Nexity: 9M 2022 Business activity and revenue

                                                                                Paris, France, 26 October 2022, 5.45 pm CEST

RESULTS IN LINE WITH OUR EXPECTATIONS
ANNUAL TARGETS CONFIRMED

Very strong efficiency of new dwelling activity in a market declining sharply

11,446 new dwelling reservations on the finish of September 2022: down 8% by quantity (vs. market lowering by 21%¹); and down 5% by worth

9M revenue: €2,954m (down 4%)

Stable revenue excluding the H1 2021 base impact in Commercial actual property

Continued sturdy progress in Services (up 9%)

Completion of the acquisition of the Angelotti group, the regional chief in city planning and residential improvement within the Occitanie area

Consolidation from 1 November 2022

Annual targets confirmed

• >14% market share in residential actual property in an anticipated market of 130,000 items²
• >4.6 billion in revenue and present working margin of round 8%

Strong visibility, safed future business: excessive backlog of €6.3bn, i.e. 2 years of improvement activity

Key figures at end-September 2022

* New scope excludes 2021 disposed actions, Century 21 consolidated till 31 March 2021 and Ægide-Domitys consolidated till 30 June 2021.

Véronique BEDAGUE, Chief Executive Officer commented

“In a difficult market environment, our position as a real estate leader, our size, the diversity of our products, particularly in managed real estate, and our territorial coverage allow us to outperform the market. Our Services activities continue to grow, driven by student residences and coworking. Revenue for the first nine months is in line with our expectations, our backlog secures future sales, and our potential gives us visibility. Nexity is confident in its ability to achieve its 2022 objectives. We are particularly vigilant in the current context about controlling our commitments and our debt.
In the medium term, Imagine 2026, our strategic plan, sets out a path of profitable and responsible growth by capitalising on the evolution of our business model towards that of a global real estate operator.”

RESIDENTIAL REAL ESTATE
The new dwelling market in France has been affected by the inflationary context noticed for the reason that starting of the yr, with new dwelling reservations down 21% within the first half of the yr in line with the FPI (down 17% for retail gross sales and down 38% for bulk gross sales).

Against this backdrop, Nexity’s business activity held up properly over the primary 9 months of the yr, with 11,446 reservations (down 8% by quantity in contrast with 9M 2021, down 5% by worth at €2.6bn). Sales costs per sq. metre stay on an upward development (up 2% for retail gross sales and up 6% for bulk gross sales in comparison with 9M 2021).

Business activity within the third quarter was contrasted by kind of consumer. While retail gross sales fell extra sharply (down 15% in 9M 2022 in contrast with -11% within the first six months of the yr) as a result of increased mortgage charges, Nexity’s privileged relationship with its institutional shoppers led to a pointy improve in bulk gross sales (up 11% in Q3 in contrast with -3% within the first six months of the yr). This momentum is predicted to proceed in This fall with a business technique of rebalancing in the direction of bulk gross sales. The Group additionally advantages from its differentiating experience in managed actual property, which responds to the evolution of its shoppers’ makes use of.

The provide on the market is step by step being rebuilt (up 14% to eight,180 heaps in contrast with 7,199 at 30 June 2022) because of the rise in constructing permits (up 26% vs. 9M 2021), although it stays at traditionally low ranges. There isn’t any accomplished properties within the provide on the market.

Revenue totalled €2,063 million within the first 9 months, down 3%, according to the development noticed for the reason that starting of the yr ensuing from the delayed new challenge building begins as a result of prudent administration of the inflationary context resulting in longer building contracts negotiation occasions.

In phrases of outlook, Nexity is sustaining its market share goal of over 14%. The Angelotti group, which is predicted to generate revenue of round €200 million in 2022, might be consolidated from 1 November 2022 and will subsequently make a small contribution to the Group’s 2022 outcomes. We will stay vigilant on the adequacy of latest manufacturing to market situations, taking into consideration expectations of rising property mortgage charges.

COMMERCIAL REAL ESTATE

At the top of September 2022, Nexity recorded order consumption of €108 million, a low level in a wait-and-see market.

Revenue for the primary 9 months amounted to €249 million, down 31% in contrast with the top of September 2021, which included the €124 million order consumption contribution for the Reiwa constructing in Saint-Ouen. Adjusted for this base impact, revenue was up 6%. Revenue within the third quarter was up 11% in comparison with Q3 2021 and stood at €89 million, contemplating the progress of operations below building.

The backlog (€827 million) and the business potential (€2.1 billion) give good visibility on future earnings prospects.

