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Tuesday 21 February, 2017

Nexity

Nexity : 2016 annual results

Nexity : 2016 annual results
2016 ANNUAL RESULTS
 
Paris, Tuesday 21 February 2017

 

 

NEXITY PERFORMS WELL IN 2016

  • Residential real estate reservations grow to a record 18,890 reservations, including 15,893[1] new home reservations in France (up 35% by volume and 29% by value)
  • Nexity's market share in Residential real estate up 1.4 percentage points to 12.7%
  • Commercial real estate order intake: €356 million
  • Development backlog: €4.0 billion (up 22%)
  • Revenue: €3.07 billion (up 0.5%)
  • Current operating profit target exceeded: €266 million (up 21% relative to 2015) and an operating margin of 8.7% (up 1.5 percentage points)
  • Free cash flow generated: €168 million
  • Net debt under control at €317 million (gearing[2]: 20%)

             

2017: GROWTH EXPECTED FOR ALL OF THE GROUP'S BUSINESS LINES

  • New client-centric organisation to prepare the ground to become a truly comprehensive real estate services provider[3] and launch a new 2018 - 2020 strategic plan
  • Growth in Nexity's new home reservations in a French market expected to be stable in 2017 (125,000 reservations), with Nexity growing its market share by around 1 percentage point 
  • Commercial real estate order intake in excess of €350 million in 2017
  • 2017 revenue growth of around 10%
  • Growth in current operating profit: €300 million in 2017, a year ahead of the business plan; €325 million in 2018
  • Dividend per share payable in 2017 and 2018 increased[4] to €2.40

             


Alain Dinin, Chairman and CEO of Nexity, commented:

"Nexity delivered an outstanding performance in 2016, meeting or exceeding all targets.

The new homes market grew strongly in 2016, with reservations set to total 125,000, close to an all-time high, thanks to low interest rates, effective demand stimulus mechanisms and a growing appetite for real estate among the French population. Nexity's growth significantly outpaced the market, allowing us to increase our market share to an unprecedented level (12.7% in 2016, compared with 11.3% in 2015). This was healthy growth, not driven by price inflation, and evenly spread across our client segments (homebuyers, private investors and institutional investors), all of which showed growth. Other real estate markets (existing homes, commercial real estate and urban planning) were also buoyant, with Nexity posting very strong commercial performance in these segments.

While 2017 has started off on a similarly favourable footing, the environment is more uncertain. Of greater concern than interest rate rises, which clients should be able to absorb if they are gradual and moderate, is the build-up of political risk, not only in France but also globally. At this stage, we expect the residential market to be stable relative to 2016 (125,000 reservations). In any event, thanks to our risk management policy and the flexibility of our operating model, we feel we are well prepared to confront any of the various scenarios that might arise.

Nexity's financial performance in 2016 was very satisfactory. Our revenue was stable: the contribution from new orders booked in 2015 and 2016 and acquisitions completed in 2016 will be deferred. Our current operating profit grew 21% to €266 million, with an improved contribution from all business lines, and service businesses pulling their weight. Cash generation was strong. Lastly, our backlog of €4.0 billion (up 22%) gives us good medium-term visibility.

We expect to deliver operating profit of at least €300 million in 2017, a year ahead of our business plan, followed by €325 million in 2018. Nexity is on a growth trajectory in terms of revenue, profit and shareholder returns.

However, over and above a continuous improvement in business line performance, Nexity is seeking to deliver a more far-reaching transformation in its business model to drive continued growth. On the strength of the leading positions it enjoys in its business segments, the Group is keen to become a truly comprehensive real estate services provider serving three client groups: Individuals, Businesses and Local Authorities. The new organisational structure I have put in place should deliver strong and measurable results in the near future."

***

At its meeting on Tuesday, 21 February 2017, chaired by Alain Dinin, Nexity's Board of Directors reviewed and approved the Group's consolidated financial statements for the financial year ended 31 December 2016. The Group's consolidated income statement and statement of financial position are included on pages 18 and 19 of this press release. Audit procedures have been performed. The audit report will be issued after the verification of the information presented in the Group's management report.

Nexity exceeds its targets[5]

  2016 actual  2016 guidance 
New home reservations in France (by volume)   +35.4%   > +15-20% *
Commercial real estate order intake   €356m   > €250m *
Revenue   €3.1bn   Stable at around €3bn *
Current operating profit   €266m   > €245m *

*: target exceeded

2016 business activity

Residential real estate

For 2016, the retail market for new homes in France is set to post its best performance since 2007. Net reservations in the full year should reach 125,000[6] (up 21% relative to 2015), thanks to the various stimulus measures currently in force up to the end of 2017, low interest rates and a return to the market of first-time buyers.

After bottoming out in November 2016 (at an average of 1.31%), mortgage rates increased slightly, reaching an average of 1.34% in December[7]. Nexity expects this gradual increase in rates to continue. The current low level of rates remains a significant driver of housing demand (rates averaged 1.62% in 2016, compared with 2.12% in 2015).

