| RESULTS FOR THE FIRST HALF OF 2017 |
| |
| Paris, Tuesday, 25 July 2017 |
ROBUST BUSINESS ACTIVITY
- 9,096 reservations in residential real estate, of which 7,794 new home reservations in France (up 10% by volume and 16% by value[1])
- Commercial real estate order intake: €77 million
- Development backlog: €4.2 billion (5% higher than at 31 December 2016)
STRONGER FINANCIAL PERFORMANCE
- Revenue: €1.46 billion (up 8% from H1 2016)
- Current operating profit: €124 million (up 16% from H1 2016); operating margin 8.5% (up 0.6 points from H1 2016)
- Net profit: €62 million (up 18% from H1 2016)
- Net debt: €416 million (gearing ratio[2] 27%)
OUTLOOK CONFIRMED
- Growth in Nexity's new home reservations in a French market expected to be stable in 2017 (126,300 reservations), with Nexity growing its market share by around 1 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 (up 13% from 2016) and €325 million in 2018
- Dividend per share stable at €2.40 in 2018[3]
Alain Dinin, Chairman and CEO of Nexity, commented:
'Between January and June 2017, Nexity registered a total of over 9,000 reservations in residential real estate (new homes in France, international developments and subdivisions), an unprecedented level for the first half of the year. Demand for new homes remains buoyant, supported by continuing very low interest rates, well-calibrated tax measures, and consumer confidence that is returning to high levels.
France got a new government a month ago. According to well-established tradition, at the beginning of each five-year presidential term of office, newly elected leaders review housing policy and consider making more or less significant changes to it. We trust that our leaders will remember the experiment conducted between 2012 and 2014, and its effects on jobs and growth, and that they will maintain - and if necessary adjust - policies that promote a balanced budget and benefit society as a whole if they are targeted at supply-constrained areas. Decisions have yet to be made, and Nexity, whose operating model is flexible and responsive and has proved its resilience, is ready for these changes. More fundamentally, elements of demographic growth in France imply medium- to long-term potential for French housing markets.
From a financial perspective, Nexity has seen revenue increase by 8% and current operating profit by 16% relative to the first half of 2016. All business lines posted strong performance, and services businesses continued on an improving trajectory. We confirm all guidance issued to the market at the start of the year. And the company as a whole is continuing its transformation into a truly comprehensive real estate services provider, with a structure firmly focused on its clients' concerns and expectations.'
***
At its meeting on 25 July 2017, chaired by Alain Dinin, Nexity's Board of Directors reviewed and approved the condensed Group's consolidated financial statements for the half-year period ended 30 June 2017, which can be found in the annexes of this press release. The 2017 half-year financial statements were subject to a limited review by the Statutory Auditors of the Company.
Business activity in H1 2017
Residential real estate
In the first half of 2017, the French retail market for new homes appeared to stabilise at a high level thanks to the range of support measures currently in force and continuing very low interest rates. The market was also helped by strong growth in the consumer confidence index.
Revised statistics from France's Commissariat Général au Développement Durable (General Commission on Sustainable Development) indicate that new home reservations reached a record high in 2016, at 126,300, in a French market where the medium-term trend for housing needs remains positive, particularly due to expected future growth in the French population and continuing urbanisation.
After hitting a low point in November 2016 (1.31% on average), mortgage rates started to rise again, reaching 1.57% on average in June 2017[4], thus returning to their level at the start of the summer in 2016, with financing terms for clients (for both new-build and existing properties) remaining very attractive throughout the period.
| Reservations (units and €m) | H1 2017 | H1 2016 | Change % | |||
| New homes (France) | 7,794 | 7,068 | +10.3% | |||
| o/w external growth* | 812 | |||||
| Subdivisions | 1,159 | 1,071 | +8.2% | |||
| International | 143 | 243 | -41.2% | |||
| Total reservations (number of units) | 9,096 | 8,382 | +8.5% | |||
| New homes (France) | 1,513 | 1,308 | +15.6% | |||
| o/w external growth* | 157 | |||||
| Subdivisions | 88 | 80 | +10.1% | |||
| International | 23 | 41 | -44.2% | |||
| Total reservations (€m incl. VAT) | 1,624 | 1,429 | +13.6% | |||
| * Edouard Denis has been consolidated since 1 July 2016 and Primosud since 31 December 2016. | ||||||
New homes
In the first half of 2017, net new home reservations in France totalled 7,794 units, up 10% compared to the first half of 2016. Expected revenue from reservations came to €1,513 million including VAT, 16% higher than in the first half of 2016. Growth in expected revenue from reservations outpaced growth in the volume of reservations over the period as a result of mix effects, in particular a higher proportion of non-social housing bulk sales (19% in H1 2017 versus 5% in H1 2016) and a slight increase in the sale price to individuals, especially outside the Paris region.
After adjusting to exclude external growth transactions, a total of 6,982 units were reserved in the first half of 2017, slightly lower than in the first half of 2016 (down 1%), mainly due to a high base effect. The corresponding expected revenue from reservations was €1,356 million including VAT, an increase of 4% compared to the first half of 2016. On a like-for-like basis over the two-year period since H1 2015, this increase was 36% in volume and 34% in value.
