Capital Markets Day. Oslo 21 March 2013

Transcription

1 Capital Markets Day Oslo 21 March 2013

2 Welcome Baard Schumann CEO 2

3 Agenda 13:00 Registration 13:10 History and background 13:25 Strategic direction 13:55 Project portfolio and land bank 14:25 Q&A 14:30 Break 14:45 Project development, market and sales 15:25 Project execution 15:45 Q&A 15:50 Break 16:05 Financial update 16:35 Q&A 16:45 Summary and closing remarks 3

4 Strategic direction Baard Schumann CEO 4

5 STRATEGIC DIRECTION Vision Selvaag Bolig aims to be Norway s leading residential property builder, based on a unique ability to develop new competences. We aim to be a driving force for innovation Lervik brygge 5

6 STRATEGIC DIRECTION Values Care & creativity A great place to work A dependable business partner Building homes for ordinary people Create residential environments where people thrive Help making better cities 6

7 STRATEGIC DIRECTION Strategy Provide targeted housing concepts to suit aspirations of different households at affordable prices in and around main cities Three well defined and robust concepts Industrial approach to homebuilding Cost efficient module based solutions No in-house construction unit Focus on Greater Oslo, Stavanger and Bergen 7

8 STRATEGIC DIRECTION Housing for all Housing for all The Gullhaug House 2013 Pluss: Housing with extra service homes completed 2012 e Modular construction Listed at Oslo Børs Løren district Defind hous i ng concept s Terraced buildings 1988 Industrial production Veitvet district The Ekeberg House 8

9 STRATEGIC DIRECTION Segmentation through housing concepts Affordable apartments based on a "no frills" model Low cost land plots situated in fringe zones of large cities Mostly modular based construction 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 Modular and on site construction 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 On site construction Affluent customers who value comfort and convenience 9

10 STRATEGIC DIRECTION Industrial approach Modular construction Sub-contractors in Estonia and Poland Modern factories 13 years of experience Profitable Lower construction costs Higher project margins Sensible house prices High quality Reduced risk of faults Technically better homes Energy efficient homes 10

11 STRATEGIC DIRECTION Module based solutions Generation I Kornmoenga Løren 11

12 STRATEGIC DIRECTION Module based solutions Generation II Bjørnåsen Moss Glassverk 12

13 STRATEGIC DIRECTION Module based solutions Generation III Lørenskog Stasjonsby, Sprinten Aase Gaard 13

14 STRATEGIC DIRECTION Targets Increase share of modular construction Project margins Modular 16% On-site 12% 1500 units for delivery in 2015 Lørenskog Stasjonsby 14

15 Residential development value chain STRATEGIC DIRECTION Value drivers Land bank development Project development and market adaption Project execution 6 36 MONTHS 6 12 MONTHS 3 9 MONTHS MONTHS Acquire and refine land for development Project design Marketing and sale Construction Zoning Sales start Construction start Deliveries 15

16 Project portfolio and land bank Baard Schumann CEO 16

17 PROJECT PORTFOLIO AND LAND BANK Norway s leading homebuilder Sales in 2012: units Tromsø 243 units Land bank for homes 1067 units under construction Trondheim 260 units Module 25% 1067 Units On-site 75% Bergen 189 units Stavanger units Greater-Oslo units Stockholm 79 units Kristiansand 34 units Note: The numbers represent the size of the land portfolio as at 31. December All numbers are adjusted for Selvaag Bolig s share in joint ventures. 1) Greater Oslo area: Oslo, Akershus, Buskerud, Vestfold and Østfold, 2) 260 units at Stord (Hordaland county) and 50 units at Alfaz Del Sol (Spain), 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 ~1 600 residential units, whereof the company has purchasing obligations for ~ and purchasing options for ~400. units. Other 310 units 17

