2018 HALF-YEAR RESULTS

Transcription

1 2018 HALF-YEAR RESULTS WEBCAST 25 JULY 2018

2 Disclaimer The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. Neither the Company, nor its shareholders, nor their advisors or representatives, nor any other person shall have any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection with this document. This document does not constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase any securities, and this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in any jurisdiction. The information, assumptions and estimates that the Company could reasonably use to determine its targets are subject to change or modification due notably to economic, financial and competitive uncertainties. Furthermore, it is possible that some of the risks presented in Section 2 of the Registration Document filed with the AMF under number D on 5 April 2018, could have an impact on the Company s ability to achieve these objectives. Accordingly, the Company cannot give any assurance as to whether it will achieve the objectives described, and makes no commitment or undertaking to update or otherwise revise this information. No assurance is given as to the fairness, accuracy, completeness or correctness of the information or opinions contained in this document. Unless stated otherwise, the financial data and indicators presented are based on Nexity s operational reporting (under IFRS with joint ventures proportionately consolidated), and reflect the impact of two new reporting standards, IFRS 15, application of which is mandatory in periods beginning on or after 1 January 2018, and IFRS 16, mandatory in periods beginning on or after 1 January 2019, which the Group is applying early from 1 January figures has been restated with new standards (IFRS 15 and IFRS 16), and by reclassifyng the CVAE (French tax on value added by the business) as Corporate income tax, to improve its comparability. 2

3 Preliminary remarks > Application of new accounting standards since 1 January 2018 and presentation of financial information IFRS 15 (revenue): full retrospective method IFRS 16 (leases): early application starting 1 January 2018 using the simplified retrospective restatement method, with simulation of the impact on 2017 (excluding consolidated financial statements) Reclassification of CVAE as corporate income tax New client-centred segments, with 2 main divisions: Individual and Commercial Clients (restructuring of existing CGUs) > Accounting impact of Ægide-Domitys full consolidation Acquisition of an additional 18% stake in Ægide-Domitys, which entails its full consolidation from 1 July 2018: % of Ægide s capital Valuation Price paid for additional stake 18% 41m Minority interests repurchase agreements 37% 101m Remeasurement of the stake already acquired 45% 109m Incl. capital gain : + 79m Total (preliminary goodwill*) 100% 251m > Financing Issuance of a convertible bond (ORNANE) for 200m, coupon of 0.25% / year, maturity of 7 years, conversion rate of 68.91, recognition of 100% in fair value, impact of - 0.6m on the financial result of 30 June 2018 (debt valued at 200.6m) * Preliminary goodwill - opening balance sheet only as of 31 December 2018 (information not yet available) 3

4 H key figures NEW HOME RESERVATIONS IN FRANCE +6% In volume COMMERCIAL REAL ESTATE ORDER INTAKE 74m +10% In value 2018 Guidance * Continued growth in Nexity s market share in a French market expected to see slight contraction 400m REVENUE +10% 1.6bn Up ~10% Revised up: >12% EBITDA In % of revenue +7% -0.4 pt 186m 12.0% Up ~10% Revised up: >12% CURRENT OPERATING PROFIT In % of revenue +12% +0.1 pt 136m 8.7% * Guidance announced on 20 February 2018, and upward revision mostly due to Ægide-Domitys consolidation NET PROFIT BEFORE NON-RECURRING ITEMS +35% 72m DEVELOPMENT BACKLOG NET DEBT BEFORE IFRS 16 FUTURE LEASE LIABILITIES (IFRS 16) +7% 739m 281m 4.3bn Total net debt: 1.0bn 4

5 Q H June Market drivers INDIVIDUAL CLIENTS Residential Real Estate // A favourable interest-rate environment // Monthly Consumer confidence - synthetic index 5.07% 2.20% 1.51% 0.80% 1.44% 0.78% 108 Average: GDP growth trend of ~2% p.a Mortgage rates (average during the last month of the period) TEC 10 index (average 10-yield over the period) Sources: Observatoire Crédit Logement and Finance Active Source: INSEE data corrected for seasonal variations 5

6 May.16 May.17 Jan.18 May.18 May.16 May.17 Jan.18 May.18 Building permits and housing starts INDIVIDUAL CLIENTS Residential Real Estate BUILDING PERMITS (in units, 12 months rolling) +1.5% -1% HOUSING STARTS (in units, 12 months rolling) +6.2% -2% 483, , , ,209 Source: Commissariat Général au Développement Durable (CGDD) 6