Steady progress continued to be made on integrating the businesses acquired through external growth transactions in 2016. Edouard Denis is expected to book at least 2,000 reservations in 2017. The Group has confirmed its target of growing its market share by 1 percentage point relative to 2016.
| Breakdown of new home reservations by client - France (number of units) On a like-for-like basis | H1 2017 | H1 2016 | ||||
| Homebuyers | 1,931 | 28% | 2,027 | 29% | ||
| o/w: - first-time buyers | 1,444 | 21% | 1,542 | 22% | ||
| - other homebuyers | 487 | 7% | 485 | 7% | ||
| Individual investors | 3,261 | 47% | 3,433 | 49% | ||
| Professional landlords | 1,790 | 26% | 1,608 | 23% | ||
| Total new home reservations | 6,982 | 100% | 7,068 | 100% |
Due to a particularly high base effect in the first half of 2016, reservations by first-time buyers and individual investors declined by 6% and 5%, respectively, in the first half of 2017. Individual investors accounted for 47% of Nexity's new home reservations in France during H1 2017. Investors benefiting from the Pinel scheme represented around 25% of new home reservations over the last couple of years.
Reservations made by professional landlords were up 11% from the first half of 2016, accounting for 26% of all new business (compared with 23% in H1 2016).
In terms of geographic breakdown, reservations in the first half of 2017 were buoyant in the Paris region (up 9%), buoyed by a sharp increase in bulk sales (2.2 times higher than in H1 2016), while reservations by individuals slowed over the same period (down 13%).
| Average selling price & floor area* | H1 2017 | H1 2016 | Change % | |||
| Average home price incl. VAT per sq.m (€) | 3,857 | 3,757 | +2.7% | |||
| Average floor area per home (sq.m) | 56.7 | 55.9 | +1.4% | |||
| Average price incl. VAT per home (€k) | 218.8 | 210.2 | +4.1% | |||
| * Excluding bulk reservations; reservations by Iselection, PERL, Edouard Denis and Primosud; and international operations | ||||||
The average price including VAT of new homes reserved by Nexity's individual clients in the first half of 2017 was 4% higher than in the first half of 2016, with an increase in the average price per square metre and the average floor area per unit.
Nexity launched a total of 9,431 units in the first half of 2017 (25% more than in H1 2016[5]). Unsold completed stock (118 units) as a proportion of the total supply for sale (6,673 units) remained very low. The average level of pre-selling booked at the start of construction work came to 79% in the first half of 2017 (compared with 72% in H1 2016), an exceptionally high level.
At end-June 2017, the business potential[6] for new homes was up 22% from end-June 2016 and came to 43,616 units, the equivalent of 2.6 years of development operations.
Subdivisions
Subdivision reservations totalled 1,159 units, 8% higher than in the first half of 2016, reflecting the vitality of the single-family home market. The average price of reservations by individuals grew by 4% to €77k.
International
Nexity recorded 143 international new home reservations in the first half of 2017, mainly in Poland. The decline relative to the first half of 2016 was linked to the sell-off of stock in Italy.
Commercial real estate[7]
Commitments in the French investment market totalled €6.8 billion in the first half of 2017, 27% lower than in the first half of 2016. Office assets accounted for almost 76% of such investments, with prime premium rates remaining stable after having steadily declined since 2008.
The market for office space in the Paris region reached almost 1.2 million sq.m marketed in the first half of 2017, up 4% year-on-year. Prime headline rents were up slightly relative to the previous quarter.
Nexity booked orders totalling €77 million at end-June 2017.
During the first half of 2017, Nexity acquired the property assets of the French headquarters of US company 3M, located in Cergy-Pontoise (Val-d'Oise). Plans are in place to build a new five-storey, 11,000-square-metre building for 3M, which has been sold off-plan to a private real estate company and is scheduled for delivery in the first quarter of 2019. At the same time, plans to build over 1,000 residential units - including a Domitys senior independent-living residence - will also be developed in place of the former office tower. This mixed-use, multi-product project illustrates the synergies between the Group's various business lines (Residential real estate, Commercial real estate and Nexity Conseil et Transaction).
Nexity has also agreed the off-plan sale of a building at the Euratechnologie business park in Lille (Nord). The project, developed by Térénéo, consists of a five-storey wood-frame office building with a total floor area of around 8,500 sq.m, rented by Capgemini.
Furthermore, during the first half of the year, Nexity took over the property portfolio of developer Thalium Promotion, enabling the Group to expand its geographic footprint in the Nouvelle-Aquitaine and Occitanie regions.
Deals in the set-up phase are progressing satisfactorily, and should be marketed starting in the second half of 2017.
Services
In Real estate services to companies, the floor area under management at end-June 2017 totalled 11.7 million sq.m, down 5% from end-December 2016, mainly as a result of the expiry of a management contract for more than 530,000 sq.m.
In Real estate services to individuals, the portfolio under management totalled 887,000 units at 30 June 2017, eroding slightly over the period (down 1.2%) but lower than in the first half of 2016 (down 2.6%). The brokerage business was buoyant, with the number of provisional sale agreements signed up 4% relative to end-June 2016.
