Regulatory News:

LES NOUVEAUX CONSTRUCTEURS (Paris:LNC), a leading residential and commercial real estate developer, today released its earning report for the year ended December 31, 2010. The 2010 financial statements, which have been approved by the Management Board, were reviewed by the Supervisory Board on Friday, March 25, 2011. The consolidated accounts have been audited and the auditors are issuing their report.

         

KEY PERFORMANCE INDICATORS (in ? millions)

 

2010

  

2009

         
Net revenue   540.0   649.1

Gross profit

    Gross margin

  110.4

20.4%

   111.8

17.2%

Recurring operating income

    Recurring operating margin

  24.1

4.5%

   32.9

5.1%

Net profit (loss), Group share   15.1   10.9
Net debt/(cash) at December 31   (35.3)   79.5

Olivier Mitterrand, Chairman of the Management Board, said:

"2010 saw a return to profit in all our countries. In France, we benefited from a buoyant market in which demand was sustained by record low interest rates, effective government incentives and a decline in supply. In Spain, our new affordable housing programs have been very successful and in Germany our refocusing initiatives have produced results. In 2011, we will pursue our development plans while remaining attentive to possible changes in our markets. With a solid balance sheet and a stronger management team, all the conditions have been met for a new phase in our growth."

REVENUE

Revenue for the year ended December 31, 2010 totaled ?540 million, a decline of 17% from the prior year.

REVENUE BY OPERATING SEGMENT

             
In ? millions excl. VAT   2010   2009   % Change
France   329.4   390.2   -16%
Of which housing 294.8 307.6 -4%
Of which commercial real estate   34.6   82.6   -58%
Spain   42.2   64.1   -34%
Germany 159.0 187.9-15%
Of which Concept Bau-Premier 60.1 90.3 -33%
Of which Zapf*   98.9   97.6   +1%
Other countries   9.4   6.8   +38%
Total   540.0   649.0   -17%

*Zapf, which was 50% proportionally consolidated until April 30, 2009, has been fully consolidated since May 1, 2009.

In France, revenue totaled ?329.4 million, down 16% compared with 2009. A decline of ?48 million in commercial real estate accounted for most of the decrease, reflecting the completion in the prior year of the Copernic 2 program, which alone contributed ?66 million to the 2009 total.

Including revenue of ?20 million generated by Dominium during the year owing to its inclusion in the scope of consolidation, the residential real estate segment contracted by 4% in 2010. This change was due to a decrease in housing construction in 2010, associated with the slowdown in sales in the second half of 2008 and reduced land potential in 2009.

In Spain, revenue amounted to ?42.2 million, down ?22 million from 2009. The 34% drop reflects a high basis of comparison in 2009 relating to two transactions carried out with banks for a total of ?33.6 million, which enabled the Spanish subsidiary to pay down debt by a corresponding amount. Excluding the impact of these transactions, 2010 revenue would be 38% higher than in 2009.

In Germany, revenue from Concept Bau-Premier totaled ?60.1 million, compared with ?90.3 million in 2009, as the company delivered only 183 homes in 2010, versus 281 in the previous year.

Revenue from Zapf amounted to ?98.9 million, compared with ?97.6 million in 2009, during which the company was 50% proportionally consolidated. On a comparable, fully consolidated basis, revenue fell by around ?8 million in 2010.

BUSINESS PERFORMANCE

Orders in 2010 rose by 11% in both value and volume to 2,889 units.

ORDERS - HOUSING

             
In ? millions incl. VAT   2010   2009   % Change
France   409   353   +16%
Of which individual homebuyers 329 296 +11%
Of which block sales   80   57   +38%
Spain   65   37   +76%
Germany 121 155-22%
Of which Concept Bau-Premier 65 95 -31%
Of which Zapf (excluding the garage business)   56   60   -7%
Other countries   29   18   +61%
Total   624   563   +11%

In France, orders were up 16% in value and 8% in volume for the year. Sales to individual homebuyers, totaling 1,373 units in 2010, rose by 4% in volume and 11% in value because of higher average unit prices.

In 2010, in a favorable market environment, LNC focused on reducing time-to-sale. This strategy led to 30 new marketing launches during the year versus 13 for the whole of 2009.

