SELVAAG BOLIG Super-profits as NAV materialises HOLD TP: NOK43.0

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1 EQUITY RESEARCH Research report prepared by DNB Markets, a division of DNB Bank ASA Industrials Q4 results review SELVAAG BOLIG Super-profits as NAV materialises Selvaag Bolig beat Q4 forecasts, having sold a commercial property. SBO reported a NOK1,268m offbalance market surplus on land plots, which translates into super-margins and EPS profits as handed over to clients. The surplus indicates a 2016e NAV of cnok40/ share. However, this is likely peak EPS in our view as it arrives from the e residential price growth in Oslo. We continue to fear the effects of the new mortgage rules and reiterate HOLD. Q4 beat on assets sales, underlying in line. Revenues were NOK886m (4% versus Bloomberg at NOK852m, 6% versus our NOK836m), a beat that may be explained by a NOK55m commercial property sale at Lørenskog. EBIT was NOK132m (9% versus Bloomberg at NOK121m, 4% versus our NOK127m), also on the assets sale. The semiannual dividend was suggested at NOK0.95 (19% versus our forecast of NOK0.8). Materialising the NAV will lead to super-profits; we have raised margin forecasts. SBO reported the market value of its land plots (NOK1,427m) exceeds the book value by NOK1,268m per year end Given EPS is based on book value gains, this market value surplus will translate into super-margins in the years to come if residential prices hold. Note the surplus value is for building plots, meaning they and the NAV have a derivative-like exposure to residential Norwegian residential prices. Mortgage market risk. Oslo s housing prices were up c23% in 2016, and the Norwegian government capped loan-to-income at 5x. Given the current prices of apartments in Norway, we fear the market might gradually slow down during the second half of 2017e as financing letters in circulation predating the new rules are no longer valid (most older ones are expected to be invalid during Q2). Updating forecasts, reiterate HOLD. We have altered our forecasts for the NAV value (rising EBIT margin forecast) and revenues for guiding and ongoing developments (moving revenue from 2018 into 2019). While we see upside in our share price valuation and have raised our target price, we reiterate our HOLD recommendation given the risk in the housing market after the implementation of the new mortgage rules. Year-end Dec e 2018e 2019e Revenue (NOKm) 2,197 2,945 3,246 3,000 2,518 3,199 3,647 EBIT adj (NOKm) PTP (NOKm) EPS rep (NOK) EPS adj (NOK) DPS (NOK) Revenue growth (%) EBIT growth adj (%) EPS growth adj (%) EBIT margin adj (%) EV/Sales adj (x) EV/EBIT adj (x) P/E (x) P/E adj (x) P/Book (x) ROE (%) ROCE (%) Dividend yield (%) HOLD TP: NOK43.0 SBO versus OSEBX (12m) feb apr jun aug okt des Selvaag Bolig OSEBX (Rebased) Source: Factset SUMMARY Recommendation (prev.) HOLD (HOLD) Share price (NOK) 39.6 Target price (previous) (NOK) 43.0 (40.0) Upside/downside potential (%) 9 Tickers SBO NO, SBO.OL CAPITAL STRUCTURE No. of shares (m) 93.8 No. of shares fully dil. (m) 93.8 Market cap. (NOKm) 3,713 NIBD adj end-2017e (NOKm) 110 Enterprise value adj (NOKm) 3,823 Net debt/ebitda adj (x) 1.27 NAV per share (NOK) 39.9 SHARE PRICE PERFORMANCE Abs. 1/3/12m (%) -1/-3/62 Rel. 1/3/12m (%) -2/-13/28 High/Low 12m (NOK) 43/24 Free float (%) 43 Source: Company, DNB Markets (estimates) NEXT EVENT Q /05/2017 ESTIMATE CHANGES (NOK) Year-end Dec 2017e 2018e 2019e EPS (old) EPS (new) Change (%) Consensus Sales (old) 2,552 3,731 3,218 Sales (new) 2,518 3,199 3,647 Change (%) Consensus 2,762 3,863 3,218 Source: DNB Markets, Bloomberg ANALYSTS Simen Mortensen simen.mortensen@dnb.no Please see the last two pages for important information. This research report was not produced in the US. Analysts employed by non-us affiliates are not registered/ qualified research analysts with FINRA in the United States.

