100 Kärnhem. 538 Block Watne. 387 BWG Homes AB 4 QUARTER NEW ORDERS NOK million 951. OPERATIONAL REVENUES NOK million 1 036

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1 4 QUARTER 2013 NEW ORDERS NOK million 951 OPERATIONAL REVENUES NOK million OPERATIONAL EBITDA MARGIN Per cent 10.3 OPERATIONAL REVENUE PER BUSINESS AREA NOK million 100 Kärnhem 538 Block Watne 387 BWG Homes AB

2 TABLE OF CONTENTS MANAGEMENT REVIEW: Key figures for Group operations 2-3 Business segments 4-6 Financial factors 7 Employees and working environment 8 Shareholders 8 Dividends 9 Market and outlook 9 CONDENSED FINANCIAL INFORMATION (IFRS): Income statement 10 Statement of financial position 11 Statement of changes in equity 12 Cash flow statement 13 Notes to the financial statements Company information 20 Highlights Q OPERATIONS DURING THE PERIOD*: Operating revenues NOK 1,036 million, up 7.8% Operational EBITDA NOK 107 million, down 26.6% Operational EBITDA margin 10.3%, down 4.8 percentage points Order intake NOK 951 million, up 19.0% Order backlog NOK 1,675 million, up 15.2% Cash flow from operations neg. NOK 102 million compared with neg. NOK 30 million for same period previous year Net interest-bearing debt up NOK 118 million from previous quarter Successful bond issue of NOK 350 million DIVIDEND: The Board will proposed a dividend of NOK 0.25 per share *The operating figures are based on internal management reports, which differ somewhat from the consolidated accounts; see note 1. The figures include Kärnhem AB with effect from May

3 Management review RESULTS FOR THE PERIOD The management review is based on management reporting (operational performance figures) from segment Block Watne AS (previously segment Norway), segment BWG Homes AB (previously segment Sweden) and segment Kärnhem AB (from May). Segment information based on management reporting is shown in note 3 to the accounts and is also reconciled with the consolidated financial statements (IFRS). Management reporting differs somewhat from the consolidated income statement (IFRS). Management reporting focuses on value creation in the period, while in the consolidated financial statements, reported in line with IFRS, Block Watne AS revenue is recognised on the basis of delivery of completed homes, regardless of the actual production in the period. See also note 1. KEY FIGURES BWG HOMES CONSOLIDATED Operational performance Q4 13 Q Amounts in NOK 1,000 Operating revenues 1,035, ,845 3,926,276 3,483,293 Operational EBITDA 106, , , ,943 Operational EBIT before impairment 103, , , ,296 Goodwill impairment 0-403, ,683 Operational EBIT after impairment 103, , ,935 42,613 Operational EBITDA margin 10.3% 15.2% 11.7% 13.1% Operational EBIT margin before impairment 10.0% 15.2% 11.2% 12.8% Other key figures Q4 13 Q Amounts in NOK 1,000 Cash flow from operations (after interest and tax) -101,686-29, , ,817 Order intake 951, ,674 3,940,763 3,374,325 Order backlog 1,675,280 1,454,709 1,675,280 1,454,709 Number of units in production 1,266 1,220 1,266 1,220 Number of units sold ,610 1,356 Number of units delivered ,576 1,381 Number of unsold completed units Number of employees 1,039 1,014 1,039 1,014 BWG Homes Group s operating revenues for the 4th quarter of 2013 amounted to NOK 1,036 million. This is an increase of 7.8% compared with the 4th quarter of The Swedish companies BWG Homes AB and Kärnhem showed positive growth in sales and operating revenues in the quarter. 2

4 OPERATING REVENUES Q1 Q2 Q3 Q OPERATIONAL EBIT Q1 Q2 Q3 Q Earnings before interest, taxes and depreciation (operational EBITDA) for the quarter amounted to NOK 107 million. This is a decline of NOK 39 million (26.6%) compared with the 4th quarter of The operational EBITDA margin was 10.3%, compared with 15.2% for the same quarter the previous year. Earnings before interest and taxes (operational EBIT) amounted to NOK 104 million, a decline of NOK 42 million (29.0%) compared with the 4th quarter of The operational EBIT margin for the quarter was 10.0%, compared with 15.2% for the 4th quarter the previous year. Operational earnings for the 4th quarter were affected by a combination of weaker sales for Block Watne and increased costs associated with project planning and regulation. BWG Homes AB (Myresjöhus and SmålandsVillan) continued the trend from the 3rd quarter, showing growth in earnings, sales and margins during the 4th quarter. Kärnhem also achieved positive growth. The improvement in the Swedish housing market was largely behind the increase in the order intake, which rose by 19.0% to NOK 951 million ORDER INTAKE 2500 ORDER BACKLOG Q1 Q2 Q3 Q4 0 Q1 Q2 Q3 Q THE YEAR The Group reported historically high revenues and a strong order intake in There was good growth in the Norwegian housing market in the first nine months, while the Swedish housing market showed a positive improvement quarter by quarter. Operating revenues for 2013 amounted to NOK 3,926 million, an increase of NOK 443 million (12.7%) compared with Operational EBITDA for the year was NOK 458 million which is in line with The EBITDA margin was 11.7% compared with 13.1% in Operational EBIT totalled NOK 441 million, down NOK 5 million (1.2%), while the EBIT margin for the year was 11.2% compared with 12.8% in The Group s order backlog at the end of 2013 was NOK 1,675 million. This is an increase of NOK 221 million (15.2%) compared with the same period in 2012 and is largely due to an increased order backlog for BWG Homes AB and Kärnhem's consolidated order backlog. In addition, BWG Homes AB recorded over 80 reservations of units in housing cooperative projects towards the end of These will be registered under order intake when binding agreements are entered into with the customers later on in