Buy-to-let sales accounted for 53% of sales to private buyers in 2010, versus 55% in full-year 2009.

Note that in early 2010, LNC changed the method of booking orders, which are now recognized only when financing arrangements are completed. Using the former method, orders would have stood at 1,927 housing units (corresponding to 1,817 orders and 110 pre-orders) in 2010, for a 14% gain in volume over the prior year. Orders from individual homebuyers would have risen by 12% over the year, with 1,373 orders and 110 pre-orders.

In Spain, the subsidiary had 12 programs on the market at December 31, 2010 compared with 10 a year earlier. Net orders for 2010 were up 76% overall, year on year. Sales to private buyers virtually tripled to 314 units, from 119 units in 2009. This sharp increase reflected the success of affordable housing programs, which represented 187 units primarily located in Madrid. Other orders concerned 103 completed housing units and 24 units sold off-plan at market prices.

No block sales were carried out in 2010, compared with 48 in 2009.

Premier España had 115 completed homes that remained unsold as of December 31, 2010, compared with 181 units a year earlier. Selling these homes remains the subsidiary's top priority.

In Germany, Concept Bau-Premier booked 147 orders in 2010 versus 279 in 2009. The substantial decline primarily reflected the high basis of comparison due to the block sale in first-quarter 2009 of 91 units in Munich to an institutional investor for around ?24 million.

Zapf's revenue from housing sales declined to ?56 million from ?60 million in 2009, due to the discontinuation of the property development business as part of the restructuring plan.

BACKLOG

At December 31, 2010, backlog stood at ?518 million, excluding VAT, up 14% from year-end 2009.

Housing backlog totaled ?517 million or 12 months of business based on 2010 revenue, compared with nine months of business at December 31, 2009.

BACKLOG AT DECEMBER 31

             
In ? millions excl. VAT   2010   2009   % Change
France   332   299   +11%
Of which housing 331 265 +25%
Of which commercial real estate   1   34   -96%
Spain   61   38   +61%
Germany 115 110+4%
Of which Concept Bau-Premier 66 60 +10%
Of which Zapf (including the garage business)   49   51   -3%
Other countries   10   8   +29%
Total   518   455   +14%

In France, backlog represented ?332 million at December 31, 2010, up ?33 million from year-end 2009.

Housing backlog was up by a strong ?66 million compared with December 31, 2009 (of which ?20 million from the consolidation of Dominium since January 1, 2010).

With no new orders received since the completion of the Copernic 2 program, commercial real estate backlog was down ?33 million compared with the end of 2009.

In Spain, backlog amounted to ?61 million at December 31, 2010, up 61% from one year earlier. The increase was led by the success of orders for four affordable housing programs in Madrid, which came to an aggregate ?40 million at December 31, 2010.

In Germany, backlog stood at ?115 million, up 4% from year-end 2009. Concept Bau-Premier's backlog increased by ?6 million, while Zapf's backlog was generally stable, with the construction and garage businesses accounting for 56% and 44% of its revenue respectively.

LAND POTENTIAL

At December 31, 2010, LNC's housing land potential amounted to ?1,002 million (excluding VAT). This represents the equivalent of 4,730 housing units, an increase of 18% from the 4,007 units reported a year earlier. Based on housing revenue over the past 12 months, the potential represents two years of business.

CONFIRMED LAND POTENTIAL AT DECEMBER 31 - HOUSING

             
In ? millions excl. VAT   2010   2009   % Change
France   708   568   +25%
Spain   91   134   -32%
Germany   178   144   +24%
Of which Concept Bau-Premier 178 141 +26%
Of which Zapf   0   3   -100%
Other countries   25   12   +98%
Total   1,002   858   +17%

In France, the land potential represented 3,525 units at December 31, 2010 versus 2,965 a year earlier. The 19% increase was due to the solid results in terms of confirmed land potential for the year.

In Spain, the land potential stood at 395 housing units at December 31, 2010, versus 525 units at year-end 2009. The decline was led by the reduction in the number of unsold, completed units in the portfolio and strong take-up of affordable housing programs. At December 31, 2010, only four lots were intentionally being kept off the market, compared with five one year earlier.

