9M 2020 BUSINESS ACTIVITY AND REVENUE VERY GOOD PERFORMANCE OF NEXITY DURING THE FIRST NINE MONTHS OF THE YEAR SHOWING THE STRONG RESILIENCE OF ITS BUSINESS MODEL GUIDANCE FOR 2020 AND 2021 SPECIFIED |
9M 2020 business activity and revenue
- Strong growth in our market shares for new homes in
France : +4.3 points (16,4% in H1 2020 compared to 12,1% in H1 2019) - New home reservations in
France : 13,635 units representing €2,948 million (down 3% by volume and up 4% by value) Commercial Real Estate order intake: €230 million excluding VAT- Development backlog: €5.7 billion (up 12% from
end-December 2019 ) - Revenue: €2,737 million (down 2% from 9M 2019)
Guidance for 2020 and 2021
2020 business activity
- New home reservations for
Nexity : around 20,000 units, expected to substantially outperform the market - High level of Commercial real estate new orders expected in Q4
Financial aspects
- Revenue of at least €4.2 billion in 2020, with a current operating margin of around 5%, reaching a low point
- For 2021, revenue growth of at least 10% relative to 2020 and a current operating margin of at least 7%
- Development pipeline (backlog + land under options) of around €20 billion
- Net financial debt (before lease liabilities) less than €1.2 billion at
31 December 2020
This guidance is based on business assumptions considering new lockdown measures but excluding an extended shutdown of construction sites.
“After a start to the year marked by the shock of a widespread lockdown,
Our new home reservations in the first nine months of the year were almost equivalent by volume to those recorded in 9M 2019 and were even higher by value. French housing demand remained high, and
In the office space market,
With a new organisation2,
For
Based on these elements, and barring the implementation of lockdown measures resulting in an extended shutdown of construction sites, we are now ready to specify our guidance:
- Around 20,000 new home reservations expected this year
- Revenue of at least €4.2 billion in 2020, and growth of at least 10% in 2021
- Current operating margin of around 5% (low point) in 2020 and at least 7% in 2021
- Development pipeline of around €20 billion
- Net financial debt at
31 December 2020 less than €1.2 billion.
Lastly,
***
9M 2020 BUSINESS ACTIVITY
INDIVIDUAL CLIENTS
In the first six months of 2020, the MALONE3 market totalled 57,732 reservations, down 26% with respect to
For full-year 2020,
At
This increase in reservations was mainly concentrated in bulk sales (up 55% relative to 9M 2019), and more specifically the growth in reservations made by institutional investors (which tripled relative to 9M 2019). This change reflected Nexity’s ability to adapt its offering to respond to this demand. The firm commitment signed with
Conversely, retail sales were lower (down 28% from 9M 2019) amidst the public health crisis. First-time buyers were also affected by the introduction of stricter conditions for mortgage approval, despite financing terms remaining highly attractive (1.22% on average in
In the third quarter of 2020 alone, reservations were down 8% by volume and up 2% by value at 4,184 units and €925 million including VAT, due to the supply deficit. Retail sales were down 17% compared to Q3 2019, partially offset by a 7% increase in bulk sales over the same period.
After including subdivisions (901 units, down 28% compared to 9M 2019, in line with the change observed in the individual client market) and international sales (432 reservations, up 29% relative to 9M 2019), business activity for
The average price including VAT of new homes reserved by Nexity’s individual clients at
The average level of pre-selling booked at the start of construction work was very high (76% at
At
Real Estate Services to Individuals
Property Management for Individuals
The portfolio of units under management amounted to over 878,000 units at
Brokerage activities (lettings and sales by
Serviced residences
Domitys opened 10 new residences since the beginning of the year, bringing its portfolio to 110 serviced residences and over 12,500 residential units. At
Distribution activities
In the period to
COMMERCIAL CLIENTS – NEXITY ENTERPRISE SOLUTIONS8
As a result of the public health crisis, take-up of office space in the
Order intake in the first nine months of 2020 was €230 million excluding VAT.
Business potential for
Real Estate Services to Companies
At
At
BACKLOG AND BUSINESS POTENTIAL AT
The Group’s backlog at
Furthermore, development business potential at
SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
The public health crisis and the spring lockdown revealed or accelerated several pre-existing underlying trends in the real estate market: the desire to be closer to nature; the need for modular, flexible living spaces and workspaces; the rise of sustainable transport; and concerns about indoor air quality.
The Group wishes to include access to nature in its residential real estate programmes. Today, 90% of programmes delivered include outside living space and access to private or shared green space. Eventually the Group aims to make this 100%.