5 SEGMENT BLOCK WATNE AS Amounts in NOK 1,000 Q4 13 Q Operational performance Operating revenues 538, ,750 2,369,318 2,302,331 Cost of goods sold (including production payroll) -376, ,350-1,638,501-1,554,915 Gross profit 161, , , ,416 Sales and administrative expenses -93,306-83, , ,059 Operational EBITDA 68, , , ,357 Income from associated companies 3,368 4,164 2,356 5,363 Depreciation ,445-2,430 Operational EBIT 71, , , ,290 Gross margin 30.1% 35.0% 30.8% 32.5% Operational EBITDA margin 12.7% 21.8% 15.5% 18.2% Operational EBIT margin 13.2% 22.4% 15.5% 18.3% Other key figures for the segment Order intake 438, ,358 2,259,814 2,179,358 Order backlog 504, , , ,298 Number of units in production 915 1, ,015 Number of units sold Number of units delivered Number of unsold completed units Number of employees Sick leave 6.8% 6.2% 6.2% 5.9% Lower sales in the quarter and a levelling off in unit prices have brought a decline in revenues. In parallel with increased production costs in the 2nd half of the year, this has resulted in lower earnings and margins. Operating revenues for the quarter declined by 14.8% compared with the 4th quarter of Operational EBITDA was 50.3% lower than in the 4th quarter of 2012, when a land gain of NOK 16.0 million from the development of a large residential area was recognised. Operational EBIT showed a 49.7% decline. The operational EBITDA margin for the quarter fell by 9.1 percentage points. The order intake for the quarter showed a decline of 14.2% compared with the 4th quarter of Sales were particularly weak in October and December. The order backlog ended the quarter NOK 105 million (17.3%) lower than at the same point in the previous year. Inventories of unsold completed homes increased by 31 units from the previous quarter and totalled 99 units at the end of the 4th quarter. In November a staff downsizing process that will reduce the workforce by approx. 15% was started. The reduction in staffing will be completed in the 1st quarter of The company also launched a programme that will bring annual fixed cost savings of NOK 50 million. Summary for 2013 Operating revenues for the year were 2.9% higher than in Operational EBITDA for the year showed a 12.5% decline and operational EBIT fell by 13.1%. The order intake for 2013 is historically high and has grown by 3.7% since 2012, which was also a year of strong sales. Staffing declined by 68 FTEs (10.4%), mainly carpenters. Focus areas There is a strong focus on reducing tied-up capital and achieving a positive cash flow, among other factors by sale of completed homes. The cost level must be constantly adapted to the production capacity and lower sales, and reduced through more efficient project design and production. A larger proportion of future production will be focused on simpler homes with lower unit prices and homes that meet the requirements for Housing Bank financing. 4

6 SEGMENT BWG HOMES AB Amounts in NOK 1,000 Q4 13 Q Operational performance Operating revenues 387, ,194 1,318,504 1,151,874 Cost of goods sold (including production payroll) -275, , , ,357 Gross profit 111,457 85, , ,517 Sales and administrative expenses -81,063-69, , ,910 Operational EBITDA 30,394 16,811 95,842 59,607 Depreciation -4,211-3,197-13,921-13,430 Operational EBIT before impairment 26,183 13,614 81,921 46,177 Goodwill impairment 0-403, ,683 Operational EBIT 26, ,069 81, ,506 Gross margin 28.8% 26.9% 28.0% 26.8% Operational EBITDA margin 7.8% 5.3% 7.3% 5.2% Operational EBIT margin before impairment 6.8% 4.3% 6.2% 4.0% Other key figures for the segment Order intake 456, ,316 1,510,679 1,194,967 Order backlog 1,051, ,411 1,051, ,411 Number of units in production Number of units sold Number of units delivered Number of unsold completed units Number of employees Sick leave 2.7% 3.8% 2.7% 3.4% Segment BWG Homes AB encompasses the operations of the subsidiaries Myresjöhus AB and SmålandsVillan AB. The Swedish economy improved during the year, and home buyers are back in the market. Increased sales and delivery volumes have brought improved earnings and margins in the 4th quarter and Operating revenues for the quarter were 21.4% higher than in the 4th quarter of Operational EBITDA and EBIT showed strong growth from low levels in 2012 and the EBITDA margin for the quarter increased by 2.6 percentage points. The order intake for the quarter was up by 58.2% compared with the 4th quarter of 2012, while the order backlog was NOK 206 million (24.4%) higher than in the same period the previous year. The number of units in production, sold and delivered reflects the increased order intake during the year. A number of housing cooperative projects were released for sale, with over 80 units already reserved by customers. These reserved units are reported under order intake when binding agreements are entered into with the customers. The first ten of these were reported in January Arnt Eriksen, CFO of BWG Homes ASA, is acting as CEO until the appointment of a new CEO. Summary for 2013 Operating revenues for the year were 14.5% higher than in Operational EBITDA for the year showed a 60.8% improvement, while operational EBIT increased by 77.4%. The order intake for 2013 shows growth of 26.4% since Staffing increased by 40 FTEs (11.3%). Focus areas The priority areas are continuing detached house production, development of projects under the company's control and housing cooperative projects, as well as production-efficient multi-dwelling products for larger parts of the housing market. 5

