Nexity: 9M 2013 Revenue and Business Activity 9M 2013 REVENUE AND BUSINESS ACTIVITY Paris La Défense, Tuesday, 29 October 2013 oRise of 2% in value of net new home reservations in France to €1.3billionincl.VAT over the first nine months of the year, for a volume of 6,540units (versus 7,139units at end_September2012) oAnnual target exceeded for order intake in Commercial real estate: €409million already recorded at end_September oBacklog up 7% at end-September compared to end-2012 (at €3.3 billion), equivalent to 16months' revenue from development activities^ oRevenue for the first nine months of the year totalling €1.9 billion, up 1.9% compared to the same period in 2012 Outlook for 2013 confirmed oResidential: around 9,000 net new home reservations in an expected market of between 70,000 and 75,000 units oCommercial: order intake of more than €400million (versus an initial target of €350 million) oConsolidated revenue for 2013 expected to exceed €2.6 billion oCurrent operating profit targeted for 2013 at over €180 million oBased on its outlook, the Company will consider proposing to its shareholders the renewal of a €2 per share dividend in 2014 Alain Dinin, Chairman and CEO of Nexity, commented: "Over the past year or so, France has taken quite a few steps to support the new homes market. These include the Duflot buy_to_let investment scheme, the enhanced 'PTZ+' interest_free loan, and a reduction in the VAT rate for social housing. In terms of urban planning laws and stimulus for new home starts, the latest legislation is definitely a move in the right direction, namely with regard to recent ordinances and certain provisions of the ALUR act. But that will probably not be enough, in the short term, to reverse the downward trend in construction starts. Further confirmation of this trend has just come from the decline in building permit requests (-16% over the twelve months to end_September). Unfortunately, based on the ongoing debate in France's parliament over such issues as the 2014 budget and ALUR act, it does not look as though any of the upcoming legislation will spur a significant short_term market rebound. The actual attractiveness of the new 'intermediate' social housing status for institutional investors is still hard to measure, and could fail to offset the ALUR act's damaging effects on residential real estate investment. We may have to wait until local elections are over in March 2014 before persistent market weakness drives the government to take more immediately effective action for recovery. It is no secret that our economy genuinely needs a healthier new homes market to help galvanize GDP growth, employment and tax receipts. Other countries such as the United Kingdom and the United States have shown us that economic recovery and a robust, dynamic real estate market go hand in hand. Nexity's confirmation of annual targets reflects resilience and a strong business model. We are adapting to changes in the legislation, while also continuing to analyse market opportunities such as buildable land and external growth. Via our process of constant innovation, we are pursuing the development of new offerings, products and market segments." *** Revenue Consolidated revenue for the first nine months of the year totalled €1,887 million (+1.9% compared to the first nine months of 2012)^. € millions 9M 2013 9M 2012 Change % Residential real estate 1,195.9 1,200.7 -0.4% Commercial real estate 355.9 313.2 +13.6% Services and Distribution Networks 330.3 332.7 -0.7% Other activities 4.5 4.3 +3.5% Total Group revenue* 1,886.6 1,851.1 +1.9% * Revenue generated by both the Residential (excluding Italy) and Commercial real estate divisions is calculated using the percentage-of-completion method, i.e. on the basis of notarised sales pro-rated to reflect the progress of committed construction costs. · Residential real estate revenue totalled €1,196 million, holding nearly steady (-0.4%) compared to the same period in 2012. The increase in international revenue (higher delivery volumes in Italy, where revenue is recognized on a completed contract basis) largely offset the decrease in revenue from new homes in France. · Commercial real estate revenue (€356 million) benefited from the high order intake recorded in 2011 and was up sharply in comparison with the first nine months of 2012 (+14%). It included substantial contributions from the Solstys (Rocher-Vienne) and T8 projects in Paris. The increased revenue recorded for the first nine months of the year is not representative of the revenue that will be recorded for the whole year. This is because a large number of projects, including the two mentioned above, will be delivered sometime during the fourth quarter of 2013 and will therefore not generate revenue over the entire quarter. · Revenue from Real estate services totalled €308 million, down 1% compared to the first nine months of 2012. Additional revenue from the consolidation of Icade Résidences Services in the first quarter of 2013 (whereas it was only consolidated as from Q2 in 2012) partially offset the absence of revenue from the services businesses in Germany sold in late 2012, as well as the revenue impact of erosion in the condominium management portfolio and a brokerage slowdown. 