Q1 2015 BUSINESS ACTIVITY
AND REVENUE[1] |
|
Paris,
Tuesday 28 April 2015 |
|
Robust business activity, especially in
new homes
-
Residential real estate: 2,234
net new home reservations in France, up 23% from Q1 2014.
Reservations up 20% by value at €425 million including
VAT
-
Commercial real estate:
€23 million in new orders in the quarter, full-year target
confirmed
-
Real estate services to
individuals: stable portfolio of units under management
-
Group backlog at end March:
€3.2 billion (18 months' revenue from development
activities[2])
-
Q1 revenue of
€569 million, up 13% from Q1 2014[3]
Outlook for 2015
confirmed
-
Residential: Nexity market
share to be maintained at around 12% in a French new homes market
estimated to grow slightly at 90,000-95,000 units
-
Commercial: order intake of at
least €200 million
-
Consolidated revenue target for
2015: around €2.75 billion
-
Current operating profit target
for 2015: around €200 million (up 10%), after €20 million annual
investment in innovation projects focused on digital
transformation
-
Confirmation of a dividend
payment of €2 per share in 2015 and 2016[4]
Alain Dinin, Chairman and CEO of
Nexity, commented:
"The most
striking feature of this year so far has been the ultra-low
interest rates implemented by monetary authorities and seemingly
set to last. Such low rates make real estate assets (both
commercial and residential) more attractive to investors. Under
these circumstances 2015 appears to be marking the start of a
recovery in France's housing market, which is encouraging after
four consecutive years of decline. Activity over the first few
months of the year has shown individual investors returning to the
market, triggering a significant jump in sales in a number of major
regional cities, while the Paris region remains sluggish and home
purchases stagnate - a sign that the real economy is cut off from
the optimism currently prevailing in financial circles.
With
institutional investors likely to step up their activities
throughout the year, 2015 looks set to be better than last year, in
line with Nexity's expectations (predicted volumes in the French
residential market of 90,000-95,000 in 2015, as compared with
85,800 in 2014).
On the supply
side, despite encouraging language from the public authorities,
considerable impediments remain. The permanence of heavy
constraints and obstacles to land development makes it impossible
to anticipate a rapid rise in new home construction at the level
required to satisfy demand.
Against this
backdrop, Nexity has delivered strong sales performance, with
reservations up more than 20% year on year. Our business
development nevertheless remains selective, with a cautious policy
on new launches and a focus on profitability. The Group's other
businesses are also performing in line with their sales
targets.
Nexity confirms
all the guidance given to the market at the beginning of the year,
and all our staff are working very hard in 2015 to improve the
Group's sales and financial performance as well as its innovation
strategy, for the benefit of our clients, partners and
shareholders."
***
Business activity in
Q1 2015
Residential real
estate
Mortgage rates continued to
decline in France, driven by a decrease in the cost of funds and
banks' desire to stimulate demand. The difference in interest rates
between year-end 2013 (3.08% on average in December 2013) and Q1
2015 (2.16% on average in March 2015)[5] equates to
a fall in new home prices of around 8%[6].
Reservations (units and €m) |
|
Q1 2015 |
|
Q1 2014 |
|
Change % |
New homes (France, number of units) |
|
2,234* |
|
1,815 |
|
+23.1% |
Subdivisions (number of units) |
|
321 |
|
326 |
|
-1.5% |
International (number of units) |
|
14 |
|
3 |
|
x4.7 |
Total reservations (number of
units) |
|
2,569 |
|
2,144 |
|
+19.8% |
New
homes (France, in €m incl. VAT) |
|
425** |
|
353 |
|
+20.4% |
Subdivisions (€m incl. VAT) |
|
23 |
|
29 |
|
-20.8% |
International (€m incl. VAT) |
|
2 |
|
-2 |
|
NA |
Total reservations (€m incl. VAT) |
|
450 |
|
380 |
|
+18.5% |
*including 184
net reservations for PERL
**of which €44 million generated by PERL
In the first quarter of 2015, the
Group recorded 2,234 net new home reservations in France, a 23%
year-on-year increase by volume, while in value terms the expected
revenue from those reservations was up 20% (€425 million including
VAT) on account of a larger proportion of reservations in the
French regions this year (65% as opposed to 53% in the first
quarter of 2014), where the average selling price is lower than in
and around the capital. On a like-for-like basis the net number of
new home reservations grew 13% by volume and 8% by value.
The first quarter stood out by
virtue of very significant growth in sales to individual investors
(up 72%)[7]. As Nexity
expected, this increase was driven by the introduction and strong
reception of the "Pinel" scheme, more favourable than its
predecessor. The impact of the change in tax regime was
particularly favourable to a number of regional markets that
crossed into different supply-constraint zoning brackets, enabling
an increase in the amount of rent investors could charge.