7 SEGMENT KÄRNHEM AB Amounts in NOK 1,000 Q4 13 Q From May 2013 Pro forma 2012 Operational performance Operating revenues 99,901 63, , , ,648 Cost of goods sold (including production payroll) -68,609-53, , , ,643 Gross profit 31,292 10,440 62,017 67,565 39,005 Sales and administrative expenses -13,027-9,230-29,998-43,005-39,820 Operational EBITDA 18,265 1,210 32,019 24, Depreciation -1, ,512-3,330-4,062 Operational EBIT 16, ,507 21,230-4,877 Gross margin 31.3% 16.4% 29.6% 25.4% 20.2% Operational EBITDA margin 18.3% 1.9% 15.3% 9.2% -0.4% Operational EBIT margin 16.7% 0.5% 14.1% 8.0% -2.5% Other key figures for the segment Order intake 56,498 21, , , ,536 Order backlog 119, , ,376 - Number of units in production Number of units sold Number of units delivered Number of unsold completed units Number of employees Sick leave 2.6% 3.8% 3.3% 3.3% 3.8% The acquisition of Kärnhem AB was completed on 25 April The financial statements were consolidated with effect from May The core activity of Kärnhem AB is the development of housing projects based on its own land portfolio and products the company has developed. The company has a project portfolio of approx. 250 residential units and also controls a development portfolio with a capacity of over 1,500 residential units, primarily in the housing cooperative segment. The land portfolio is largely based in growth areas from Stockholm southwards. Over 70 percent of the residential projects relate to construction for housing cooperatives. When construction begins, both the land and building activity are sold to the housing cooperative. The houses are built by external contractors who buy wall panels and windows from Kärnhem's production. In December, an agreement was signed with Sunnerbo Fönster AB for the sale of Kärnhem's window factory Sävsjö Snickerifabrik. Sunnerbo Fönster AB has acquired the business with its equipment and 17 employees with effect from January 2014, and will rent the premises for four years. The sale was conducted at book value. Pro forma figures for the year 2013 show positive growth in sales, revenue and profitability compared with At the end of the 4th quarter, Kärnhem had two new housing cooperative projects for sale and ten projects under construction. Focus areas Kärnhem AB maintains the plans that were laid down at the time of acquisition. Focus areas include ensuring stable operation by increasing the number of housing cooperative projects. 6

8 FINANCIAL FACTORS CASH FLOW STATEMENT Amounts in NOK 1,000 Q4 13 Q Net cash flow from operations (after interest and tax) -101,686-29, , ,817 Net cash flow from investments -2,382-13,117-54,626-12,247 Net cash flow from financing 216,700-78, , ,633 Net cash flow for the period 112, ,284 80,436-62,431 Cash flow from operations (after interest and taxes) for the 4th quarter of 2013 was a negative NOK 102 million, compared with a negative cash flow of NOK 30 million for the same quarter the previous year. Capital tied up in inventory decreased by NOK 47 million in the 4th quarter, although net changes in other working capital items caused a temporary increase of NOK 192 million in tied-up capital. Payments relating to the purchase of land totalled NOK 32 million during the period. This is NOK 29 million lower than for the previous quarter and NOK 131 million down on the same period the previous year. Block Watne's payments relating to the purchase of land were NOK 17 million, while Kärnhem's payments were NOK 9 million of the total amount for the quarter. Land purchases for the full year 2013 were NOK 313 million. Block Watne's share of the total amount was NOK 238 million. Cash flow from investments during the quarter was a negative NOK 2 million. Cash flow from investments during the year was NOK 55 million. NOK 19 million of this amount was related to loans to associated companies. Cash flow from financing was NOK 217 million, compared with a negative NOK 78 million for the same period the previous year. This includes proceeds of NOK 350 million from the new bond issue in November. Parts of the proceeds from the bond issue were used to pay off project financing. After these repayments, the Group's cash and cash equivalents were NOK 187 million at the end of NET INTEREST-BEARING DEBT Amounts in NOK 1,000 31/12/ /09/ /12/2012 Long-term interest-bearing debt 1,116, , ,239 Short-term interest-bearing debt 916,677 1,019, ,513 Total bank deposits and cash -184,143-71, ,707 Net interest-bearing debt 1,849,408 1,731,321 1,474,045 The Group's long-term debt increased as a result of the new bond issue of NOK 350 million in the quarter. The unused portion of the proceeds increased the Group's cash and cash equivalents to NOK 184 million at the end of The negative cash flow from operations meant that net interest-bearing debt increased by NOK 118 million from the previous quarter. WORKING CAPITAL Amounts in NOK 1,000 31/12/ /09/ /12/2012 Current assets 3,597,115 3,601,729 3,022,405 Current liabilities (non-interest-bearing) -1,172,903-1,480,227-1,315,748 Net working capital 2,424,212 2,121,502 1,706,657 Short-term project financing (interest-bearing) -916,677-1,019, ,513 Net working capital incl. project financing 1,507,535 1,102, ,144 7