Reservations (units and €m) 2016 2015 % change
New homes in France   15,893 * 11,741   +35.4%
Subdivisions   2,518   2,202   +14.4%
International   479   292   +64.0%
Total reservations (number of units) 18,890 14,235 +32.7%
New homes in France   2,943 * 2,285   +28.8%
Subdivisions   197   166   +18.6%
International   79   42   +89.6%
Total reservations (€m incl. VAT) 3,218 2,493 +29.1%
* Of which 842 Edouard Denis reservations totalling €138 million including VAT.
  • New homes

In 2016, the Group booked 15,893 net new home reservations in France, up 35% by volume and 29% by value year on year[8]. Based on initial estimates of the French market (around 125,000 reservations6), Nexity's market share reached an all-time high of 12.7%, compared with 11.3% in 2015.

Expected revenue from reservations increased sharply, up 29% to €3,218 million including VAT. The increase in the volume of reservations was even sharper, however, as a result of mix effects, including in particular an 11% drop in the average price of bulk sales and a sharp increase in reservations for homes in serviced residences (up 58% relative to 2015) and regions with a reduced VAT rate (up 58% relative to 2015), where unit prices are lower.

In the fourth quarter of 2016, net new home reservations in France totalled 5,201 units, up 23% by volume and 21% by value relative to Q4 2015 (on a like-for-like basis: up 10% by volume and 9% by value); this slowdown in the growth rate was mainly driven by a high base effect in the fourth quarter of 2015.

Breakdown of new home reservations by client - France (number of units) - excluding Edouard Denis 2016  2015  % change
Homebuyers   3,716 25%   2,555 22%   +45.4%
o/w: - first-time buyers 2,84119% 1,91016% +48.7%
 - other homebuyers 8756% 6455% +35.7%
Individual investors   6,555 44%   5,046 43%   +29.9%
Professional landlords   4,780 32%   4,140 35%   +15.5%
Total new home reservations 15,051100% 11,741100% +28.2%

Reservations made by first-time buyers were up 49% relative to 2015, buoyed by urban areas with a reduced VAT rate and the new PTZ interest-free loan scheme, which entered into force on 1 January 2016.

Reservations by individual investors also increased sharply in 2016 (up 30% relative to 2015), driven not only by historically low interest rates and investor appetite for the security of real estate investment but also by the Pinel scheme, which retained its appeal. This trend is set to continue, with the scheme extended until the end of 2017.

Reservations made by professional landlords grew more slowly (up 15% relative to 2015), accounting for 32% of all new business (compared with 35% in 2015).

Average selling price & floor area* 2016 2015 % change
Average home price incl. VAT per sq.m (€)   3,834   3,843   -0.2%
Average floor area per home (sq.m)   55.7   55.7   0.0%
Average price incl. VAT per home (€k) 213.6 214.1 -0.2%
 * Excluding bulk reservations, reservations by Iselection, PERL and Edouard Denis, and international operations

Both average prices including VAT and average floor areas for homes reserved by Nexity's individual clients held steady over the course of the year.

Seeking to track the market recovery while remaining selective in its commitments, in 2016 Nexity launched a total of 13,976 units (8% more than in 2015)[9]. Unsold completed stock (103 units) as a proportion of the total supply for sale (5,661 units[10]) remained very low. The level of pre-selling booked at the start of construction work remained high, averaging 72% in 2016 (compared with 67% in 2015).

At end-December 2016, the business potential[11] for new homes was up 6% relative to end-2015 at 36,367 units, equating to 2.4 years' business (41,813 units including external growth transactions completed in 2016, equating to 2.6 years' business).


  • Subdivisions

Subdivision reservations totalled 2,518 units, up 14% relative to 2015, reflecting the upturn in the market for detached houses. The average price of net reservations made by individuals increased by 1.7% to €77.2k, while average subdivision size was relatively stable (down 0.8%) and the average price per square metre increased slightly (up 2.5%).

  • International

Nexity booked 479 international new home reservations in the year. There were 367 reservations in Poland (56% higher than in 2015). In Italy, developments were sold at a satisfactory pace (112 reservations) following the implementation of restructuring and risk reduction measures at the end of 2014.

Commercial real estate[12]

In 2016, €23.6 billion was invested in commercial real estate in France - still a high figure, albeit 8% lower than the €26 billion invested in 2015. Office space in the Paris region accounted for 74% of these volumes, including prime assets, which traded at an all-time low yield of 3.00%. The market for VEFA off-plan contracts for offices remained buoyant (at nearly €2.3 billion), down slightly relative to 2015 volumes but with strong growth in speculative deals, which accounted for 61% of transactions, as investors showed greater risk appetite and anticipated a shortage of high-quality supply in the rental market.

The rental market proved buoyant in the fourth quarter, with take-up in the Paris region totalling 679,000 sq.m, bringing take-up (volume of rental transactions and user sales) in the full year to 2.4 million sq.m, up 7% relative to 2015.