Despite competitive interest
rates, the number of home buyers decreased due to the still fragile
state of the French economy (no growth in incomes, high
unemployment). The situation was possibly aggravated in the Paris
region by the reform of PTZ interest-free lending.
Reservations by professional
landlords were up 3%. Pending the issue of building permits, no
reservations by SNI were recorded in the first quarter under the
preliminary agreement for 569 housing units.
Breakdown of new home reservations by client -
France (number of units) |
|
Q1 2015 |
|
|
Q1 2014 |
|
|
Change % |
Home
buyers |
|
592 |
27% |
|
642 |
35% |
|
-7.8% |
o/w: - first-time buyers |
|
471 |
21% |
|
498 |
27% |
|
-5.4% |
- other home buyers |
|
121 |
6% |
|
144 |
8% |
|
-16.0% |
Individual investors |
|
1,079 |
48% |
|
627 |
35% |
|
+72.1% |
Professional landlords |
|
563 |
25% |
|
546 |
30% |
|
+3.1% |
Total new home reservations |
|
2,234 |
100% |
|
1,815 |
100% |
|
+23.1% |
In Q1 2015, the average price
of residential units reserved by Nexity's individual
clients[8] was down
9.0% relative to Q1 2014, due to the geographic mix of sales
and to the customer mix (individual investors, who on average
purchase smaller units than owner-occupiers, were more widely
represented this quarter).
Average sale price & floor area* |
|
Q1 2015 |
|
Q1 2014 |
|
Change |
Average home price incl. VAT per sq.m (€) |
|
3,703 |
|
3,879 |
|
-4.6% |
Average floor area per home (sq.m) |
|
55.5 |
|
58.2 |
|
-4.6% |
Average price incl. VAT per home
(€k) |
|
205.7 |
|
226.0 |
|
-9.0% |
* excluding bulk sales,
Iselection and PERL
Nexity has continued its policy of
controlled commercial launches, with the number of units placed on
the market in the first quarter[9] stable at
1,155. The unsold completed stock of new residential units remained
very low (2%) and stable relative to the end of March 2014.
The average level of pre-selling recorded at the time construction
work was launched remains high (65% on average).
At end March 2015 the business
potential[10] for new
homes was up 12% from end March 2014, and up 6% from end December
2014, at 26,250 units.
Subdivision
reservations totalled 321 units, down 2% relative to the first
quarter of 2014, with the average price of net reservations from
individuals falling 4% to €78k due to a decrease in the average
price per square metre (down 1.2%) and the average unit size (down
2.6%).
Nexity recorded 14 international
new home reservations in the first quarter of 2015, of which 11 in
Poland and three in Italy. In Italy, Nexity's announced policy of
risk mitigation is being implemented.
Commercial real
estate
Transaction volumes in the French
commercial real estate market in the first quarter of 2015 totalled
€4.3 billion, up 10% relative to the first quarter of
2014[11], driven by
French and foreign investor appetite for real estate assets. In a
reflection of this trend, investors began showing renewed interest
in "speculative" VEFA off-plan arrangements in Paris and its inner
suburbs.
For the same period, space taken
up in the Paris region (372,500 sq.m) was down 27% relative to
the first quarter of 2014 and 33% below the average first quarter
volume for the past ten years11.
There was thus a visible
disconnect between investor demand and end-user demand, which could
raise questions for the real estate outlook in France if it
continues.
Nexity booked new orders totalling
€23 million in the first quarter of 2015. Given its portfolio
of projects at the advanced start-up or marketing phases, the
Group's target of achieving new orders of at least
€200 million in the year is confirmed.
Services and
Networks
In Real estate
services, the portfolio of units under management for
individuals (933,300 units at 31 March 2015) remained
stable relative to end December 2014.
In real estate services to
companies, the volume of units under management totalled
12 million sq.m at 31 March 2015, up 2.4% from end
2014.
In Networks,
the number of provisional sale agreements (compromis) recorded in the first quarter by
Century 21 and Guy Hoquet l'Immobilier was up 1% relative to
the same period a year earlier, despite a decrease in the number of
franchises (1,221 agencies at end March 2015 versus 1,265 at end
March 2014).
Urban
regeneration (Villes & Projets)
For end March 2015, at 557,800
sq.m[12], the land
development potential of Nexity's urban regeneration business
(Villes & Projets) remained nearly stable relative to
year-end 2014 (down 1%). No additions to the portfolio were
recorded in the first quarter.
Revenue
In the first quarter of 2015,
Nexity recorded revenue of €569 million,
up 13% relative to the first quarter of 2014. This €64 million
increase was mainly driven by the increase in revenue recognised by
the Commercial division (up €30 million from the first quarter of
last year) and by the acquisitions completed in 2014 (addition of
€29 million for Oralia and PERL).