9M 2013 Business Activity Residential real estate In line with its expectations for the financial year as a whole, the Group recorded a 9% decline in net reservations for new homes and subdivisions in France and abroad over the first nine months of 2013, compared to the same period last year, with 7,957 units^ reserved. In value terms, net reservations for new homes and subdivision lots in France and abroad were down 2% to €1,441 million including VAT. After reaching a historic low in June (2.89% on average excluding insurance), mortgage rates have edged upward since July, reaching an average of 3.00% in September (source: Observatoire Crédit Logement). The increase has been meagre, with rates still particularly low in absolute terms. This is unlikely to change in the short term, based on the ECB's announcements about keeping interest rates low for an extended period of time, which should help the market considerably. But the new home market in France is still feeling the impact of the weakened economic environment (rise in unemployment, economic recession, increased tax burden, etc.) and its toll on consumer morale and purchasing power, as well as the fiscal and regulatory uncertainty (ALUR bill) that has hampered investment decision_making. In France, net reservations for new homes registered by the Group in the first nine months of the year were down 8% in volume terms but rose in value terms (+2%), essentially due to a sharp drop in the volume of bulk sales to professional landlords (-23%) compared to last year, and to the growing proportion of sales in the areas of tightest supply (45% in zones A and Abis, versus 40% over the first nine months of 2012), which also carried higher average prices. The first nine months of the year also saw fewer commercial launches (-18% by number of units compared to the same period one year earlier), especially in the first quarter, due to the need to redefine the schedule for certain operations and renegotiate certain land deals to best align with the requirements of the new Duflot buy-to-let investment scheme (published at the very end of 2012). Based on assumed project launch figures for the fourth quarter, the total number of launches over the whole financial year should match initial annual Group forecasts. New home and subdivision reservations - France (units and €m) 9M 2013 9M 2012 Change % New homes (number of units) 6,540 7,139 -8.4% Subdivisions (number of units) 1,339 1,382 -3.1% Total new home and subdivision reservations (number of units) 7,879 8,521 -7.5% New home reservations (€m incl. VAT) 1,311 1,285 +2.1% Subdivision reservations (€m incl. VAT) 106 107 -0.9% Total new home and subdivision reservations (€m 1,417 1,392 +1.8% incl. VAT) The drop in net new home reservations registered over the first nine months of the year was caused solely by a decrease in sales to professional landlords (-23%), while sales to individuals (home buyers and individual investors) remained stable overall (4,438 reservations at end-September 2013 versus 4,404 reservations at end-September 2012). The first half of 2012 had seen especially high sales to professional landlords, but it is possible that some of them have adopted a wait_and_see attitude this year, in anticipation of the new 2014 VAT rate on social housing. Breakdown of new home reservations by client - France (number of units) 9M 2013 9M 2012 Change % Home buyers 2,180 33% 1,946 27% +12.0% o/w: - first-time buyers 1,689 26% 1,507 21% +12.1% - other home buyers 491 7% 439 6% +11.8% Individual investors 2,258 35% 2,458 34% -8.1% Professional landlords 2,102 32% 2,735 38% -23.1% Total new home reservations 6,540 100% 7,139 100% -8.4% Excluding bulk sales to professional landlords and Iselection sales, the average price of homes sold in France rose by 4.2%, consistent with an increase in average floor area (+1.2%) and average price per square metre (+2.9%). This uptrend is mainly due to the geographic mix of sales. More sales occurred in the Paris region, where average prices are higher. Average sale price & floor area* - France 9M 2013 9M 2012 Change % Average home price incl. VAT per sq.m (€) 3,876 3,766 +2.9% Average floor area per home (sq.m) 57.5 56.8 +1.2% Average price incl. VAT per home (€k) 222.9 214.0 +4.2% * excluding bulk sales and Iselection For new residential developments in France, the average pre-sale rate recorded at the time construction work was launched remained very high (75% on average over the first nine months of the year), and unsold completed stock held by the Group remained very low (79 units versus 60 units at end_September 2012). The business potential^ of the Group's Residential real estate division for new homes in France shrank 5% compared to 30 