In the fourth quarter of 2016, Nexity booked new orders totalling €108 million, mainly thanks to the off-plan sale to the Yvelines region Caisse d'Allocations Familiales of a 6,700 sq.m property in Versailles (Yvelines) and the off-plan sale of hotel space (to a fund managed by Amundi Immobilier) in the Perisight building in Clichy (Hauts-de-Seine), which complemented the off-plan sale of the office space in that same building to a fund managed by LaSalle Investment Management in the third quarter.

Office space business outside the Paris region was very buoyant in 2016, particularly thanks to the wood-frame segment, which booked orders totalling €84 million, mainly outside the Paris region, including the off-plan sale of Block 12 of the Euratechnologies development to BNP Paribas REIM, representing a floor area of 6,000 sq.m in Lille. Thanks to its Ywood and Térénéo subsidiaries, Nexity is the French market leader in wood-frame properties, with a total of almost 40,000 sq.m delivered at 31 December 2016.

New orders in 2016 totalled €356 million excluding VAT, exceeding the full-year target of at least €250 million. The largest order in the year was the off-plan sale to Crédit Agricole Assurances of the Online building (totalling 18,000 sq.m) in Rueil-Malmaison (Hauts-de-Seine).

Lastly, in January 2017, Nexity signed an off-plan lease with the Île-de-France region for the Influence 2.0 building in the eco-district of Saint-Ouen (Seine-Saint-Denis), which will house the future regional council premises, with the Influence 1 building (previously sold by Nexity to an investor in 2014). The entire development represents a floor area of almost 57,000 sq.m.

Services

In Real estate services to companies, the floor area of units under management at end-December 2016 totalled 12.3 million sq.m, up 1% relative to end-2015.

In Real estate services to individuals, the portfolio under management at 31 December 2016 totalled 898,000 units, slightly down relative to end-December 2015[13] (-1.9%). The brokerage business was particularly buoyant, with the number of provisional sale agreements signed up 6% relative to 2015. Nexity Studéa, which specialises in managing student residences, saw its occupancy rate increase to 89.6% (compared with 87.3% at end-2015).

The digital transformation in real estate services to individuals continued, notably including the introduction of new customer service tools (paperless property inspections, private interactive client spaces, etc.) and the development of connected agencies and disruptive offerings such as E-gérance (the first fully digital rental management offering).

In Franchise operations, Century 21 and Guy Hoquet l'Immobilier signed 10% more provisional sale agreements than in 2015 in an exceptionally strong market for existing real estate in France[14]. After declining for several years, the number of franchised agencies picked up in the year (with 1,217 agencies at end-December 2015, compared with 1,206 at end-December 2015).

In 2016, Nexity strengthened its partnership with Aegide-Domitys, the market leader in non-medical senior serviced residences with an integrated business model (covering both property development and operation). At 31 December 2016, Nexity owned 45.16% of Aegide-Domitys, with an option to acquire full control by 2018.

Urban regeneration (Villes & Projets)

At end-December 2016, Nexity's urban regeneration business (Villes & Projets) had land development potential of 531,500 sq.m[15], with the notable addition to the portfolio of the Bordeaux Belvédère development, with a floor area of 70,000 sq.m. Furthermore, in the commercial real estate segment, work began on the iconic project to recreate the neighbourhood around the Versailles-Chantiers railway station (Yvelines), the second-busiest station in the Paris region.

Digital and Innovation

In line with its strategic plan, in 2016 Nexity continued to invest in innovative projects focused on digital transformation, including in particular the following:

  • Bien'ici - a next-generation property listings website in which Nexity has a 40% stake alongside a consortium of real estate professionals (Consortium des Professionnels de l'Immobilier) - continued to receive a growing number of membership requests from professionals wishing to place paid listings (with 5,800 member agencies at end-2016).
  • Nexity continued to develop a digital management tool for connected homes, newly rebranded Eugénie. Following delivery of the first smart homes as part of a real estate development in Paris in 2015, a further four pilot developments will be fitted out in 2017.
  • On 22 February 2017, Nexity's Commercial real estate division will unveil the Nexity Lab demonstrator at its head office in Paris.

Nexity continues to invest around €20 million a year in digital technology and innovation, split between in-house digitisation projects and investment in new services through direct investments (Blue Office, Bien'ici, E-gérance, etc.) or through partnerships with start-ups (SpiceSoft, Lucibel, etc.) and investment in venture capital funds.

Governance[16]

Nexity's strategy and long-term growth model are based on a unique combination of specialist real estate business lines. Having these different business lines within a single company enables us to become a truly comprehensive real estate services provider to spur growth by focusing on Nexity's three client groups: Individuals, Businesses and Local Authorities.

To align the Group's organisation with this configuration and get all of Nexity's staff (our Internal Clients) on board, Alain Dinin decided to change the governance structure by streamlining his senior management team into three Deputy Chief Executive Officers and a Deputy Managing Director, responsible for Internal Clients, Individual Clients, Business Clients and Local Authorities.