2 2016 Revenues Costs Net finance 2017e Revenues Costs Net finance 2018e DNB Markets Selvaag Bolig Investment case overview Share price performance, DNB Markets target price, bear- and bull-case scenarios 56.0 NOK55.0 (39%) NOK39.6 NOK43.0 (9%) NOK25.0 (-37%) 21.0 feb 2016 jun 2016 okt 2016 feb 2017 jun 2017 okt 2017 Historical Share Price Performance Price Target (feb 18) Current Share Price Source: FactSet, DNB Markets Target price methodology Our DCF suggests a 12-month forward fair value of NOK69.6/share using a WACC of 11.4% and a 3% terminal growth rate. Our peer-based SOTP suggests a fair value of NOK50.7/share (applying a 60% discount to building loans). Historical peer P/E valuation suggests a fair value of NOK48.3/share. The average of our normalised and relative (peer-based) valuations is NOK50/share, but we do note a peak estimate impact and market risk from new mortgage rules. Source: DNB Markets Downside risks to our investment case Residential market slowdowns. Increased interest rates or reduced mortgage availability. Increased residential property tax coming in Oslo 2018e. Weakening labour markets and slowing immigration to Norway. Failure to obtain fast-enough zoning and delays to project starts. DNB Markets investment case and how we differ from consensus Due to Norwegian accounting and legislation, building loans are held onbalance sheet, making NIBD- and EVbased valuations appear higher than the actual risks versus peers, where this debt is off-balance sheet. We see support from an attractive P/E valuation, and strong sales and equity ratios. But fear a sentiment turn in the Norwegian residential market in 2017e Upside risks to our investment case The new Norwegian mortgage rules do not slow down the market. Increased housing starts outside Oslo. Rising residential prices. Flexible operating set-up (no production capacity or obligations) and good financial flexibility (building loans paid down with development completion). Source: DNB Markets Source: DNB Markets Source: DNB Markets EBT adj. bridge e (NOKm) 1, , Source: DNB Markets (forecasts), company (historical data) 2

3 Q4 review Figure 1: Q4 preview (IFRS) Key highlights 4Q16 Deviation (%) Deviation, Abs 4Q15 (NOKm, except per share data) Actual DNB Cons. DNB Cons. DNB Cons. Actual Revenues % 4 % Tot. COGS % Joint ventures -5 0 na EBITDA % 8 % EBITDA adj % 7 95 Amortization -2 0 na -2-6 Depreciation 0 0 na 0 0 EBIT % 9 % EBIT Adj % 7 95 Net Interest % -4-9 EBT % 5 % EBT Adj % 3 87 Tax % Minority 0 0 na 0 0 Translation differences 1 0 na 1 1 Net income ex. min % 35 % Net income ex. min adj % 0 63 EPS % 34 % EPS adj % 9 % DPS % 0.15 Source: DNB Markets (forecasts), company (historical data), Bloomberg consensus Figure 2: Units sold, started, and completed including forecasts, rolling 12 months Sold 12m Started 12m Completed 12m Source: DNB Markets (forecasts), company (historical data) 3

4 Figure 3: Completion guidance (including JV adjustment) Q17e 2Q17e 3Q17e 4Q17e 1Q18e Source: Company (guidance) The few units to be delivered in Q have made us move unit deliveries from our 2018 forecasts into 2019e, which explains the majority of our 2018/19e revenue estimate update. Figure 4: Units and sales value data & forecasts Housing data - All e 2018e 2019e - No. of units sold No. of housing units starts No. of housing units completed No. of units in production No. of unsold completed units No. of units handed over Price grow th (Market) 7.1 % 4.6 % 1.8 % 8.3 % 12.0 % 6.0 % -2.0 % -3.0 % Source: DNB Markets (forecasts), company (historical data) Our forecast reflects our mapping of the company s projects. 4