9 ORGANISATION NUMBER OF EMPLOYEES 31/12/ /09/ /12/2012 Employees in administrative functions* Production employees and carpenters Total 1,039 1,085 1,014 Number of employees in Norway* Number of employees in Sweden** * Including the CEO and executive staff (BWG Homes ASA) and employees of Hetlandhus AS. ** Including 51 employees of Kärnhem AB at the end of Q BWG Homes AB also had 23 temporary employees at the end of Q These are mainly production workers. The workforce has declined by 46 FTEs (4.2%) since the end of the previous quarter, but has increased by 25 FTEs compared with the end of of these are employees of Kärnhem AB (21 administrative and 30 production employees). In January 2014, the number of employees at Kärnhem will be reduced by 17 as a result of the sale of the window factory. Block Watne started a downsizing process in the 4th quarter and this will be completed in the 1st quarter of At the end of the quarter, Block Watne had reduced its workforce by 68 production employees. 20 employees are working out their notice and will leave in the coming months. The need for further downsizing will be regularly assessed in relation to the situation regarding production and implementation of new projects. HEALTH, SAFETY AND ENVIRONMENT Group management focuses constantly on production quality and HSE. Safety training, with an emphasis on the correct use of tools and scaffolding, management monitoring of injuries and inspections at building sites take place continuously. In 2013, 44 lost-time injuries and incidents were registered, compared with 34 in The majority of the lost-time incidents were at Block Watne. At Block Watne, building sites are subject to unannounced inspections, with subsequent follow-up of nonconformances, both at local level (regional offices) and at central level. During 2013, 114 inspections were carried out, with an average of 0.46 non-conformance per inspection, compared with 132 inspections and an average of 0.64 non-conformance per inspection in SHAREHOLDERS At the end of the quarter, the company had 1,569 shareholders, 125 of whom were foreign. The foreign shareholders owned 29.5 million shares, corresponding to an ownership share of 22%. A total of 15.4 million shares were traded during the quarter and 76.3 million shares were traded in Shares were traded on all the trading days. The closing price on the reporting date was NOK LARGEST SHAREHOLDERS Number of shares Ownership share Oslo Bolig and Sparelag 44,906, % Perestroika AS 8,045, % Verdipapirfondet DNB SMB 4,925, % Skandinaviska Enskilda Banken AB, A/C Finnish 4,260, % Fondsfinans Spar 3,975, % Skandinaviska Enskilda Banken AB, Egenhandel 3,841, % Storebrand Verdi 2,854, % Lani Industrier AS 2,779, % MP Pensjon PK 2,695, % Solsten Investment Funds PLC 2,045, % Total 10 largest shareholders 78,283, % Other shareholders 57,837, % Total number of shares 136,121, % 8

10 DIVIDEND FOR THE 2013 FINANCIAL YEAR The Board will propose to the Annual General Meeting that a dividend of NOK 0.25 per share be paid for the 2013 financial year. The total dividend will amount to NOK 34 million. The Board has decided to deviate from the previously announced dividend level corresponding to at least 50% of profit after tax, and instead prioritize down-payment of debt. MARKET AND OUTLOOK In Norway, growth in house prices and the sales rate has levelled off in recent months, and appears to be stabilising at more normal levels. According to the market analysis company Prognosesenteret, new housing starts in 2013 were approx. 6% lower than in 2012, and flat growth in housing starts is expected during A certain tightening of the banks' mortgage lending policies has been noted. Customers are more cautious and sales are taking longer to complete, although there are geographical differences. Block Watne is adapting its operations to the market situation and is prioritising less complex and more affordable housing with a shorter completion time. In Sweden, there is still a low level of housing starts and a large unmet need for new housing. The economy has taken a positive turn and home buyers are returning to the market, although there are geographical disparities. Our Swedish operations have demonstrated increasing sales throughout the year. Development of projects under the company's control and products adapted to housing cooperatives are expected to have a positive effect on volumes and earnings for BWG Homes AB. In the second half of 2013, the company commenced sales in six housing cooperative projects, which have been well received in the market, and production of the first projects has started in the 1st quarter of Kärnhem has shown good growth and a higher level of activity than previously planned. With a large number of projects for sale and in production, Kärnhem is well positioned for The focus is constantly on market adaptation of products and projects, profitability and cost efficiency, both in Norway and Sweden. Oslo, 12 February 2014 Board and CEO of BWG Homes ASA Roar Engeland Daniel K. Siraj Charlotte Axelsson Hege Bømark Lars Nilsen Chairman Deputy Chairman Tore Morten Randen Ørjan Reinholdsson Magne Staalstrøm Ole Feet CEO 9

11 CONDENSED FINANCIAL INFORMATION (IFRS) BWG HOMES ASA CONSOLIDATED INCOME STATEMENT Amounts in NOK 1,000 Note Q4 13 Q Operating revenues 1,263, ,475 4,015,109 3,474,614 Cost of goods sold -782, ,263-2,500,293-2,144,138 Payroll and personnel expenses -180, , , ,537 Other operating expenses -100,104-87, , ,250 Earnings before interest, tax and depreciation (EBITDA) 200, , , ,689 Income from associated companies 3,368 4,164 2,356 5,363 Depreciation -6,407-3,900-18,756-16,010 Earnings before interest, tax and impairment (EBIT) 197, , , ,042 Goodwill impairment 0-403, ,683 Earnings before interest and tax (EBIT) 197, , , Interest and other finance income 2,086 1,103 4,616 4,257 Interest expenses -27,908-17,759-95,337-91,362 Changes in value of financial instruments ,090 2,763 Exchange gains/losses 5 8,489-10,693 71,978-3,876 Other finance costs -4,646-5,999-18,214-24,866 Net financial items 5-20,981-32,686-32, ,084 Earnings before tax (EBT) 176, , , ,725 Tax expenses -51,057-8, ,935-60,727 Earnings in the period 125, , , ,452 Earnings per share (NOK) Diluted earnings per share (NOK) EBITDA margin 15.9% 14.0% 11.7% 11.9% EBIT margin (before goodwill impairment) 15.6% 14.0% 11.3% 11.6% COMPREHENSIVE INCOME STATEMENT Amounts in NOK 1,000 Note Q4 13 Q Change in fair value of interest rate hedging -3,529-1,986-5,905-8,247 Deferred tax relating to fair value of interest rate hedging 953 1,453 1,594 3,206 Actuarial gains/losses on pensions 1, ,110 0 Deferred tax attributable to actuarial gains/losses on pensions Earnings in the period (from income statement) 125, , , ,452 Translation gains/losses on consolidation 14,739-12,433 72,262-10,741 Other comprehensive income Total comprehensive income 138, , , ,254 10