CONSOLIDATED 2016 RESULTS

Revenue

Nexity generated revenue of €3,073 million in 2016, stable relative to 2015 (up 0.5%).

€ millions 2016 2015 % change 
Residential real estate   2,267.4   2,161.7   +4.9%  
Commercial real estate   306.9   379.2   -19.1%  
Services   494.1   503.8   -1.9%  
Other activities   4.3   12.5   -65.7%  
Total Group revenue* 3,072.7 3,057.1 +0.5% 
 * Revenue generated by the Residential and Commercial divisions from VEFA off-plan sales and CPI development contracts is recognised using the percentage-of-completion method, i.e. on the basis of notarised sales and pro-rated to reflect the progress of incurred construction costs.  
 
 

Residential real estate revenue totalled €2,267 million, up 5% year on year. This growth was mainly driven by the contribution from Iselection and PERL, whose revenue (recognised in full at the point when a notarised deed is signed) comes in more quickly than for Nexity-branded property development business. Furthermore, given restatements in the opening balance sheet and remeasurements of assets and liabilities to fair value as part of the purchase price allocation (PPA), revenue generated in the year by Edouard Denis made no contribution to Nexity's consolidated revenue, in spite of being consolidated since 1 July 2016.

In line with Nexity's forecasts, Commercial real estate revenue was down 19% relative to 2015 at €307 million, reflecting the construction schedules of ongoing developments. In 2015, revenue was boosted by significant contributions from major developments delivered in late 2015 and early 2016 (such as Eco Campus in Châtillon and Le Nuovo in Clichy, both in Hauts-de-Seine).
  
The Services division generated revenue of €494 million, down 1.9% relative to 2015. Stable revenue from property management for individuals (down 0.7%) and higher revenue from franchise networks (up 8.3%) partly made up for lower revenue from real estate services to companies and Nexity Studéa (due to the non-renewal of leases on loss-making residences).

Revenue from Other activities (€4.3 million, compared with €13 million in 2015) included sales to third parties of development rights acquired through Villes & Projets.

In IFRS terms, revenue to end-December 2016 totalled €2,975 million, up 3% relative to consolidated revenue for the year ended 31 December 2015 (€2,876 million). This figure excludes revenue from joint ventures, in accordance with IFRS 11, which requires joint ventures to be accounted for via the equity method instead of proportionately consolidated as they were previously.


Current operating profit

Nexity generated current operating profit of €266 million in 2016, up 21% relative to 2015 (€220 million). The current operating margin increased by 1.5 percentage points to 8.7%.

€ millions 2016 2015 % change
Residential real estate   203.1   186.3   +9.0%
% of revenue 9.0% 8.6%  
Commercial real estate   57.1   39.0   +46.5%
% of revenue 18.6% 10.3%  
Services   44.8   35.4   +26.4%
% of revenue 9.1% 7.0%  
Other activities   (38.5)   (40.6)   ns
Current operating profit 266.5 220.1 +21.1%
% of revenue 8.7% 7.2%  

Current operating profit and profit margins increased in all Group divisions in 2016.

In Residential real estate, current operating profit grew 9% year on year (up €16.8 million), reflecting good progress on housing and subdivision development projects. The division's current operating margin increased by 0.4 percentage points, returning to its normative level of 9.0% (compared with 8.6% in 2015).

In Commercial real estate, current operating profit totalled €57 million in 2016, compared with €39 million in 2015 (up 46%). The division's current operating margin was very high (18.6%), higher than its normative level, reflecting sound financial and technical management of ongoing projects as well as reversals of provisions on delivered projects.

The Services division generated current operating profit of €45 million, compared with €35 million in 2015, resulting in a sharp rise in its current operating margin to 9.1% (compared with 7.0% in 2015).

Current operating profit from property management for individuals rose by 22% to €32 million, resulting in a 1.9 percentage point increase in the current operating margin to 10.4%, helped by the restructuring of Nexity's real estate services to individuals business and strong growth in the brokerage business. The profitability of real estate services to companies continued to be affected by the reorganisation of Nexity Conseil et Transaction. Nexity Studéa's profitability improved sharply as a result of the strategy of repositioning its portfolio of student residences. Very strong profitability in the franchise networks was mainly driven by increased revenue, improving the absorption of fixed costs.

The operating loss from Other activities (€39 million in 2016, compared with €41 million in 2015) includes profit/(loss) from the holding company, research and overhead costs incurred by Villes & Projets, the development of incubated start-ups and digital projects[17], and IFRS expenses on share-based payments.


EBITDA[18]

In 2016, Nexity generated total EBITDA of €305 million, compared with €260 million in 2015 (up 17%), giving an EBITDA margin of 9.9%, compared with 8.5% in 2015. The EBITDA margin rose in all business lines, notably in Commercial real estate (up from 10.2% to 18.5%) and Services (up from 9.2% to 11.2%). In Property management for individuals, it rose from 11.7% to 12.9%.

