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Wednesday 26 October, 2011

nexity

NEXITY: 9M 2011 Revenue and Business Activity







  Paris La Défense, Wednesday, October 26, 2011

9M 2011 Revenue and Business Activity


  * Residential: 8,010 net reservations for new homes in France, up 3% compared
    to the first nine months of 2010; 3% increase in value terms in Residential
    Division total reservations to €1,741 million including VAT

      * Commercial: €576 million excl. VAT order intake for the first nine
        months of the year
      * Backlog as of September 30: up 23% compared to December 31, 2010, at
        €3.4 billion, equivalent to 20 months' revenue from development
        activities[1]

  * Revenue for 9-month period ended September 30, 2011 (9M 2011): €1,773
    million, in line with the Group's full-year guidance


Full-year 2011 outlook
§        Residential: more than 10,000 reservations targeted, on the basis of an
expected total market of between 90,000 and 100,000 new homes

§         Commercial: order intake target of approximately €650 million
§         Consolidated revenue for 2011 expected to be around €2.6 billion
§          Current operating  margin target  of 8% for  2011, excluding expenses
related to the "Nexity Demain" project




Alain Dinin, Chairman and CEO of Nexity, commented:

"Against a backdrop of widespread concern about the economy, the Group saw 3%
growth in reservations of new homes in France in the first nine months of 2011,
and 6% in the third quarter alone. As Nexity enjoys a diversified client base,
the Group was able to offset the drop in sales to private investors with a
strong increase in sales to first-time buyers (up 34% in the third quarter),
while also more than doubling its sales to institutional investors. Encouraged
by these results, the Group reaffirms its full-year 2011 forecast of more than
10,000 reservations, in a French new home market now expected to total between
90,000 and 100,000 reservations for the year.

Even though it is still too early to make a firm prediction, the French new home
market is expected to decline further in 2012. Nevertheless, as Nexity works
across a wide range of customer segments, the Groups looks calmly upon the
upcoming revision of housing policies in France which will come in the wake of
the French presidential elections. As the housing crisis becomes more acute and
households continue to face financing difficulties, vigorous measures will need
to be introduced to spur new home construction. These measures will necessarily
involve professionals in the sector. As a leader in its business lines,
maintaining a solid financial structure and able to provide solutions for
private customers, institutional investors and local authorities, Nexity is well
positioned for continued success in this new environment."
                                     * * *

Revenue

In the first nine months of 2011, Nexity Group recorded revenue of €1,773
million, a 4% decline compared to the same period in 2010.

                             -----------   -----------   ------------
 € millions                    9M 2011       9M 2010       Change %
--------------------------   -----------   -----------   ------------
 Residential                   1,149.2       1,166.2            -1%

 Commercial                      255.1         287.4           -11%

 Services & Distribution         366.4         398.3            -8%

 Other activities                  1.8           2.9           -36%

 Total Group revenue*          1,772.6       1,854.9            -4%
--------------------------   -----------   -----------   ------------
* Revenue generated by the Residential (excluding Italy) and Commercial
divisions is calculated using the percentage-of-completion method, on the basis
of notarized sales pro-rated to reflect the progress of committed construction
costs.

The Residential division posted revenue of €1,149.2 million, compared to
€1,166.2 million in the first nine months of 2010. Revenue for new home
development activity in France declined by 2%, amounting to €1,031.6 million.
The subdivision business recorded revenue of €101.1 million, up 4% over the same
period in 2010.

·         In the Commercial division, revenue was down 11% compared to the first
nine months of 2010. As a result of the fire that broke out on March 17, 2011 at
the construction site of the Basalte office building in La Défense, recognition
of a portion of this project's revenue initially budgeted for the current year
will be carried forward to 2012. In addition, the major orders booked in the
first half of 2011 (in all totaling €576 million) have as yet made only a
marginal contribution to the Group's recognized revenue. Outside France, revenue
recorded in 2011 includes the proceeds from the sale of the third building in
the Viale Edison Business Center development near Milan.


·         Revenue posted by the Services business was €289.6 million,
representing a 9% decrease year on year. This negative growth results primarily
from changes in the scope of consolidation, with the drop in revenue entailed by
the disposal during the second quarter of the Citéa urban extended-stay
residence business (impact of about €20 million for the nine-month period), as
well as the effect of the decline in the number of units under management
recorded in 2010. At constant structure (i.e. excluding the sale of the Citéa
business), revenue fell by 3%.

The Distribution business posted revenue of €76.8 million, down 5% compared to
the first nine months of 2010, attributable to lower revenue recorded by
Iselection after the surge in the number of definitive sales agreements
concluded at year-end 2010.

