the fact that we have bought back a good amount of loan from Arben Property in the quarter. In terms of goods and labor, it is much lower with 712 million, and that is due to a lot of deliveries in the quarter. And then we have started a part, but here the factoring has not yet started from the terminal side, but it will come, so we expect an increase in goods and labor next quarter. The finished goods storage is up to 58 million. That is because we have not delivered everything that has been finished, so we have some more properties in the balance per 1-12. But that is on a low and comfortable level with 25 unsold finished units. Then we will look at the yield. We have the interest rate yield of 2.1 billion, where the construction loan is the big one with 1.2 billion. We also have a loan to Urban Property of 682 million, which is linked to purchase agreements and sales credits. And then we also have some empty loans again on the balance of 279 million. There are no major changes in the conditions on these loans. We have also not raised any of the top facilities at the beginning of the quarter. This brings us down to a net profit margin of 1.6 billion, which is much lower than last quarter, which was at 2.3 billion. Then we will look at the exchange rate. We have, since the budget settlement in 2012, prioritized good exchange rates for our shareholders. If we look at the graph on the left, we paid out 2 kroner in August for the first half of the year. The board now proposes 3 kroner for the second half of the year, which brings us up to 5 kroner per year. This makes up about 93% of the profit per share in the period of 5.40 kroner. If we look at the graph on the right, we have accumulated an exchange rate of about 49 kroner from the stock market in 2012. This makes up about 92% of the stock market share at 53 kroner in this period. We will continue to prioritize and give good direct issuance to our shareholders. Finally, we will look at the issuance of the income tax. This is estimated to be a 12-month rolling net profit, divided by the incoming revenue in the 12-month period. This results in a net profit of NOK 505 million and a return of 21%. Unfortunately, we will continue with an update on the market.

Yes, we are starting to look at, as usual, how the situation is in Oslo in relation to the offer or the balance between the offers after the course. It has been completed in the last 15 years, about 3,000 units per year in Oslo, and it is about to be in 2021. It has not been completely halved yet, so it is still red, even though we are in 2022 now. 1,800 units in 2022, 1,600 and in 2023, 2,350. It is very low in relation to the estimated need for 4,000 units annually. And that is of course the reason for the high price pressure and all the writing around how difficult it is to get in for first-time establishments in Oslo, for example. If you look at Akershus, the old Akershus, the numbers are more rising. There are 3,750 that have been completed. It will be completed in 2021, 4,100 units. In 2022, 4,200. And next year, 3,300. So it's a downward trend. But Akershus has generally been good. Look at Lørenskog. We have large volumes in Lørenskog. They are very on the ball when it comes to regulation, and it goes away, compared to the worst in the class, which is Oslo. But there is still a gap here now. There is a lot of regulation in Lønnskog, and it is sold terribly much. Due to the large shortage in Oslo, many move to Lønnskog, for example, or the outskirts of Akershus in general. The demand here is 4,900, so there is a gap. It is not as large as in Oslo, but it is also built up here, which is probably a consequence of low supply in Oslo. So we see here what has actually been out in the market and has been sold through 2021. If we look at the year's income in 2021, it was 1,000 units. Only 2,000 units have been sold in Oslo in 2021. There are about 1,000 units left in 2021. These numbers mean that what is left out is sold. The 1,000 units that are left out are in projects that are sold linearly through the construction process. I have been doing this for many years, and not so many years ago there was a balance between the supply side in Oslo and Akershus. And now you can see that there are three times as many homes for sale in Akershus as there are in Oslo. It is an unhealthy, low supply in Oslo. Akershus is much more balanced, and there is a fairly large volume that is out for sale, over 3,000 units, which is quite normal. And then more than 5,000 units have been sold throughout the year, and that's a lot. And about the same, actually healthy offer side now at the turn of the year again. Bergen has the same tendency as in Oslo. We have projects there that take a long time to regulate. Bergen and Oslo are the two that don't get it done. As you can see, only 530 units have been laid out, while we have focused on what was out to begin with this year. There are only 640 properties for sale in Bergen. Bergen is much smaller than Oslo, but in spite of everything, it is starting to be a low supply side here as well. Trondheim is more balanced, the same in Stavanger and Sandnes. If we look at how this has developed over the last four years, When it comes to how big the supply side is, you can see that in Oslo it has been very steeply declining, and we have talked about this for several years. It is on an all too low level. It is 