In Germany, Concept Bau-Premier's land potential rose by 35% over the period, to 483 housing units from 357 at December 31, 2009. In the second half, an agreement was signed to purchase a major tract of land representing 141 housing units in Munich.

The discontinuation of Zapf's property development business led to the elimination of its land potential.

Lastly, a large plot of land potentially representing 337 housing units was acquired in Indonesia in the fourth quarter of 2010.

FINANCIAL REVIEW

  • Income statement

Gross profit amounted to ?110.4 million in 2010, a decline of ?1.4 million from the previous year. Gross margin, however, improved sharply, rising more than 3 points to 20.4%, from 17.2% in 2009

The country-by-country breakdown in gross profit is as follows:

GROSS PROFIT BY COUNTRY

         
In ? millions excl. VAT   2010   2009
France - Housing   54.8   54.1
France - Commercial real estate 2.7 18.0
Spain 9.3 0.9
Germany - Concept Bau-Premier 11.9 16.2
Germany - Zapf 30.7 21.1
Other countries   1.0   1.4
Total   110.4   111.8

In France, gross profit from the Housing business rose by ?0.7 million. Gross margin stood at 18.6%, versus 17.6% for the previous year.

Gross profit from the Commercial Property business was sharply lower (down ?15.4 million) due to the steep drop in revenue in this segment.

In Spain, gross profit rose by ?8.4 million year on year. Gross margin stood at 22% of revenue, compared with 1.4% in 2009. This sharp upswing was due to a favorable basis of comparison owing to a block sale to a bank subsidiary in 2009 that resulted in a gross loss of ?2.8 million.

In Germany, the ?4.3-million contraction in Concept Bau Premier's gross profit was due to the decline in revenue. Gross margin however improved by approximately 2 points to 19.8%.

Zapf's gross profit increased by ?9.6 million of which ?2.5 million due to a change in consolidation method, with the remainder stemming mainly from a decline in production costs and the reversal of provisions for inventory recognized in 2008 and 2009.

Recurring operating income amounted to ?24.1 million and represented 4.5% of revenue, compared with ?32.9 million and 5.1% in 2009.

The main differences, involving commercial real estate (down ?13.1 million) and Spain (up ?7.6 million), reflected corresponding changes in gross profit in both segments.

As for the Housing segment in France, the ?3.4-million decline in recurring operating income (even though gross profit was very slightly higher) was due to an increase in operating expenses mainly because of new program launches.

Operating income totaled ?24.1 million, compared with ?28.9 million in 2009. No non-recurring operating expense was recorded in 2010, compared with a net expense of ?4 million in the prior year.

The cost of net debt for the year was sharply lower at ?7 million, compared with ?13.4 million in 2009. The decline was due mainly to a reduction in average debt, which stood at ?162 million in 2010, compared with ?289 million in the previous year.

Net profit, Group share amounted to ?15.1 million compared with ?10.9 million in 2009. The Group's Spanish operations and Zapf, both of which reported substantial losses in 2008 and 2009, returned to profit in 2010, offsetting the decline in earnings from the Commercial Real Estate business.

  • Balance sheet structure

At December 31, 2010, working capital requirement was significantly lower at ?148.5 million, compared with ?271.3 million at year-end 2009. The decrease was due to the combined effect of declines both in inventory, which was down ?78 million following strong sales during the year, and in trade receivables, which were reduced by ?108.9 million mainly because of the delivery of the Copernic 2 program in February 2010.

The decline in working capital requirement enabled the Company to pay off all its debt. At year-end 2010, LNC had net cash totaling ?35.3 million compared with net debt of ?79.5 million one year earlier.

Consolidated equity totaled ?196.3 million at year-end, compared with ?188 million at December 31, 2009. Equity in France amounted to ?168.2 million at year-end 2010 and accounted for 86% of the consolidated total.

DIVIDEND - PLAN TO SUPPORT EMPLOYEE SHARE OWNERSHIP

At the Annual Meeting on Friday, May 20, the Management Board will ask shareholders to approve a dividend of ?0.50 per share.