Net profit

€ millions 2016 2015 Change in €m
Revenue 3,072.7 3,057.1 15.5
         
EBITDA 304.7 259.8 44.9
% of revenue 9.9% 8.5%  
         
Current operating profit 266.5 220.1 46.4
Net financial income (expense)   (28.0)   (20.3)   (7.7)
Income taxes   (89.0)   (73.7)   (15.3)
Share of profit (loss) from equity-accounted investments   (7.2)   (0.5)   (6.6)
Net profit 142.3 125.6 16.8
Non-controlling interests   (3.2)   (2.0)   (1.2)
Net profit attributable to equity holders of the parent company 139.1 123.5 15.6

The net financial expense came in at €28.0 million, compared with €20.3 million in 2015, mainly due to the impact of expenses arising from the redemption of the 2014 OCEANE bonds (€4.8 million).

The tax expense (€89.0 million) increased by €15.3 million as a result of the higher profit figure: the effective tax rate held more or less steady at 37.3% (compared with 37.0% in 2015).

Equity-accounted investments made a €7.2 million negative contribution (compared with a €0.5 million loss in 2015). The main components of this item are the contributions from Bien'ici, equity-accounted since 1 January 2016, and Ægide-Domitys.

Net profit attributable to equity holders of the parent company came in at €139.1 million for the period, compared with €123.5 million in 2015 (up 13%).


Working Capital Requirement (WCR)

€ millions 31 Dec. 2016 31 Dec. 2015 Change in €m
Residential real estate   759   589   170
Commercial real estate   (3)   (10)   7
Services   (63)   (64)   1
Other activities   2   10   (7)
Total WCR excluding tax 695 525 170
Income taxes   (3)   8   (11)
Total WCR 692 533 159

Operating WCR at 31 December 2016 was €695 million, €170 million higher than in December 2015, largely due to acquisitions in the year in Residential real estate (€134 million).

Goodwill

Goodwill increased by €65 million in 2016, ending the year at €1,214 million (compared with €1,149 million at end-2015), as a result of acquisitions in Residential real estate (+€53 million) and Services (+€12 million).
           
Cash flows

€ millions 2016 2015
Cash flow from operating activities before financial and tax expenses   288.8   237.1
       
Cash flow from operating activities after financial and tax expenses   181.6   148.9
Change in operating working capital (excluding tax)   (27.8)   87.0
Changes in tax-related working capital, dividends from equity-accounted investments and other   37.1   4.2
Net cash flow from/(used in) operating activities 190.9 240.1
Net cash flow from/(used in) operating investments   (23.3)   (19.6)
Free cash flow 167.6 220.5
Net cash flow from/(used in) financial investments   (57.1)   0.3
Dividend paid by Nexity SA   (120.5)   (108.4)
Net cash flow from/(used in) financing activities, excluding dividends   (112.0)   41.1
Change in cash and cash equivalents (122.0) 153.5

Cash flow from operating activities before financial and tax expenses totalled €289 million, up €52 million relative to 2015 mainly as a result of the higher profit figure for the year.

Cash flows from operations decreased slightly to €191 million (compared with €240 million in 2015) due to an increase in the operating WCR (excluding changes in the scope of consolidation).

Operating investments, particularly in IT, increased to €23 million, compared with €20 million in 2015.

Nexity's free cash flow in 2016 was €168 million, compared with €221 million the previous year, comfortably exceeding the dividend payout.

Cash flows used in financial investments totalled €57 million as a result of external growth and partnerships formed during the year (excluding commitments to buy out minority interests and existing debt on external growth transactions).

Net cash used in financing activities (€112 million) mainly reflected proceeds from the issue of 2016 OCEANE bonds net of the redemption of the 2014 OCEANE bonds[19], buyouts of minority interests and net repayments of bank borrowing.

Financial structure

Nexity's consolidated equity (attributable to parent company shareholders) stood at €1,589 million at 31 December 2016, compared with €1,579 million at 31 December 2015, mainly after €120 million in dividends paid and net profit attributable to parent company shareholders of €139 million.

€ millions 31 Dec. 2016 31 Dec. 2015 Change in €m
Bond issues (incl. accrued interest and arrangement costs)   610.4   538.8   71.6
Loans and borrowings   374.9   350.2   24.7
Other financial borrowings and other financial receivables   7.7   11.7   (3.9)
Net cash and cash equivalents   (676.4)   (798.4)   122.0
Net debt 316.6 102.3 214.3

Net debt increased by €214 million, mainly as a result of external growth in the year (€214 million) and the net impact of refinancing the Group's OCEANE bonds (€31 million). Net cash flows from operations fully covered the increase in operating WCR, payment of the dividend and investments. At 31 December 2016, net debt equated to 20% of equity and around 1x EBITDA for the year.

At 31 December 2016, Nexity had authorisations from banks to borrow up to €1.030 million, including available facilities of €300 million on its corporate credit lines (undrawn). At 31 December 2016, the Group had drawn down €375 million of its authorised credit. At 31 December 2016, Nexity was in compliance with all of the financial covenants attached to its borrowings and credit lines.

