Nexity : Q1 2016 business activity and revenue
(Thomson Reuters ONE) -
Q1 2016 BUSINESS ACTIVITY
AND REVENUE
Paris, Wednesday, 27 April 2016
Robust levels of business, especially in new homes
* Residential real estate: 2,947 net new home reservations in France, up 35%
from Q1 2015. Reservations up 29% by value to ?536 million including VAT
* Commercial real estate: ?44 million in new orders
* Group backlog: ?3.4 billion (up 2%), i.e. 16 months' revenue from
development activities[1]
* Revenue: ?622 million, up 9% from Q1 2015
Outlook for 2016 confirmed
* External growth: acquisition of a majority stake in Groupe Edouard Denis
* Growth in Nexity's new home reservations, consistent with estimated French
market volume of around 110,000 reservations for 2016 (versus 102,500 in
2015)
* Order intake in Commercial real estate of about ?250 million
* 2016 revenue: stable, around ?3 billion
* 2016 current operating profit target: at least ?235 million (up 7%)
* Proposed dividend per share up 10% (?2.20) for 2016[2] and 2017[3]
Alain Dinin, Chairman and CEO of Nexity, commented:
"The gradual recovery of the French residential market, which began in 2015,
continued over the first quarter of 2016. This recovery was rooted in the
continuation of factors at play in 2015 (very low interest rates, the Pinel
scheme) and the new PTZ interest-free loan scheme's immediate success upon
implementation. The announcements made by France's president on 8 April 2016 (on
extending the Pinel scheme until end-2017 and expanding assistance for low -
income homebuyers) helped improve visibility for the real estate industry and
clients alike. All the pieces are in place for the market to pick up again, and
all signs point to the French residential market continuing to grow in 2016
(growth estimated by Nexity: 5% to 10%, closer to the upper end of the range),
and once again in 2017. On a less positive note, administrative burdens continue
to weigh on the structuring of development projects, reflected in particular by
the persistently sluggish pace of the pickup in building permits.
National statistics are not yet available but should confirm that the new home
market is well on track, with Nexity's first-quarter new home reservations
growing by 35%. However, this high growth rate should be put into perspective:
first of all, first-quarter trends cannot be extrapolated to the entire year;
secondly, this growth reflects a catch-up effect from the end of 2015.
It goes without saying that Nexity continues to carefully monitor the medium-
term risks that may affect the housing market (macroeconomic, geopolitical and
banking risks), and has also adopted a prudent approach to the commercial real
estate market, while being especially vigilant as to the proper correlation of
asset values and changes in end-user take-up (in volume and value of rents).
Lastly, Nexity is continuing to pursue the digital transformation of its
businesses and the development of its distribution methods, as reflected for
example by its 40% investment in Bien'ici, a new website launched by real estate
professionals.
To sum up, Nexity has entered 2016 with confidence, and confirms all the targets
and guidance shared with the market for the year, as well as its medium-term
target of ?300 million in current operating profit for 2018."
***
Business activity in Q1 2016
Residential real estate
Mortgage rates continued to decline in France, benefiting from an abundance of
under-earning monetary resources, and with the ECB offering even better
refinancing terms. As a result, in March 2016, mortgage rates averaged 1.97%
(2.12% in the new-build market), their lowest level since the end of the 1940s.
-------------------------------------- --------- --------- ---------
Reservations (units and ?m) Q1 2016 Q1 2015 Change %
-------------------------------------- --------- --------- ---------
New homes (France) 2,947 2,187 +34.8%
Subdivisions 417 321 +29.9%
International 73 14 x 5.2
-------------------------------------- --------- --------- ---------
Total reservations (number of units) 3,437 2,522 +36.3%
-------------------------------------- --------- --------- ---------
New homes (France) 536 415 +29.3%
Subdivisions 32 23 +37.9%
International 13 2 x 6.4
-------------------------------------- --------- --------- ---------
Total reservations (?m incl. VAT) 581 440 +32.2%
-------------------------------------- --------- --------- ---------
* New homes
In the first quarter of 2016, the Group recorded 2,947 net new home reservations
in France, up 35% by volume and 29% by value year on year.
The first quarter stood out by virtue of very significant growth in all client
segments.
Reservations made by first-time buyers were up 39% with respect to Q1 2015,
following the application of the new PTZ interest-free loan scheme, in effect
since 1 January 2016, which can now finance up to 40% of the property price,
versus the previous maximum limit of 26%. At end-March 2016, 67% of first-time
buyers took out a PTZ interest-free loan to finance their Nexity home (63% in Q1
2015).
Reservations with individual investors also surged in Q1 2016 (up 28% with
respect to Q1 2015), driven by the Pinel scheme, which remained very attractive.