5 The ongoing production at Q4 Figure 5: Project overview updated post Q Norw ay 1Q17e 2Q17e 3Q17e 4Q17e 1Q18e 2Q18e 3Q18e 4Q18e 1Q19e 2Q19e 3Q19e 4Q19e Project Lade Alle Nybyen Frøyatun Kilenkollen Lørensko Økern Hovineng Nybyen Nybyen Lørenport Units Sales value NOKm Project Løren 5 Løren 5 Nyhavn Kaldnes Løren Lørenport Units Sales value NOKm Project Lørensko Nyhavn Moss Heimdal Kaldnes Units Sales value NOKm Project Lørensko Kaldnes Løren 5 - Units Sales value NOKm Project Nybyen Units 67 Sales value NOKm 291 Project Units Sales value NOKm Project Units Sales value NOKm Units guided vs. Reg 1Q17e 2Q17e 3Q17e 4Q17e 1Q18e 2Q18e 3Q18e 4Q18e 1Q19e 2Q19e 3Q19e 4Q19e SBO Guidance: Completed units Sum of reg. Completions (Units) Diff. Vs. Guidance - - (68) Value of compl. Developments 1Q17e 2Q17e 3Q17e 4Q17e 1Q18e 2Q18e 3Q18e 4Q18e 1Q19e 2Q19e 3Q19e 4Q19e Sales value of developments DNB quarterly revenue forecast Diff Continuing its tradition, Selvaag Bolig updated its guidance (previous page) on completions for the next five quarters. Based on our forecasts of underlying developments (forming the headline guidance), we believe the company has good coverage for the guidance period. Note the Q3 and Q4 relate to the Kaldnes JV we have adjusted for these in our P&L forecasts. 5

6 Figure 6: Sales value of ongoing projects (Value per unit per Q4 NOK4,72m) Source: Company (historical data) Figure 7: P&L NOKm IFRS e 2018e 2019e Sales 2,758 2,133 2,888 3,192 2,924 2,545 3,199 3,647 Other income Revenues 2,812 2,197 2,945 3,246 3,000 2,545 3,199 3,647 Tot. COGS -2,354-1,919-2,591-2,826-2,579-2,121-2,695-3,125 Joint ventures EBITDA EBITDA adj Amortization Depreciation EBIT EBIT Adj Ass. Comp Net Interest EBT EBT Adj Tax Net income Net income Adj Minority Translation differences Net income ex. min Net income ex. min adj EPS EPS adj DPS Source: Company (historical figures), DNB Markets (forecasts) 6

7 DNB NAV foreast Figure 8: NAV break down per Q

8 Figure 9: SOTP (NOKm/NOK) Fundamentals / Estimates IFRS Source: DNB Markets Peer valaution - CAGR EBIT EV Historical peer valaution EV / EBIT Current peer valaution EV / EBIT EBIT CAGR /EBIT EV 9.09x 11.15x Selvaag 2017e 2018e 2019e e EV /share 2017e 2018e 2017e 2018e Business areas Residential dev % 11.6x 6, Other % 10.0x (1,426) (15.2) EBIT Adj % 12 5, Associated Companies Buidling loans -679 (at 60% w eight) -407 (4.3) Land loans (10.1) Parent company loan (5.3) Cash and cash equivalents Minorities -9 (0.1) Equity value 4754 Value per share No shares 94 m Figure 10: SOTP CAGR (NOK) Residential dev. Other Associated Companies Buidling loans Land loans Parent company loan Cash and cash equivalents Minorities Value per share EPS15e Source: DNB Markets 8

9 Figure 11: P/E valuations (NOK) Estimates - IFRS Source: DNB Markets Peer EPS CAGR value EPS Hist. Peer valaution Historic P/E next12m 11.9x Current peer valaution Curr.P/E next12m 15.5x EPS CAGR P/E Fair Selvaag 2017e 2018e 2019e FY e Value 2017e 2018e 2017e 2018e EPS % 16.2x EPS adj % 16.4x Figure 12: Average of our valuations (NOK) DCF Peer CAGR 2017e 2018e 2017e 2018e Peer CAGR 2017e 2018e 2017e 2018e Avg Source: DNB Markets Normalized Current peers Normalized Current peers DNB DCF EV/EBIT P/E NAV Avg Last price Target 9

