Selvaag Bolig Asa · OSL:SBO
Selvaag Bolig Asa — Q1 2020 Earnings Presentation
67 slides from Selvaag Bolig Asa's earnings presentation, May 20, 2020
Slide 1: Q1 2020
Q1 2020 Oslo, 20 May 2020 Rolf Thorsen, CEO Sverre Molvik, CFO
Slide 2: Agenda
Agenda Highlights and sales COVID-19 update Operational and financial update Market Outlook and summary
Slide 3: Highlights Q1 2020
Highlights Q1 2020 · Strong operational results considering few deliveries · Good sales, but impacted by COVID-19 towards the end of the quarter · Urban Property transaction completed, additional dividend of NOK 22 per share Completed, ongoing and upcoming projects 3
Slide 4: Key financials Q1 2020 - excluding effects from UP transaction
Key financials Q1 2020 - excluding effects from UP transaction 209 56.1 Operating revenues Adjusted EBITDA* margin NOK million Per cent 756 21.1 Operating revenues (NGAAP) EBITDA** margin (NGAAP) NOK million Per cent * EBITDA is profit before interest, taxes, depreciation and amortization. EBITDA ad
Slide 5: Sales value and units sold
Sales value and units sold Total and average sales value Number of units sold per quarter NOK million Units 1 183 1 044 1 109 Q4 840 752 Q3 756 701 696 705 5.3 Q2 4.9 5.0 5.1 4.8 164 Q1 280 243 190 185 164 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 2016 2017 2018 2019 2020 Total sales value Average price per uni
Slide 6: Rolling sales value and units sold
Rolling sales value and units sold Sales value 12 months rolling Units sold 12 months rolling NOK million Units 3 678 3 662 3 753 905 896 908 3 320 3 410 831 834 4.8 5.0 5.1 4.4 4.7 754 783 760 752 673 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Total sales value Average sales value
Slide 7: Agenda
Agenda Highlights and sales COVID-19 update Operational and financial update Market Outlook and summary
Slide 8: COVID-effects in Q1 2020
COVID-effects in Q1 2020 · Limited operational impact · Limited impact on total sales · Selvaag took immediate actions - Prioritizing the safety of employees, customers and partners - Minimizing risks - Preparing for operational adjustments if necessary - Securing cash flow and liquidity 8
Slide 9: Agenda
Agenda Highlights and sales COVID-19 update Operational and financial update Market Outlook and summary
Slide 10: Construction starts and completions
Construction starts and completions Construction starts and completions per quarter Units 311 307 248 254 203 174 97 89 12 15 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Number of construction starts Number og units completed Note: Number of units are adjusted for Selvaag Bolig’s share in joint ventures 10
Slide 11: Units under construction and completions
Units under construction and completions Sales value units under construction Expected completions per quarter NOK million Units 7 097 7 039 7 192 7 155 6 742 1 534 1 538 306 1 510 1 504 1 431 212 162 104 75 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Sales value Number of units unde
Slide 12: Proforma figures including proportionate share of JV
Proforma figures including proportionate share of JV Revenues and adjusted EBITDA margin* (IFRS) · 114 units delivered (29) - 40 units from subsidiaries (17) NOK million - 74 units from share of JVs (12) · Revenues NOK 584 (191) 1 528 - Units delivered NOK 566m (164) - Other revenues NOK 17m (27) 1
Slide 13: Income statement highlights Q1 2020 (IFRS)
Income statement highlights Q1 2020 (IFRS) Revenues and adjusted EBITDA margin* (IFRS) · 114 units delivered (29) NOK million · Revenues NOK 209m (109) - Units delivered NOK 196m (93) 1 414 - Other revenues NOK 13m (16) · Project costs NOK 134m (70) 56% 1 035 - Of which NOK 7m is interest (3) 810 ·
Slide 14: Income statement highlights Q1 2020 (NGAAP)