On Tuesday, April 5, 2011, as part of the Company's policy of motivating employees and giving them a stake in its earnings, 710,185 new shares will be issued under the 2009 share ownership plan for executives and employees.

OUTLOOK

After the stepped-up pace of marketing launches throughout 2010, Les Nouveaux Constructeurs intends to continue expanding its product portfolio this year and pursue new business initiatives while remaining highly vigilant as to the application of its land acquisition criteria. Les Nouveaux Constructeurs has begun 2011 with a revitalized land portfolio, as well as stronger, fully operational teams and a very sound balance sheet to support its growth and development.

FINANCIAL CALENDAR

  • First-quarter financial data: Thursday, May 5, 2011, (before the opening of the NYSE-Euronext Paris stock exchange).

LES NOUVEAUX CONSTRUCTEURS

Les Nouveaux Constructeurs, founded by Olivier Mitterrand, is a leading developer of new housing, as well as offices, in France and two other European countries.

Since 1972, Les Nouveaux Constructeurs has delivered nearly 60,000 apartments and single-family homes in France and abroad. It has an extensive presence in France, where its operations in the country's five largest metropolitan areas and high-quality programs have made Les Nouveaux Constructeurs one of the most well known names in the industry.

Les Nouveaux Constructeurs has been listed on the NYSE Euronext Paris, compartment C, since November 16, 2006 (code LNC; ISIN code: FR0004023208) and is included in the SBF 250 index.

All LNC press releases are posted on its website at: http://www.lesnouveauxconstructeurs.fr/fr/communiques

APPENDIXES

QUARTERLY REVENUE - BY COUNTRY

         
In ? millions excl. VAT 2010 2009
  Q1   Q2   Q3   Q4 Q1   Q2   Q3   Q4
France (Housing) 52.7   76.4   75.8   89.9 46.7   76.4   68.2   116.3
France (Commercial real estate) 6.5   10.3   11.4   6.3 14.5   22.4   18.7   27.0
Spain 16.0   10.9   3.6   11.8 7.0   37.1   13.6   6.3
Germany (Concept Bau-Premier) 12.6 2.5 8.7 36.4 10.3 14.9 11.2 54.0
Germany (Zapf) 10.2   20.7   24.5   43.4 5.3   17.9   30.4   44.0
Other countries 0.4   0.8   0.7   7.5 0.8   1.8   0.8   3.4
Total 98.4   121.6   124.7   195.3 84.6   170.4   142.9   251.1

AVERAGE UNIT PRICE - HOUSING ORDERS

             
In ? thousands incl. VAT   2010   2009   % Change
France - including block sales(1)

France - Excluding block sales(1)

   225

240

  210

224

  +7%

+7%

Spain(2)   208   223   -7%
Germany(3)   241   274   -12%
Other countries(4)   111   94   +18%
LNC   216   216   +0%

(1) Including VAT of 5.5% or 19.6%. (2) Including VAT of 7% for first-time homebuyers. (3) No VAT. (4) Including 10% sales tax in Indonesia.

NUMBER OF HOUSING ORDERS, NET

             
Number of units   2010   2009   % Change
France   1,817   1,686   +8%
Spain   314   167*   +88%
Germany (Concept Bau-Premier)   147   279   -47%
Germany (Zapf)   357   287   +24%
Other countries   254   187   +36%
Total   2,889   2,606   +11%

*Of which 48 units through the sale to a bank subsidiary

QUARTERLY HOUSING ORDERS BY COUNTRY

         
In ? millions incl. VAT 2010 2009
  Q1   Q2   Q3   Q4 Q1   Q2   Q3   Q4
France 76   119   95   119 113   94   78   69
Spain 15   14   21   15 6   17   7   7
Germany (Concept Bau-Premier) 13   17   14   21 44   23   15   12
Germany (Zapf) 9   19   23   5 14   24   16   7
Other countries 3   8   9   8 3   4   4   6
Total 116   178   161   168 180   162   120   101

BACKLOG BY QUARTER (period end)