September 2012, coming in at approximately 23,500 units. Subdivision reservations totalled 1,339 units, down 3% compared to the first nine months of 2012, while the average price of net reservations by private individuals climbed 3% to €78.6 thousand. The drop in volume was part of a general contraction affecting the detached houses market, the main driver for this business. According to Union des Maisons Françaises^, sales of detached houses were down 16% at end_July compared to the previous 12month period. The business potential for subdivisions rose 15% compared to end_September 2012, reaching close to 10,600 units. Commercial real estate · Transaction volumes in the French commercial investment market during the first nine months of 2013 reached €10.7 billion, a 15% year-on-year increase. As investors began expanding to a wider geographic area, the third quarter saw major deals in the area around Paris, such as Nexity's Éco Campus joint development in Châtillon. Over the year, investment volumes should total between €15 and €16 billion, as they did in 2011 and 2012 (source: CBRE). Business activity recorded at end_September mainly involved existing and rented properties. The market showed little appetite for unsecured (i.e. not partially or totally pre_let) projects involving either new or refurbished buildings. Over the first nine months of the year only one "speculative" (en blanc) VEFA off_plan project was sold (source: JonesLangLaSalle). With economic forecasts still gloomy and the market interested only in pre_let projects, which are more complex and time_consuming to put together, new_build volumes are not expected to pick up in 2014. · The weakened economic environment weighed on take-up in the Paris region, which totalled 1.3 million sq.m at end_September 2013, down 30% compared to the same period in 2012, particularly affecting transactions in excess of 5,000 sq.m. Over the year, take-up in the Paris region is expected to be even lower than the levels predicted in July, at around 1.8 million sq.m versus 2.4 million sq.m last year, i.e. a drop of roughly 25% (source: CBRE). · The Group has met and exceeded its annual order intake target of €350million, with €409million in new orders recorded over the first nine months of the year (including the ÉcoCampus project in Châtillon and the LeNuovo project in Clichy, both of which were totally or partially pre_let under firm-term leases). Major orders placed in the third quarter included the ÉcoCampus project and an office_building refurbishment in Paris' 8^th arrondissement on behalf of an institutional investor. Services and Distribution Networks In Real estate services, the portfolio of units under management for individuals amounted to 792,700 units at 30 September 2013 (a 2.9% attrition rate compared to end_December2012). This decrease mainly affected the condominium management business and was driven by the natural attrition rate, insufficiently offset by new appointments entering the portfolio. In real estate services to companies, total floor space under management amounted to 11.2 million sq.m at end_September 2013. The new management team is taking measures to enhance the business model to improve operating profitability. If the ALUR bill passes in its current form, certain provisions directed at the rental and condominium management professions will alter the economic landscape and require further changes to the business model. In Distribution Networks, the number of promissory sale agreements recorded in the first nine months of the year by Century21 and Guy Hoquet l'Immobilier was up 2.4% compared to the same period last year, while the market for existing property is expected to decline by 9% over the year, to 645,000 transactions (source: CréditFoncierImmobilier^). The number of franchised agencies totalled 1,281 at end_September 2013, compared to 1,325 at end_December 2012. Backlog - Order book at 30 September 2013 € millions (excluding VAT) 30 September 2013 31 December. 2012 Change % Residential real estate - New homes* 2,582 2,449 +5.4% Residential real estate - Subdivisions 267 266 +0.2% Residential real estate backlog 2,849 2,715 +4.9% Commercial real estate backlog 453 383 +18.3% Total Group backlog 3,302 3,098 +6.6% * including outside France and Iselection The Group's order backlog at end-September 2013 amounted to €3.3 billion, up 7% from year-end 2012 and equivalent to 16 months' revenue from Nexity development activities^. Order backlog in Residential real estate was €2.8 billion at end-September, i.e. a nearly 5% increase over end-December 2012. Outlook for 2013 oResidential real estate: around 9,000 net new home reservations in an expected market of between 70,000 and 75,000 units oCommercial real estate: order intake of more than €400 million (versus an initial target of €350million) oConsolidated revenue for 2013 expected to exceed €2.6 billion oCurrent operating profit targeted for 2013 at over €180 million oBased on its outlook, the Company