10 Forecast changes P&L New Old Change (NOKm) 2017e 2018e 2019e 2017e 2018e 2019e 2017e 2018e 2019e Revenues 2,518 3,199 3,647 2,552 3,731 3, Cost of sales -2,099-2,695-3,125-2,153-3,187-2, Gross profit Operating expenses EBITDA EBITDA adj EBITDA margin (%) Depreciation EBITA Amortisation EBIT EBIT adj Associated companies Net interest Net financial items PBT Taxes Net profit Adjustments to net profit Net profit adj Per share data (NOK) EPS EPS adj DPS Other key metrics (%) Revenue growth EBIT adj growth EPS adj growth Avg. number of shares (m) OpFCF Working capital 1, NIBD adj , Source: DNB Markets 10

11 Forecast changes By segment and assumptions New Old Change (NOKm) 2017e 2018e 2019e 2017e 2018e 2019e 2017e 2018e 2019e Revenues R.D. IFRS 2,482 3,161 3,608 2,518 3,695 3, Other - IFRS R.D. Segm 3,770 4,075 4,199 3,624 3,587 3, Other - Segm IFRS adj. 1, , , EBIT R.D. IFRS Other - IFRS R.D. Segm Other - Segm IFRS adj EBIT margin R.D. IFRS 23.2% 20.5% 18.5% 21.6% 18.2% 15.3% 1.7% 2.3% 3.2% Other - IFRS % % % % % % -35.2% -39.0% -37.7% R.D. Segm 19.2% 17.7% 15.8% 16.3% 13.7% 13.2% 2.9% 4.1% 2.6% Other - Segm % % % % % % -37.7% -41.6% -40.3% IFRS adj. 11.1% 7.5% -1.9% 4.1% 172.5% -4.2% 7.0% % 2.3% EBITDA R.D. IFRS Other - IFRS R.D. Segm Other - Segm IFRS adj EBITDA margin R.D. IFRS 23.2% 20.5% 18.5% 21.6% 18.2% 15.3% 1.7% 2.3% 3.2% Other - IFRS % % % % % % -35.2% -39.0% -37.7% R.D. Segm 19.2% 17.7% 15.8% 16.3% 13.7% 13.2% 2.9% 4.1% 2.6% Other - Segm % % % % % % -37.7% -41.6% -40.3% IFRS adj. 11.1% 7.5% -1.9% 4.1% 172.5% -4.2% 7.0% % 2.3% Assumptions Units sold Unit start Unit comp Unit in prod. 1,544 1,655 1,729 1,525 1,413 1, Unsold Delivered Source: DNB Markets 11

12 Quarterly numbers (NOKm) Q Q Q Q Q Q Q1 2017e Q2 2017e Q3 2017e Q4 2017e Q1 2018e Revenues , , Cost of sales Gross profit Operating expenses EBITDA Depreciation EBITA Amortisation EBIT Associated companies Net interest Net financial items PBT Taxes Net profit Adjustments to net profit Net profit adj Dividend paid Avg. number of shares (m) Per share data (NOK) EPS EPS adj DPS Growth and margins (%) Revenues, QOQ growth Revenues, YOY growth EPS adj, YOY growth nm Gross margin nm EBITDA adj margin nm Depreciation/revenues EBIT adj margin nm Net profit margin nm nm nm nm nm nm nm nm nm nm nm Adjustments to quarterly numbers (NOKm) Q Q Q Q Q Q Q1 2017e Q2 2017e Q3 2017e Q4 2017e Q1 2018e EBITDA EBITDA adj EBITA EBITA adj EBIT EBIT adj Net profit Net profit adj