7 New home reservation market in France (developers) INDIVIDUAL CLIENTS Residential Real Estate (in units) +22% 153,300 +8% 165, ,000/157, , , , , ,700 28,000/32, ,000/125, e Retail sales Bulk sales > ECLN retail sales for Q1 2018: -5% (30,000 reservations) Sources: Commissariat Général au Développement Durable basis) - New figures following the 2017 recast of the Enquête sur la commercialisation des logements neufs (ECLN, a French survey of new home sales) now called ECLN2 published in May Fédération des Promoteurs Immobiliers for bulk sales - Nexity s estimate for

8 Nexity new home reservations INDIVIDUAL CLIENTS Residential Real Estate VOLUME (in units) VALUE (in m incl. VAT) +2.0% +8.1% 56 6, , ,382 1,071 7, ,096 1,159 7,794 9, ,252 10, % Subdivision International New homes 8 1, , , , , ,924 1, , , % H H H H H H H H > In H1 2018, new home reservations in France are up 6% in volume and 10% in value compared to H

9 Nexity reservations: quarterly change INDIVIDUAL CLIENTS Residential Real Estate NEW HOME RESERVATIONS IN FRANCE (in units) +8% +3% 2,776 2,781 2,722 2,949 4,121 3,506 4,288 3,618 4,634 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q

10 Nexity key client segments performance INDIVIDUAL CLIENTS Residential Real Estate VOLUME (in units) +6% 7,068 23% 7,794 25% +19% 8,252 28% Professional landlords (o/w 66% social landlords) 49% 48% -3% 44% Individual investors (o/w 68% Pinel) 7% 22% 7% 20% -21% +19% 5% 23% Other home buyers First-time buyers H H H

11 Nexity reservations in France by area INDIVIDUAL CLIENTS Residential Real Estate VOLUME (in units) VALUE (in m incl. VAT) +6% +10% 7,068 37% 7,794 39% +12% 8,252 41% Paris region 1,308 46% 1,513 45% +21% 1,666 49% 63% 61% +2% 59% Rest of France 54% 55% +1% 51% H H H H H H > Private clients (excluding bulk sales): +14% in Paris region, -6% for the rest of France, non supply-constrained areas, especially B2 zone, have suffered from the Pinel scheme elimination > Bulk sales: +6% in Paris region, +32% for the rest of France 11

12 Nexity new homes: price trends INDIVIDUAL CLIENTS Residential Real Estate AVERAGE PRICE (in thousand of euros, excl. Edouard Denis, Primosud, International and bulk sales) Paris region: +6.8% Paris region excl. Paris: +8.3% France: +5.0% Rest of France : +0.7% H H RETAIL SALES H H Change Average home price incl. VAT (sq.m.) 3,857 3, % Average surface area per home (sq.m.) % Average price incl. VAT per home ( k) % 12

13 Nexity new homes: supply for sale INDIVIDUAL CLIENTS Residential Real Estate CURENT SUPPLY FOR SALE (in units, excl. International) -3% 6,988 2% 52% 3,663 3,542 4,202 4,293 5,058 5,313 6,438 6,773 7,833 2% 23% 74% 8,651 2% 28% 70% 8,383 1% 27% 71% 46% H H New homes in project phase New homes under construction Completed new homes > Marketing period: 5.3 months in H (vs 5.6 in H1 2017) > Cautious approach on new home launches to maintain a stable supply for sale (7,277 units launched in H1 2018, down 30% compared to H1 2017) 13

14 Business potential for new homes INDIVIDUAL CLIENTS Residential Real Estate (in units, excl. International) 2.7 YEARS OF ACTIVITY +8% 47,560 41,813 43,616 34,453 46% 44% 51,498 43% 22,824 28% 19,057 21,285 23,143 23,941 23,100 24,832 72% 56% 54% 57% H H Paris region Rest of France 14

15 Real Estate Services to Individuals INDIVIDUAL CLIENTS Real Estate Services to Individuals PROPERTY MANAGEMENT TO INDIVIDUALS Units under management (in thousands of units) Condominium management Rental management * H churn rate on a like-for-like basis: -1.4% (-1.1% at end 2017) -1.1%* H SERVICED RESIDENCES Studéa (student residences): 124 residences at 30 June % of average occupancy rate at 30 June 2018 (vs 90.9% at end June 2017) Domitys (senior residences): 78 residences at 30 June % of average occupancy rate in H1 2018* * 98% of average occupancy rate in H for the 48 «cruising speed» residences (residences with an occupancy rate of 95% at 1 January 2018) FRANCHISES +3% > Change in number of agencies: 1,242 1,206 1,217 1,292 1, H Century 21 Guy Hoquet l Immobilier > Provisional sales agreements signed by franchised agencies are up 4% DISTRIBUTION ACTIVITIES - iselection and PERL (in units) 3, ,448 4, ,244 2,188 1, % 4, , H , ,937 H iselection PERL 15