In Franchise operations, Century 21 and Guy Hoquet l'Immobilier signed 8% more provisional sale agreements in the first half of 2017 than during the same period the previous year, in a French market for existing properties having reached an all-time high at end-June 2017[8]. The number of franchisees grew in the first half of 2017, totalling 1,257 agencies at end-June 2017 versus 1,217 at end-December 2016.
Urban regeneration (Villes & Projets)
At end-June 2017, Nexity's urban regeneration business (Villes & Projets) had land development potential of 508,000 sq.m[9], with the notable addition to the portfolio of a residential development located in Villenave-d'Ornon (near Bordeaux), with a floor area of nearly 9,000 sq.m.
Digital and Innovation
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.), partnerships with start-ups and investments with venture capital funds.
In the first half of 2017, Nexity:
- opened Le Lab, an in-house demonstrator dedicated to enterprise clients, at the Group's Paris headquarters, together with a new Blue Office shared office space (third-party office and co-working space for companies, freelancers and start-ups);
- signed a contract with Atos to deliver a Blue Office at its Bezons campus (Val-d'Oise);
- launched in Lyon (Rhône), for the first time in France, an entirely online sales campaign for a large-scale new home development (Vill'Arboréa: 425 units); and
- launched Connect', Nexity Conseil et Transaction's interactive and immersive new space in Paris (on Avenue de la Grande Armée), in partnership with an ecosystem of French start-ups and established businesses, providing investors and end-users with optimal conditions to develop their real estate strategy.
In addition, Bien'ici - a next-generation property listings website in which Nexity has a 48% 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 6,800 member agencies at 30 June 2017).
National advertising campaign
After having brought all of its business lines under a single brand in 2012, and following its two previous national advertising campaigns in 2013 and 2014, on 4 June 2017, Nexity launched a moving new television and digital media campaign with the aim of firmly establishing the Group's brand image as a comprehensive real estate services provider.
Governance
As from 9 June 2017[10], the members of the Executive Committee, led by Alain Dinin, Chairman and CEO, are as follows:
- Véronique Bédague-Hamilius, Company Secretary, in charge of Commercial and Local Authority Clients;
- Julien Carmona, Deputy CEO in charge of Internal Clients;
- Jean-Philippe Ruggieri, Deputy CEO in charge of Individual Clients, and President of Nexity's Residential and Commercial real estate development business; and
- Frédéric Verdavaine, Deputy Managing Director in charge of Individual Clients, and President of Nexity's Real estate services to individuals business.
This new organisation is part of Nexity's transition to its role as a comprehensive real estate services provider, focused on each of its client categories and structured by business line.
CONSOLIDATED RESULTS
Revenue
In the first half of 2017, Nexity recorded revenue of €1,464 million, increasing across all the Group's business lines and globally up 8% relative to the first half of 2016. On a like-for-like basis, excluding Edouard Denis and Primosud, Group's revenue for the first half 2017 came to €1,445 million, up 6% compared to H1 2016.
| € millions | H1 2017 | H1 2016 | Change % | |||
| Residential real estate | 1,073.6 | 982.2 | +9.3% | |||
| Commercial real estate | 142.4 | 128.8 | +10.6% | |||
| Services | 245.6 | 243.7 | +0.8% | |||
| Other activities | 2.8 | 2.8 | +0.4% | |||
| Total Group revenue* | 1,464.5 | 1,357.5 | +7.9% |
* 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 €1,074 million, up 9% compared to H1 2016. This growth reflects the increase in the division's backlog observed over the previous quarters.
On a like-for-like basis, division's revenue for the first half of 2017 came to €1,054 million. Revenue generated in the first half of 2017 by Edouard Denis and Primosud (€84 million) is only recognised in the amount of €19 million as part of consolidated revenue due to the adjustment for the effects of PPA (purchase price allocation), which involves the elimination of the portion of revenue relating to business activity prior to the acquisitions.
Revenue for the Commercial real estate division was substantially higher than in the first half of 2016 (up 11%), at €142 million, reflecting the ramp-up of projects signed in 2015 and 2016, particularly those outside the Paris region.
The Services division recognised revenue of €246 million, up 1% from H1 2016. Higher revenue from property management for individuals and franchise networks offset lower revenue from real estate services to companies and Nexity Studéa (due to the voluntary non-renewal of less-profitable operating contracts).
As in the first half of 2016, revenue from Other activities was not significant.
In IFRS terms, revenue for the first half of 2017 was €1,402 million, up 7% relative to consolidated revenue of €1,316 million in the first half of 2016. 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's current operating profit was €124 million in the first half of 2017 (compared with €107 million in H1 2016), up 16%.
The current operating margin increased by 0.6 percentage points to 8.5%.
| € millions | H1 2017 | H1 2016 | Change % | |||
| Residential real estate | 86.4 | 79.4 | +8.9% | |||
| % of revenue | 8.0% | 8.1% | ||||
| Commercial real estate | 30.4 | 21.9 | +39.1% | |||
| % of revenue | 21.4% | 17.0% | ||||
| Services | 18.7 | 15.4 | +21.7% | |||
| % of revenue | 7.6% | 6.3% | ||||
| Other activities | (11.7) | (9.9) | ns | |||
| Current operating profit | 123.9 | 106.7 | +16.1% | |||
| % of revenue | 8.5% | 7.9% |
In Residential real estate, current operating profit grew 9% (up €7.0 million compared to H1 2016), reflecting good progress on housing and subdivision development projects. The division's current operating margin was nearly stable (down 0.1 percentage points). Nexity expects an improvement in this operating margin during the second half of 2017.