18 PROJECT PORTFOLIO AND LAND BANK Greater Oslo (selected projects) Avløs/Ballerud - Bærum units - Avløs - Ballerud Note: purchasing obligations Nydalen - Oslo 323 units - Fernanda Nissen - Lillohøyden Lørenskog - Lørenskog units - Skårødegården - Vestparken - Skårer bolig - LSV Landås - Oslo units Note: purchasing option and obligation Oslo South - Oslo units - Bjørnåsen - Mortensrud 18

19 PROJECT PORTFOLIO AND LAND BANK Stavanger (selected projects) Jaasund - Sola units - Jaasund - Jaasund Bolig Lervik brygge- Stavanger units (+150 if high utilisation) - Lervik Brygge - Lervik Brygge Øya Note: includes option Emmaustunet - Stavanger 22 units Aase Gård - Sandnes units Sandnes center * units *SBO s share in the project 19

20 PROJECT PORTFOLIO AND LAND BANK Rest of Norway (selected projects) Tromsø units - Strandkanten I - Strandkanten II Trondheim units - Lade Bergen units - Nesttun - Nyhavn 20

21 PROJECT PORTFOLIO AND LAND BANK Land bank strategy Acquisition criteria Proximity to attractive high growth areas Preferably non-zoned with option to buy when planning permission is given Potential of units Good infrastructure and public transport Alignment with existing land bank portfolio Greater Oslo, Stavanger and Bergen areas Sandnes sentrum Location to fit with criteria for one or more of the three housing concepts Photo: nyebilder.no 21

22 PROJECT PORTFOLIO AND LAND BANK Land bank strategy Recently acquired land for development Avløs Ballerud 22

23 PROJECT PORTFOLIO AND LAND BANK Land bank strategy Project refining Utilize existing land bank Allows for flexibility in development plans Adaptive to market changes Maximizing utilization through continuous project evaluation and development Kaldnes brygge 23

24 PROJECT PORTFOLIO AND LAND BANK Lervik Brygge phase 2 - utilisation turnaround Discovered significant unrealised potential in zoning volume Planning permits for up to sq m TBRA New zoning proposal for TBRA of approximately sq m sq m SBRA ( sq m TBRA) Approximately 150 housing units Development potential Paid for sq m SBRA, receives sq m SBRA Profit for additional land Additional profit as developer Previous zoning plan New zoning plan Lervik Brygge 24

25 Q&A 25

26 Project development, market and sales Baard Schumann CEO 26

27 PROJECT DEVELOPMENT, MARKETS AND SALES EXTERNAL FACTORS Cost development Approximate industry margins (NOK) 70,000 60,000 50,000 40,000 30,000 20, ,000 Lillohøyden 0 Oslo Center Eastern Norway Modular Construction cost Sales price Source: Selvaag Bolig/ECON 27

28 PROJECT DEVELOPMENT, MARKETS AND SALES EXTERNAL FACTORS Demographic changes People per household in Norway High population growth in main cities 3.3 Urbanization Immigration Increased life expectancy Less people per household Supports need for smaller houses Source: Statistics Norway 28

29 PROJECT DEVELOPMENT, MARKETS AND SALES EXTERNAL FACTORS Strong housing market Critical undersupply of houses in Oslo Support from strong national macro economics Significant housing need short and long term High immigration supports demand Selvaag Bolig well positioned in growth areas Housing units 9,000 6,000 3, Housing construction Housing need from population growth* Source: Statistics Norway * Average household size in Oslo is

30 PROJECT DEVELOPMENT, MARKETS AND SALES EXTERNAL FACTORS Increasing demand for lower cost housing Immigration from Europe most important Labour related immigration for permanent settling 74% of population growth from immigration 3% 3% 0% Solid purchase power, though somewhat below population average Selvaag Bolig well positioned for constructing affordable homes Strongest growth in Selvaag Bolig s focus areas 31% 50 % labor related 52% Europe Africa Asia North America South America Oceania 11% Source: Statistics Norway Source: Statistics Norway / Selvaag Bolig 30