For a number of years
Nexity’s commitment to pursuing an ambitious low-carbon policy was illustrated in particular by the completion of the Palazzo Nice Méridia, France’s tallest timber-frame office building with E+C- (positive-energy, low-carbon) certification, which is the first commercial building in
In
9M 2020 CONSOLIDATED REVENUE – OPERATIONAL REPORTING9
Revenue for the first nine months of 2020 was €2,737 million, down €68 million or 2% compared to 9M 2019, versus the 7% drop in H1 2020 compared to H1 2019. This change resulted from an excellent performance achieved in the third quarter (€1,021 million, up 6% relative to Q3 2019).
(in millions of euros) | 9M 2020 | 9M 2019 | % change | |||
Individual Clients | 2,292.5 | 2,452.2 | -6.5% | |||
Residential Real Estate* | 1,640.0 | 1,797.1 | -8.7% | |||
Real Estate Services to Individuals | 652.5 | 655.1 | -0.4% | |||
Property Management for Individuals (incl. franchises) | 246.2 | 268.6 | -8.3% | |||
Serviced residences | 248.2 | 223.7 | +10.9% | |||
Distribution activities | 158.0 | 162.8 | -2.9% | |||
Commercial Clients | 444.6 | 351.7 | +26.4% | |||
368.6 | 282.4 | +30.5% | ||||
Real Estate Services to Companies | 76.0 | 69.3 | +9.6% | |||
Other Activities | 0.0 | 0.9 | n.s. | |||
Revenue | 2,737.1 | 2,804.9 | -2.4% |
* Revenue generated by
Revenue for the
Real Estate Services to Individuals posted revenue of €652 million for the period ended
Revenue growth in
Revenue from Real Estate Services to Companies amounted to €76 million, up €7 million. While Morning posted revenue growth for the first nine months of the year (€5 million), revenue was affected by lower occupancy rates at its shared workspaces than at the beginning of the year, following the lockdown period.
REVENUE UNDER IFRS
In IFRS terms, revenue to
GUIDANCE FOR 2020 AND 2021
2020 business activity
- New home reservations for
Nexity : around 20,000 units, expected to substantially outperform the market - High level of Commercial real estate new orders expected in Q4
Financial aspects
- Revenue of at least €4.2 billion in 2020, with a current operating margin of around 10%, reaching a low point
- For 2021, revenue growth of at least 5% relative to 2020 and a current operating margin of at least 7%
- Development pipeline (backlog + land under options) of around €20 billion
- Net financial debt (before lease liabilities) less than €1.2 billion at
31 December 2020 .
FINANCIAL CALENDAR & PRACTICAL INFORMATION
2020 annual results (after market close) | Wednesday, |
Q1 2021 revenue and business activity (after market close) | Wednesday, |
2021 Shareholders’ Meeting | Wednesday, |
2021 interim results (after market close) | Wednesday, |
A conference call on 9M 2020 revenue and business activity will be held today in English at
- Calling from | +33 (0)1 76 77 22 57 |
- Calling from elsewhere in | +44 (0)330 336 9411 |
- Calling from | +1 720 452 9217 |
The presentation accompanying this conference will be available on the Group’s website from
The conference call will be available on replay at https://www.nexity.fr/en/group/finance 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, notably due to economic, financial and competitive uncertainties. Furthermore, it is possible that some of the risks described in Section 2 of the Universal Registration Document filed with the AMF under number D.20-0280 on
AT
With more than 11,000 employees and €4.5 billion in revenue,
Our services platform is designed to serve all our clients as their real estate needs evolve.