In Commercial real estate, current operating profit totalled €30 million in the first half of 2017, compared with €22 million in the first half of 2016 (up 39%). The division's current operating margin saw exceptional growth, rising to 21.4%, which was significantly higher than usual, reflecting excellent financial and technical management of ongoing projects as well as reversals of provisions on delivered projects.
The Services division generated current operating profit of €19 million, compared with €15 million in the first half of 2016, resulting in a sharp rise in its current operating margin to 7.6% (compared with 6.3% in H1 2016).
Current operating profit from property management for individuals rose by 27% to €15 million, resulting in a 2.0 percentage points increase in the current operating margin to 9.9%, helped by good control of overhead costs and strong growth in the brokerage business. Nexity Studéa's profitability continued to rise, due in particular to improvements in occupancy rates. The franchise networks had an earnings-enhancing impact on the operating margin for the Services division. The profitability of real estate services to companies continued to be affected by the ongoing reorganisation of Nexity Conseil et Transaction.
The operating loss from Other activities (€12 million in H1 2017, compared with €10 million in H1 2016) includes loss from the holding company, research and overhead costs incurred by Villes & Projets, the development of incubated start-ups and digital projects[11], and a portion of the IFRS expenses on share-based payments.
EBITDA[12]
In the first half of 2017, Nexity generated total EBITDA of €139 million, compared with €119 million in the first half of 2016 (up 16%), giving an EBITDA margin of 9.5%, compared with 8.8% in H1 2016. The EBITDA margin rose in all business lines, notably in Commercial real estate (up from 17.8% to 21.6%) and Services (up from 7.7% to 9.7%). In Property management for individuals, it rose from 9.3% to 11.8%.
Net profit
| € millions | H1 2017 | H1 2016 | Change in €m | |||
| Consolidated revenue | 1,464.5 | 1,357.5 | 107.0 | |||
| EBITDA | 138.9 | 119.3 | 19.6 | |||
| % of revenue | 9.5% | 8.8% | ||||
| Operating profit | 123.9 | 106.7 | 17.2 | |||
| Net financial income/(expense) | (14.9) | (14.8) | (0.1) | |||
| Income taxes | (39.7) | (34.9) | (4.8) | |||
| Share of profit/(loss) from equity-accounted investments | (5.1) | (3.4) | (1.8) | |||
| Net profit | 64.1 | 53.6 | 10.4 | |||
| Non-controlling interests | (2.0) | (1.1) | (0.9) | |||
| Net profit attributable to equity holders of the parent company | 62.0 | 52.5 | 9.5 |
Net financial expense was stable in the first half of 2017 at €14.9 million (€14.8 million in H1 2016). In 2017, it included the impact of expenses related to the early redemption of €65 million in bonds issued in 2013 and originally due to mature in 2018, for €3.1 million, whereas the net financial expense in H1 2016 had included a €4.8 million expense related to the redemption of 2014 OCEANE bonds. After restating for these items, the increase in net financial expense reflects the controlled increase in the Group's debt.
The tax expense (€39.7 million) increased by €4.8 million as a result of the higher taxable profit figure. The effective tax rate fell to 36.3% (38.0% in H1 2016), which was still higher than the usual rate of 34.4%.
Equity-accounted investments made a €5.1 million negative contribution (compared with a €3.4 million loss in H1 2016) and mainly reflected the contributions of Bien'ici and Ægide-Domitys.
Net profit attributable to equity holders of the parent company grew by 18% to €62.0 million for the period, compared with €52.5 million in H1 2016.
Working Capital Requirement (WCR)
| € millions | 30 June 2017 | 31 Dec. 2016 | Change in €m | |||
| Residential real estate | 700 | 759 | (59) | |||
| Commercial real estate | 68 | (3) | 71 | |||
| Services | (48) | (63) | 15 | |||
| Other activities | 2 | 2 | (0) | |||
| Total WCR excluding tax | 722 | 695 | 27 | |||
| Corporate income tax | 12 | (3) | 15 | |||
| Total WCR | 734 | 692 | 42 |
Operating WCR at 30 June 2017 was €722 million, up €27 million from its level in December 2016. This change was mainly due to the rise in WCR for Commercial real estate (up €71 million), resulting in particular from unfavourable client payment schedules in the period, which are expected to remain a factor in the coming quarters. Conversely, WCR for Residential real estate improved (down €59 million in H1 2017), reflecting the successful sale of projects.