31 PROJECT DEVELOPMENT, MARKETS AND SALES EXTERNAL FACTORS Regional differences Oslo & Eastern Norway Limited amount of unsold finished units Amount of unsold started and not started units stable Stavanger & Western Norway Practically no unsold finished units Amount of unsold started and not started units stable Contractors East: Many suppliers, good capacity West: Few large, limited capacity Unsold units status East 6,000 3,000 0 Construction not started Construction started Finished Unsold units status West 2,000 1,000 0 Apr 12 Jun 12 Aug 12 Oct 12 Dec 12 Feb 12 Construction not started Construction started Finished Source: ECON 31

32 PROJECT DEVELOPMENT, MARKETS AND SALES SELVAAG BOLIG ADAPTATION Multi-concept-projects Løren (Oslo) Lervig Brygge (Stavanger) Løren Start Lørenpynten* Løren Torg Hageby Start Sjøkvartalet Lervik Brygge Pluss No of apartments 88 No of apartments 127 No of apartments 108 No of apartments 36 No of apartments 67 No of apartments 188 Sold 88 (100%) Sold 80 (63%) Sold 108 (100%) Sold 36 (100%) Sold 67(100%) Sold 73 (39%) Construction start Q Construction start Q Construction start Q Construction start Q2 2012e Construction start Q Construction start Q Completion Q4 2013e Completion Q1 2015e Completion Q Completion Q3 2013e Completion Q Completion Q4 2015e * Several development phases 32

33 PROJECT DEVELOPMENT, MARKETS AND SALES SELVAAG BOLIG ADAPTATION Market adaption Changed market conditions Original project not meeting demand Project development flexibility enable project adjustments Pluss Hjem and Start sq m per unit Onsite Module Nyhavn 33

34 PROJECT DEVELOPMENT, MARKETS AND SALES SELVAAG BOLIG ADAPTATION Sales optimization targeting correct pricing Aim for 60% sold after 6-9 months Price adjustments at construction start All major costs secured at 60% sold Price adjustments during construction period 6-9 MONTHS 60% sold MONTHS 40% sold Last unit sold at time of delivery Sales start Construction start Deliveries Price adjustments 34

35 Project execution Baard Schumann CEO 35

36 PROJECT EXECUTION Modules vs. on-site construction Approximate average value On-site Modular 12% 4% - 6% 10% - 20% 6% - 10% 16% 3% - 5% 10% - 20% 5% - 8% 60% - 65% 55% - 60% Margin Financial costs Costs of land Project managment Construction cost Lørenskog stasjonsby - modular On-site Modular Lervik Brygge on-site 36

37 PROJECT EXECUTION Project duplication Bjørnåsen Start - floor plan 37

38 PROJECT EXECUTION Project duplication Duplication of Bjørnåsen Start project Lørenskog stasjonsby Lørenskog stasjonsby 38

39 PROJECT EXECUTION Project management optimisation Standardised and detailed project specifications Reduce deviation Improve contractor efficiency Lowers project design cost 39

40 PROJECT EXECUTION Long term relations Leading, financial solid contractors Improved efficiency through project recurrence Fixed price contracts Most costs fixed at 60% sold 40

41 Q&A 41

42 Financial update Haavard Rønning CFO 42

43 FINANCIAL UPDATE Margin break down 100% 55% - 65% 5% - 10% 10% - 20 % 3% - 6% 12% - 16% Sales revenue Construction cost Project managment Costs of land Financial costs Margin 43

44 FINANCIAL UPDATE Project margins Q Q Kornmo Kaldnes Nesttun Jaasund Løren 2B* Løren 5* Bjørnåsen Syd Lervig Brygge Tangen Location Tårnåsen Tønsberg Bergen Sola Oslo Oslo Oslo Stavanger Kristiansand No of units Sqm SBRA Revenues NOK 40m NOK 71m NOK 269m NOK 45m NOK 259m NOK 362m NOK 92m NOK 238m NOK 247m 29.8 % 15.0 % 13.7 % 14.7 % 15.7 % 12.2 % 14.9 % 18.4 % 15.2 % Project margin 9.6 % 14.3 % *Including commercial property On-site Module Margin before adjustments for value added 44