SERVICES 

Services revenue for the primary 9 months totalled €637 million, persevering with the sturdy progress noticed for the reason that starting of the yr (+9% in comparison with the top of September 2021), thus consolidating a sustainable business base. The improve is principally as a result of serviced properties business: scholar residences and significantly coworking actions.

• Property Management revenue was steady over the primary 9 months, with contrasting activity relying on the business line. The condominium and rental administration companies posted a web improve within the variety of items below administration over the interval, reflecting good business efficiency and improved buyer satisfaction. Transactions and rental administration are on the rise, which offsets the slowdown in rental actions reflecting the numerous discount within the rental provide. The present context of power sobriety has led to an acceleration of Nexity’s assist for its shoppers of their condominiums’ power renovation tasks (+40% improve within the variety of preliminary research).
• In Serviced properties, Studéa recorded a 12% improve in revenue in comparison with the top of September 2021. The success of the advertising and marketing marketing campaign for the 2022/2023 educational yr is mirrored in an occupancy price near 100% on the finish of September. Revenue from coworking actions elevated greater than twofold in comparison with 30 September 2021. This improve is defined by the continued wonderful occupancy price of mature areas and a quicker filling price of latest areas. This acceleration is the results of a broader consumer base (start-ups, scale-ups and giant firms) in a Paris market that’s under-supplied in comparison with different world capitals. A brand new flagship house opened within the coronary heart of Paris in Q3, Morning Lafitte (representing Morning’s largest house at c.9,500 sq.m and accommodating over 1,000 coworkers).
• Distribution revenue totalled €195 million, up +4% on the finish of September 2022, reflecting the great stage of transformation of reservations into notarial deeds. Business activity was down by solely 8%, reflecting a very good efficiency within the particular person buy-to-let market.

This good progress dynamic ought to proceed for the remainder of the yr.

IFRS CONSOLIDATED REVENUE

Under IFRS, reported revenue at finish of September 2022 was €2,724 million. It excludes revenue from joint ventures in utility of IFRS 11, which requires their recognition by fairness accounting of proportionally built-in joint ventures in operational reporting. IFRS reported revenue at 9M 2021 (€3,022 million) isn’t comparable because it included the revenue of the disposed actions in 2021 (Century21 and Ægide-Domitys) for €196 million. On a like-for-like foundation, lower was restricted at -4%.

As a reminder, revenue generated by the event companies from VEFA off-plan gross sales and CPI improvement contracts is recognised utilizing the percentage-of-completion methodology, i.e., based mostly on notarised gross sales and pro-rated to mirror the progress of all inventoriable prices.

OUTLOOK

Nexity confirms its 2022 full-year steering:

• >14% market share in 2022, in a brand new dwelling market anticipated at 130,000 items³
• >€4.6bn revenue and a present working margin round 8%

Nexity will proceed to intently monitor the present financial, social and well being scenario.

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FINANCIAL CALENDAR & PRACTICAL INFORMATIONS

A convention name might be held right now in French with a simultaneous translation into English at 6.30 p.m. (Paris Time), obtainable on the web site https://nexity.group/en/ within the Finance part and with the next numbers:

Code: Nexity en

The presentation accompanying this convention might be obtainable on the Group’s web site from 6:15 p.m. (Paris Time) and could also be considered on the following tackle: 9M 2022 Nexity webcast

The convention name might be obtainable on replay at https://nexity.group/en/finance from the next day.

Disclaimer: The data, assumptions and estimates that the Company may fairly use to find out its targets are topic to alter or modification, notably as a result of financial, monetary and aggressive uncertainties. Furthermore, it’s doable that among the dangers described in Section 2 of the Universal Registration Document filed with the AMF below quantity D.22-0248 on 6 April 2022, may have an effect on the Group’s operations and the Company’s means to attain its targets. Accordingly, the Company can’t give any assurance as as to whether it is going to obtain its said targets and makes no dedication or endeavor to replace or in any other case revise this data.