13 Quarterly numbers by segment and assumptions (NOKm) Q Q Q Q Q Q Q1 2017e Q2 2017e Q3 2017e Q4 2017e Q1 2018e Revenues R.D. IFRS , , Other - IFRS R.D. Segm ,008 1,026 Other - Segm IFRS adj EBIT R.D. IFRS Other - IFRS R.D. Segm Other - Segm IFRS adj EBIT margin R.D. IFRS 18.4% 15.0% 16.5% 14.5% 21.7% 20.6% 19.9% 21.5% 25.1% 24.1% 23.2% Other - IFRS % % % % % % % % % % % R.D. Segm 15.8% 15.0% 17.2% 17.6% 26.2% 27.6% 18.8% 19.2% 19.8% 19.0% 18.4% Other - Segm % % % % % % % % % % % IFRS adj. 5.5% 12.0% 22.3% 4.4% 24.4% 127.6% 18.2% 13.9% 14.5% 62.3% 17.6% EBITDA R.D. IFRS Other - IFRS R.D. Segm Other - Segm IFRS adj EBITDA margin R.D. IFRS 18.4% 15.0% 16.5% 14.5% 21.7% 20.6% 19.9% 21.5% 25.1% 24.1% 23.2% Other - IFRS % % % % % % % % % % % R.D. Segm 15.8% 15.0% 17.2% 17.6% 26.2% 27.6% 18.8% 19.2% 19.8% 19.0% 18.4% Other - Segm % % % % % % % % % % % IFRS adj. 5.5% 12.0% 22.3% 4.4% 24.4% 127.6% 18.2% 13.9% 14.5% 62.3% 17.6% Assumptions Units sold Unit start Unit comp Unit in prod. 1,426 1,339 1,386 1,344 1,464 1,356 1,547 1,581 1,675 1,544 1,720 Unsold Delivered

14 Annual P&L (NOKm) e 2018e 2019e Revenues ,812 2,197 2,945 3,246 3,000 2,518 3,199 3,647 Cost of sales ,354-1,919-2,591-2,826-2,579-2,099-2,695-3,125 Gross profit Operating expenses EBITDA Depreciation EBITA Amortisation EBIT Associated companies Net interest Net financial items PBT Taxes Effective tax rate (%) Net profit Adjustments to net profit Net profit adj Dividend paid Avg. number of shares Per share data (NOK) EPS EPS adj DPS Growth and margins (%) Revenue growth EPS adj growth nm nm nm Gross margin 17.3 nm EBITDA margin EBITDA adj margin Depreciation/revenues EBIT margin EBIT adj margin PBT margin nm nm Net profit margin nm nm nm nm nm nm nm nm nm nm 14

15 Adjustments to annual P&L (NOKm) e 2018e 2019e EBITDA EBITDA adj EBITA EBITA adj EBIT EBIT adj Net profit Net profit adj Per share data (NOK) EPS Recommended adjustment EPS adj Cash flow (NOKm) e 2018e 2019e Net profit Depreciation and amortisation Other non-cash adjustments Change in net working capital Cash flow from operations (CFO) ,133 1,302 1,128 1,004 Acquisitions/Investments Cash flow from investing (CFI) Free cash flow (FCF) ,103 1,302 1,128 1,004 Net change in debt Dividends paid Cash flow from financing (CFF) , Total cash flow (CFO+CFI+CFF) FCFF calculation Free cash flow ,103 1,302 1,128 1,004 Less: net interest Less: acquisitions Growth (%) CFO CFI nm nm FCF CFF FCFF nm nm nm nm nm nm nm nm nm nm 15