45 FINANCIAL UPDATE Substantial portfolio for development Total land bank portfolio No of units * Total Land bank Option Obligation to acquire In production JV Land bank included in the balance sheet *The portfolio is adjustedwith 253 units at Lillohøyden and 127 units at Lørenpynten, but only 61 units at Lillohøyden and 54 units at Lørenpynten had started construction as of 31 December

46 FINANCIAL UPDATE Land bank valuation External valuation vs. booked value Independent land valuation, by Akershus Eiendom. NOKm Valuation is mainly based on a calculated profit from sales of fully developed housing units For projects under development, remaining costs are split on developer and buyer, affecting value distribution DCF valuation method is applied on residents for lease Booked value Added value Valuation Akershus Eiendom 46

47 FINANCIAL UPDATE Income statement IFRS (figures in NOK million) FY 2012 FY 2011 Total operating revenues Project expenses ( ) (199.0) Other operating expenses (212.6) (173.3) Associated companies and joint ventures EBITDA EBITDA margin 19.3 % (5.8) EBIT EBIT margin 17.4 % 2.3 % Profit/(loss) before taxes (29.0) Income taxes (101.8) 23.3 Net income (5.7) Earnings per share (NOK) 3.39 (0.15) Net income for the period attributable to: Minority interests 68.0 (1.0) Shareholders in Selvaag Bolig ASA (majority interests) (4.7) 47

48 FINANCIAL UPDATE Cash Flow statement (figures in NOK million) FY 2012 FY 2011 Net cash flow from operating activities (354.9) Net cash flow from investment activities Net cash flow from financing activities (319.5) Net change in cash and cash equivalents Cash and cash equivalents at start of period Cash and cash equivalents at end of period

49 FINANCIAL UPDATE Sound balance sheet (figures in NOK million) Total non-current assets Inventories (property) Other current assets TOTAL ASSETS Total equity Equity attributed to shareholders in Selvaag Bolig ASA * Non-controlling interests Total non-current liabilities Total current liabilities TOTAL EQUITY AND LIABILITIES Equity ratio majority shareholders in Selvaag Bolig ASA 36.0 % 24.0 % Equity ratio non-controlling interests 1.3 % 0.2 % *corresponding to NOK 22.1 per share 49

50 FINANCIAL UPDATE Financial structure going forward Defined down payment of term loan: 39 MNOK in MNOK in MNOK in 2015 Long-term goal: Working capital facilities only in mother company (Selvaag Bolig ASA) Land loans and corresponding construction loans in single purpose entity(spe) Loan facility 1 NOK 225 million term loan from DNB 2 NOK 150 million revolving credit facility from DNB maturing in NOK 150 million working capital facility from DNB maturing in NOK 500 million long term land loan from DNB 5 Land loan facilities from a range of Nordic credit institutions 6 Construction loan facilities from a range of Nordic credit institutions Drawn per (NOKm) Interest rate margin % % % % % % % % 50

51 FINANCIAL UPDATE Construction loans Revolving construction loan (example) Land acquisition 50% equity, 50% land loan Interest and development costs paid by equity up to construction start NOKm Land loan converted to construction loan at construction start, given 60% presale 0 Separate construction loan for each project -50 Revolving credit facility when multiple building phases -100 Building costs 100% financed by construction loan Interest added to construction loan (145) Months 51

52 Q&A 52

53 Summary Baard Schumann CEO 53

54 SUMMARY Summary Maintain position as leading residential developer in Norway Utilize potential in strong land bank Continue development of industrial approach to homebuilding Increase share of modular based development Average project margins of 12% and 16% for on-site and module 1,500 units for delivery in

55 Thank you for your attention AGM 2012: 10 April 2013 Q1 2013: 29 May