€ millions |
|
Q1 2015 |
|
Q1 2014 |
|
Change % |
|
Residential real estate |
|
360.5 |
|
340.7 |
|
+5.8% |
|
Commercial real estate |
|
85.7 |
|
55.4 |
|
+54.7% |
|
Services & Networks |
|
121.5 |
|
106.6 |
|
+14.0% |
|
Other
activities |
|
1.0 |
|
1.9 |
|
-46.3% |
|
Total Group revenue* |
|
568.7 |
|
504.6 |
|
+12.7% |
|
* Revenue
generated by the Residential and Commercial divisions (through VEFA
off-plan sales and CPI development contracts) 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 €361 million, up 6% relative to the same
period in 2014. This increase reflects a favourable base effect
arising from the first quarter of 2014. PERL posted revenue of
€25 million in the quarter, of which only €13 million was
included in Nexity's revenue after accounting for restatements in
the opening statement of financial position and remeasurements of
assets and liabilities to fair value. Excluding changes in scope,
revenue for the division was up 2% (up 4% in France after
accounting for a €7 million decrease in international
revenue).
-
In Commercial real estate,
continuing the trend seen in the fourth quarter of 2014 of a
ramp-up in major developments initiated in 2013, including in
particular "Eco Campus" in Châtillon (Hauts-de-Seine) and "Le
Nuovo" in Clichy (Hauts-de-Seine), first quarter revenue was up 55%
at €86 million.
-
The Services and Networks
division recognised revenue of €121 million, up 14% relative
to the first quarter of 2014. This increase was driven by
additional revenue arising from the consolidation of Oralia
(€15 million). Excluding Oralia, revenue from Real estate
services to individuals was down 2.1%.
-
Revenue from Other
activities (€1 million) takes into account rents received
in connection with the Group's investment activities.
In IFRS terms, revenue for the
first quarter of the year was €528 million, up 16% relative to
consolidated revenue of €454 million to 31 March 2014.
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 before.
Backlog - Order book at
31 March 2015
€ millions, excluding VAT |
|
31 March 2015 |
|
31 Dec. 2014 |
|
Change % |
Residential real estate - New homes * |
|
2,608 |
|
2,591 |
|
+0.6% |
Residential real estate - Subdivisions |
|
235 |
|
243 |
|
-3.3% |
Residential real estate backlog |
|
2,843 |
|
2,834 |
|
+0.3% |
Commercial real estate backlog |
|
389 |
|
449 |
|
-13.3% |
Total Group backlog |
|
3,232 |
|
3,283 |
|
-1.6% |
* including
outside France
The Group's order book at end
March 2015 stood at €3.232 billion, slightly down relative to
end 2014 and equivalent to 18 months' revenue from Nexity's
development activities[13].
***
Financial calendar and practical
information
|
Tuesday, 19 May 2015 |
|
|
|
Monday, 25 May 2015 |
|
Wednesday, 27 May 2015 |
|
Thursday, 23 July 2015 |
A conference
call on the Group's revenue and business activity in
Q1 2015 will be held in English at 19:00 CET on Tuesday,
28 April 2015, accessible by dialling the following numbers
and using the code 1085986:
- Calling from France |
+ 33 (0) 1 76 77 22 20 |
- Calling from the rest of Europe |
+ 44 (0) 203 427 1900 |
- Calling from the USA |
+ 1 646 254 3367 |
The presentation referred to in the conference
call will be available via the Group's website from 18:45 CET,
and may be followed at the following address:
http://edge.media-server.com/m/p/b8opii96
A recording of the conference call
will be available from the next day at the following link:
http://www.nexity.fr/immobilier/groupe/finance/slides-show/webcast.
Disclaimer
The information,
assumptions and estimates that the Company could reasonably use to
determine its targets are subject to change or modification due
notably to economic, financial and competitive uncertainties.
Furthermore, it is possible that some of the risks described in
Section 4 of the Document de Référence, filed with the AMF under
number D.15-0297 on 8 April 2015, could have an impact on the
Group's operations and the Company's ability to achieve its
targets. Accordingly, the Company cannot give any assurance as to
whether it will achieve the targets 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.