[2]9M 2011 Business Activity

Residential division

The French new home market saw contrasting trends during the first nine months
of 2011. While sales to private investors clearly declined over the period,
before making a likely recovery in the last quarter given the reduction in tax
benefits associated with buy-to-let investments (under the Scellier scheme) due
to take effect in 2012, sales to first-time buyers are being buoyed by the new,
re-targeted zero-interest loan scheme known as the PTZ+ (for prêt à taux zéro
renforcé), which increases the borrowing capacity of these buyers in urban
areas. The PTZ+ is now playing a major role in this segment of the market, with
66% of Nexity's first-time buyers making use of this loan scheme in the first
nine months of 2011, compared to 55% who made use of the former PTZ in 2010. In
addition, mortgage rates seem to have stabilized. According to Crédit Logement,
average rates were near 3.9% (excluding insurance) in both September and June,
as against 3.3% in the fourth quarter of 2010.

As of September 30, 2011, net new home and subdivision reservations booked by
the Group rose by 1%, compared to the same period in 2010. They amounted to
9,870 units (including 114 promissory purchase agreements in Italy),
representing a total value of €1,741 million (including €45 million in Italy).
------------------------------------------------ --------- --------- -----------
New home and subdivision reservations - FRANCE
(units and €m)                                    9M 2011   9M 2010     Change %
------------------------------------------------ --------- --------- -----------
New homes (number of units)                         8,010     7,812          +3%

Subdivisions (number of units)                      1,746     1,822          -4%

Total new home and subdivision reservations
(number of units)                                   9,756     9,634           1%
------------------------------------------------ --------- --------- -----------
New home reservations (€m incl. VAT)                1,562     1,534          +2%

Subdivision reservations (€m incl. VAT)               134       133            -

Total new home and subdivision reservations
(€m incl. VAT)                                      1,696     1,667          +2%
------------------------------------------------ --------- --------- -----------
-                The number of new home reservations in France came to 8,010
units, up 3% compared to the first nine months of 2010. The first-time buyers
segment saw a significant trend reversal during the period, with reservations
declining 19% year on year in the first quarter of 2011, followed by stable
performance in the second quarter and a 34% rise in the third quarter, compared
to the same period in 2010. This development is attributable in particular to
the success of the PTZ+, which is increasingly being adopted by France's retail
banking networks. Sales to private investors represented 3,652 reservations in
the first nine months of 2011, down 17%. The third quarter also saw steady
growth in sales to institutional investors (776 units, up from 338 units in the
third quarter of 2010), offsetting the decline in the private investor segment.

--------------------------------------------------------------------------------
                                                                        Change %


Breakdown of new home reservations by
client - FRANCE                             9M 2011       9M 2010
--------------------------------------------------------------------------------
Home buyers (number of units)                 2,239  28%    2,158  28%       +4%

                  o/w: - first-time buyers    1,607  20%    1,618  21%       -1%

                       - other home buyers      632   8%      540   7%      +17%

Private investors (number of units)           3,652  46%    4,377  56%      -17%

Institutional investors (number of units)     2,119  26%    1,277  16%      +66%

Total new home reservations (number of
units)                                        8,010 100%    7,812 100%       +3%
--------------------------------------------------------------------------------
Excluding block sales to institutional investors and Iselection sales,[3] the
average price including VAT of homes sold was €230 thousand for an average floor
area of 59 sq.m. The high average price level observed is due in large part to
the 120 sales recorded in Paris during the first nine months of 2011, whose
average price was €759 thousand. In the French regions, the average price came
to €196 thousand.
--------------------------------------------   -----------   -----------






 Average sale price & surface area*              9M 2011       9M 2010
--------------------------------------------   -----------   -----------
 Average home price incl. VAT per sq.m (€)         3,873         3,574

 Average surface area per home (sq.m)               59.4          58.1

 Average price incl. VAT per home (€k)( )          230.2         207.6
--------------------------------------------   -----------   -----------
                        * excluding block sales and Iselection
Unsold completed stock held by the Group remains very low, amounting to 74 homes
as of September 30, 2011. In the first nine months of 2011, the level of pre-
commercialization recorded at the time construction work was launched remained
very high (73% on average).

The Group's available commercial offer increased in comparison with year-end
2010 thanks to the launches of 103 new developments, corresponding to 8,700
units, versus 7,300 units launched during the same period a year earlier. As of
September 30, 2011, the business potential for new homes of the Group's
Residential division[4] corresponded to the equivalent of 22,300 units,[5] up
from 19,600 units as of September 30, 2010.