16 Balance sheet (NOKm) e 2018e 2019e Assets 1,082 5,425 5,735 5,970 6,214 6,251 6,409 5,461 4,842 4,471 Inventories 366 4,211 3,911 4,284 4,349 4,715 4,284 3,168 2,349 1,772 Current financial assets Cash and cash equivalents ,051 1,247 1,449 Current assets 456 4,726 4,958 5,213 5,503 5,536 5,464 4,516 3,895 3,524 Property, plant and equipment Goodwill Investments in associates Non-current financial assets Non-current assets Total assets 1,082 5,425 5,735 5,970 6,214 6,251 6,409 5,461 4,842 4,471 Equity and liabilities 1,082 5,425 5,735 5,970 6,214 6,251 6,409 5,461 4,842 4,471 Total equity to the parent 322 1,306 2,072 2,237 2,443 2,542 2,690 2,855 3,052 3,254 Minority interests Total equity 322 1,312 2,147 2,260 2,457 2,551 2,699 2,864 3,061 3,263 Trade payables Other payables and accruals Short-term debt 628 1,263 1, Total current liabilities 675 1,678 1,914 1,336 1,711 1,545 1,485 1,349 1,280 1,291 Long-term debt 0 2,303 1,461 2,116 1,752 1,847 2,039 1, Deferred tax liabilities Pension liabilities Other non-current liabilities Total non-current liabilities 85 2,435 1,675 2,373 2,046 2,155 2,225 1, Total liabilities 760 4,112 3,588 3,710 3,757 3,700 3,709 2,596 1,780 1,208 Total equity and liabilities 1,082 5,425 5,735 5,970 6,214 6,251 6,409 5,461 4,842 4,471 Key metrics Net interest bearing debt 614 3,171 2,272 2,198 2,146 1,946 1, ,184 Invested capital 1,069 5,030 5,177 5,383 5,648 5,579 5,522 4,409 3,595 3,022 16

17 Valuation ratios (NOKm) e 2018e 2019e Enterprise value Share price (NOK) Number of shares (m) Market capitalisation 1,678 1,660 1,885 2,579 3,751 3,713 3,713 3,713 Net interest bearing debt 614 3,171 2,272 2,198 2,146 1,946 1, ,184 Adjustments to NIBD , Net interest bearing debt adj ,281 1,652 1,386 1,246 1, ,220 EV 3,951 3,858 4,031 4,524 5,438 4,263 3,317 2,529 EV adj 3,331 3,046 3,131 3,723 4,415 3,823 3,145 2,493 Valuation EPS EPS adj DPS P/E P/E adj P/NAV P/B Average ROE -6.0% -0.5% 16.1% 8.1% 10.9% 11.4% 11.3% 11.8% 12.8% 13.2% Earnings yield adj 16.1% 10.8% 14.3% 11.2% 7.5% 8.8% 10.2% 11.2% Dividend yield 0.0% 2.8% 6.0% 5.5% 4.0% 4.4% 5.6% 6.1% Free cash flow yield 27.5% 9.1% 9.6% 17.4% 29.3% 35.0% 30.3% 27.0% EV/SALES EV/SALES adj EV/EBITDA EV/EBITDA adj EV/EBIT EV/EBIT adj EV/capital employed EV/NOPLAT EV/OpFCF (taxed)

18 Key accounting ratios e 2018e 2019e Profitability (%) ROA ROCE ROCE after tax Return on invested capital (%) Net PPE/revenues Working capital/revenues Revenues/invested capital (pre-gw) Pre-tax ROIC (pre-goodwill) Pre-tax ROIC (incl. goodwill) After-tax ROIC (pre-goodwill) After-tax ROIC (incl. goodwill) Cash flow ratios (%) FCF/revenues FCF/market capitalisation CFO/revenues CFO/market capitalisation CFO/current liabilities Cash conversion ratio OpFCF margin Total payout ratio Leverage and solvency (x) Interest cover nm nm nm EBIT/interest payable EBITA adj/interest payable Cash coverage Net debt/ebitda Total debt/total capital (BV) LTD / (LTD + equity (MV)) Cash conversion cycle Inventory turnover days Credit period