Contact:
Domitille Vielle – Head of Investor relations / +33 (0)6 03 86 05 02 – [email protected]
Géraldine Bop – Deputy Head of Investor relations / +33 (0)6 23 15 40 56 – [email protected]

ANNEX: OPERATIONAL REPORTING

Quarterly reservations – Residential Real Estate

Cumulated reservations – Residential Real Estate

Breakdown of latest dwelling reservations in France by consumer

Services

Quarterly figures – Revenue

* Disposed actions are consolidated till 31 Mars 2021 for Century 21 and till 30 June 2021 for Ægide-Domitys

Backlog

GLOSSARY

Business potential: The whole quantity of potential business at any given second, expressed as a variety of items and/or revenue excluding VAT, inside future tasks in Residential Real Estate Development (New properties, Subdivisions and International) in addition to Commercial Real Estate Development, validated by the Group’s Committee, in all structuring phases, together with the tasks of the Group’s city regeneration business (Villes & Projets); this business potential consists of the Group’s present provide on the market, its future provide (challenge phases not but marketed on bought land, and tasks not but launched related to land secured by choices)

Current working margin: present working revenue in comparison with revenue

Current working revenue: Includes all working revenue gadgets except for gadgets ensuing from uncommon, irregular and occasionally occurring transactions. In explicit, impairment of goodwill isn’t included in present working revenue

Development backlog (or order e-book): The Group’s already secured future revenue, expressed in euros, for its actual property improvement companies (Residential Real Estate Development and Commercial Real Estate Development). The backlog consists of reservations for which notarial deeds of sale haven’t but been signed and the portion of revenue remaining to be generated on items for which notarial deeds of sale have already been signed (portion remaining to be constructed)

EBITDA: Defined by Nexity as equal to present working revenue earlier than depreciation, amortization and impairment of non-current property, web adjustments in provisions, share-based fee bills and the switch from stock of borrowing prices immediately attributable to property developments, plus dividends acquired from equity-accounted investees whose operations are an extension of the Group’s business. Depreciation and amortization embody right-of-use property calculated in accordance with IFRS 16, along with the affect of neutralising inner margins on disposal of an asset by improvement firms, adopted by take-up of a lease by a Group firm.

EBITDA after lease funds: EBITDA web of bills recorded for lease funds which are restated to mirror the applying of IFRS 16 Leases

Free money stream: Cash generated by working actions after taking into consideration tax paid, monetary bills, reimbursement of lease liabilities, adjustments in WCR, dividends acquired from firms accounted for below the fairness methodology and web investments in working property

Joint ventures: Entities over whose actions the Group has joint management, established by contractual settlement. Most joint ventures are property developments (Residential Real Estate Development and Commercial Real Estate Development) undertaken with one other developer (co-developments)

Land financial institution: The quantity similar to acquired land improvement rights for tasks in France carried out earlier than acquiring a constructing allow or, in some circumstances, planning permissions

Net revenue earlier than non-recurring gadgets: Group share of web revenue restated for non-recurring gadgets resembling change in truthful worth changes in respect of the ORNANE bond situation and gadgets included in non-current working revenue (disposal of serious operations, any goodwill impairment losses, remeasurement of equity-accounted investments following the idea of management)

New scope: Scope of consolidation excluding the contribution of disposed actions (Century 21 and Ægide-Domitys) and capital good points. Disposed actions have been consolidated till 31 March 2021 for Century 21 and till 30 June 2021 for Ægide-Domitys.

Order consumption: Commercial Real Estate: The whole of promoting costs excluding VAT as said in definitive agreements for Commercial Real Estate Development tasks, expressed in euros for a given interval (notarial deeds of sale or improvement contracts).

Operational reporting: According to IFRS however with joint ventures proportionately consolidated. This presentation is utilized by administration because it higher displays the financial actuality of the Group’s business actions

Pipeline: sum of backlog and business potential; might be expressed in months or years of activity (because the backlog and the business potential) based mostly on the final 12 months revenue.

Property Management: Management of residential properties (leases, brokerage), frequent areas of house buildings (as managing agent on behalf of condominium house owners), business properties, and companies supplied to customers.

Reservations by worth: (or anticipated revenue from reservations) – Residential Real Estate: The web whole of promoting costs together with VAT as said in reservation agreements for improvement tasks, expressed in euros for a given interval, after deducting all reservations cancelled throughout the interval.

Revenue: revenue generated by the event companies from VEFA off-plan gross sales and CPI improvement contracts is recognised utilizing the percentage-of-completion methodology, i.e. on the premise of notarised gross sales and pro-rated to mirror the progress of all inventoriable prices.

Serviced properties: the Group’s business actions within the administration and operation of scholar residences in addition to versatile workspaces.

Time-to-market: provide on the market in comparison with reservations for the final 12 months, expressed in months, for brand spanking new dwelling reservations in France

1 Source: Q2 2022 new dwelling market printed on 15 September 2022 by FPI
2 Nexity estimate
3 Nexity estimate