SOLON EIENDOM ASA Q3 2017 Andreas Martinussen, CEO Scott Danielsen, CFO 9 November 2017
Agenda Highlights Operational update Financial update Market Summary
Highlights Q3 Real estate segment revenue increased to NOK 248 (198) million in Q3 2017 Segment EBITDA increased to NOK 47 (44) million in Q3 2017 All time high sale YTD 2017 with 149 (111) units and a sales value of NOK 1 277 (652) million Sold 99 % of expected completions in 2017 and 86 % in 2018
Key financials Q3 2017 Total sales value 185 NOK million Project margin 25 percent (incl. finance) EBITDA 47 NOK million EBITDA margin 19 percent
Operational update Q3 23 (38) units sold and 46 (56) units delivered Construction started on 94 units 305 (266) units under construction by end of quarter Sold 87 % of units under construction Total landbank acquisitions in Q3 2017 amounted to NOK 66 million
800 700 600 500 400 300 200 100 0 25,0 20,0 15,0 10,0 5,0 0,0 Total sales value and value per unit (NOK million) 685 407 323 230 6,1 9,2 7,0 10,1 8,0 185 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Value Total sales value pr unit
Sales per quarter (units) 168 125 146 149 23 18 38 62 17 9 2013 2014 2015 2016 2017 Q1 Q2 Q3 Q4
Expected completions per quarter (units) 86 49 30 units in Kolbotn Hage moved from Q2 to Q3 No deliveries planned in Q4 2018 29 30 Level of units under construction at a high level Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 0
Financial update
Real estate segment revenue and EBITDA (NGAAP, NOK million) 775 557 Project margin (incl. finance) remained stable at 25 % in Q3 2017 198 248 44 47 102 148 Increase in revenue due to increase in sales value of units under construction EBITDA margin in Q3 2017 19 % (22 %) Q3 2016 Q3 2017 9M 2016 9M 2017 Revenue EBITDA
Revenue and EBIT (IFRS, NOK million) 619 589 272 286 38 27 68 79 46 (56) units delivered in Q3 2017 Decrease in EBIT is mainly due to increase in accruals Q3 2016 Q3 2017 9M 2016 9M 2017 Revenue EBIT
NOK 2.8 billion in projects for sale Units for sale Value of units for sale (in NOK million) 349 2 762 For sale Sold Current projects under development consits of 349 units and a total sales value of NOK 2.8 billion 298 2 207 Sold 85% of the units and 80% of the total sales value As per Q3 2017
NOK 2.8 billion in projects for sale Number of units sold Value of units sold (in NOK million) 298 2 207 32 303 Awaiting construction Under construction 298 units sold of which 266 are under construction Sales value of NOK 2.2 billion locked in through sales contracts 266 1 904 Turn key construction contracts with fixed prices Good visibility on profits As per Q3 2017
Consolidated balance sheet (NOK thousand) 1 800 Non-current 1 600 1 400 1 200 Current liabilities Current assets consist mainly of construction in progress NOK 1 360 million 1 000 Current Cash of NOK 212 million 800 600 400 200 - Cash Assets Non-current liabilities Equity Equity and Liabilities Current liabilities consist mainly of interest bearing debt NOK 603 million and prepayment from customers NOK 162 million Equity ratio of 22 %
Interest bearing debt (NOK million) Land loans 554 Construction loans 446 Total interest bearing debt of NOK 1 000 million Net interest bearing debt of NOK 788 million NOK 50 million in undrawn line of credit
Market outlook
Market outlook Housing regulation has effectively reduced price pressure with regards to first time buyers and investors Media attention has impacted market psychology Macro economic fundementals are still positive We continue to expect demand for type of projects Solon delivers with High quality Unique architecture Attractive locations
Summary
Summary High visibility on 2017 and 2018 revenue and profitability with turnkey fixed price construction contracts Well positioned in the premium segment, targeting established buyers in attractive areas surrounding Oslo Confident that the unique qualities of these projects will secure solid sales Solid financial position and ready to capture attractive market opportunities when the time is right
Solon Eiendom ASA Org.nr. 966 033 967 Olav Vs gate 5, 0161 Oslo www.soloneiendom.no
Disclaimer This Document includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Document are based on current expectations, estimates and projections about economic conditions. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions changes in governmental regulations, interest rates and such other factors as may be discussed from time to time in the Document. Although Solon Eiendom ASA believes that its expectations and the Document are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Document. Solon Eiendom ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Document, and neither Solon Eiendom ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. The Solon group consists of many legally independent entities, constituting their own separate identities. Solon is used as the common brand or trade mark for most of this entities. In this document we may sometimes use Solon", "Group, "we" or "us" when we refer to Solon companies in general or where no useful purpose is served by identifying any particular Solon company.