19 Important Information Company: Selvaag Bolig Coverage by Analyst: Simen Mortensen Date: 15/02/2017 This report has been prepared by DNB Markets, a division of DNB Bank ASA. DNB Bank ASA is a part of the DNB Group. This report is based on information obtained from public sources that DNB Markets believes to be reliable but which DNB Markets has not independently verified, and DNB Markets makes no guarantee, representation or warranty as to its accuracy or completeness. This report does not, and does not attempt to, contain everything material which there is to be said about the Company. Any opinions expressed herein reflect DNB Markets judgement at the time the report was prepared and are subject to change without notice. The report is planned updated minimum every quarter. Recommendation structure and risk classification DNB Markets recommendations are based on absolute performance: Buy Hold Sell - indicates an expected return greater than 10% within 12 months - indicates an expected return between 0 and 10% within 12 months - indicates an expected negative return within 12 months The return-requirement bands above may be applied with some degree of flexibility depending on the liquidity and volatility characteristics of the individual share. High risk Medium risk Low risk - Volatility over 40 percent. - Volatility from 25 percent to 40 percent. - Volatility under 25 percent. Current 6 months volatility rates this security as LOW risk. Investing in any security is subject to substantial risk. Return on investment may vary greatly. Careful consideration for possible financial distress should be accounted for before investing in any security. Price targets are based on a combination of several valuation methods such as discounted cash flow, pricing based on earnings multiples, multiple on book value, net asset value and peer comparison. Substantial material sources for coverage of this company include historical financial figures and communication with the company, and relevant third party information. Recommendations and historical target prices below may not compile all recommendations by DNB Markets, for further information please contact DNB Markets. Price, Rating, and Price Target History Selvaag Bolig (SBO NO) as of B : B : B : H : H : Source: Factset Estimates (Prices) / DNB (ratings and target price) Conflict of interest DNB Markets/DNB Group may receive compensation for investment banking services or other products/services from Selvaag Bolig. Share positions in the company: Analyst* Employees** DNB*** Update Number of shares /02/2017 *The analyst or any close associates. **Share positions does not include administration and section FX/Treasury. ***Share positions as part of DNB Group. Holdings as part of DNB Markets investment services activity are not included. Recommendation distribution and corporate clients for the last 12 months Buy Hold Sell No rec Total Number % of total 40 % 35 % 20 % 4 % DNB Markets client 15 % 7 % 3 % 4 % 62 19

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The name and address of the agent for service of process for DNB Bank ASA (DNB Markets) and DNB Markets, Inc. in the local jurisdiction is: Alberta: Blake, Cassels & Graydon LLP, 855-2nd Street S.W., Suite 3500, Bankers Hall East Tower, Calgary, AB T2P 4J8. British Columbia: Blakes Vancouver Services Inc., 595 Burrard Street, P.O. Box 49314, Suite 2600, Three Bentall Centre, Vancouver, BC V7X 1L3. Manitoba: Aikins, MacAulay & Thorvaldson LLP, 30th Floor, Commodity Exchange Tower, 360 Main Street, Winnipeg, MB R3C 4G1. New Brunswick: Stewart McKelvey, Suite 1000, Brunswick House, 44 Chipman Hill, PO Box 7289, Station A, Saint John, NB E2L 2A9. Newfoundland and Labrador: Stewart McKelvey, Suite 1100, Cabot Place, 100 New Gower Street, P.O. Box 5038, St. John's, NL A1C 5V3. Nova Scotia: Stewart McKelvey, Purdy's Wharf Tower One, 1959 Upper Water Street, Suite 900, P.O. Box 997, Halifax, NS B3J 2X2. Northwest Territories: Gerald Stang, Suite 201, Street, Yellowknife, NT X1A 1P8. Nunavut: Field LLP, P.O. Box 1779, Building 1088C, Iqaluit, NU X0A 0H0. Ontario: Blakes Extra-Provincial Services Inc., Suite 4000, 199 Bay Street, Toronto, ON M5L 1A9. Prince Edward Island: Stewart McKelvey, 65 Grafton Street, Charlottetown, PE C1A 1K8. Québec: Services Blakes Québec Inc., 600 de Maisonneuve Boulevard Ouest, Suite 2200, Tour KPMG, Montréal, QC H3A 3J2. Saskatchewan: MacPherson, Leslie & Tyerman LLP, 1500 Continental Bank Building, 1874 Scarth Street, Regina, SK S4P 4E9. Yukon: Grant Macdonald, Macdonald & Company, Suite 200, Financial Plaza, 204 Lambert Street, Whitehorse, YK Y1A 3T2. In Brazil The analyst or any close associates do not hold nor do they have any direct/indirect involvement in the acquisition, sale, or intermediation of the securities discussed herein. Any financial interests, not disclosed above, that the analyst or any close associates holds in the issuer discussed in the report is limited to investment funds that do not mainly invest in the issuer or industry discussed in the report and the management of which these persons cannot influence. 20