Backlog - Order book at 31 December 2016

€ millions, excluding VAT   31 Dec. 2016   31 Dec. 2015   % change
Residential real estate - New homes *   3,227   2,573   +25.4%
Residential real estate - Subdivisions   237   233   +1.5%
Residential real estate backlog   3,464   2,806   +23.4%
Commercial real estate backlog   544   487   +11.7%
Total Group backlog   4,008   3,293   +21.7%
 * Including International, PERL, Iselection and Edouard Denis       

At end-December 2016, the Group's order book stood at €4,008 million, up 22% relative to end-2015 and equivalent to 19 months' revenue from Nexity's development activities[20].


Financial calendar and practical information

Q1 2017 revenue and business activity Tuesday, 25 April 2017
Shareholders' Meeting Thursday, 1 June 2017
2017 interim results

 
Tuesday, 25 July 2017

A conference call on the 2016 annual results will be held in English at 18:30 CET, accessible via the following numbers using code 4522703:

-  Calling from France +33 (0)1 76 77 22 57
-  Calling from Europe excluding France +44 (0)33 0336 9411
-  Calling from the USA +1 719 457 1036

The presentation accompanying this conference call will be available from the Group's website from 18:15 CET and may be viewed at the following address: http://edge.media-server.com/m/p/3pz6omzz

A recording of the conference call will be available at http://www.nexity.fr/immobilier/groupe/finance from the following day.

Disclaimer

______

 

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 business lines - real estate brokerage, management, design, development, planning, advisory and related services - are now 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 following indices: SBF 80, SBF 120, CAC Mid 60, CAC Mid & Small and CAC All Tradable
Ticker symbol: NXI - Reuters: NXI.PA - Bloomberg: NXI FP
ISIN: FR0010112524
______

 

CONTACT
Domitille Vielle - Head of Investor Relations / +33 (0)1 85 55 19 34 - [email protected]
Géraldine Bop - Deputy Head of Investor Relations / +33 (0)1 85 55 18 43 - [email protected]

Information, assumptions and estimates that the Company could reasonably use to determine its targets are subject to change or modification, notably due to economic, financial and competitive uncertainties. Furthermore, it is possible that some of the risks described in Section 4 of the Document de Référence filed with the AMF on 13 April 2016 under number D.16-0325 could have an impact on the Group's business and the Company's ability to achieve its objectives. Accordingly, the Company cannot give any assurance as to whether it will achieve its stated targets, and makes no commitment or undertaking to update or otherwise revise this information.


ANNEXES

QUARTERLY FIGURES
OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)

Reservations: Residential real estate division

  2016 2015 2014
  Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1
Number of units               
New homes (France)   5,201 3,624 4,121 2,947   4,237 2,368 2,949 2,187   3,653 2,175 2,722 1,815
- o/w Edouard Denis 547295            
Subdivisions   1,027 420 654 417   925 400 556 321   836 395 547 326
International   141 95 170 73   133 103 42 14   7 73 10 3
Total (number of units) 6,3694,1394,9453,437 5,2952,8713,5472,522 4,4962,6433,2792,144
Value (€m incl. VAT)               
New homes (France)   969 666 772 536   803 473 595 415   677 419 475 353
- o/w Edouard Denis 9048            
Subdivisions   87 30 48 32   69 29 45 23   63 29 42 29
International   21 17 28 13   19 15 6 2   2 10 1 -2
Total (€m incl. VAT) 1,076713848581 891516646440 742458518380

Revenue by division

  2016 2015 2014
€ millions Q4Q3Q2Q1 Q4Q3Q2Q1 Q4Q3Q2Q1
Residential real estate   809.9 475.4 549.3 432.8   809.3 460.3 531.5 360.5   672.4 425.2 394.4 340.7
Commercial real estate   117.5 60.6 61.3 67.6   74.2 102.8 116.5 85.7   104.6 58.2 49.4 55.4
Services   125.6 124.8 122.8 120.9   131.3 129.8 121.2 121.5   131.2 122.9 123.6 106.6
Other activities   0.9 0.6 2.1 0.7   1.3 1.2 9.0 1.0   1.4 1.4 42.5 1.9
GROUP 1,053.8661.4735.6621.9 1,016.0694.1778.2568.7 909.6607.7610.0504.6


CONSOLIDATED INCOME STATEMENT -
31 DECEMBER 2016


OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)

€ thousands 31/12/201631/12/2015
    
Revenue 3,072,6593,057,132
    
Purchases   (2,010,675) (2,085,724)
Personnel costs   (501,758) (476,160)
Other operating expenses   (238,275) (219,611)
Taxes (other than income tax)   (32,166) (30,807)
Depreciation, amortisation and impairment   (23,301) (24,731)
    
Current operating profit 266,484220,099
    
Operating profit  266,484220,099
    
Financial expense   (39,509) (30,631)
Financial income   11,498 10,334
    
Net financial income/(expense) (28,011)(20,297)
    