16 Commercial real estate market COMMERCIAL CLIENTS Commercial Real Estate COMMERCIAL REAL ESTATE INVESTMENTS IN FRANCE (in billion) COMPARISON OF PRIME REAL ESTATE AND GOVERNMENT BOND YIELDS 30 10% 25 9% 8% 20 Average : 18.4 BN 7% 6% ~ H Q1 Q2 Q3 Q4 5% 4% 3% 2% 1% 0% H1 18 Class A logistics Paris CBD office space OAT TEC % 3.00% 0.67% > Offices off-plan sales: 1.4bn in H1 2018, vs 1.3bn in H > Take-up in Paris region: +15% year on year at 1.3 million sq.m in H (o/w 640,000 sq.m in Q2 2018) Sources: CBRE Marketview France Investissements and Bureaux Île-de-France Q

17 Commercial real estate market COMMERCIAL CLIENTS Commercial Real Estate OFFICE SPACE IN THE PARIS REGION: IMMEDIATELY AVAILABLE SUPPLY AND VACANCY RATES (in millions of sq.m) % < % H Vancancy rate New-build and refurbished Second-hand > The scarcity of good-quality supply in the market is prompting users to invest at an early stage in new-build projects Sources: Immostat, CBRE Marketview France Investissements and Bureaux Île-de-France Q

18 Commercial Real Estate: new order intake and backlog COMMERCIAL CLIENTS Commercial Real Estate ORDER INTAKE (in m) BACKLOG (in m) % Paris region H Rest of France target dec restated -208 H revenue +74 H order intake +1 Additional works and other adjustments June 2018 > 74m signed in H1 2018, including 12m of wood-frame offices and 12m by Nexity Contractant Général > Target of 400m over the year, boosted by 138m in additional orders booked between 1 and 25 July 2018 > Backlog is equivalent to 9 months revenue from development activities (Commercial Real Estate revenue basis, 12 months rolling period) 18

19 Business potential* for Commercial Real Estate COMMERCIAL CLIENTS Commercial Real Estate AT 31 DECEMBRE 2017 (in m) 3.9 YEARS OF ACTIVITY AT 30 JUNE 2018 (in m) 5.6 YEARS OF ACTIVITY 811 (52%) 1,551m 739 (48%) +53% 835 (35%) 2,379m 1,544 (65%) Paris region Rest of France > Major operation in La Garenne-Colombes (92) signed on 13 July 2018 (future eco-campus of Engie on a 9-hectares plot) * Corresponds to the total volume of potential business at any given moment, expressed as estimated revenue excluding VAT, within future projects validated by the Nexity s Investment Committee, under options or purchased land, in all structuring phases, including urban regeneration business (Villes & Projets). This business potential includes Nexity s current supply for sale as well as its future supply 19

20 La Garenne-Colombes (92) COMMERCIAL CLIENTS Commercial Real Estate Nexity / Engie : a financial, strategic and technological development partnership > Acquisition with Engie of a 9-hectares plot of PSA group industrial land in La Garenne-Colombes (92), and a further 2 hectares with RATP group > Conclusion of a technological partnership to develop with Engie an ambitious general interest urban project in terms of energy transition > Mixed programme of offices, housing, shops and a hotel, a new PSA branch, and community facilities > Creation of Engie s eco-business park for more than 120,000 sq.m 20

21 H Consolidated income statement in m H H restated Revenue 1, ,412.6 EBITDA % EBITDA / Revenue 12.0% 12.4% Current operating profit % Current operating profit / revenue 8.7% 8.6% Revaluation after acquisition of control of Ægide-Domitys Operating profit % operating profit / revenue 13.8% 8.6% Net financial income (expenses) (17.9) (19.5) Income taxes (44.3) (40.8) Share of profit / (loss) from equity-accounted investments (0.9) (5.1) Non-controlling interests (1.6) (1.9) Net profit attributable to equity holders of the parent company % +7% +12% X 2.8 In euros Basic earning per share* > 71.9m net profit before non-recurring items in H1 2018, vs 53.4m in H (+35%), i.e 1.28 per share* (vs 0.97 in H1 2017), up 32% * Based on average number of shares outstanding over the period 21