Firmly committed to focusing on people and how they are connected with each other, their cities and the environment,
CONTACTS
Géraldine Bop – Deputy Head of Investor Relations / +33 (0)1 85 55 18 43 – investorrelations@nexity.fr
ANNEX 1: OPERATIONAL REPORTING
Reservations:
Reservations (units and €m) | 9M 2020 | 9M 2019 | % change | |||
New homes ( | 13,635 | 14,043 | -2.9% | |||
Subdivisions | 901 | 1,252 | -28.0% | |||
International | 432 | 334 | +29.3% | |||
Total reservations (number of units) | 14,968 | 15,629 | -4.2% | |||
New homes ( | 2,948 | 2,833 | +4.1% | |||
Subdivisions | 74 | 101 | -26.6% | |||
International | 65 | 53 | +23.9% | |||
Total reservations (€m incl. VAT) | 3,088 | 2,987 | +3.4% |
Breakdown of new home reservations by client – | 9M 2020 | 9M 2019 | ||||||
Homebuyers | 2,305 | 17% | 3,041 | 22% | ||||
o/w: - First-time buyers | 1,970 | 14% | 2,420 | 17% | ||||
- Other homebuyers | 335 | 2% | 621 | 4% | ||||
Individual investors | 4,680 | 34% | 6,721 | 48% | ||||
Professional landlords | 6,650 | 49% | 4,281 | 30% | ||||
o/w: - Institutional investors | 4,201 | 31% | 1,520 | 11% | ||||
- Social housing operators | 2,449 | 18% | 2,761 | 20% | ||||
Total | 13,635 | 100% | 14,043 | 100% |
Real Estate Services to Individuals
Property Management for Individuals – Portfolio of units under management | Change | |||||
- Condominium management | 704,000 | 709,000 | -0.8% | |||
- Rental management | 174,000 | 175,000 | -0.2% | |||
Franchise networks – Century 21 | ||||||
- Number of agencies | 899 | 898 | +0.1% | |||
Serviced residences – Students – Studéa | ||||||
- Number of residences in operation | 124 | 124 | 0 | |||
- Rolling 12-month occupancy rate | 94.2% | 94.7% | -0.5 pts | |||
Serviced residences – Seniors – Domitys | ||||||
- Total number of residences in operation | 110 | 100 | +10 | |||
o/w: Number of residences opened more than 2 years ago ( | 72 | 58 | +14 | |||
- Rolling 12-month occupancy rate | 85.0% | 84.2% | +0.8 pts | |||
Distribution activities – iSelection and PERL | ||||||
- Total reservations | 2,700 | 3,406 | -20.7% | |||
- Reservations on behalf of third parties | 1,521 | 1,929 | -21.2% |
QUARTERLY FIGURES
Reservations:
2020 | 2019 | 2018 | ||||||||||||
Number of units | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||
New homes ( | 4,184 | 5,794 | 3,657 | 7,794 | 4,557 | 5,603 | 3,883 | 6,600 | 4,757 | 4,634 | 3,618 | |||
Subdivisions | 244 | 297 | 360 | 836 | 435 | 559 | 258 | 812 | 336 | 576 | 339 | |||
International | 193 | 74 | 165 | 307 | 161 | 137 | 36 | 170 | 80 | 75 | 40 | |||
Total (number of units) | 4,621 | 6,165 | 4,182 | 8,937 | 5,153 | 6,299 | 4,177 | 7,582 | 5,173 | 5,285 | 3,997 | |||
Value (€m incl. VAT) | ||||||||||||||
New homes ( | 925 | 1,231 | 792 | 1,529 | 909 | 1,150 | 773 | 1,327 | 922 | 951 | 715 | |||
Subdivisions | 19 | 25 | 30 | 76 | 35 | 46 | 20 | 63 | 28 | 51 | 28 | |||
International | 29 | 11 | 26 | 47 | 37 | 13 | 3 | 15 | 7 | 6 | 4 | |||
Total (€m incl. VAT) | 973 | 1,267 | 847 | 1,652 | 981 | 1,209 | 797 | 1,405 | 956 | 1,008 | 747 |
Revenue
2020 | 2019 | 2018 | ||||||||||||
(in millions of euros) | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||
Individual Clients | 930.7 | 659.4 | 702.4 | 1,562.0 | 840.8 | 849.4 | 761.6 | 1,470.3 | 764.3 | 712.3 | 603.1 | |||
690.1 | 459.0 | 490.9 | 1,251.9 | 615.2 | 629.4 | 552.5 | 1,133.8 | 545.3 | 524.2 | 445.1 | ||||
Real Estate Services to Individuals | 240.5 | 200.4 | 211.5 | 310.1 | 225.6 | 219.9 | 209.1 | 336.5 | 219.0 | 188.1 | 158.0 | |||
Property Management for Individuals (including franchises) | 87.9 | 76.8 | 81.6 | 90.2 | 90.0 | 91.7 | 86.9 | 91.5 | 91.6 | 91.8 | 84.9 | |||
Serviced residences | 87.6 | 76.4 | 84.2 | 92.5 | 78.5 | 73.3 | 71.9 | 68.9 | 70.1 | 21.3 | 22.5 | |||
Distribution activities | 65.1 | 47.3 | 45.7 | 127.3 | 57.1 | 54.9 | 50.3 | 176.1 | 57.3 | 75.0 | 50.6 | |||
Commercial Clients | 90.3 | 269.9 | 84.4 | 132.0 | 123.2 | 109.6 | 118.9 | 167.3 | 174.2 | 154.4 | 84.7 | |||
63.7 | 247.6 | 57.3 | 102.0 | 96.1 | 88.0 | 98.3 | 146.1 | 157.6 | 138.7 | 69.6 | ||||
Real Estate Services to Companies | 26.6 | 22.2 | 27.1 | 30.0 | 27.1 | 21.6 | 20.6 | 21.2 | 16.6 | 15.8 | 15.1 | |||
Other Activities | (0.0) | (0.0) | 0.0 | 0.0 | (0.0) | 0.4 | 0.5 | 0.9 | 1.5 | 1.4 | 0.5 | |||