         
In ? millions excl. VAT 2010 2009
  Q1   Q2   Q3   Q4 Q1   Q2   Q3   Q4
France (Housing) 297   322   331   331 338   334   326   265
France (Commercial real estate) 28   19   8   1 95   74   57   34
Spain 42   43   59   61 48   40   36   38
Germany (Concept Bau-Premier) 60 75 81 66 89 98 101 60
Germany (Zapf) 57   78   87   49 68   80   77   51
Other countries 10   15   21   10 10   11   11   8
Total 494   552   586   518 648   637   608   455

LAND POTENTIAL AT DECEMBER 31

             
Number of units   2010   2009   % Change
France   3,525   2,965   +19%
Spain   395   525   -25%
Germany (Concept Bau-Premier)   483   357   +35%
Germany (Zapf)   0   8   -100%
Other countries   327   152   +115%
Total   4,730   4,007   +18%

Housing

LAND POTENTIAL BY QUARTER (period end)

         
In ? millions excl. VAT 2010 2009
  Q1   Q2   Q3   Q4 Q1   Q2   Q3   Q4
France 617   684   619   708 365   311   355   568
Spain 116   116   97   91 173   145   138   134
Germany (Concept Bau-Premier) 162   142   186   178 158   146   132   141
Germany (Zapf) 2   1   0   0 54   47   37   3
Other countries 12   15   15   25 21   17   16   12
Total 909   958   917   1,002 770   666   678   858

Excluding commercial real estate

DISCLAIMER

The statements on which the Company objectives are based may contain forward-looking statements. Such forward-looking statements involve risks and uncertainties regarding the economic, financial, competitive, and regulatory environment and the completion of investment programs and asset transfers. In addition, the occurrence of certain risks [see chapter 4 in the Document de Base registered with the French Stock Exchange Commission (AMF) under number I.06-155] could affect the business of the Company and its financial performance. Moreover, the achievement of the objectives supposes the success of the marketing strategy of the Company (see chapter 6 of the Document de Base). Therefore, the Company hereby makes no commitment nor gives any guarantee as to the fulfillment of objectives. The Company does not undertake to update any forward-looking statement subject to the respect of the principles of the permanent information as provided by articles 221-1 et seq. of the AMF's general regulations.

CONSOLIDATED INCOME STATEMENT

         
CONSOLIDATED INCOME STATEMENT   Dec. 31, 2010   Dec. 31, 2009
In ? thousands        
 
Revenue 539,964 649,065
Cost of sales (429,605) (537,307)
Gross profit 110,359 111,758
Staff costs (46,156) (40,292)
Other recurring operating income and expense, net (34,937) (33,149)
Taxes and assimilated payments (1,685) (1,764)
Net amortization expense and impairment (3,489) (3,636)
         
Recurring operating income   24,092   32,918
 
Impairment of goodwill
Other operating income and expense 0 (4,002)
         
Operating income   24,092   28,916
 
Finance costs (7,906) (14,790)
Income from cash and cash equivalents 874 1,380
Net finance costs (7,032) (13,410)
Other financial expense (3,132) 15
Other financial income 1,717 1,187
         
Net finance costs and other financial income and expense   (8,447)   (12,208)
Income (loss) from operations before tax   15,645   16,708
 
Income tax (199) (6,297)
Share of profits and losses in equity associates 563 (6)
Results of discontinued operations and non-current assets held for sale 0 (457)
         
Net profit (loss) of fully consolidated companies   16,009   9,948
Minority interests   866   (922)
Net profit (loss), Group share   15,143   10,869
         
Basic earnings per share (in ?)   1.08   0.78
Diluted earnings per share (in ?)   1.03   0.76

CONSOLIDATED BALANCE SHEET

         
ASSETS   Dec. 31, 2010   Dec. 31, 2009
In ? thousands        
Net goodwill 6,433 5,476
Net intangible assets 95 167
Net property, plant and equipment 35,321 35,660
Other non-current investments 2,014 2,115
Deferred tax assets   5,102   5,469
Total non-current assets   48,965   48,888
Inventories and work in progress 261,530 339,009
Trade receivables and related accounts 49,452 125,040
Tax receivables 135 142
Other current assets 37,090 32,445
Current available-for-sale securities 1,002 1,036
Other short-term financial assets 12,914 10,266
Cash and cash equivalents   172,514   156,540
Total current assets   534,637   664,478
Assets held for sale        
Total assets   583,602   713,365
 