12 STATEMENT OF FINANCIAL POSITION Amounts in NOK 1,000 Note 31/12/ /09/ /12/2012 Assets Goodwill 9 1,655,947 1,642,088 1,547,487 Brands 9 541, , ,115 Other intangible assets 5,184 3,499 1,944 Total intangible assets 2,202,777 2,181,116 2,030,546 Property, plant & equipment 103, ,056 85,994 Financial assets 97, ,416 50,467 Total non-current assets 2,403,936 2,381,588 2,167,007 Projects and work in progress 4 1,480,114 1,551,296 1,374,081 Inventories 49,020 65,147 40,136 Land 1,845,388 1,782,196 1,469,939 Total inventories and land 3,374,522 3,398,639 2,884,156 Trade receivables 90, ,289 87,014 Other receivables 132,509 67,801 51,235 Total receivables 222, , ,249 Cash & cash equivalents 184,143 71, ,707 Total current assets 3,781,258 3,673,245 3,126,112 Total assets 6,185,194 6,054,833 5,293,119 Equity and liabilities Total equity 2,559,821 2,421,667 2,181,673 Pension obligations 8,814 5,742 5,742 Deferred tax 211, , ,558 Provision for guarantee and other obligations 198, ,585 76,646 Total provisions 418, , ,946 Long-term interest-bearing debt 7 1,116, , ,239 Short-term interest-bearing debt 8 916,677 1,019, ,513 Trade payables 340, , ,261 Current liabilities related to land acquisition 352, , ,572 Prepayments from customers 104, , ,311 Other current liabilities 375, , ,604 Total other current liabilities 1,172,903 1,480,227 1,315,748 Total current liabilities 2,089,580 2,499,469 2,109,261 Total debt and liabilities 3,625,373 3,633,166 3,111,446 Total equity and liabilities 6,185,194 6,054,833 5,293,119 KEY FIGURES Amounts in NOK 1,000 31/12/ /09/ /12/2012 Working capital 2,424,212 2,121,502 1,706,657 Net interest-bearing debt 1,849,408 1,731,321 1,474,045 Equity ratio 41.4% 40.0% 41.2% 11

13 STATEMENT OF CHANGES IN EQUITY Amounts in NOK 1,000 Share capital Share premium reserve Hedging reserve Currency reserve Other equity Total equity Balance at , ,840-3,204-23,083 1,343,718 1,945,547 Private placement 34, , ,000 Share issue expenses -7,200-7,200 Translation gains/losses on consolidation -8,662-8,662 Other items in comprehensive income Net profit Q ,617 36,617 Balance at , ,847-3,123-31,914 1,380,514 2,366,383 Repair issue 3,062 32,160 35,222 Share issue expenses -1,635-1,635 Translation gains/losses on consolidation Other items in comprehensive income -20-2, ,535 Net profit Q ,269 50,269 Balance at , ,352-5,219-32,630 1,430,364 2,446,988 Share issue expenses -7-7 Translation gains/losses on consolidation 11,070 11,070 Other items in comprehensive income -2,493-2,493 Net profit Q ,789 47,789 Balance at , ,345-7,712-21,560 1,478,153 2,503,347 Translation gains/losses on consolidation -12,433-12,433 Other items in comprehensive income Net profit Q , ,127 Balance at , ,345-8,245-33,993 1,169,445 2,181,673 Translation gains/losses on consolidation 16,206 16,206 Other items in comprehensive income Net profit Q ,310 62,310 Balance at , ,345-8,226-17,787 1,231,775 2,260,228 Translation gains/losses on consolidation 5,557 5,557 Other items in comprehensive income Net profit Q ,728 59,728 Balance at , ,345-7,341-12,230 1,291,503 2,326,398 Translation gains/losses on consolidation 35,760 35,760 Other items in comprehensive income -2,639-2,639 Net profit Q ,148 62,148 Balance at , ,345-9,980 23,530 1,353,651 2,421,667 Translation gains/losses on consolidation 14,739 14,739 Other items in comprehensive income -2, ,765 Net profit Q , ,180 Balance at , ,345-12,556 38,269 1,479,642 2,559,821 12

14 CASH FLOW STATEMENT Amounts in NOK 1,000 Q4 13 Q Cash flow from operating activities before changes in working capital (EBITDA) 200, , , ,689 Change in inventories 47,026-44,518 28, ,341 Change in trade receivables -111,983 64, ,926 83,955 Change in trade payables -79,894 13,683-19,968-8,142 Land acquisitions -31, , , ,341 Change in other accruals -37,566-21,824-37,215-12,534 Net change in working capital items -214, , , ,403 Interest paid -27,903-24, ,279-97,581 Tax paid -59,869 10, ,869-37,522 Net cash flow from operations (after interest and tax) -101,686-29, , ,817 Purchase of property, plant & equipment -9,434-3,341-22,888-8,825 Purchase of shares 3,012-1,228-1,342-3,048 Sale of property, plant & equipment ,346 0 Cash effect of acquisition of Kärnhem AB ,143 0 Net cash flow from associated companies 1,173-9,643-19,215-4,623 Interest received 2,086 1,095 4,616 4,249 Net cash flow from investing activities -2,382-13,117-54,626-12,247 Increase/decrease (-) short-term debt -102,561 48, ,156-15,343 Payments relating to refinancing of debt -5,250-7,107-5,250-19,294 Repayment of long-term debt -25, ,474-50,754-1,007,671 New long-term debt 350, , , ,000 Proceeds from new equity (net) ,941 Net cash flow from financing activities 216,700-78, , ,633 Net change in cash & cash equivalents 112, ,284 80,436-62,431 Cash & cash equivalents at start of period 71, , , ,138 Cash & cash equivalents at end of period 184, , , ,707 Unutilised overdraft facilities at end of period 263, , , ,994 13