Recurring pre-tax profit 238,473199,802
    
Income taxes   (88,960) (73,693)
Share of net profit/(loss) from equity-accounted investments   (7,167) (547)
    
Net profit 142,346125,562
Net profit attributable to equity holders of the parent company 139,113123,521
Net profit attributable to non-controlling interests   3,233 2,041


CONSOLIDATED STATEMENT OF FINANCIAL POSITION-
31 DECEMBER 2016

OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)

ASSETS
€ thousands
 31/12/201631/12/2015
Non-current assets      
Goodwill   1,213,627 1,148,836
Other intangible assets   63,904 61,388
Property, plant and equipment   49,816 49,003
Equity-accounted investments   28,063 10,254
Other financial assets   40,981 40,256
Deferred tax assets   8,092 10,038
Total non-current assets 1,404,4831,319,775
Current assets      
Inventories and work in progress   1,618,141 1,431,023
Trade and other receivables   438,313 411,673
Tax receivable   5,868 8,598
Other current assets (1)   1,165,093 1,101,458
Other financial receivables   31,045 20,423
Cash and cash equivalents   697,616 837,111
Total current assets 3,956,0763,810,286
Total assets 5,360,5595,130,061
 (1)Of which client working capital accounts (Services) 673,152684,109
    
LIABILITIES AND EQUITY
€ thousands
 20162015
Equity      
Share capital   274,045 270,945
Additional paid-in capital   778,546 915,255
Treasury shares   - -
Reserves and retained earnings   397,568 269,376
Net profit for the period   139,113 123,521
Equity attributable to equity holders of the parent company 1,589,2721,579,097
Non-controlling interests   4,866 2,279
Total equity 1,594,1381,581,376
Non-current liabilities      
Long-term borrowings and financial debt   728,419 632,047
Employee benefits   29,553 28,541
Deferred tax liabilities   56,010 39,494
Total non-current liabilities 813,982700,082
Current liabilities      
Short-term borrowings, financial debt and operating liabilities (1)   316,831 327,790
Current provisions   99,987 101,137
Trade and other payables   887,074 772,375
Current tax liabilities   9,065 538
Other current liabilities (2)   1,639,482 1,646,763
Total current liabilities 2,952,4392,848,603
Total liabilities and equity 5,360,5595,130,061
 (1) Of which bank overdrafts 21,20738,723
 (2) Of which client working capital accounts (Services) 673,152684,109


EBITDA BY DIVISION

OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)

Nexity defines EBITDA as follows: current operating profit + depreciation and amortisation + provisions for liabilities and charges net of reversals + IFRS expenses on free shares + interest expense transferred from inventories. EBITDA is an alternative indicator of performance which is reconciled with current operating profit as follows.

  2016 2015  
€ millions Current operating profit Adjustments EBITDA Current operating profit Adjustments EBITDA % change in EBITDA
Residential real estate 203.1 7.1 210.2 186.3 3.0 189.3 +11.0%
% of revenue 9.0%   9.3% 8.6% 8.8%  
             
Commercial real estate 57.1 (0.3) 56.8 39.0 (0.2) 38.8 +46.6%
% of revenue 18.6%   18.5% 10.3% 10.2%  
             
Services 44.8 10.6 55.4 35.4 10.9 46.3 +19.5%
% of revenue 9.1%   11.2% 7.0% 9.2%  
             
Other activities (38.5) 20.9 (17.7) (40.6) 26.0 (14.6) N/A
             
GROUP 266.5 38.2 304.7 220.1 39.7 259.8 +17.3%
% of revenue 8.7% 9.9% 7.2% 8.5%  

HALF-YEAR FIGURES BY DIVISION

OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)

CURRENT OPERATING PROFIT

  2016 2015 2014
€ millions FYH2H1 FYH2H1 FYH2H1
Residential real estate   203.1 123.7 79.4   186.3 117.1 69.2   142.8 84.2 58.6
Commercial real estate   57.1 35.3 21.9   39.0 16.8 22.2   45.6 32.4 13.2
Services   44.8 29.4 15.4   35.4 23.3 12.1   26.7 15.7 11.0
Other activities   (38.5) (28.6) (9.9)   (40.6) (29.5) (11.1)   (31.4) (21.8) (9.6)
GROUP 266.5159.8106.7 220.1127.892.3 183.7110.573.2

EBITDA

  2016 2015 2014
€ millions FYH2H1 FYH2H1 FYH2H1
Residential real estate   210.2 131.7 78.4   189.3 121.2 68.1   152.4 90.4 62.0
Commercial real estate   56.8 33.9 22.9   38.8 20.3 18.5   41.2 31.0 10.1
Services   55.4 36.6 18.8   46.3 32.6 13.7   36.1 23.9 12.3
Other activities   (17.7) (16.8) (0.9)   (14.6) (13.4) (1.2)   (9.1) (8.0) (1.1)
GROUP 304.7185.4119.3 259.8160.699.2 220.7137.383.4