         
LIABILITIES Dec. 31, 2010 Dec. 31, 2009
In ? thousands        
Contributed capital 14,532 14,532
Additional paid-in capital 77,115 77,115
Reserves and retained earnings 88,242 81,445
Net profit (loss), Group share   15,143   10,869
Shareholders' equity before minority interests   195,032   183,962
Minority interests   1,306   4,077
Shareholders' equity   196,338   188,038
Non-current borrowings 47,497 96,692
Non-current provisions 2,898 2,292
Deferred tax liabilities 5,622 12,138
Other non-current borrowings   0   72
Total non-current liabilities   56,017   111,194
Current borrowings 102,042 152,490
Current provisions 15,982 20,676
Trade and other payables 114,282 115,825
Tax liabilities 763 5,533
Other current liabilities 87,927 113,856
Other current borrowings   10,251   5,753
Total current liabilities   331,247   414,133
Liabilities held for sale        
Total shareholders' equity and liabilities   583,602   713,365

CONSOLIDATED STATEMENT OF CASH FLOWS

         
CONSOLIDATED STATEMENT OF CASH FLOWS   Dec. 31, 2010   Dec. 31, 2009
In ? thousands        
 
Net profit (loss) 15,143 10,869
Minority interests 866 (922)
Net profit (loss) of fully consolidated companies 16,009 9,948
 
Adjustments to reconcile (loss) income to net cash provided by operating activities 631 524
Elimination of depreciation, amortization and provisions (819) 236
Elimination of fair value adjustments 2,822 21
Elimination of capital gains and losses (99) 695
Elimination of earnings of equity-accounted investments (563) 6
 
= Cash flow after financing costs and tax 17,981 11,430
 
Elimination of net interest expense (income) 7,032 13,433
Elimination of tax expenses, including deferred tax 199 6,297
 
= Cash flow before finance costs and tax 25,212 31,160
 
Impact of changes in working capital requirement for operations 121,942 134,163
Net interest payments (7,026) (13,658)
Tax payments (11,076) 11,292
         
Net cash used by operating activities   129,052   162,957
 
Effect of changes in the scope of consolidation (2,144) 3,823
Disposals of consolidated companies, after deducting disposals of cash (80) 716
Acquisition of intangible and tangible assets (2,056) (1,836)
Acquisition of financial assets (81) (297)
Disposal of intangible and tangible assets 210 69
Disposal and repayment of financial assets 532 177
Dividends received 410 0
         
Net cash used by financing activities   (3,209)   2,652
 
Impact of changes in the scope of consolidation (450) 0
Dividends paid to parent company shareholders (6,996) 0
Dividends paid to minority shareholders of consolidated companies (884) (3,421)
Acquisition and disposal of treasury shares (51) 0
Change in borrowings (99,789) (90,791)
         
Net cash provided by financing activities   (108,170)   (94,212)
 
Effect of exchange rate fluctuations on cash 179 124
         
Change in net cash and cash equivalents   17,852   71,521
         
Opening net cash and cash equivalents   154,070   82,549
         
Closing net cash and cash equivalents   171,922   154,070
of which Cash and cash equivalents 172,514 156,540
of which Bank overdrafts   592   2,470
Closing net cash and cash equivalents   171,922   154,070

Investor Relations
Les Nouveaux Constructeurs
Paul-Antoine Lecocq, +33 (0)1 45 38 45 45
Vice President Finance
palecocq@lncsa.fr
or
LT Value
Investor Relations
Nancy Levain / Maryline Jarnoux-Sorin, +33 (0)1 44 50 39 30
nancy.levain@ltvalue.com
maryline.jarnoux-sorin@ltvalue.com
or
Media
Cap & Cime
Financial Media
Capucine de Fouquières, +33 (0)6 09 46 77 33
capucine@capetcime.fr
or
Real Estate Media
Virginie Hunzinger, +33 (0)1 55 35 08 18
+33 (0)6 10 34 52 81
vhunzinger@capetcime.fr