This trend should continue, following the French government's announcement that
the scheme will be extended until the end of 2017.
Reservations by professional landlords were up 32%, with an increase in
transaction size (33 units per transaction on average in Q1 2016, versus 29
units on average in Q1 2015). All of these reservations were placed by social
housing operators (whereas in the first quarter of 2015, 20% of reservations
were transacted with institutional investors).
--------------------------------------- -------------- -------------- ---------
Breakdown of new home reservations by
client - France (number of units) Q1 2016 Q1 2015 Change %
--------------------------------------- -------------- -------------- ---------
Homebuyers 885 30% 592 27% +49.5%
o/w: - first-time buyers 653 22% 471 22% +38.6%
- other homebuyers 232 8% 121 5% +90.6%
Individual investors 1,317 45% 1,032 47% +27.6%
Professional landlords 745 25% 563 26% +32.3%
--------------------------------------- -------------- -------------- ---------
Total new home reservations 2,947 100% 2,187 100% +34.8%
--------------------------------------- -------------- -------------- ---------
At end-March 2016, the average price of residential units reserved by Nexity's
individual clients[4] was up 2% relative to end-March 2015, due to a 2% increase
in average floor area (since the proportion of homebuyers, who on average
purchase larger units than individual investors, grew more than the latter group
over the quarter), with the average price per square metre remaining stable in
the first quarter of 2016 with respect to the first quarter of 2015. Given this
virtually flat trend in retail prices for property developed under the Nexity
brand, the weaker increase in value terms than in volume for reservations of new
homes during the first quarter of 2016 is explained by the decrease in average
sale prices at PERL and Iselection and for bulk sales (reflecting the mix of
products and geographies).
---------------------------------------------- --------- --------- ---------
Average sale price & floor area * Q1 2016 Q1 2015 Change %
---------------------------------------------- --------- --------- ---------
Average home price incl. VAT per sq.m (?) 3,705 3,703 +0.1%
Average floor area per home (sq.m) 56.6 55.5 +2.0%
Average price incl. VAT per home (?k) 209.9 205.7 +2.0%
---------------------------------------------- --------- -------------------
* Excluding bulk sales, Iselection and PERL
As the market recovered, the number of units launched by Nexity more than
doubled in Q1 2016[5] (2,572 units, versus 1,155 units at end-March 2015). This
increase arose from the size of the developments launched (89 units per
development on average in Q1 2016, versus 44 units on average in Q1 2015). The
unsold completed stock of new residential units remained very low (76 homes).
The average level of pre-selling recorded at the time construction work was
started remains high (68% on average).
At end-March 2016, the business potential[6] for new homes totalled 31,882
units, up 21% from end-March 2015 and up 8% from end-December 2015, illustrating
Nexity's capacity to replenish its potential supply.
* Subdivisions
Subdivision reservations totalled 417 units, soaring 30% relative to the first
quarter of 2015, with the average price of net reservations from individuals
falling 2.5% to ?76k due to a combination of a 5.0% decrease in the average unit
size and a 2.5% increase in the average price per square metre.
* International
Nexity recorded 73 international new home reservations in the first quarter of
2016. In Poland, the number of reservations came to 47 units, with a
satisfactory pace of sales activity across all developments. In Italy, 26
reservations were recorded in the first quarter of 2016.
Commercial real estate
Transaction volumes in the French commercial real estate market in the first
quarter of 2016 totalled ?2.9 billion. The now commonly accepted seasonality of
the French property investment market was fully borne out with robust end-of-
year purchase volumes (?10.8 billion in transactions for Q4 2015 alone)
generally giving way to a lull in the following quarter. The beginning of 2016
seemed especially sluggish, however, with volumes driven down 37% year on
year[7] with a lack of large deals valued at ?200 million or more (only two such
deals were closed, versus eight the year before).
Conversely, take-up in the Paris region (492,600 sq.m) was up 19% year on year
in Q1 2016, rallying thanks to a number of deals of more than 5,000 sq.m, but
remaining 11% below the 10-year Q1 average.(7)
Nexity booked new orders totalling ?44 million in the first quarter of 2016, of
which ?41 million were for wood-frame constructions[8], a testament to the
rising popularity of this product line. Given its portfolio of projects in the
advanced start-up or marketing phases, the Group's target of achieving new
orders of at least ?250 million in the year is confirmed.
Services and Distribution Networks
In Real estate services to companies, the volume of units under management
totalled 12.3 million sq.m at end - March 2016, up 1% from end-December 2015.
In Real estate services to individuals, the portfolio of units under management
for individuals (910,500 units at 31 March 2016) shrank slightly (down 0.5%)
relative to end-December 2015. A major property management contract covering the
entire residential portfolio of an institutional investor, awarded to Nexity's
large-scale private investment subsidiary Nexity GIP, was an important win this
quarter. The portfolio contains 728 units in around twenty buildings, most of
them housing or shops, all within the City and the inner suburbs of Paris.