Subdivision reservations totaled 1,746 units, down 4% compared to the first nine
months of 2010, despite a remarkable 27% year-on-year increase in the third
quarter. The elimination from January 2011 of the Pass-Foncier® scheme is having
a dampening effect on reservations. The average price of net reservations from
individuals was €78 thousand.

Commercial division

·         In the first nine months of 2011, transaction volumes in the French
commercial investment market came to €8.3 billion, up 30% compared to the same
period in 2010.[6] Three transactions in excess of €300 million each were
recorded in the third quarter. Nevertheless, liquidity is still focused on the
most secure assets, keeping prime yields at levels in the range of 4.5% to 6% in
Paris CBD. Take-up in the Paris region amounted to 2 million square meters (up
20% compared to the first nine months of 2010), owing to several exceptional
transactions. However, worsening economic conditions could cause postponements
in investment or take-up decisions in the coming months.

·         Total new orders booked by the Group remained unchanged compared to
the first six months of the year at €576 million. This record-setting amount
includes in particular the orders signed in connection with the paired projects
at Rue du Rocher / Rue de Vienne and the T8 complex in Paris, totaling €458
million for the Commercial division, Gecina's order for the C2 building in
Saint-Ouen, and the  sale of a 12,000 sq.m completed building in the Viale
Edison Business Center in Sesto San Giovanni near Milan. As of September
30, 2011, the Commercial division had an order backlog of €727 million,
providing strong visibility over the coming years. The Group reaffirms its full-
year 2011 order intake target of €650 million.

Services & Distribution division

In the Services business, there were a total of 684,000 units under condominium
management at the end of the period (including 47,000 units outside France),
representing a drop of 15,000 units over year-end 2010, but stable compared to
June 30, 2011. The new all-inclusive condominium management fee package launched
early in the year has met with genuine success among co-owners. In rental
management, the Group's portfolio numbered 198,000 units at the end of September
2011, down from 212,000 units as of December 31, 2010, due to the expected
expiration of one institutional investor's mandate corresponding to a portfolio
of more than 14,000 units. Since June 30, 2011, the portfolio of units under
rental management remained stable. In the area of commercial real estate, total
space under management amounted to 6.2 million square meters, compared to 6.6
million as of December 31, 2010.

Within the Distribution business, the number of agencies belonging to the
franchise networks operated by the Group increased during the period, with
1,358 agencies as of September 30, 2011, up from 1,343 agencies as of December
31, 2010. Transaction volumes in the market for existing properties have slumped
due to higher mortgage rates and the announced changes in the tax regime
applicable to capital gains on real estate. Purchase agreement volumes recorded
by franchise agencies in the Group's networks have thus declined by nearly 6%
compared to the first nine months of 2010. In line with the drop in interest
among private investors observed in the market, as a vendor of real estate
savings products on behalf of third-party real estate developers, Iselection's
activity was sharply lower in the period, following its exceptional performance
in 2010 (1,068 reservations, versus 1,631 reservations in the first nine months
of 2010).


Order backlog as of September 30, 2011

----------------------------- ---------------- ------------------------
€ millions (excluding VAT)     Sept. 30, 2011   Dec. 31, 2010  Change %
----------------------------- ---------------- ------------------------
New homes*                              2,372           2,098      +13%

Subdivisions                              264             246       +8%

Residential division backlog            2,636           2,344      +12%

Commercial division backlog               727             390      +86%

Total Group backlog                     3,363           2,734      +23%
----------------------------- ---------------- ------------------------
* including Italy

In the first nine months of 2011, the Group raised its backlog to a level
nearing its best prior performance. Surging 23% compared to its level as of
December 31, 2010, Nexity's total order backlog represented 20 months of revenue
from real estate development activities as of September 30, 2011.[vii] The
substantial rise over the nine-month period is attributable in large part to a
number of major orders signed by the Commercial division in the first half.
Full-year 2011 outlook

Given  its sales performance  in the first  nine months of  2011 and the Group's
assessment  of the consequences of  the fire that broke  out on the construction
site of the Basalte building, on the basis of information and analysis available
to  date to the Group,  the Group reaffirms the  following full-year outlook for
2011:



  * Residential: more than 10,000 reservations targeted, on the basis of an
    expected total market of between 90,000 and 100,000 new homes
  * Commercial: order intake target of approximately €650 million
  * Consolidated revenue for 2011 expected to be around €2.6 billion
  * Current operating margin target of 8% for 2011, excluding expenses related
    to the "Nexity Demain" project


