4th Quarter 2010 presentation 15 February 2011 Lars Nilsen, CEO and Arnt Eriksen, CFO
Q4-2010 Highlights Group Strong and improved results Positive development in both segments Production ramp-up continues for the Swedish operation Operating revenues and results are increased. Operational EBITDA margin at 13.0% Strong financial situation Positive cash flow in spite of production growth Net interest-bearing debt further reduced The Board will propose a dividend of NOK 0.90 per share Market conditions Positive key drivers in Norway and Sweden Strong demand in the residential market Positive development in the professional market. Contracts with NCC and HSB PAGE 2
Financials
Operational key figures Q4-2010 and 2010: Based on operating results from the segments NOK million Q4-2010 Q4-2009 Y/Y 2010 2009 Operating revenues 858 657 30.6% 2 940 2 534 EBITDA 111 13.0% 85 12.9% 30.8% 369 12.6% 274 EBIT 107 12.5% 81 12.4% 32.0% 352 12.0% 250 Cash flow from operations after interest and tax 34 132 144 301 New orders 724 690 5.0% 3 182 2 882 Order backlog 1 809 1 471 23.0% 1 809 1 471 Number of employees 971 826 17.6% 971 826 Strong results and improved margins Increased number of employees and production capacity have given growth in turnover PAGE 4
Quarterly development: Revenues: +30.6% EBIT: +32.0% 1000 900 160 140 800 120 700 600 100 500 80 400 60 300 40 200 100 20 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2007 2008 2009 2010 Revenue Q4-2010: NOK 858 million. Revenue Q4-2009: NOK 657 million. 2007 2008 2009 2010 EBIT Q4-2010: NOK 107 million, 12.5% margin. EBIT Q4-2009: NOK 81 million, 12.4% margin. PAGE 5
Quarterly development: New orders: +5.0% 1000 900 800 700 600 500 400 300 200 100 0 1Q 2Q 3Q 4Q 2007 2008 2009 2010 New orders Q4-2010: 724 million. New orders Q4-2009: 690 million. Order backlog: NOK 1.8 billion 2500 2000 1500 1000 500 0 1Q 2Q 3Q 4Q 2007 2008 2009 2010 Order backlog Q4-2010: NOK 1 809 million. Order backlog Q4-2009: NOK 1 471 million. PAGE 6
Cash flow and Net interest-bearing debt NOK million Q4-2010 Q4-2009 2010 2009 Net cash flow from operating activities 34 132 144 301 Net cash flow from investing activities -5 1-22 32 Net cash flow from financing activities 31-148 -115-292 Change in cash in period 59-14 7 41 Net interest-bearing debt 1 347 1 483 1 347 1 483 Net cash flow from operations are positive in both segments in spite of volume growth. Reduced by NOK 99 million y/y due to lower activity levels in 2009 Net interest-bearing debt reduced by NOK 136 million y/y Ordinary and extraordinary instalments of NOK 135 million in total in 2010 Strong cash flow All covenants fulfilled for Q4-2010 PAGE 7
Balance sheet (IFRS) NOK million 31.12.10 30.09.10 31.12.09 Total non-current assets 2 600 2 598 2 480 Total inventory and land 1 670 1 574 1 612 Total receivables 135 195 129 Bank deposits and cash 110 50 102 Total current assets 1 914 1 820 1 843 Total assets 4 514 4 418 4 323 Total equity 1 879 1 804 1 654 Total provisions 212 214 225 Long term intererest-bearing debt 1 040 1 094 1 138 Short term intererest-bearing debt 442 361 470 Total current liabilities 941 944 837 Total equity and liablilities 4 514 4 418 4 323 Equity ratio 41.6% 40.8% 38.3% PAGE 8
IFRS key figures Q4-2010 and 2010 NOK million Q4-2010 Q4-2009 2010 2009 Operating revenues 877 601 2 783 2 496 EBITDA 124 14.1% 28 4.6% 284 10.2% 246 9.9% EBIT 120 13.7% 24 4.0% 267 9.6% 222 8.9% EBT 105-7 250 89 Earnings in the period 76 1 179 70 EPS (NOK) 0.77 0.01 1.82 0.75 PAGE 9
Share dividend for financial year 2010 The Group has strengthened its financial position considerably in 2009 and 2010 Operations are expected to yield good results for the coming years The Board will propose to the General Meeting to pay dividend of NOK 0.90 per share PAGE 10
The Norwegian operation