Income statement highlights Q1 2020 (NGAAP) Revenues and EBITDA margin (NGAAP)* 12 months rolling revenues (NGAAP)* NOK million NOK million 1 062 3 286 3 260 3 336 3 230 3 083 868 756 680 650 23% 24% 23% 21% 22% 27% 23% 24% 22% 21% Q1 19 Q2 19 Q3 19 Q4 19 Q1 2020 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Operat
Slide 15: Cash flow development Q1 2020
Cash flow development Q1 2020 NOK million 1 029 1 681 87 396 247 220 1 137 2 055 1 179 771 Cash and cash Profit (loss) before Disposal of assets Other gains Share of Changes in CF from Net change in Dividends paid to Cash and cash equivalents at 31 income taxes and liabilities held (losses), net pro
Slide 16: Balance sheet highlights Q1 2020
Balance sheet highlights Q1 2020 Balance sheet composition NOK million · Book value of equity NOK 26.2 per share 7 000 - Equity ratio of 40.4% 6 000 Non-current assets · Changes from Q4 2019: 5 000 Equity - Inventories increased by NOK 417m 4 000 - Cash decreased by NOK 407m Non-current 3 000 Curren
Slide 17: Inventories (property) Q1 2020
Inventories (property) Q1 2020 Q1 20 vs Q4 19 Inventory value development NOK million · Land value is up NOK 41m 288 170 · Work in progress up NOK 422m 101 136 - Due to few deliveries from fully owned 183 projects 2 923 2 856 2 560 · Finished goods down NOK 47m 2 433 2 855 · UP transaction completed
Slide 18: Debt structure
Debt structure Interest-bearing debt at 31 March 2020 NOK million Drawn at 31 March. Interest rate Loan facility (NOKm) margin* Construction loan facilities from 294 1 1 359 1.75% - 2.60% a range of Nordic credit institutions (Q4: 1 294) 2 Land loans Urban Property** 864 3.75%*** NOK 864 (Q4: NA) 2
Slide 19: Return on equity (IFRS)
Return on equity (IFRS) 12 months rolling net income (NOKm) ROE (%) 12 months rolling net income (NOKm) ROE (%) Q1 2020 Net income excluding Other gains of NOK 1 029m Q1 2020 Net income including Other gains of NOK 1 029m 1 799 58% 739 770 739 613 655 613 655 567 567 520 520 356 366 27% 356 366 27%
Slide 20: Margin development through project stages
Margin development through project stages* 6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales Project margin 20% 15% Project margin 10% 20% 18% 5% 0%
Slide 21: Project margin development
Project margin development NOK million 3 637 3 479 3 480 3 195 3 254 3 194 3 239 3 204 3 277 3 142 3 179 3 038 2 931 2 929 2 683 2 586 2 377 29% 30% 28% 29% 28% 27% 28% 28% 26% 26% 26% 26% 26% 24% 22% 19% 20% Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q
Slide 22: Agenda
Agenda Highlights and sales Covid-19 update Operational and financial update Market Outlook and summary
Slide 23: Estimated completions in Oslo well below forecasted need
Estimated completions in Oslo well below forecasted need 5 000 4 000 Forecasted housing need of 4 500 units per year until 2023 Average number of (medium alternative) completions (2006-19): 3 000 ~3 000 units 2 000 1 000 0 2012 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e Actual completions
Slide 24: Newbuild market update
Newbuild market update Oslo – 1 Jan – 30 Apr 2020 Viken ex. Buskerud and Østfold – 1 Jan – 30 Apr 2020 Units Units 487 781 182 552 3 263 2 969 1 735 1 365 Available Supplied to Sold Available April Available Supplied to Sold Available April December 2019 market* 2020 December 2019 market* 2020 Sourc
Slide 25: Newbuild market update
Newbuild market update Bergen – 1.1.20 - 30.4.20 Trondheim – 1.1.20 - 30.4.20 Stavanger/Sandnes– 1.1.20 - 30.4.20 Units Units Units 263 300 209 276 233 163 1 658 1 621 1 114 1 047 855 925 Available Supplied to Sold Available Available Supplied to Sold Available Available Supplied to Sold Available D
Slide 26: Oslo second-hand market update
Oslo second-hand market update Units sold 1 Jan – 30 April, 2008-20 Inventory 30 April, 2008-20 Units Units 8 000 8 000 7 000 7 000 6 000 6 000 5 000 5 000 4 000 4 000 3 000 3 000 2 000 2 000 1 000 1 000 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2008 2009 2010 2011 2012 20
Slide 27: Bergen second-hand market update