1.4 new homes per thousand capita in Oslo. In Akershus, it is 5, which is much more balanced, 5 housing per capita, per thousand capita, as in Trondheim, where the supply side is also very good. Bergen, on the other hand, is beginning to come down to an unhealthy low level, and it should probably be more on the 19-20 level. Stavanger-Sjønne is more balanced, If we look at the same thing when it comes to used housing, we also see that the trend now is that it is a little out, and that is mainly due to P&T, that there have been changes in the expropriation law when it comes to what is put forward as documentation when you sell a used housing. So now it has become a bottle neck, so the supply side will probably increase on the used side considerably, I reckon, over the spring. If we look at what is offered in the used market compared to the population, it is quite normal. In all cities it is quite the same, of course, because most people buy and sell a used apartment, then they change it. So it's a pretty healthy situation. The only thing we see here now is that it is a little unhealthy, low, over the whole country, actually. This is reflected when the supply side is low, there is price pressure. This is the reason for the record in Oslo, with a price increase of 4.7% for January. This is a lot, both in Bergen and other cities. Now it is normal that prices are rising quite strongly in the first half of the year and also in January, but this has probably driven a lot of what I mentioned with a lot of supply side due to demands in terms of selling the housing. So what we have to offer in this market is good. We have a lot of goods in our shelves. We have a lot to sell in Ringve, an electronics store. We have our Plus project there, which we started selling in 2004, which is going well. We are just going to lay out the construction line as it is sold. We have a lot on Skårebyen in Lørenskog. We have snow there. We also have a lot on Lørenskog station town. There we will come out with, among other things, a new plus project soon. We have sold very well on a large plus project we have on Skåresletta. Therefore, we will launch a new one on Lørenskog station town. Lillelørn Park, a project on Sinsenveien, we launched last week with a deadline yesterday. We sold a lot there. We launched half of the first construction line and sold Over 80% of that for good prices, so it is a very hot market, especially in the big Oslo region at the moment. But it is also sold well in the other regions. So good sales all over, and we have a lot in the market, over 400 apartments out for sale PTE. And we have over 600 that we can fill in the first half year. And more, of course, in a number of years. So we have a good pipeline to pump forward. If we look at the big projects that are coming, that will be exciting, especially Stockholm, we are looking forward to. It will be the first plus project in Barkarbystad, and the first in what is called an ordinary market in Stockholm. We are looking forward to that. We will release that after the holiday. Fredrikstad is a large area that we have together with Jotna Eiendom, which is under regulation. We hope to sell there in the new year. There will probably not be a very large regulation plan for more than 2,000 units, plus a lot of business. So there is a lot to work through for the municipality there. Bjerke, there we have adopted the so-called main plan, but the property requires detail regulation. It goes, as I hinted at a little earlier, unfortunately terribly late. We therefore do not dare to allow the sale to start before 2024 on that property, even if there is no way for it to be regulated now in a year's time. Fornebu, there it goes its own way. We are hoping for a sales start in 2024. This has its natural limitation in relation to the construction of Fornebu-banen. So if we look at how we think about the future, we see the light on that. There will be an increase in interest rates or three more, without us being scared of that. As I said at the beginning of the previous interest rate increase, that is not what is on the critical line when it comes to our housing customers on an average price of 5 million. It is not the ability to make a living, it is five times the income that affects it. As long as we are in the need market, it is a little sensitive until the interest comes to a certain level, and we are not there now. We have a lot of good projects in the pipeline to put out in the market. We are excited to get started in Stockholm and see what we can build there over time. If we continue as we did last year, this will be very exciting. We will of course do everything we can to get there. We have a lot to sell in the quarter. To sum up, Q4 was a record fourth quarter when it comes to sales. We have increased the number of started units by building a total of 450 units, which is essentially more than we have completed. We deliver good numbers again, and pay an exchange rate of 5 kroner per year, which is solid and accounts for 93% of earnings per share. We also have over half a billion in added value on the part of Tomtebank that is still in our balance, which was not sold to Urban Property. That was what I was going to say before any questions. No questions? No questions? That was fine. Then we say thank you for us. Then we'll see you again on May 25th with the first part of the results. Have a good one.