22 H Consolidated revenue (in m) +10.2% 1, , Other activities Commercial Clients +52% 1,253 1,315 Individual Clients +5% H restated Individual Clients Commercial Clients Other activities H > Revenue up 10% compared to H1 2017, growing for both Individual and Commercial Clients > Order intake in property development resulting in progressive revenue recognition over a period of about two years, in application of the percentage-of-completion method 22

23 H EBITDA EBITDA (in m and margin rate in %) EBITDA MARGIN RATE (in %) 175 (12.4%) 27 (16.9%) +6.7% + 11m 186 (12.0%) 38 (15.8%) 20.4% 18.0% 16.9% 15.8% 12.4% 12.0% 8.8% 9.2% 153 (12.2%) - 1m 151 (11.5%) -5 H restated Individual Clients Commercial Clients -3 H Other activities H restated Residential Real estate H H restated H Services to Individuals H restated H Commercial Clients H restated Group H Individual Clients EBITDA: current operating profit before depreciation. amortisation and impairment of fixed assets (including lease payments restated under IFRS 16), net changes in provisions. share-based payment expenses and the transfer from inventory of borrowing costs directly attributable to property developments, plus dividends received from equity-accounted investees whose operations are an extension of the Group s business 23

24 Reconciliation between H EBITDA and current operating profit (in m) m H EBITDA IFRS 16 amortisation Depreciation, amortisation and impairment of fixed assets Provision charges (-) / reversals (+) Share-based payments Borrowing costs directly attributable to property developments, transferred from inventory (IAS 23) H current operating profit > In H1 2018, 50m of «non-cash» expenses, including 31m of IFRS 16 amortisation (Studéa s automatically renewable leases and those with a term of less than 1 year reported as operating expenses) > Vs 54m in H1 2017, including 39m of IFRS 16 amortisation 24

25 H Current operating profit CURRENT OPERATING PROFIT (in m and margin rate in %) 12.5% CURRENT OPERATING MARGIN (in %) 15.0% 14.8% 121 (8.6%) 23 (15.0%) + 12m 136 (8.7%) 35 (14.8%) 7.8% 7.7% 10.7% 10.7% 8.6% 8.7% 109 (8.7%) + 3m 112 (8.5%) -11 H restated Individual Clients Commercial Clients -12 H Other activities H restated Residential Real Estate H H restated H Services to Individuals H restated H Commercial Clients H restated Group H Individual Clients Total operating profit reported: 215m (positive impact of 79m following the remeasurement of Ægide stake) 25

26 Balance sheet at 30 June 2018 (in m) Goodwills 1,474 1,669 Equity (incl. Non-controlling interests) Other assets Provisions WCR Net financial debt before IFRS 16 Leases IFRS 16 Total net debt: 1,020m ASSETS EQUITY AND LIABILITIES 26

27 H Change in goodwills* (in m) 1, , Commercial Clients 1,108 1,369 Individual Clients 31 decembre 2017 Acquisitions of individual property management firms Fully consolidation of Ægide-Domitys (preliminary) 30 June 2018 * After restructuration of existing CGUs for Individual and Commercial Clients 27

28 H Change in working capital requirement (in m) + 154m Commercial Clients Other activities (incl. income tax) Real estate services to individuals Individual Clients Residential real estate restated Individual Clients Residential real estate Individual Clients Services to individuals Commercial Clients Other activities (incl. income tax) > Individual Clients: Increase in Residential real estate WCR is in line with the growth in this segment, partly offset by lower WCR for Real estate services to individuals (limited supply for its distribution activities). The average level of pre-sales booked at the start of construction work remained very high at 75% > Commercial Clients: WCR increase due to higher weight of projects with less favourable client payment schedules > Other activities: WCR increase due to non-recurring cash flow mismatch H

29 H Change in net financial debt (before IFRS 16) (in m) - 396m Cash flow from Change in operating activities operating WCR before WCR, interest and tax Interest and tax payments Future lease payments due Dividend CAPEX Financial investments* Others H Buy back of minority interests * Including Ægide-Domitys consolidation for 142m 29

30 Financial debt schedule (before IFRS 16) at 30 June 2018 (in m) Drawn at 30/06/ (1) (2) 346 (3) (4) (5) ,230 Corporate borrowings Project-related loans > 48% of debt with maturity > 5 years ,517 > Average maturity: 3.8 years > Cost of financing (debt drawn down): 2.5% at 30 June 2018 (3.0% at 30 June 2017) (1) Including 135m of bonds issued in January 2013 (2) Including 25m of bonds issued in May 2014 (3) Including 146m of bonds issued in May 2014 (4) 270m of convertible bonds (incl. shareholders equity) issued in May 2016 (maturity date 1 January 2023) + 30m of bonds issued un June 2017 (5) 121m of bonds issued in June 2017 / 200m of convertible bonds issued in March