Bergen second-hand market update Units sold 1 Jan – 30 April, 2008-20 Inventory 30 April, 2008-20 Units Units 2 250 2 250 2 000 2 000 1 750 1 750 1 500 1 500 1 250 1 250 1 000 1 000 750 750 500 500 250 250 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2008 2009 2010 2011 2012
Slide 28: Trondheim second-hand market update
Trondheim second-hand market update Units sold 1 Jan – 30 April, 2008-20 Inventory 30 April, 2008-20 Units Units 2 250 2 250 2 000 2 000 1 750 1 750 1 500 1 500 1 250 1 250 1 000 1 000 750 750 500 500 250 250 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2008 2009 2010 2011 20
Slide 29: Stavanger second-hand market update
Stavanger second-hand market update Units sold 1 Jan – 30 April, 2008-20 Inventory 30 April, 2008-20 Units Units 2 250 2 250 2 000 2 000 1 750 1 750 1 500 1 500 1 250 1 250 1 000 1 000 750 750 500 500 250 250 0 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2008 2009 2010 2011 20
Slide 30: Regional price development 1 Jan – 30 April, 2007-20
Regional price* development 1 Jan – 30 April, 2007-20 Oslo Bergen 11% 10% 9% 8% 8% 8% 7% 7% 7% 7% 7% 7% 7% 6% 6% 6% 6% 6% 5% 5% 5% 4% 4% 4% 2% 2% 1% 1% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Trondhei
Slide 31: Regional price development April 2007-20
Regional price* development April 2007-20 Oslo Bergen 3% 3% 2% 2% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 0% -1% -1% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Trondheim Stavanger
Slide 32: Agenda
Agenda Highlights and sales Covid-19 update Operational and financial update Market Summary and outlook
Slide 33: Outlook
Outlook Year to date Short term Longer term 2.00% 2.2% 2.0% 1.8% 1.50% 1.7% 1.7% 1.3% 1.3% 1.00% 1.2% 1.2% 1.2% 1.1% 1.1% 1.0% 0.9% 0.7% 0.7% 0.7% 0.7% 0.50% 0.00% Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May 19 19 19 19 19 19 19 19 19 19 19 19 2008 2010 2012 2014 2016 2018 2020F 2022F 2024F Key
Slide 34: Addressing long term housing need
Addressing long term housing need · Urban developer · With large projects · In growth areas 34
Slide 35: Summary
Summary · Strong operational results considering few deliveries · Good sales, but impacted by COVID-19 towards the end of the quarter · Urban Property transaction completed, additional dividend of NOK 22 per share 35
Slide 36: Thank you for your attention – follow us online!
Thank you for your attention – follow us online! Next event: 2nd quarter 2020 @SelvaagAksjen 18 August 2020
Slide 37: Appendix
Appendix
Slide 38: Price development Norway and selected regions (2005-19)
Price development Norway and selected regions (2005-19) Price development (rebased 01/01/05) 280 260 240 220 200 180 160 140 120 100 80 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Norway Oslo Bergen Stavanger area* Trondheim Source:
Slide 39: Increasing share of population growth in Oslo and Akershus
Increasing share of population growth in Oslo and Akershus 54% 55% 44% 42% 41% 39% 38% 24.7 % 34% 35% 34% 24.5 % 32% 24.3 % 24.2 % 24.0 % 23.9 % 23.6 % 23.7 % 23.5 % 23.3 % 23.1 % 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Share of total population in Oslo and Akershus Share of total pop
Slide 40: Dividend policy
Dividend policy 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 forecast
Slide 41: Share performance since IPO in June 2012
Share performance since IPO in June 2012 NOK 70 60 50 40 30 20 0.50 1.20 0.70 0.80 0.65 0.95 1.20 1.80 2.00 2.50 2.00 22.00 1.50 10 0 Share price Dividend Source: Oslo Børs 41
Slide 42: Earnings and dividend per share since IPO
Earnings and dividend per share since IPO Accumulated dividend and earnings per share Earnings per share 37.80 Dividend per share 31.14 · FY 2019 EPS of NOK 7.04 (6.14) 24.10 · FY 2019 DPS of NOK 3.50 (4.50) - H1 2019 DPS of NOK 2.00 17.96 - H2 2019 DPS of NOK 1.50 15.80 13.61 12.30 · 2020 additiona
Slide 43: Return on equity (IFRS)