Cash flows
| € millions | H1 2017 | H1 2016 | ||
| Cash flow from operating activities before financial and tax expenses | 131.8 | 114.3 | ||
| Cash flow from operating activities after financial and tax expenses | 80.9 | 71.3 | ||
| Change in operating working capital (excluding tax) | (20.3) | (8.9) | ||
| Changes in tax-related working capital, dividends from equity-accounted investments and other | (3.6) | 15.5 | ||
| Net cash flow from/(used in) operating activities | 57.0 | 77.9 | ||
| Net cash flow from/(used in) operating investments | (15.4) | (9.8) | ||
| Free cash flow | 41.6 | 68.1 | ||
| Net cash flow from/(used in) financial investments | (2.6) | (55.2) | ||
| Dividends paid by Nexity SA | (132.7) | (120.5) | ||
| Net cash flow from/(used in) financing activities, excluding dividends | 59.1 | (40.8) | ||
| Change in cash and cash equivalents | (34.6) | (148.4) |
Cash flow from operating activities before financial and tax expenses totalled €132 million, up €18 million relative to H1 2016, mainly as a result of the higher profit figure for the period.
Cash flows from operations decreased to €57 million (compared with €78 million in H1 2016) due to an increase in operating WCR and in corporate income tax.
Operating investments, particularly in IT and digital, increased to €15 million, compared with €10 million in the first half of 2016.
Nexity's free cash flow for the first six months of 2017 was €42 million, compared with €68 million for the first half of 2016.
Net cash used in financial investments was much lower than in the first half of 2016, when this item included the acquisition of a 55% stake in Edouard Denis for €55 million.
Net cash from financing activities (€59 million) primarily involved the proceeds from the bond issue carried out in June 2017 for €151 million (see below), net of loan repayments and bond partial redemption during the period.
Financial structure
Nexity's consolidated equity (attributable to equity holders of the parent company) was €1,525 million at end-June 2017, compared to €1,589 million at end-December 2016, mainly after €133 million in dividends paid and the inclusion of net profit for the half-year period (€62 million attributable to parent company shareholders).
| € millions | 30 June 2017 | 31 Dec. 2016 | Change in €m | |||
| Bond issues (incl. accrued interest and issuance fees) | 698 | 610 | 88 | |||
| Loans and borrowings | 359 | 375 | (16) | |||
| Other financial borrowings and other financial receivables | 0 | 8 | (7) | |||
| Net cash and cash equivalents | (642) | (676) | 35 | |||
| Net debt | 416 | 317 | 99 |
Net financial debt amounted to €416 million at 30 June 2017, compared to €317 million at 31 December 2016 (up €99 million). This increase in net debt over the first half of the year was mainly due to the increase in operating working capital (up €20 million), the dividend payment (€133 million) and investments (€15 million), partially offset by the cash flow generated by operations in the first half of the year (€81 million).
At 30 June 2017, net debt equated to 27% of equity and 1.3x EBITDA over the previous 12 months.
On 22 June 2017, Nexity successfully issued €151 million in bonds into the private placement market, comprising one tranche of €30 million in bonds, redeemable at maturity in November 2023 (6.5 years) and paying an annual coupon rate of 2.05%, and a second tranche of €121 million in bonds, redeemable at maturity in June 2025 (8 years) and paying an annual coupon rate of 2.60%. At the same time, Nexity redeemed €65 million in bonds originally due to mature in December 2018, issued in January 2013 and carrying an annual coupon rate of 3.75%. This new borrowing extends the maturity of the debt (4 years as against 3.2 years prior to the new issue) while also taking advantage of current favourable interest rates.
At 30 June 2017, Nexity had authorisations from banks to borrow up to €1,013 million, including available facilities of €300 million on its corporate credit lines (undrawn). The Group had drawn down €359 million of its authorised credit at 30 June 2017. Nexity was in compliance with all of the financial covenants attached to its borrowings and lines of credit as of 30 June 2017.
Backlog at 30 June 2017
| € millions, excluding VAT | 30 June 2017 | 31 Dec. 2016 | Change % | |||
| Residential real estate - New homes | 3,488 | 3,227 | +8.1% | |||
| Residential real estate - Subdivisions | 255 | 237 | +7.8% | |||
| Residential real estate backlog | 3,744 | 3,464 | +8.1% | |||
| Commercial real estate backlog | 482 | 544 | -11.5% | |||
| Total Group backlog | 4,226 | 4,008 | +5.4% | |||
The Group's backlog at end-June 2017 stood at €4,226 million, up 5% relative to year-end 2016 and equivalent to 19 months' revenue from Nexity's development activities (revenue on a rolling 12-month basis).
Order book in the Residential division totalled €3,744 million, up 8% compared to 31 December 2016. This backlog amounts to 19 months of revenue (Residential division revenue on a rolling 12-month basis).
The Commercial division's backlog dropped to €482 million at 30 June 2017 (compared with €544 million at year-end 2016), as the new orders received during the half-year period did not offset the extent of completion of projects under construction. This backlog amounts to 18 months of revenue (Commercial division revenue on a rolling 12-month basis).
Implementation of IFRS 15 and IFRS 16
Detailed information regarding IFRS 15 Revenue from Contracts with Customers and IFRS 16 Leases is provided in Note 2.1 to the consolidated interim financial statements in Section 2 of the 2017 Interim Financial Report.