For Distribution Networks, the number of provisional sale agreements recorded in
the first quarter by Century 21 and Guy Hoquet l'Immobilier was up 9.5% relative
to the same period a year earlier, despite a decrease in the number of
franchisees (1,211 agencies at end-March 2016 versus 1,221 at end-March 2015).
This increase was due in particular to the Century 21 distribution network,
which saw a 12% increase in the number of provisional sales agreements signed
between end-March 2015 and 2016.
Urban regeneration (Villes & Projets)
For end-March 2016, at 500,000 sq.m[9], the land development potential of
Nexity's urban regeneration business (Villes & Projets) was down 6% relative to
year-end 2015 on account of parts of some projects being transferred to the
development phase. No additions to the portfolio were recorded in the first
quarter.
Digital and Innovation
In line with its strategic plan, Nexity continued to pursue innovative projects
focused on digital transformation. Following the launches of Weroom, Blue Office
and E-gérance over the past two years, the first quarter of 2016 saw the ramp-up
of Bien'ici, a new property listings website based on 3D maps, of which Nexity
is a 40% owner. Launched in December 2015, Bien'ici brings together a large
number of real estate professionals and currently features more than one million
online listings.
Revenue
In the first quarter of 2016, Nexity recorded revenue of ?622 million, up 9%
relative to the first quarter of 2015. This ?53 million increase was driven by
the increase in revenue recognised by the Residential division (up ?72 million
from end-March 2015).
------------------------------------ --------- --------- ---------
? millions Q1 2016 Q1 2015 Change %
------------------------------------ --------- --------- ---------
Residential real estate 432.8 360.5 +20.0%
Commercial real estate 67.6 85.7 -21.1%
Services and Distribution Networks 120.9 121.5 -0.5%
Other activities 0.7 1.0 -31.9%
------------------------------------ --------- --------- ---------
Total Group revenue* 621.9 568.7 +9.4%
------------------------------------ --------- --------- ---------
* 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 ?433 million, up 20% relative
to the same period in 2015. This increase was mainly due to a higher number of
notarial deeds of sale for new homes signed in the first quarter of 2016 (up
28% compared to Q1 2015), but also reflected a favourable base effect for PERL,
which in the first quarter of 2015 had been affected by restatements in the
opening balance sheet and remeasurements of assets and liabilities to fair
value.
· In Commercial real estate, in line with Nexity's expectations, revenue
was down 21% for the first quarter of 2016, at ?68 million, reflecting the
construction schedules of ongoing developments. The first quarter of 2015
included several major developments that contributed heavily to revenue.
· The Services and Distribution Networks division recognised revenue of
?121 million, stable with respect to the first quarter of 2015, with higher
revenue from Distribution Networks (up 9%) offsetting lower revenue from the
Services businesses (down 1%).
· Revenue from Other activities (?0.7 million) takes into account rents
received in connection with the Group's investment activities and revenue
generated by the Blue Office business (shared offices in the Paris region).
In IFRS terms, revenue for the first quarter of the year was ?605 million, up
14.7% relative to consolidated revenue of ?528 million as of 31 March 2015. 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 2016
---------------------------------------- --------- ------- ---------
? millions, excluding VAT Q1 2016 2015 Change %
---------------------------------------- --------- ------- ---------
Residential real estate - New homes * 2,671 2,573 +3.8%
Residential real estate - Subdivisions 231 233 -1.2%
Residential real estate backlog 2,901 2,806 +3.4%
Commercial real estate backlog 467 487 -4.1%
---------------------------------------- --------- ------- ---------
Total Group backlog 3,368 3,293 +2.3%
---------------------------------------- --------- ------- ---------
* Including International
The Group's order book at end-March 2016 stood at ?3.368 billion, up 2.3% from
end-2015 and equivalent to 16 months' revenue from Nexity's development
activities[10].
***
Financial calendar and practical information
* Shareholders' Meeting Tuesday, 31 May 2016
* 2014 dividend*, subject to approval at the
Shareholders' Meeting:
* Ex-dividend date Friday, 3 June 2016
* Payment date Tuesday, 7 June 2016
* H1 2016 results Thursday, 21 July 2016
* For tax purposes, all amounts distributed to shareholders (?2.20 per share)
constitute repayments of capital contributions (see resolutions submitted to the
Shareholders' Meeting of 31 May 2016).