31 H Cash flow statement In m H H restated Cash flow from operating activities before financial and tax expenses Cash flow from operating activities after financial and tax expenses Change in operating WCR (excluding tax) (149) (9) Change in tax-related working capital, dividends from equity-accounted investments and other 6 (4) Net cash from / (used in) operating investments (15) (15) Free cash flow (36) 83 Net cash from / (used in) financial investments (51) (3) Future lease payments due restated under IFRS 16 (32) (41) Dividends paid by Nexity SA (140) (133) Net cash from / (used in) financing activities (excluding dividend) Change in cash and cash equivalent (57) (35) > Net cash used for financial investments amounting to 51.4m corresponds to external growth transactions (acquisition of an additional 18% stake in Ægide-Domitys and of several firms in property management for individuals > Net cash from financing activities corresponds to new borrowings ( 239m), mainly the proceeds of the ORNANE bond issue ( 200m) reduced by payments relating to commitments to acquire minority interests (- 34m) 31

32 Real estate development Backlog* at 30 June MONTHS REVENUE FROM DEVELOPMENT ACTIVITIES (in m, excl. VAT) +7% 3, ,355 3,283 3, , , , , ,702 2,869 2,834 2,806 3,464 3,243 3,526 3,924 Dec Dec Dec Dec Dec June 2017 restated Dec restated June 2018 Residential Real Estate Commercial Real Estate * Corresponds to the Group s order backlog in terms of forecast revenue and number of months of development activities 32

33 2018 Guidance Financial outlook revised up FINANCIAL PERFORMANCE >>>>>>>>>>>>>>>>> # Revenue and EBITDA now expected to grow by more than 12% (1) # Dividend per share increased: at least 2.50 payable in 2019 (2) Revised up INDIVIDUAL CLIENTS >>>>>>>>>>>>>>>>> # Continued growth in Nexity s market share, in a market that should see slight contraction while remaining at a high level (between 120,000 and 125,000 retail sales (2) expected in 2018) COMMERCIAL CLIENTS >>>>>>>>>>>>>>>>> # Commercial Real Estate order intake: 400 million (1) Compared to a growth of around 10% announced on 20 February 2018, upward revision mostly due to Ægide-Domitys consolidation (2) Pending the decision of Nexity s Board of Directors and approval of the Shareholders Meeting (3) New home reservation market in France published by ECLN 33

34 Our goals for FINANCIAL PERFORMANCE >>>>>>>>>>>>>>>>> # Compound annual growth in revenue and EBITDA of 10% # Dividend per share of at least 2.50 (1) over the period of the plan INDIVIDUAL CLIENTS >>>>>>>>>>>>>>>>> # Reservations for new homes in France: continued market share gains for Nexity (up 3 percentage points) in a stable market (160,000 reservations expected in 2021) (2) # Growth in the portfolio of units served by Nexity s individual property management business # Strong development in serviced residences COMMERCIAL CLIENTS >>>>>>>>>>>>>>>>> # Commercial Real Estate order intake: about 650 million on average per year over the period of the plan LOCAL AUTHORITY CLIENTS >>>>>>>>>>>>>>>>> # Reinforcement of our market position as the 1 st private town planner in France and increase in land bank investments (1) Pending the decision of Nexity s Board of Directors and approval of the Shareholders Meeting (2) From 14% to 17% based on a French new home market in 2021 at around 130,000 units (current estimate) 34

35 Appendix

36 Professional landlords BREAKDOWN OF RESERVATIONS TO PROFESSIONAL LANDLORDS (in units, excl. International) +19% 6,071 3,765 2, ,140 2, ,780 3, ,953 1, H , ,326 1, H Framework agreement signed in 2014 with SNI for 800 to 1,000 new homes per year New framework agreement signed in 2018 for 5,000 new homes during 3 years In early 2018, Action Logement via its subsidiary in li announced its intention to acquire 100,000 intermediate homes in France by 2025 Framework agreement for 5,000 new homes during 5 years Social housing Unregulated housing Intermediate housing (SNI, FLI...) non social > Decrease in social housing reservations: -2% compared to H > Increase in non social housing reservations: 2 times higher than H

37 H Change in equity (in m) 1, , Dec restated Net result before non-recurring items Non-recurring item : revaluation of Ægide-Domitys Dividend Share-based payment expenses Adjustment on put options granted to noncontrolling interests 30 June

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