15 NOTES TO THE FINANCIAL STATEMENTS NOTE 1 The Group and the consolidated accounts Group BWG Homes ASA is domiciled in Norway and listed on the Oslo Stock Exchange. The consolidated financial statements cover BWG Homes ASA and its subsidiaries and the Group s shares in associated companies. At the end of the quarter, the Group comprised the same legal units as at the most recent year-end, with the addition of Kärnhem AB. Approval of the quarterly report This interim report was adopted by the Company s Board on 12 February The interim financial statements have not been audited. Application of IFRS when preparing financial information The condensed financial information has been presented in accordance with International Financial Reporting Standards (IFRS) and the interpretations specified by the International Accounting Standards Board (IASB). The condensed financial information has also been prepared in accordance with the rules contained in IAS 34 Interim Financial Reporting. IAS 34 states that interim financial reporting shall primarily be an update of new events and transactions since the last annual report. Consequently, this interim report should be read in connection with the most recent annual report (2012). Accounting principles The accounting principles applied in the preparation of the report are consistent with those described in the Company's 2012 annual report. Accounting terms - definitions Order intake: Value of new orders entered into during the period less value of cancelled orders entered into in the same period Order backlog: Value of orders entered into remaining to be produced Gross profit: Operating revenue less cost of goods sold EBITDA margin: EBITDA divided by operating revenue EBIT margin: EBIT before impairment divided by operating revenue Working capital: Inventories and receivables less other current liabilities Net interest-bearing debt: Total interest-bearing debt less bank deposits, cash and interest-bearing receivables Equity ratio: Book value of equity divided by book value of total assets Number of employees: Employees at end of period NOTE 2 Estimates A significant proportion of the Group s business comprises house building projects. Project revenue is normally recognised when delivery has taken place and the financial results of the project are known. However, accounting involves a certain use of estimates related to the value of the projects etc. Other items requiring use of estimates are pension obligations, pension costs, carrying amount of goodwill and other added value, recognition of financial instruments and accounting for taxes. A more detailed description of the use of estimates for accounting purposes can be found in the 2012 annual report. 14

16 NOTE 3 SEGMENT INFORMATION Definition of segments BWG Homes consists of three segments: Block Watne AS, BWG Homes AB and Kärnhem AB. Segment BWG Homes AB includes the operations of Myresjöhus AB and SmålandsVillan AB. All of the segments are mainly engaged in producing and marketing homes for consumers. The three segments are separate entities with their own organisation and management, and with different risks and returns. They are therefore monitored separately within the Group. Units which do not qualify for reporting as separate segments are presented collectively under "Other units". This applies to Hetlandhus, which was re-launched in 2009 and sells houses in the Norwegian market based on modules produced in SmålandsVillan's factories in Sweden. Accounting principles for segment reporting Segment reporting is based on operational management reports prepared by the entities. For BWG Homes AB, the accounting principles applied for this report are in line with IFRS, and the figures for BWG Homes AB are included directly in the consolidated figures. For Block Watne AS and Kärnhem AB there is a deviation between operational management reporting and IFRS rules in relation to recognition of project revenues. It is important for management to monitor the earnings performance in ongoing projects. In operational reporting this is measured by using the percentage of completion principle (production contracts). This means the estimated accrued project revenue is recognised by reference to the stage of completion. Revenue is only recognised for houses for which binding sales contracts have been signed. The stage of completion corresponds to contract costs incurred for work performed to date as a percentage of the estimated total costs. Degree of sale is defined as the number sold as a percentage of total expected sales. Recognised revenue is the estimated total revenue x degree of sale x stage of completion. The reported outcome is estimated final outcome x degree of sale x stage of completion. For Block Watne, accrual accounting includes the whole project, while for Kärnhem, the sale of land to housing cooperatives is accounted for separately. Consequently, Kärnhem only uses accrual accounting for the actual house delivery. The accounting principles applied for segment reporting are in line with those applied in the preparation of the 2012 annual report. There are no transactions between the segments that are of significance to the reporting. SEGMENT INFORMATION Amounts in NOK 1,000 Q4 13 Q BALANCE SHEET ITEMS Total assets Block Watne AS 3,916,754 3,196,879 3,916,754 3,196,879 BWG Homes AB 1,949,251 1,709,693 1,949,251 1,709,693 Kärnhem AB 206, ,173 0 Other units 3,256,608 2,638,863 3,256,608 2,638,863 +/-deviating acc. principle in segment and in consolidation 64, ,291 64, ,291 Eliminations -3,208,095-2,546,607-3,208,095-2,546,607 Total assets, consolidated 6,185,194 5,293,119 6,185,194 5,293,119 Total debt and liabilities Block Watne AS -2,402,768-1,826,285-2,402,768-1,826,285 BWG Homes AB -1,074,439-1,388,394-1,074,439-1,388,394 Kärnhem AB -93, ,689 0 Other units -1,103, ,339-1,103, ,339 +/-deviating acc. principle in segment and in consolidation -104, , , ,311 Eliminations 1,153,612 1,045,883 1,153,612 1,045,883 Total liabilities, consolidated -3,625,373-3,111,446-3,625,373-3,111,446 15

