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2016-10-26

Nexity : 9M 2016 business activity and revenue

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| 9M 2016 BUSINESS ACTIVITY |
| |
|AND REVENUE |
| |
| Paris, Wednesday, 26 October 2016 |
| |
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Robust business activity:

* Residential real estate: 10,692 new home reservations[1]in France at 30
September 2016, up 42% in volume and 33% in value compared to the first 9
months of 2015 * On a like-for-like basis, 10,397 new home reservations in
France at 30 September 2016, up 39% in volume and 30% in value
* Commercial real estate: €248 million in orders at end-September 2016
* Group backlog: up 13.5%, reaching a record €3.7 billion, i.e. 18 months'
revenue from development activities [2]
* Revenue: €2,019 million at 30 September 2016 (stable)

Acquisitions and partnerships:

* Successful start of the tie-up with Edouard Denis, consolidated since 1
July 2016 within the Group's Residential real estate division
* Majority stake acquired in Primosud (finalised on 14 October 2016)
* Strategic partnership announced with AEgide-Domitys[3], the French market
leader for serviced senior residences (Nexity's stake raised from 38.15% to
45.15% of the share capital)

Outlook for 2016:

* Nexity's new home reservations growth outlook revised upward, now expected
to outperform[4]the French market (estimated growth of 15-20%, with around
120,000 reservations for 2016)
* Commercial real estate order intake: at least €250 million
* 2016 revenue: stable, around €3 billion
* 2016 current operating profit target: at least €245 million
* Proposed renewal of a €2.20 per share dividend in 2017[5]

Alain Dinin, Chairman and CEO of Nexity, commented:

"The French residential market has maintained its strong momentum, driven by
very low interest rates, effective housing stimulus measures and a growing
appetite in France for property. Since the beginning of 2016, Nexity has
roundly outperformed the market thanks to its effective sales organisation
and its strong presence in areas where demand is highest (such as Greater
Paris, reduced-VAT home sales and serviced residences). In 2016, Nexity's
market share should reach its highest level ever - around 12.5%, which is a
market gain of about 100 basis point. Our outlook remains positive, subject
to the uncertainty surrounding the timing of future interest rate hikes. It
is still too early to speculate on the upcoming presidential election's
potential consequences on housing policy, but we do not expect any
fundamental change to take place.

In commercial real estate, where market conditions are also favourable, Nexity
delivered strong sales performance, and will beat its initial target of €250
million in order intake.

With a backlog up 13% over the first nine months of the year, Nexity confirms
its organic growth potential. This was boosted by external growth: the
majority stake acquired in Edouard Denis represents an important addition to
the group, and the partnership is progressing in a highly satisfactory
manner. The strategic partnership with Ægide-Domitys, announced today, will
enable Nexity to add a new business line to its integrated real estate
services platform, focused on serviced residences and personal assistance
services, which will be a growth driver in the future."

***
9M 2016 business activity

Residential real estate

The retail market for new homes in France is expected to see growth of between
15% and 20% for 2016 (i.e. around 120,000 reservations[6]), boosted by
historically low mortgage rates (1.41%[7]on average in the third quarter of
2016).

-------------------------------------------------------------------------------
| Reservations (units and €m) 9M 2016 9M 2015 Change % |
| New homes (France) 10,692 * 7,504 +42.5% |
| Subdivisions 1,491 1,277 +16.8% |
| International 338 159 x 2.1 |
| Total reservations (number of units) 12,521 8,940 +40.1% |
| New homes (France) 1,974 * 1,483 +33.2% |
| Subdivisions 110 97 +13.1% |
| International 58 22 x 2.6 |
| Total reservations (€m incl. VAT) 2,142 1,602 +33.7% |
| * Including 295 net reservations for Edouard Denis representing €48 million |
|incl. VAT |
-------------------------------------------------------------------------------
* New homes

At end-September 2016, the Group recorded 10,692 net new home reservations in
France, up 42% by volume and 33% by value (€1,974 million) year-on-year.

On a like-for-like basis, at 30 September 2016, net new home reservations in
France were up 39% in volume (10,397 reservations) and 30% in value (€1,927
million) with respect to 30 September 2015. At end-September 2016, the
disparity observed between the increase in the number of reservations and the
increase in expected revenue from reservations is mainly due to the lower
average price of bulk sales (down 11% with respect to the same period in
2015) and to an unfavourable product mix effect on retail sales (see the
"Average sale price&floor area" table below).