                                      ***




Financial Calendar & Practical Information



 -         2011 Business Activity and Results   Tuesday, February 21, 2012


  * A conference call on revenue and business activity in 9M 2011 will be
    accessible in English at 3:00 p.m. CET on Thursday, October 27, 2011, by
    dialing the following numbers:

-         Dial-in number (France)       +33 (0)1 70 99 35 15 Access code: Nexity

-           Dial-in   number  (rest  of +44 (0)207 153 20 27 Access code: Nexity
Europe)

-            Dial-in   number   (United +1 480 629 9673      Access code: Nexity
States)
Playback  will be available  by phone after  the conference call  by dialing the
following number:
+44 (0)207 959 67 20 (Access code: 4481532#)
The presentation accompanying this conference can be accessed at the following
address:


http://www.media-server.com/m/p/96my9976

This presentation will be available on the Group's website starting at 9:00 a.m.
CET on October 27, 2011.
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.11-317 on April 18, 2011 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  press release is considered to be  a Quarterly Financial Report as defined
in the Transparency Directive transposed by the AMF.

About Nexity

A  fully integrated real  estate group in  France, Nexity uses its comprehensive
range  of sector-specific expertise to  serve the private individuals, companies
and  local authorities: property development (homes, land subdivisions, offices,
logistics  platforms,  hotels  and  other  businesses), real estate services for
private  individuals  and  companies,  franchise  networks, asset management and
urban  regeneration. Nexity can  today provide global  responses to the needs of
its customers all over the territory. Nexity is also present in Europe.


Nexity  is  listed  on  the  SRD  and  on  Euronext's Compartment A - ISIN code:
FR0010112524
Member  of the Indices:  SBF120, SBF80, CAC  Mid60, CAC Mid  & Small and CAC All
Tradable
Mnemo: NXI - Reuters: NXI.PA - Bloomberg: NXI FP


Nexity Contacts

 Financial analysts/Investors         Press

 Olivier Seux  +33 (0)1 71 12 15 49   Blandine Castarède  +33 (0)1 71 12 15 52

 Investor Relations Director          Communications and Brand Director

 [email protected]          [email protected]





Appendices



Revenue by division

Residential

----------------   -----------   -----------   -------------------
 € millions          9M 2011       9M 2010               Change %
----------------   -----------   -----------   -------------------
 New homes           1,031.6       1,057.7                    -2%

 Subdivisions          101.1          97.7                    +4%

 International          16.5          10.8                   +53%

 Residential         1,149.2       1,166.2                    -1%
----------------   -----------   -----------   -------------------
Commercial

------------------------------------------- --------- --------- ----------------
€ millions                                   9M 2011   9M 2010          Change %
------------------------------------------- --------- --------- ----------------
Office buildings and hotels                    218.6     278.5              -22%

Logistics platforms and other business
premises                                        36.5       9.0              x 4

Commercial                                     255.1     287.5              -11%
------------------------------------------- --------- --------- ----------------
Services & Distribution

--------------------------   -----------   -----------   -----------
 € millions                    9M 2011       9M 2010       Change %
--------------------------   -----------   -----------   -----------
 Services                        289.6         317.7            -9%

 Distribution                     76.8          80.6            -5%

 Services & Distribution         366.4         398.3            -8%
--------------------------   -----------   -----------   -----------
Quarterly progression of revenue by division



------------------------ ------------------------- --------------------

                                   2010                    2011
                         ------------------------- --------------------
€ millions                 Q1    Q2    Q3    Q4      Q1      Q2    Q3
------------------------ ------------------------- --------------------
Residential               342.9 442.9 380.4 565.5   359.8 435.5 353.9

Commercial                 81.7 102.1 103.6  87.6    72.7 108.0  74.4

Services & Distribution   130.3 134.4 133.6 210.9   126.3 111.8 128.3

Other activities            1.0   0.9   1.1  28.3     0.5   0.5   0.8

Revenue                   555.9 680.3 618.7 892.3   559.3 655.8 557.4
------------------------ ------------------------- --------------------









--------------------------------------------------------------------------------

[1] Revenue basis - previous 12-month period.
[2]  Sales of new homes as an operator, excluding commercialization on behalf of
third parties.
[4] The business potential includes current supply for sale, future supply
corresponding to project tranches not yet commercialized on acquired land, and
supply not yet launched associated with land secured through options.
[5] Excluding Villes et Projets operations portfolio.
[6] Source: CBRE.
[7] Revenue basis - previous 12-month period.



Revenue 9M 2011: 


http://hugin.info/143515/R/1558187/481349.pdf




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[HUG#1558187]

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