17 SEGMENT INFORMATION Amounts in NOK 1,000 Q4 13 Q INCOME STATEMENT ITEMS Operating revenues Block Watne AS 538, ,750 2,369,318 2,302,331 BWG Homes AB 387, ,194 1,318,504 1,151,874 Kärnhem AB 99, ,688 0 Other units 24,774 19,508 74,193 64,587 Eliminations -14,526-9,607-45,427-35,499 Operating revenues, segment 1,035, ,845 3,926,276 3,483,293 +/-deviating acc. principle in segment and in consolidation 227,575 5,630 88,833-8,679 Operating revenues, consolidated 1,263, ,475 4,015,109 3,474,614 EBITDA Block Watne AS 68, , , ,357 BWG Homes AB 30,394 16,811 95,842 59,607 Kärnhem AB 18, ,019 0 Other units -10,314-9,109-37,130-22,021 Eliminations EBITDA, segment 106, , , ,943 +/-deviating acc. principle in segment and in consolidation 93,392-10,401 12,986-43,254 EBITDA, consolidated 200, , , ,689 EBIT (before goodwill impairment) Block Watne AS 71, , , ,290 BWG Homes AB 26,183 13,614 81,921 46,177 Kärnhem AB 16, ,507 0 Other units -10,327-9,147-37,255-22,171 Eliminations EBIT, segment 103, , , ,296 +/-deviating acc. principle in segment and in consolidation 93,639-10,401 13,233-43,254 EBIT, consolidated 197, , , ,042 EBT (before goodwill impairment) Block Watne AS 52, , , ,596 BWG Homes AB 20,927 2,370 55,692-2,147 Kärnhem AB 16, ,681 0 Other units -7, ,486 14, ,751 Eliminations 0 403, ,683 EBT, segment 82, , , ,381 +/-deviating acc. principle in segment and in consolidation 94,187-2,765 26,125-32,423 EBT, consolidated (goodwill impairment) 176, , , ,958 16

18 NOTE 4 Book value of current projects The Group has a significant inventory of ongoing projects. These projects may be own projects under the companies' control or homes built for other end consumers or professional developers. The book value of the projects is recognised in the balance sheet at accumulated production cost. SPECIFICATION OF CURRENT PROJECTS Amounts in NOK 1,000 31/12/ /09/ /12/2012 Projects and work in progress, Norway (Block Watne AS and Hetlandhus AS) 1,464,048 1,521,658 1,336,745 Projects and work in progress, BWG Homes AB 23,973 31,359 37,336 Projects and work in progress, Kärnhem AB -7,907-1,721 0 Book value of projects and work in progress 1,480,114 1,551,296 1,374,081 Value of projects and work in progress based on percentage of completion for projects under own control: Block Watne AS 1,192,747 1,024, ,828 Kärnhem AB -7,907-1,721 0 NOTE 5 Exchange gains/losses The Group is exposed in Swedish kronor (SEK) as a result of its investments in Sweden. The Swedish operations are financed in Swedish kronor. Loan financing comes partly from the parent company and partly from the bank. In April 2013, SEK 500 million of the intra-group loan from BWG Homes ASA to BWG Homes AB was converted to the equity of BWG Homes AB. The loan, which has given rise to exchange effects in the income statement, has been reduced correspondingly. Under IAS 21, exchange differences on intra-group balances are recognised in profit or loss. Net exchange gains in the 4th quarter amounted to NOK 8.5 million. The SEK has strengthened against the NOK during the year, resulting in an exchange gain of NOK 72 million for NOTE 6 Related party transactions Waterguard International AS sells water guard systems to the subsidiaries Block Watne AS and Hetlandhus AS. These are sold through wholesalers and are based on market prices. At the end of the 4th quarter of 2013, water guard systems totalling NOK 6.3 million had been purchased. Water Guard International AS is a company controlled by Board member Lars Nilsen, former CEO of BWG Homes ASA. Water Guard International has also supplied accounting services to BWG Homes ASA, which amounted to NOK 53,000 at the end of the 4th quarter of Provision of these services has been terminated and they are discontinued from 31 December Lani Development AS, a company 100% controlled by Lars Nilsen, signed a contract for the purchase of two houses from Hetlandhus AS in December The transactions were conducted at market prices. The deliveries were completed in 2013, and the final settlement has been made. The total purchase price was NOK 3.9 million. The subsidiaries Block Watne AS and Hetlandhus AS purchased legal services from the law firm Martin Kr. Feet AS totalling NOK 3 million in Martin Kr. Feet is the brother of the CEO of BWG Homes ASA. The transactions were conducted at market prices. In 2013, Block Watne AS concluded an option agreement with CEO Ole Feet for the purchase of a site for property development. The agreement has been dealt with by the Board of BWG Homes ASA. The purchase price agreed is a minimum of NOK 17.5 million. The final purchase price will be determined on the basis of the actual area on which property is built. The agreement was entered into at market conditions and an independent valuation has been obtained. The option was exercised on 30 January