In the third quarter of 2016, net new home reservations in France increased by
53% in volume and 41% in value year-on-year (41% and 31%, respectively, on a
like-for-like basis).

------------------------------------------------------------------------------------------------------
| Breakdown of new home reservations by client 9M 2016 9M 2015 Change % |
| |
| |
|France (number of units) - Exclusive of Edouard Denis |
| Homebuyers 2,692 26% 1,875 25% +43.6% |
| o/w: - first-time buyers 2,066 20% 1,434 19% +44.1% |
|- other homebuyers 626 6% 441 6% +42.0% |
| Individual investors 4,700 45% 3,499 47% +34.3% |
| Professional landlords 3,005 29% 2,130 28% +41.1% |
| Total new home reservations 10,397 100% 7,504 100% +38.6% |
------------------------------------------------------------------------------------------------------
The first nine months of financial year 2016 saw continued growth across all
client segments.

On a like-for-like basis:

* Reservations made by first-time buyers were up 44% with respect to the
first nine months of 2015, still boosted by the new PTZ interest-free loan
scheme, which took effect on 1 January 2016. At end-September 2016, 63% of
Nexity's first-time buyer clients had a PTZ interest-free loan;
* Reservations by individual investors also surged in the first nine months
of 2016 (up 34% year-on-year), driven by appealing government stimulus
measures for the housing sector, very low interest rates and a growing
appetite in France for property. This trend should continue, especially
following the French government's announcement that the Pinel scheme will
be extended until the end of 2017;
* Reservations by professional landlords were up 41%, with an increase in the
share of reservations made by social housing operators (84% at
end-September 2016, versus 68% at end-September 2015); and
* In terms of geographic distribution, reservations made in the first nine
months of the year increased in both the Paris region (up 43%) and the rest
of France (up 36%). As in the first half of 2016, the increase in
reservations by individual clients was more pronounced in the Paris region
(up 52%) than in the rest of France (up 30%).

------------------------------------------------------------------------------------------------
| Average Sale price&floor area* 9M 2016 9M 2015 Change % |
| Average home price incl. VAT per sq.m (€) 3,784 3,841 -1.5% |
| Average floor area per home (sq.m) 55.9 56.0 -0.3% |
| Average price incl. VAT per home (€k) 211.4 215.1 -1.7% |
| * Excluding bulk sales, Iselection, PERL and Edouard Denis |
------------------------------------------------------------------------------------------------
At end-September 2016, the average price of homes reserved by Nexity's
individual clients[8]was down 1.7% with respect to end-September 2015, due to
changes in the product mix (reservations in serviced residences - which
concern smaller units with a lower average sale price - increased by 53%
during the period - up 80% including bulk sales[9]) and the proportion of
reservations located in 5.5% reduced-VAT zones (which made up 19% of
reservations at end-September 2016 with 1,440 units versus 17% at
end-September 2015 with 907 units - a 59% increase in volume).

In the first nine months of 2016, the number of units launched[10]by Nexity
rose by 22% (10,683 units, versus 8,778 units at end-September 2015), in line
with the growth in reservations. The unsold completed stock of new
residential units remained very low (78 homes). The average level of
pre-selling recorded at the time construction work was started increased
year-on-year (72% on average, versus 68% the previous year).

At end-September 2016, the business potential[11]for new homes totalled 36,386
units, up 10% from end-September 2015, illustrating Nexity's capacity to
replenish its potential supply.

* Subdivisions

Subdivision
reservations totalled 1,491 units, a significant increase of 17% compared to
end-September 2015, with the average price of net reservations from
individuals remaining stable at €75k.

* International

Nexity recorded 338 international new home reservations in the first nine
months of 2016. In Poland, the number of reservations came to 248 units, with
a satisfactory pace of sales activity across all projects. In Italy, 90
reservations were recorded at end-September 2016.

Commercial real estate

In the third quarter of 2016, transaction volumes in the Paris region's
commercial real estate market totalled €5.5 billion, bringing the total
invested since the beginning of th...

Författare Hugin

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