______
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
Nexity is included in 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
Amélie Laroche-Truong - Head of Investor Relations / +33 (0)1
85 55 15 49 - investorrelations@nexity.fr |
APPENDICES
APPENDIX 1: RESERVATIONS BY
QUARTER[14]
|
|
2015 |
|
2014 |
|
2013 |
|
|
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
Number of units |
|
|
|
|
|
|
|
|
|
|
|
|
New homes |
|
2,234 |
|
3,653 |
2,175 |
2,722 |
1,815 |
|
3,581 |
2,099 |
2,781 |
1,660 |
of which PERL |
|
184 |
|
222 |
123 |
|
|
|
|
|
|
|
Subdivisions |
|
321 |
|
836 |
395 |
547 |
326 |
|
765 |
448 |
521 |
370 |
International |
|
14 |
|
7 |
73 |
10 |
3 |
|
19 |
26 |
41 |
11 |
Total (number of units) |
|
2,569 |
|
4,496 |
2,643 |
3,279 |
2,144 |
|
4,365 |
2,573 |
3,343 |
2,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Value, in €m incl. VAT |
|
|
|
|
|
|
|
|
|
|
|
|
New homes |
|
425 |
|
677 |
419 |
475 |
353 |
|
654 |
438 |
546 |
327 |
of which PERL |
|
44 |
|
58 |
29 |
|
|
|
|
|
|
|
Subdivisions |
|
23 |
|
63 |
29 |
42 |
29 |
|
64 |
39 |
40 |
27 |
International |
|
2 |
|
2 |
10 |
1 |
-2 |
|
2 |
7 |
12 |
5 |
Total (€m incl. VAT) |
|
450 |
|
742 |
458 |
518 |
380 |
|
720 |
484 |
598 |
359 |
APPENDIX 2: REVENUE[15]
Revenue by division
€ millions |
|
Q1 2015 |
|
Q1 2014 |
|
Change % |
New homes |
|
325.2 |
|
298.9 |
|
+8.8% |
Subdivisions |
|
25.5 |
|
24.9 |
|
+2.2% |
International |
|
9.8 |
|
16.9 |
|
-42.0% |
Residential real estate |
|
360.5 |
|
340.7 |
|
+5.8% |
|
|
|
|
|
|
|
Commercial real estate |
|
85.7 |
|
55.4 |
|
+54.7% |
|
|
|
|
|
|
|
Services |
|
113.6 |
|
99.2 |
|
+14.5% |
Networks |
|
7.9 |
|
7.4 |
|
+7.4% |
Services & Networks |
|
121.5 |
|
106.6 |
|
+14.0% |
|
|
|
|
|
|
|
Other
activities |
|
1.0 |
|
1.9 |
|
-46.3% |
|
|
|
|
|
|
|
GROUP |
|
568.7 |
|
504.6 |
|
+12.7% |
Quarterly progression of revenue
by division
|
|
2015 |
|
2014 |
|
2013 |
€ millions |
|
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
Residential real
estate |
|
360.5 |
|
672.4 |
425.2 |
394.4 |
340.7 |
|
636.2 |
391.8 |
440.0 |
364.1 |
Commercial real
estate |
|
85.7 |
|
104.6 |
58.2 |
49.4 |
55.4 |
|
97.5 |
111.4 |
130.5 |
114.0 |
Services &
Networks |
|
121.5 |
|
131.2 |
122.9 |
123.6 |
106.6 |
|
115.2 |
109.9 |
113.0 |
107.4 |
Other activities |
|
1.0 |
|
1.4 |
1.4 |
42.5 |
1.9 |
|
1.7 |
1.8 |
1.6 |
1.1 |
GROUP |
|
568.7 |
|
909.6 |
607.7 |
610.0 |
504.6 |
|
850.6 |
614.9 |
685.2 |
586.5 |
[1] The
financial data and indicators used in this press release are based
on Nexity's operational reporting, with joint ventures
proportionately consolidated
[2] Revenue
basis - previous 12-month period
[3] up 7%
excluding changes in scope: Oralia has been consolidated with
effect from 1 April 2014 and PERL with effect from 1 July
2014
[4] Pending
decision of Nexity's Board of Directors and approval at the General
Shareholders' Meeting
[5] Source:
Observatoire Crédit Logement - rates for new-build purchases
[6] All other
things being equal
[8] Excluding
bulk sales to professional landlords, and Iselection and PERL
sales
[9] Excluding
PERL and Iselection for all data relative to selling, supply for
sale and business potential
[10] Includes
the Group's current supply for sale, its future supply
corresponding to project phases not yet marketed on acquired land,
and projects not yet launched associated with land secured through
options.
[12] Floor
areas are provided for information purposes only and may be subject
to adjustment once administrative authorisations have been
obtained
[13] Revenue
basis - previous 12-month period
[14] Following
an error in the breakdown between Q3 and Q4 2014 of PERL
reservations in the 2014 annual results disclosure (press release
dated 17 February 2015), the "New homes" and "Total" number of
units lines have been corrected.
[15] According
to IFRS but with joint ventures proportionately consolidated
Q1 2015 revenue
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX 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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