***
Financial calendar and practical information
9M 2017 business activity and revenue Wednesday, 25 October 2017 (after market close)
2017 annual results Tuesday, 20 February 2018 (after market close)
Q1 2018 business activity and revenue Wednesday, 25 April 2018 (after market close)
Shareholders' Meeting Thursday, 31 May 2018
A conference call on H1 2017 revenue and business activity will be held in English at 6:30 p.m. CET on 25 July 2017, accessible using code 8040410 by dialling the following numbers:
| - From France | +33 (0)1 76 77 25 06 |
| - From other locations in Europe | +44 (0)330 336 94 12 |
| - From the USA | +1 719 457 1036 |
The presentation accompanying this conference will be available on the Group's website from 6:15 p.m. CET and may be viewed at the following address: http:// (http://edge.media-server.com/m/p/dn9hd8wv)edge.media-server.com/m/p/dn9hd8wv (http://edge.media-server.com/m/p/dn9hd8wv)
The conference call will be available on replay at http://www.nexity.fr/real-estate (http://www.nexity.fr/real-estate) from the following day.
The French version of the 2017 Interim Financial Report has been filed with the Autorité des Marchés Financiers (AMF) and can be accessed via the Group's website.
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 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 code: FR0010112524 CONTACT Domitille Vielle - Head of Investor Relations / +33 (0)1 85 55 19 34 - investorrelations@nexity.fr Géraldine Bop - Deputy Head of Investor Relations / +33 (0)1 85 55 18 43 - investorrelations@nexity.fr |
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 2 of the Registration Document (Document de référence) filed with the AMF under number D.17-0335 on 6 April 2017 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 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
| 2017 | 2016 | 2015 | |||||||||||
| Number of units | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||
| New homes (France) | 4,288 | 3,506 | 5,201 | 3,624 | 4,121 | 2,947 | 4,237 | 2,368 | 2,949 | 2,187 | |||
| - o/w 2016 external growth | 399 | 413 | 547 | 295 | |||||||||
| Subdivisions | 680 | 479 | 1,027 | 420 | 654 | 417 | 925 | 400 | 556 | 321 | |||
| International | 106 | 37 | 141 | 95 | 170 | 73 | 133 | 103 | 42 | 14 | |||
| Total (number of units) | 5,074 | 4,022 | 6,369 | 4,139 | 4,945 | 3,437 | 5,295 | 2,871 | 3,547 | 2,522 | |||
| Value (€m incl. VAT) | |||||||||||||
| New homes (France) | 858 | 655 | 969 | 666 | 772 | 536 | 803 | 473 | 595 | 415 | |||
| - o/w 2016 external growth | 82 | 75 | 90 | 48 | |||||||||
| Subdivisions | 53 | 35 | 87 | 30 | 48 | 32 | 69 | 29 | 45 | 23 | |||
| International | 14 | 9 | 21 | 17 | 28 | 13 | 19 | 15 | 6 | 2 | |||
| Total (€m incl. VAT) | 925 | 699 | 1,076 | 713 | 848 | 581 | 891 | 516 | 646 | 440 | |||
Revenue by division
| 2017 | 2016 | 2015 | |||||||||||
| € millions | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||
| Residential real estate | 625.8 | 447.8 | 809.9 | 475.4 | 549.3 | 432.8 | 809.3 | 460.3 | 531.5 | 360.5 | |||
| Commercial real estate | 56.7 | 85.8 | 117.5 | 60.6 | 61.3 | 67.6 | 74.2 | 102.8 | 116.5 | 85.7 | |||
| Services | 124.3 | 121.3 | 125.6 | 124.8 | 122.8 | 120.9 | 131.3 | 129.8 | 121.2 | 121.5 | |||
| Other activities | 1.7 | 1.1 | 0.9 | 0.6 | 2.1 | 0.7 | 1.3 | 1.2 | 9.0 | 1.0 | |||
| GROUP | 808.5 | 656.0 | 1,053.8 | 661.4 | 735.6 | 621.9 | 1,016.0 | 694.1 | 778.2 | 568.7 | |||
CONSOLIDATED INCOME STATEMENT - 30 JUNE 2017
OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)
| € thousands | 30/06/2017 | 30/06/2016 | |
| Revenue | 1,464,458 | 1,357,497 | |
| Purchases | (932,343) | (878,750) | |
| Personnel costs | (261,071) | (238,938) | |
| Other operating expenses | (118,082) | (105,183) | |
| Taxes (other than income tax) | (17,904) | (16,930) | |
| Depreciation, amortisation and impairment of fixed assets | (11,202) | (11,008) | |
| Current operating profit | 123,856 | 106,688 | |
| Operating profit | 123,856 | 106,688 | |
| Financial expense | (17,703) | (17,994) | |
| Financial income | 2,777 | 3,189 | |
| Net financial income/(expense) | (14,926) | (14,805) | |
| Pre-tax recurring profit | 108,930 | 91,883 | |
| Income taxes | (39,733) | (34,918) | |
| Share of profit/(loss) from equity-accounted investments | (5,140) | (3,363) | |
| Net profit | 64,057 | 53,602 | |
| Net profit attributable to equity holders of the parent company | 62,007 | 52,499 | |