Return on equity (IFRS) 12 months rolling net income (IFRS)* and return on equity** NOK million 2,000 90% 1799*** 1,800 80% 1,600 70% 1,400 60% 1,200 58% 50% 1,000 40% 800 739 613 655 567 30% 600 520 397 354 401 356 366 27% 20% 400 301 335 326 261 265 253 20% 22% 21% 18% 10% 200 13% 15% 14% 15% 13%
Slide 44: Largest shareholders at 31 March 2020
Largest shareholders at 31 March 2020 Shareholder # of shares % share SELVAAG AS 50 180 087 53.5% LANDSFORSAKRINGAR FASTIGHETSFOND 8 356 652 8.9% Morgan Stanley & Co. Int. Plc. *) 2 664 220 2.8% State Street Bank and Trust Comp *) 2 568 454 2.7% PARETO INVEST AS 2 008 605 2.1% VERDIPAPIRFONDET ALFRE
Slide 45: Positioned to realize large projects in Norway’s four largest growing urban areas
Positioned to realize large projects in Norway’s four largest growing urban areas Land-bank strategy Land bank exposure Geographical spread · Acquire the right mix of zoned and un-zoned land in suitable locations · Land acquisitions in defined core areas in co-operation with Urban Property · High de
Slide 46: Land bank in Oslo and Greater Oslo
Land bank in Oslo and Greater Oslo Løren/Økern/Ensjø 525 units Lørenskog 2 213 units Bærum 2 208 units Tiedemannsfabrikken 74 units Lørenskog Stasjonsby 724 units Avløs 504 units Sinsenveien 175 units Skårer bolig 901 units Ballerud 270 units Kjelsås 315 units Lørenvangen 22 140 units LSV 300 units
Slide 47: Land bank in Stavanger area
Land bank in Stavanger area Stavanger 292 units Lervig brygge 292 units Sola 232 units Jaasund 232 units 232 units 292 Stavanger units Sandnes 480 units Aase gård 85 units Sola Sandnes vågen 360 units Luratoppen 35 units Sandnes 480 units *The numbers are adjusted for Selvaag Bolig’s share in joint
Slide 48: Land bank in Bergen, Trondheim and Stockholm
Land bank in Bergen, Trondheim and Stockholm Trondheim 369 units Heimdal 41 units Haakon VII gate 4 328 units Sweden 369 units Stockholm 125 units Løvholmen 40 units Bergen 741 units Årsta 85 units Sandsliåsen 57 105 units Sandsliåsen 59 112 units Finland Sandsliåsen 46 150 units Norway Torvmyra 39
Slide 49: Substantial portfolio for development
Substantial portfolio for development Total land bank portfolio at 31 March 2020 Units 6 450 11 950 5 500 Total land bank Options and obligations to acquire Land bank in balance sheet
Slide 50: Land bank book value vs. external valuation year end
Land bank book value vs. external valuation year end Q4 2017 Q4 2018 Q4 2019 NOK million NOK million 1 773 1 610 1 501 3 711 3 210 3 114 1 938 1 600 1 613 Book value Gap Valuation: 60 Book value Gap Valuation: 60 31.12.2018 Grader Book valaue Gap Valuation: 31.12.2017 Grader Næringsmegling 31.12.201
Slide 51: Income statement IFRS
Income statement IFRS (figures in NOK million) Q1 2020 Q1 2019 2019 Total operating revenues 209.1 109.2 3 368.8 Project expenses (133.9) (69.5) (2 279.5) Other operating expenses (51.6) (56.7) (274.1) Associated companies and joint ventures 86.7 5.6 62.2 EBITDA 110.3 (11.5) 877.5 Depreciation and a
Slide 52: Balance sheet
Balance sheet (figures in NOK million) Q1 2020 Q1 2019 2019 Intangible assets 383.4 383.4 383.4 Property, plant and equipment 5.5 7.6 5.6 Investments in associated companies and joint ventures 512.2 398.9 430.3 Other non-current assets 249.7 482.2 280.4 Total non-current assets 1 150.8 1 272.0 1 099
Slide 53: Cash flow statement
Cash flow statement (figures in NOK million) Q1 2020 Q1 2019 2019 Net cash flow from operating activities 1 182.6 (358.1) 985.9 Net cash flow from investment activities 220.2 39.7 64.1 Net cash flow from financing activities (1 810.1) 226.4 (528.4) Net change in cash and cash equivalents (407.3) (92
Slide 54: Operational highlights – key operating figures
Operational highlights – key operating figures Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Number of units sold 243 210 159 140 164 Number of construction starts 97 311 174 248 15 Number of units completed 12 307 203 254 89 Number of units delivered 29 246 243 214 114 Number of units under construction 1 534 1 53