Norway: Q4-2010 Financials New orders down 6.7% on Q4-2009, but up 5.3% on 2009 Increasing order backlog, up 18.0% on Q4-2009 Improved profitability in operations and strong margins in Q4-2010 Increasing manpower and production capacity backed by sales and order backlog NOK million Q4-2010 Q4-2009 Y/Y 2010 2009 Operating revenues 439 393 11.9% 1 578 1 479 Gross profit 162 37.0% 139 35.4% 16.9% 534 33.9% 452 30.6% EBITDA 87 19.7% 72 18.4% 20.2% 276 17.5% 212 14.3% EBIT 86 19.6% 71 18.2% 20.5% 271 17.1% 205 13.9% Number of employees 554 474 16.9% 554 474 PAGE 12
Norway: Q4-2010 Highlights No 3 player in Norway Strong development in results and strong margins in the quarter Still low interest rates and available credit facilities for customers 32 unsold finished units by end of Q4-2010 Target approx. 15% increase in production staff through 2011 Ongoing improvement programmes to further streamlining the operations Focus on production efficiency, contracting of land and start-up of new housing projects PAGE 13
The Norwegian operation: Hetlandhus brand Nine highly standardized houses in the value for money segment, based on SmålandsVillan modules Eight of nine houses are certified for energy class B 50 houses contracted during 2010 15 houses to be delivered to the Norwegian builder chain Mestergruppen as Klart Hus www.hetlandhus.no PAGE 14
The Swedish operation
Sweden: Q4-2010 Financials New orders up 18.3% on Q4-2009, and 17.1% on 2009 Order backlog growth, up 26.3% on Q4-2009 Improved results, but pressure on margins due to ramp-up costs One-off costs of NOK 12 million in 2010; 0.7%-points on EBITDA-margin Volume growth improves the turnover, but increases costs and affects efficiency until the target capacity is reached NOK million Q4-2010 Q4-2009 Y/Y 2010 2009 Operating revenues 419 265 58.1% 1 363 1 057 Gross profit 105 25.2% 79 29.7% 34.1% 375 27.5% 299 28.2% EBITDA 31 7.4% 20 7.7% 51.4% 116 8.5% 85 8.1% EBIT 28 6.7% 18 6.7% 58.2% 104 7.6% 68 6.4% Number of employees 411 346 16.9% 411 346 PAGE 16
Sweden: Q4-2010 Highlights No 1 player in its segment. 11% market share Myresjöhus and SmålandsVillan combined Low interest rates and falling unemployment Improving sales for SmålandsVillan Order backlog growth 15 unsold finished units by end of Q4-2010 Ongoing improvement programmes for further utilization of the production capacity and increase efficiency Increased focus on contracting of land and development of housing projects PAGE 17
Outlook 2011
Technical demand -> undersupply Macro economy Population growth Technical demand (population growth/2.1 person per house) vs housing starts Boy meets girl Interest rates (inter-bank) Employment Replacements 2008 2009 2010 E2011 E2012 Norway Sweden Norway Sweden Norway Sweden Norway Sweden Norway Sweden Technical demand Housing starts Undersupply 29 500 35 000 28 000 40 100 28 000 38 800 28 600 36 700 28 700 33 800 20 000 21 800 19 700 16 800 23 000 22 000 28 000 24 500 30 000 28 000-9 500-13 200-8 300-23 300-5 000-16 800-600 -12 200-5 800 Sources: SSB, SCB, Prognosesenteret PAGE 19
Summary outlook 2011 Still undersupply of new homes both in Norway and Sweden Positive development in the professional market Key drivers look favourable for BWG products and operations The on-going improvement programmes are expected to yield positive effects in 2011 The market situation for affordable homes is positive PAGE 20
Welcome back 1st Quarter 2011: 12 May 2011 at 11:00 hrs PAGE 21
Appendix 1 Shareholder Information 10 largest shareholders per 14 February 2011 Share price development 2006 - Feb. 2011 SHAREHOLDER % TOTAL Lani Industrier AS 28.70% Rasmussengruppen AS 12.01% Lani Development AS 3.51% Vital Forsikring ASA 3.24% Staff-Gruppen 2.54% Skandinaviska Enskilda Banken 2.34% State Street Bank and Trust Co. 2.14% DnB NOR SMB VPF 2.11% MP Pensjon 2.04% DnB NOR Norge (IV) VPF 1.75% CEO Lars Nilsen owns 32.52% PAGE 22