| Net profit attributable to non-controlling interests | 2,050 | 1,103 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - 30 JUNE 2017
OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)
| ASSETS € thousands | 30/06/2017 | 31/12/2016 | |
| Non-current assets | |||
| Goodwill | 1,217,341 | 1,213,627 | |
| Other intangible assets | 69,385 | 63,904 | |
| Property, plant and equipment | 49,783 | 49,816 | |
| Equity-accounted investments | 22,149 | 28,063 | |
| Other financial assets | 37,250 | 40,981 | |
| Deferred tax assets | 11,947 | 8,092 | |
| Total non-current assets | 1,407,855 | 1,404,483 | |
| Current assets | |||
| Inventories and work in progress | 1,609,603 | 1,618,141 | |
| Trade and other receivables | 509,729 | 438,313 | |
| Tax receivable | 17,485 | 5,868 | |
| Other current assets (1) | 1,178,537 | 1,165,093 | |
| Other financial receivables | 33,106 | 31,045 | |
| Cash and cash equivalents | 660,270 | 697,616 | |
| Total current assets | 4,008,730 | 3,956,076 | |
| Total assets | 5,416,585 | 5,360,559 | |
| (1) o/w client working capital accounts (Services) | 689,520 | 673,152 | |
| LIABILITIES AND EQUITY € thousands | 30/06/2017 | 31/12/2016 | |
| Equity | |||
| Share capital | 276,525 | 274,045 | |
| Additional paid-in capital | 640,799 | 778,546 | |
| Treasury shares | |||
| Reserves and retained earnings | 545,423 | 397,568 | |
| Net profit for the period | 62,007 | 139,113 | |
| Equity attributable to equity holders of the parent company | 1,524,754 | 1,589,272 | |
| Non-controlling interests | 6,010 | 4,866 | |
| Total equity | 1,530,764 | 1,594,138 | |
| Non-current liabilities | |||
| Long-term borrowings and financial debt | 816,392 | 728,419 | |
| Employee benefits | 30,544 | 29,553 | |
| Deferred tax liabilities | 69,933 | 56,010 | |
| Total non-current liabilities | 916,869 | 813,982 | |
| Current liabilities | |||
| Short-term borrowings, financial debt and operating liabilities (1) | 292,889 | 316,831 | |
| Current provisions | 94,303 | 99,987 | |
| Trade and other payables | 789,972 | 887,074 | |
| Current tax liabilities | 5,493 | 9,065 | |
| Other current liabilities (2) | 1,786,295 | 1,639,482 | |
| Total current liabilities | 2,968,952 | 2,952,439 | |
| Total liabilities and equity | 5,416,585 | 5,360,559 | |
| (1) o/w bank overdraft facilities | 18,489 | 21,207 | |
| (2) o/w client working capital accounts (Services) | 689,520 | 673,146 |
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.
| H1 2017 | H1 2016 | |||||||||
| € millions | Current operating profit/(loss) | Adjustments | EBITDA | Current operating profit/(loss) | Adjustments | EBITDA | % change in EBITDA | |||
| Residential real estate | 86.4 | 5.2 | 91.6 | 79.4 | (0.9) | 78.4 | +16.7% | |||
| % of revenue | 8.0% | 8.5% | 8.1% | 8.0% | ||||||
| Commercial real estate | 30.4 | 0.4 | 30.8 | 21.9 | 1.1 | 22.9 | +34.4% | |||
| % of revenue | 21.4% | 21.6% | 17.0% | 17.8% | ||||||
| Services | 18.7 | 5.1 | 23.9 | 15.4 | 3.5 | 18.8 | +26.7% | |||
| % of revenue | 7.6% | 9.7% | 6.3% | 7.7% | ||||||
| Other activities | (11.7) | 4.4 | (7.4) | (9.9) | 9.0 | (0.9) | N/A | |||
| GROUP | 123.9 | 15.0 | 138.9 | 106.7 | 12.6 | 119.3 | +16.4% | |||
| % of revenue | 8.5% | 9.5% | 7.9% | 8.8% | ||||||
HALF-YEAR FIGURES BY DIVISION
OPERATIONAL REPORTING (In accordance with IFRS but with joint ventures proportionately consolidated)
Current operating profit
| 2017 | 2016 | 2015 | ||||||||
| € millions | H1 | FY | H2 | H1 | FY | H2 | H1 | |||
| Residential real estate | 86.4 | 203.1 | 123.7 | 79.4 | 186.3 | 117.1 | 69.2 | |||
| Commercial real estate | 30.4 | 57.1 | 35.3 | 21.9 | 39.0 | 16.8 | 22.2 | |||
| Services | 18.7 | 44.8 | 29.4 | 15.4 | 35.4 | 23.3 | 12.1 | |||
| Other activities | (11.7) | (38.5) | (28.6) | (9.9) | (40.6) | (29.5) | (11.1) | |||
| GROUP | 123.9 | 266.5 | 159.8 | 106.7 | 220.1 | 127.8 | 92.3 | |||
EBITDA
| 2017 | 2016 | 2015 | ||||||||
| € millions | H1 | FY | H2 | H1 | FY | H2 | H1 | |||
| Residential real estate | 91.6 | 210.2 | 131.7 | 78.4 | 189.3 | 121.2 | 68.1 | |||
| Commercial real estate | 30.8 | 56.8 | 33.9 | 22.9 | 38.8 | 20.3 | 18.5 | |||
| Services | 23.9 | 55.4 | 36.6 | 18.8 | 46.3 | 32.6 | 13.7 | |||
| Other activities | (7.4) | (17.7) | (16.8) | (0.9) | (14.6) | (13.4) | (1.2) | |||
| GROUP | 138.9 | 304.7 | 185.4 | 119.3 | 259.8 | 160.6 | 99.2 | |||
CONSOLIDATED INCOME STATEMENT - 30 JUNE 2017
(IFRS)
| € thousands | 30/06/2017 6-month period | 30/06/2016 6-month period | |
| Revenue | 1,401,938 | 1,315,526 | |