Slide 55: EBITDA Q1 2020
EBITDA Q1 2020 Property (figures in NOK million) development Other Total Operating revenues 744.1 12.2 756.3 Project expenses (542.4) (0.3) (542.6) Other operating expenses (7.1) (47.1) (54.1) EBITDA (percentage of completion) 194.7 (35.2) 159.5 Note: Construction costs are exclusive of financial ex
Slide 56: Value of units sold - gross and net
Value of units sold - gross and net Sales value of units sold NOK million 1 642 1 393 1 314 1 320 1 234 209 1 086 1 031 914 870 849 862 861 859 788 710 696 487 660 1 367 443 1 130 1 183 1 106 394 1 056 999 764 771 840 690 693 751 756 705 633 632 614 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1
Slide 57: Number of units sold - gross and net
Number of units sold - gross and net Number of units sold Units 405 209 294 298 270 276 238 207 216 203 201 196 182 187 182 192 169 487 158 326 443 280 277 394 243 190 210 165 178 168 185 181 182 161 148 159 164 140 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19
Slide 58: Norwegian housing market
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 worl
Slide 59: Total household debt and homeownership
Total household debt and homeownership 282% 239% 239% 223% 189% 145% 141% 140% 127% 121% 115% 107% 106% 95% 90% 87% 79% 79% 90% 70% 70% 72% 70% 75% 72% 72% 75% 75% 65% 63% 68% 60% 50% 50% 50% 50% 43% 35% Household debt in % of net disposable income (2019) Homeownership rate (2018) Source: OECD, Prog
Slide 60: Immigration increases demand over time
Immigration increases demand over time Homeownership rate among immigrants in Norway (per year living in Norway) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Slide 61: Norway – robust economic conditions
Norway – robust economic conditions GDP growth 2012 - 2022e Unemployment 2012 - 2022e 8% 10% 8% 3% 6% 2012 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e 4% -3% 2% -8% 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020e 2021e 2022e Norway Sweden Germany UK Norway Sweden Germany UK Population grow
Slide 62: Reduced capital binding in practice, in effect no equity needed in Selvaag Bolig for land
Reduced capital binding in practice, in effect no equity needed in Selvaag Bolig for land Residential development value chain: cooperation between Selvaag Bolig and Urban Property Acquisition of land Zoning Sales start Construction start Delivery 6 – 36 months 6 – 12 months 3 – 9 months 12 – 24 mont
Slide 63: Historic general margin development through project stages
Historic general margin development through project stages 6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales Project margin 20% 15% Project margin 1
Slide 64: Example project calculations before and after
Example project calculations before and after LAND OWNED BY URBAN 1 BOOK VALUE OF LAND 2 MARKET VALUE OF LAND 3 PROPERTY Figures for illustration purposes only MNOK % MNOK % MNOK % Sales revenue 348.5 100.0 % 348.5 100.0% 348.5 100.0% Construction cost 195.8 56.2 % 195.8 56.2% 195.8 56.2% Land cost
Slide 65: Project margin will somewhat deflate but higher IRR and less/no equity bound in land
Project margin will somewhat deflate* but higher IRR and less/no equity bound in land 6 – 36 MONTHS 6 – 12 MONTHS 3 – 9 MONTHS 12 – 24 MONTHS 0 MONTHS Acquire and refine Contracting, marketing Project design Construction and sales Delivery to customers land for development and pre-sales Project marg
Slide 66: Balance sheet implications and effects of dividend
Balance sheet implications and effects of dividend Statements of financial position Reported Transaction Pro forma (figures in MNOK) Q4 2019 Sale Dividend Q4 2019 ASSETS Investments in associated companies and joint ventures 430 0 0 430 Loans to associated companies and joint ventures 130 -59 0 71 O
Slide 67: Selvaag Bolig
SELVAAG BOLIG