19 NOTE 7 Specification of long-term debt Amounts in NOK 1,000 31/12/ /09/ /12/2012 Bond issue, maturity , , ,000 Bond issue, maturity , , ,000 Bond issue, maturity , Long-term debt with Nordea, maturity , , ,000 Other liabilities, Kärnhem AB 19,764 19,977 0 Other liabilities, Block Watne AS 7, Amortised borrowing costs -9,922-11,382-15,761 Total long-term debt 1,116, , ,239 Unsecured bond issue maturing in 2018 In November 2013, BWG Homes ASA launched a new unsecured bond issue of NOK 350 million with a maturity date of November The bond issue has an ongoing interest charge, which is NIBOR plus 380 basis points. The net proceeds from the bond issue are being used to refinance debt. NOTE 8 Specification of short-term debt Amounts in NOK 1,000 31/12/ /09/ /12/2012 1st year s instalments on long-term debt 50,000 50,000 50,000 Land loans 372, , ,808 Building loans 407, , ,719 Other loans 879 1,683 0 Use of bank overdrafts 85,644 67, ,986 Total current liabilities 916,677 1,019, ,513 NOTE 9 Acquisition of Kärnhem AB The acquisition of 100% of the shares in Kärnhem AB was completed on 25 April 2013, and the purchase price was SEK 60 million. An additional earn-out payment was also agreed, based on earnings over the next three years. The sellers are entitled to 50 percent of the company's earnings before interest and taxes (EBIT) for the years The sellers are providing SEK 20 million of the purchase consideration for the shares as a loan to Kärnhem AB for three years from commencement. Kärnhem AB is a limited company with its head office in Växjö in Sweden. Kärnhem AB is a dedicated project development organisation with its own project portfolio of approx. 250 residential units. The company also controls a development portfolio with a capacity of over 1,500 residential units, primarily in the housing cooperative segment. After several years of good results, Kärnhem experienced a decline in profitability in 2011 and This was due to a combination of the general market situation in Sweden and internal restructuring to optimise the company's operations. The acquisition analysis was adjusted in the 4th quarter. This has resulted in a change to goodwill, which has increased from SEK 12.2 million to SEK 18.9 million. As a result of this change, there has been some adjustment to the period figures to reflect costs and depreciation. Kärnhem has contributed NOK 183,804 thousand to the Group's operating revenues and NOK -3,067 thousand to the Group's ordinary profit before tax in the period from the acquisition to the end of the 4th quarter of

20 Goodwill arising on the acquisition of Kärnhem AB is allocated as follows: FAIR VALUES RECOGNISED ON ACQUISITION Amounts in SEK 1,000 Assets Brands 23,500 Other intangible assets 3,698 Other non-current assets 44,979 Projects and work in progress 65,417 Other current assets 53,639 Liabilities Provisions (8,927) Long-term interest-bearing debt (44,711) Other short-term liabilities (40,993) Fair value of net identifiable assets 96,602 Purchase consideration 60,000 Earn-out 55,500 Total cost 115,500 Goodwill on acquisition 18,898 Cash payment 60,000 Cash in acquired company 36,311 Net cash flow on acquisition 23,689 NOTE 10 Foreign exchange trading In August 2013, BWG Homes ASA signed two foreign exchange trading agreements. One was with Nordea and concerned the purchase of NOK 200,000,000 and sale of SEK 215,146,299.48, i.e., at a rate of NOK/SEK The other was with Danske Bank and concerned the purchase of NOK 100,000,000 and sale of SEK 107,688,994.18, i.e., at a rate of NOK/SEK Both agreements can be settled by agreement or no later than 27 August NOTE 11 Change to the tax rate in Norway The tax rate in Norway has changed from 28 percent to 27 percent with effect from 1 January The change means that deferred tax in the balance sheet at 31 December 2013 is calculated based on the new tax rate. The change has resulted in a tax saving of NOK 3.5 million, which is recognised in the 4th quarter accounts. 19

21 Company information BWG Homes operates and develops leading house builders with strong brands. The Group develops, sells and produces houses for the Nordic market under the Block Watne and Hetlandhus brands in Norway and the Kärnhem, Myresjöhus and SmålandsVillan brands in Sweden. BWG Homes delivers approx. 2,000 new houses every year under its own housing projects and for individual customers with their own land. The Company has approx. 1,040 employees and reported a turnover of NOK 3.9 billion in BWG Homes ASA is listed on the Oslo Stock Exchange under the ticker symbol BWG. The Company's share capital is NOK 136,121,433, divided into 136,121,433 shares with a par value of NOK 1. BOARD OF DIRECTORS Roar Engeland, Chairman Daniel Kjørberg Siraj, Deputy Chairman Charlotte Axelsson, Board Member Hege Bømark, Board Member Lars Nilsen, Board Member Tore Morten Randen, Employee-elected Board Member Ørjan Reinholdsson, Employee-elected Board Member Magne Staalstrøm, Employee-elected Board Member FINANCIAL CALENDAR: Results Q1 2014: 07 May 2014 Results Q2 2014: 21 August 2014 Results Q3 2014: 12 November 2014 Results Q4 2014: 12 February 2015 Annual General Meeting: 22 May 2014 IR CONTACTS: Ole Feet, CEO, T: , Arnt Eriksen, CFO, T: , CONTACT INFORMATION: BWG Homes ASA Postboks 1817 Vika 0123 Oslo post@bwghomes.no T: F: Company reg. no.: Visiting address: Vika Atrium Munkedamsveien 45 Stair D, 5th floor 0250 Oslo 20

22 BWG HOMES ASA P.O.Box 1817 Vika NO 0123 OSLO bwghomes.no