| Purchases | (879,886) | (846,466) | |
| Personnel costs | (261,066) | (238,928) | |
| Other operating expenses | (117,701) | (104,238) | |
| Taxes (other than income tax) | (17,840) | (16,517) | |
| Depreciation, amortisation and impairment of fixed assets | (11,202) | (11,008) | |
| Current operating profit | 114,243 | 98,369 | |
| Operating profit | 114,243 | 98,369 | |
| Share of profit from equity-accounted investments | 5,727 | 4,760 | |
| Operating profit after share of profit from equity-accounted investments | 119,970 | 103,129 | |
| Financial expense | (17,483) | (17,763) | |
| Financial income | 2,793 | 3,314 | |
| Net financial income/(expense) | (14,690) | (14,449) | |
| Pre-tax recurring profit | 105,280 | 88,680 | |
| Income taxes | (36,083) | (31,715) | |
| Share of profit/(loss) from other equity-accounted investments | (5,140) | (3,363) | |
| Net profit | 64,057 | 53,602 | |
| Net profit attributable to equity holders of the parent company | 62,007 | 52,499 | |
| Net profit attributable to non-controlling interests | 2,050 | 1,103 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - 30 JUNE 2017
(IFRS)
| ASSETS € thousands | 30/06/2017 | 31/12/2016 | |
| Non-current assets | |||
| Goodwill | 1,217,341 | 1,213,627 | |
| Other intangible assets | 69,385 | 63,904 | |
| Property, plant and equipment | 49,783 | 49,816 | |
| Equity-accounted investments | 38,233 | 46,597 | |
| Other financial assets | 38,537 | 42,256 | |
| Deferred tax assets | 10,869 | 7,330 | |
| Total non-current assets | 1,424,148 | 1,423,530 | |
| Current assets | |||
| Inventories and work in progress | 1,512,002 | 1,523,197 | |
| Trade and other receivables | 475,944 | 435,156 | |
| Tax receivable | 19,090 | 5,064 | |
| Other current assets | 1,151,103 | 1,140,650 | |
| Other financial receivables | 101,317 | 89,199 | |
| Cash and cash equivalents | 584,773 | 631,823 | |
| Total current assets | 3,844,229 | 3,825,089 | |
| Total assets | 5,268,377 | 5,248,619 | |
| LIABILITIES AND EQUITY € thousands | 30/06/2017 | 31/12/2016 | |
| Equity | |||
| Share capital | 276,525 | 274,045 | |
| Additional paid-in capital | 640,799 | 778,546 | |
| Treasury shares | |||
| Reserves and retained earnings | 545,423 | 397,568 | |
| Net profit for the period | 62,007 | 139,113 | |
| Equity attributable to equity holders of the parent company | 1,524,754 | 1,589,272 | |
| Non-controlling interests | 6,010 | 4,866 | |
| Total equity | 1,530,764 | 1,594,138 | |
| Non-current liabilities | |||
| Long-term borrowings and financial debt | 815,229 | 728,419 | |
| Employee benefits | 30,544 | 29,553 | |
| Deferred tax liabilities | 67,253 | 54,153 | |
| Total non-current liabilities | 913,026 | 812,125 | |
| Current liabilities | |||
| Short-term borrowings, financial debt and operating liabilities | 286,565 | 304,407 | |
| Current provisions | 93,567 | 99,390 | |
| Trade and other payables | 741,495 | 849,461 | |
| Current tax liabilities | 4,284 | 8,550 | |
| Other current liabilities | 1,698,676 | 1,580,548 | |
| Total current liabilities | 2,824,587 | 2,842,356 | |
| Total liabilities and equity | 5,268,377 | 5,248,619 |
The financial data and indicators, including forward-looking information, used in this press release are based on Nexity's operational reporting, with joint ventures proportionately consolidated.
[1]On a like-for-like basis: 6,982 new home reservations (down 1% by volume and up 4% by value)
[2] Gearing: net debt / equity
[3] Pending the decision of Nexity's Board of Directors and approval at the Shareholders' Meeting
[4] Source: Observatoire Crédit Logement
[5] Sales data (launches, completed stock, supply for sale and pre-selling rate) is shown at constant scope.
[6] 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.
[7] Sources of market data: CBRE's France Investment MarketView and Immostat for take-up - Q2 2017
[8] 907,000 transactions to end-May 2017, up 7.3% in six months (CEGDD)
[9] Floor areas are provided for information purposes only and may be subject to adjustment once administrative authorisations have been obtained.
[10] See press release of 9 June 2017
[11] In the first half of 2017, digital projects and other innovative activities at Nexity gave rise to an accounting expense of 4.5 million, of which €2.7 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.
[12] 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.
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