A conference call on Q1 2016 revenue and business activity will be held in
English at 6:30 p.m. CET on Wednesday, 27 April 2016, which may be accessed
using the code 7240706 by dialling one of the following numbers:
- Calling from France +33 (0)1 76 77 22 23
- Calling from elsewhere in Europe +44 (0)203 427 1918
- Calling from the USA +1 646 254 3363
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://edge.media-server.com/m/p/xsdunt33
The conference call will be available on replay at
http://www.nexity.fr/immobilier/groupe/finance/slides-show/webcast from the
following day.
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.16-0325 on 13 April 2016 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 targets described, and makes no commitment or undertaking to update or
otherwise revise this information.
This press release is considered 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
Member of the 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
Julien Carmona - Chief Financial Officer / +33 (0)1 85 55 14 97 -
investorrelations(at)nexity.fr
ANNEXES
ANNEX 1: RESERVATIONS BY QUARTER
------- ------------------------- ------------------------
2016 2015 2014
------- ------------------------- ------------------------
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
------- ------------------------- ------------------------
Number of units
-------------------- ------- ------------------------- ------------------------
New homes 2,947 4,237 2,368 2,949 2,187 3,653 2,175 2,722 1,815
Subdivisions 417 925 400 556 321 836 395 547 326
International 73 133 103 42 14 7 73 10 3
-------------------- ------- ------------------------- ------------------------
Total (number of 3,437 5,295 2,871 3,547 2,522 4,496 2,643 3,279 2,144
units)
-------------------- ------- ------------------------- ------------------------
Value, in ?m incl.
VAT
-------------------- ------- ------------------------- ------------------------
New homes 536 803 473 595 415 677 419 475 353
Subdivisions 32 69 29 45 23 63 29 42 29
International 13 19 15 6 2 2 10 1 -2
-------------------- ------- ------------------------- ------------------------
Total (?m incl. 581 891 516 646 440 742 458 518 380
VAT)
-------------------- ------- ------------------------- ------------------------
ANNEX 2: REVENUE[11]
Revenue by division
------------------------------------ --------- --------- ---------
? millions Q1 2016 Q1 2015 Change %
------------------------------------ --------- --------- ---------
New homes 398.5 325.2 +22.5%
Subdivisions 29.7 25.5 +16.4%
International 4.7 9.8 -52.3%
Residential real estate 432.8 360.5 +20.0%
Commercial real estate 67.6 85.7 -21.1%
Services 112.3 113.6 -1.2%
Distribution Networks 8.6 7.9 +9.3%
Services and Distribution Networks 120.9 121.5 -0.5%
Other activities 0.7 1.0 -31.9%
------------------------------------ --------- --------- ---------
GROUP 621.9 568.7 +9.4%
------------------------------------ --------- --------- ---------
Quarterly progression of revenue by division
------- --------------------------- ------------------------
2016 2015 2014
------- --------------------------- ------------------------
Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1
------- --------------------------- ------------------------
? millions
------------------ ------- --------------------------- ------------------------
Residential real
estate 432.8 809.3 460.3 531.5 360.5 672.4 425.2 394.4 340.7
Commercial real
estate 67.6 74.2 102.8 116.5 85.7 104.6 58.2 49.4 55.4
Services and
Distribution
Networks 120.9 131.3 129.8 121.2 121.5 131.2 122.9 123.6 106.6
Other activities 0.7 1.3 1.2 9.0 1.0 1.4 1.4 42.5 1.9
------------------ ------- --------------------------- ------------------------
GROUP 621.9 1,016.0 694.1 778.2 568.7 909.6 607.7 610.0 504.6
------------------ ------- --------------------------- ------------------------
--------------------------------------------------------------------------------
The financial data and indicators used in this press release - including
forward-looking information - are based on Nexity's operational reporting, with
joint ventures proportionately consolidated. All indicators are exclusive of
Edouard Denis.
(([1])) Revenue basis - previous 12-month period
[2] See the proposed resolutions for Nexity's Shareholders' Meeting of 31 May
2016, adopted by the Board of Directors on 12 May 2016
[3] Pending the decision of Nexity's Board of Directors and approval at the
Shareholders' Meeting
[4] Excluding bulk sales to professional landlords, and Iselection and PERL
sales
[5] Excluding PERL and Iselection for all data relative to selling, supply for
sale and business potential
[6] 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
[7] Source: CBRE
[8] Wood-frame offices in the French regions marketed by the Ywood and Térénéo
brands
[9] Floor areas are provided for information purposes only and may be subject to
adjustment once administrative authorisations have been obtained
[10] Revenue basis - previous 12-month period
[11] According to IFRS but with joint ventures proportionately consolidated
Q1 2016 revenue:
http://hugin.info/143515/R/2007363/742013.pdf
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Nexity via GlobeNewswire
[HUG#2007363]
Unternehmensinformation / Kurzprofil:
Datum: 27.04.2016 - 17:35 Uhr
Sprache: Deutsch
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contact information:
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