Revenue | 1,021.0 | 929.3 | 786.8 | 1,694.0 | 964.0 | 959.4 | 881.1 | 1,638.5 | 940.1 | 868.1 | 688.3 |
Backlog
2020 | 2019 | 2018 | ||||||||||||
(in millions of euros, excluding VAT) | 9M | H1 | Q1 | 12M | 9M | H1 | Q1 | 12M | 9M | H1 | Q1 | |||
5,214 | 5,095 | 4,623 | 4,455 | 4,328 | 4,321 | 4,109 | 3,979 | 4,065 | 3,724 | 3,451 | ||||
183 | 191 | 173 | 185 | 182 | 172 | 160 | 182 | 188 | 201 | 182 | ||||
5,397 | 5,285 | 4,796 | 4,640 | 4,510 | 4,493 | 4,269 | 4,161 | 4,253 | 3,924 | 3,634 | ||||
321 | 373 | 398 | 456 | 401 | 269 | 222 | 308 | 379 | 332 | 409 | ||||
5,719 | 5,659 | 5,194 | 5,095 | 4,911 | 4,762 | 4,491 | 4,469 | 4,632 | 4,256 | 4,042 |
ANNEX 2: BREAKDOWN BETWEEN DEVELOPMENT AND SERVICES
To offer an additional tool for analysing its operational performance, the Group also provides a breakdown of its revenue by business line, separating its Real Estate Development activities (
Revenue
(in millions of euros) | 9M 2020 | 9M 2019 | % change | |||
Development* | 2,008.6 | 2,079.5 | -3.4% | |||
1,640.0 | 1,797.1 | -8.7% | ||||
368.6 | 282.4 | +30.5% | ||||
Services | 728.4 | 724.5 | +0.5% | |||
Property Management for Individuals, Franchises, Property Management for Companies | 297.2 | 318.3 | -6.6% | |||
Serviced Residences, Shared Office Space | 273.2 | 243.4 | +12.2% | |||
Distribution | 158.0 | 162.8 | -2.9% | |||
Other Activities | 0.0 | 0.9 | n.s. | |||
2,737.1 | 2,804.9 | -2.4% |
* Revenue generated by
GLOSSARY
Business potential: The total volume of potential business at any given moment, expressed as a number of units and/or revenue excluding VAT, within future projects in
Current operating profit: Includes all operating profit items with the exception of items resulting from unusual, abnormal and infrequently occurring transactions. In particular, impairment of goodwill is not included in current operating profit
Development backlog (or order book): The Group’s already secured future revenue, expressed in euros, for its
EBITDA: Defined by
EBITDA after lease payments: EBITDA net of expenses recorded for lease payments that are restated to reflect the application of IFRS 16 Leases
Free cash flow: Cash generated by operating activities after taking into account tax paid, financial expenses, changes in WCR, dividends received from companies accounted for under the equity method and net investments in operating assets, and before repayment of lease liabilities
Gearing: Net debt divided by consolidated equity
Joint ventures: Entities over whose activities the Group has joint control, established by contractual agreement. Most joint ventures are Residential or
Land bank: The amount of projects in
MALONE (Marché du Logement Neuf): New home market in
Net profit before non-recurring items: Group share of net profit restated for non-recurring items such as change in fair value adjustments in respect of the ORNANE bond issue and items included in non-current operating profit (any goodwill impairment losses, remeasurement of equity-accounted investments following the assumption of control)
Operational reporting: According to IFRS but with joint ventures proportionately consolidated. This presentation is used by management as it better reflects the economic reality of the Group’s business activities
Order intake –
Property Management for Individuals (PMI): Management of rented properties on behalf of individual clients (management for the owner of all relations with the tenant, management of the sale of the property if applicable) as well as the management of the common areas of apartment buildings (as a managing agent) on behalf of condominium owners. This also includes brokerage activities
Reservations by value (or expected revenue from reservations) –
Residences open for more than 2 years (Domitys): Residences open since
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.
2 See press release of
3 French market for new homes, including bulk sales. Source: ECLN for retail sales and FPI for bulk sales
4 See glossary on page 11
5 See press release of
6 Take-up period: Available market supply / Reservations for the last 12 months, expressed in months
7 See glossary on page 11
8 Source of market data: Immostat
9 See glossary on page 11
10 See press release of
Attachment
- 20201028_PR_Q32020_28102020 vdef2
© OMX, source