CONSOLIDATED INCOME STATEMENT -
31 DECEMBER 2016 (IFRS)

€ thousands 31/12/201631/12/2015
    
Revenue 2,975,4302,875,898
    
Purchases   (1,933,077) (1,926,265)
Personnel costs   (501,740) (476,139)
Other operating expenses   (236,791) (217,933)
Taxes (other than income tax)   (31,555) (29,916)
Depreciation, amortisation and impairment   (23,301) (25,003)
    
Current operating profit 248,966200,642
    
Operating profit  248,966200,642
    
Share of profit from equity-accounted investments   13,908 15,454
    
Operating profit after share of profit from equity-accounted investments 262,874216,096
    
Financial expense   (39,184) (30,489)
Financial income   11,687 10,552
    
Net financial income/(expense) (27,497)(19,937)
    
Recurring pre-tax profit 235,377196,159
    
Income taxes   (85,864) (70,050)
Share of net profit/(loss) from equity-accounted investments   (7,167) (547)
    
Net profit 142,346125,562
Net profit attributable to equity holders of the parent company 139,113123,521
Net profit attributable to non-controlling interests   3,233 2,041

CONSOLIDATED STATEMENT OF FINANCIAL POSITION -
31 DECEMBER 2016 (IFRS)

ASSETS
€ thousands
 31/12/201631/12/2015
Non-current assets      
Goodwill   1,213,627 1,148,836
Other intangible assets   63,904 61,388
Property, plant and equipment   49,816 49,003
Equity-accounted investments   46,597 30,527
Other financial assets   42,256 43,238
Deferred tax assets   7,330 7,907
Total non-current assets 1,423,5301,340,899
Current assets      
Inventories and work in progress   1,523,197 1,326,851
Trade and other receivables   435,156 385,618
Tax receivable   5,064 8,270
Other current assets   1,140,650 1,073,923
Other financial receivables   89,199 93,893
Cash and cash equivalents   631,823 744,267
Total current assets 3,825,0893,632,822
Total assets 5,248,6194,973,721
      
LIABILITIES AND EQUITY
€ thousands
 31/12/201631/12/2015
Equity      
Share capital   274,045 270,945
Additional paid-in capital   778,546 915,255
Treasury shares      
Reserves and retained earnings   397,568 269,377
Net profit for the period   139,113 123,521
Equity attributable to equity holders of the parent company 1,589,2721,579,098
Non-controlling interests   4,866 2,279
Total equity 1,594,1381,581,377
Non-current liabilities      
Long-term borrowings and financial debt   728,419 632,044
Employee benefits   29,553 28,541
Deferred tax liabilities   54,153 37,690
Total non-current liabilities 812,125698,275
Current liabilities      
Short-term borrowings, financial debt and operating liabilities   304,407 309,955
Current provisions   99,390 100,418
Trade and other payables   849,461 710,978
Current tax liabilities   8,550 339
Other current liabilities   1,580,548 1,572,379
Total current liabilities 2,842,3562,694,069
Total liabilities and equity 5,248,6194,973,721



[2] Gearing: net debt / equity

[3] See press release of 23 January 2017

[4] Compared with a dividend of €2.00 per share paid in 2015, €2.20 per share paid in 2016 and pending decision of Nexity's Board of Directors and approval at the Shareholders' Meeting

[5] Guidance issued in February 2016 and partly upgraded on 31 May, 21 July and 27 October 2016

[6] Source: Nexity in-house estimate based on the calculation method used in the ECLN survey

[7] Source: Observatoire Crédit Logement

[8] On a like-for-like basis: 15,051 reservations, up 28% by volume and 23% by value

[9] Excluding Edouard Denis

[10] 6,773 units taking into account external growth transactions completed in 2016 (Edouard Denis and Primosud)

[11] Business potential includes the Group's current supply for sale, its future supply corresponding to project phases not yet marketed on purchased land, and projects not yet launched associated with land secured under options

[12] Sources of market data: CBRE MarketView: Paris Region Office and France Investment - Q4 2016

[13] On a like-for-like basis (excluding external growth and sales of property management business), the churn rate came in at 2.9%

[14] Market estimated at 845,000 transactions, equating to growth of 5% (FNAIM 2016 overview - 26 January 2017)

[15] Floor areas are provided for information purposes only and may be subject to adjustment once administrative authorisations have been secured

[16] See press release of 23 January 2017

[17] In 2016, digital projects and other innovative activities at Nexity gave rise to an accounting expense of €18 million, of which €13 million was recognised in 'Other activities' and the rest was reported on a segment-by-segment basis in the income statements of the other divisions

[18] Nexity defines EBITDA as follows: current operating profit + depreciation and amortisation + provisions for liabilities and charges net of reversals + IFRS expenses on free shares + interest expense transferred from inventories. See the reconciliation with current operating profit in the annexes

[19] See press release of 10 May 2016

[20] Based on rolling 12-month revenue




This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Nexity via Globenewswire


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