will consider proposing to its shareholders the renewal of a €2 per share dividend in 2014 *** Financial Calendar & Practical Information 2013 Business activity and results: Tuesday, 18 February 2014 A conference call on 9M 2013 revenue and business activity will be accessible in English at 19:00 CET on Tuesday, 29October 2013, by dialling the following numbers: - Dial_in number (France) + 33 (0) 1 70 99 35 15 Access code: Nexity - Dial_in number (rest of + 44 (0) 207153 2027 Access code: Nexity Europe) - Dial_in number (United + 1 (0) 480 629 9822 Access code: Nexity States) Playback will be available by phone after the conference call by dialling the following number: +44 (0) 207 959 6720 (Access code: 4626021#) The presentation accompanying this conference can be accessed at the following address: http://www.media-server.com/m/p/rjha8q4r This presentation will be available on the Group's website starting at 19:00 CET on 29 October 2013. Disclaimer The information, assumptions and estimates that the Company could reasonably use to determine its objectives are subject to change or modification due notably to economic, financial and competitive uncertainties. Furthermore, it is possible that some of the risks described in chapter 4 of the Document de Référence, filed with the AMF under number D.13-0342 on 12 April 2013 could have an impact on the Group's activities and the Company's ability to achieve its 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. This release constitutes quarterly financial reporting within the meaning of the Transparency Directive as transposed by the AMF. ______ AT NEXITY, WE AIM TO SERVE ALL OUR CLIENTS AS THEIR REAL ESTATE NEEDS EVOLVE Nexity offers the widest range of advice and expertise, products, services and solutions for private individuals, companies and local authorities, so as to best meet the needs of our clients and respond to their concerns. Our businesses - transactions, management, development, urban regeneration, advisory and related services - are now all fully client focused, optimally organised to serve and support our clients. As the benchmark operator in our sector, we are resolutely committed to all of our clients, but also to the environment and society as a whole. Nexity is listed on the SRD and on Euronext's Compartment A Member of the indices SBF80, SBF120, CACMid60, CAC Mid & Small and CAC All Tradable Mnemo: NXI - Reuters: NXI.PA - Bloomberg: NXI FP ISIN code: FR0010112524 ______ CONTACTS Nexity: Amélie Laroche-Truong - Head of Investor Relations / +33 (0)1 71 12 15 49 - email@example.com Blandine Castarède- Director of communication and brand strategy/ + 33 (0)1 71 12 15 52- firstname.lastname@example.org APPENDIX Revenue by division residential real estate € millions 9M 2013 9M 2012 Change % New homes 1,039.3 1,088.3 -4.5% Subdivisions 87.1 83.2 +4.7% International 69.5 29.3 x2.4 Residential real estate 1,195.9 1,200.7 -0.4% commercial real estate € millions 9M 2013 9M 2012 Change % Commercial real estate 355.9 313.2 +13.6% Services and Distribution Networks € millions 9M 2013 9M 2012 Change % Services 307.7 309.9 -0.7% Distribution Networks 22.6 22.8 -0.9% Services and Distribution Networks 330.3 332.7 -0.7% Quarterly progression of revenue by division 2012 2013 € millions Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Residential real estate 396.8 399.2 404.7 654.7 364.1 440.0 391.8 Commercial real estate 81.8 105.2 126.2 204.3 114.0 130.5 111.4 Services and Distribution Networks 107.8 112.1 112.8 120.0 107.4 113.0 109.9 Other activities 1.4 1.2 1.7 1.3 1.1 1.6 1.8 Revenue 587.9 617.6 645.6 980.2 586.5 685.2 614.9 -------------------------  Revenue basis - previous 12-month period Iselection, previously attached to the Services and Distribution Networks division, was organisationally integrated into the Residential real estate division at the start of the year. The revenue data hereafter presented reflect this reclassification. Data for the 2012 financial year are also presented after this reclassification to facilitate comparison. This reclassification is without impact on the recognition of new home reservations.  Of which, 59 units in Italy and 19 units in Poland for €23 million, compared to 197 units reserved outside France (89 units in Italy and 108 units in Belgium) over the first nine months of 2012 for €84 million  Includes the Group's current supply for sale, its future supply corresponding to project stages not yet marketed on acquired land, and projects not yet launched associated with land secured through options  Press release dated 12 September 2013  Press release dated 15 October 2013  Revenue basis - previous 12-month period 9M 2013 Revenue and Business Activity ------------------------------------------------------------------------------ This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. Source: Nexity via Thomson Reuters ONE HUG#1738956
Nexity: 9M 2013 Revenue and Business Activity
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