Appendix 2 Riksbanken ser ingen bostadsbubbla Riksbankens hemliga bostadsutredning Riksbanken ser ingen bostadsbubbla eller något bubbelbeteende på den svenska bostadsmarknaden, enligt vice riksbankschefen Barbro Wickman-Parak. - Men detta är svår materia, man kan inte utesluta att det finns en viss övervärdering som kan bero på en viss överoptimism vad gäller den fortsatta ränteutvecklingen. Barbro Wickman-Parak sade att hushållens ökande upplåning är oroande. En upplåning som ökar med 8 procent per år, som i dag, är inte långsiktigt hållbar. - Vi har en skuldkvot som vi inte har sett någon motsvarighet till, sade hon. Norman pekade ut bostadsmarknaden, hushållens skuldsättning och bankernas expansion som tre oroande faktorer. Source: e24.se, 24.01.2011 Riksbankens bostadsutredning går i tryck senast nästa vecka. Rapporten innehåller fler regelförslag kring bolånen för att kväva bubbelrisker. Men den förblir hemlig fram till i vår. Just nu är osäkerheten stor kring den framtida spelplanen för bolåntagare. Bland de politiska förslagen för att dämpa skuldökningen finns amorteringskrav och minskade ränteavdrag. - Vid sidan av det redan införda bolånetaket kan Sverige enligt Ingves till exempel införa ett tak för hushållens skuldkvot, det vill säga skulderna i förhållande till inkomsterna, eller ett krav att räntebetalningarna ska vara fasta under en viss tid, sa Ingves. Source: di.se, 21.01.2011 PAGE 23
Appendix 3 Bostadsministern om bopriserna: "Det är något som inte fungerar" Bostadsbristen bort för 19 miljarder Gör det förmånligare att hyra ut delar av bostaden. Det är den nye ministern Stefan Attefalls snabba recept mot bostadsbristen. Men det måste också bli fart på byggandet. Det under många år låga byggandet i Sverige jämfört med andra länder betraktar han som osunt för prisutveckligen. Jag vill att vi skapar en attraktiv miljö för att bygga nya bostäder, så att vi får en större rörlighet på bostadsmarknaden. Då får vi lättare tillväxt i ekonomin för människor kan komma till jobben lättare, säger han utan att vilja sätta en siffra på ambitionerna. Source: di.se, 24.10.2010 Ny kalkyl från Statens Bostadskreditnämnd Det skulle kosta 19 miljarder kronor att bygga bort bostadsbristen i Sverige. 35 000 nya lägenheter per år behövs, 7 000 fler än vad som byggs. Beräkningen har gjorts av Statens Bostadskreditnämnd. I dag investeras totalt cirka 115 miljarder kronor per år i bostäder. Source: byggnyheter.se, 27.10.2010 PAGE 24
Appendix 4 - Skrikende behov for boliger Frykter ny boligboble -Vi er nødt til å ha betydelig økt aktivitet på nybyggsiden i 2011. Det må bygges 30.000-35.000 nye boliger de neste årene for å møte behovet, sier Christian Dreyer, leder i Norges Eiendomsmeglerforbund (NEF) til E24. - Urealistisk Partner i prognosesenteret, Bjørn-Erik Øye mener at selv om markedet trenger 35.000 nye boliger, er dette urealistisk å få til. Han mener etterslepet er en tung trend å snu. Dersom befolkningsveksten fortsetter vil Norge trenge 50.000 nye boliger i 2020. - Det paradoksale er at det ikke er nok byggeklare tomter til priskonkurranse, sier han og mener å ta tilstrekkelig areal byggeklart og at myndighetene må se på selvpålagte krav, som markagrensa, for å bedre situasjonen. Source: e24.no, 03.01.2011 Prognosesenteret, som lager markedsrapporten Boligmeteret for Eiendomsmegler 1-kjeden, anslår en vekst på syv prosent det kommende året. I bakgrunnen truer en mulig boligboble. Odd Nymark, administrerende direktør for Eiendomsmegler 1 Oslo og Akershus peker på at det over tid er bygget for få boliger for å møte etterspørselsøkningen, som kommer som følge av økt tilflytting til byene og økt innvandring til landet. -Det er for lite boliger i markedet, og etterspørselen kan bli så kraftig at prisene skyter i været. Source: dn.no, 30.12.2010 PAGE 25