Nexity Sa · EURONEXT:NXI
Nexity Sa — Investor Presentation (November 2019)
49 slides from Nexity Sa's investor presentation, November 2019
Slide 1: Investor Presentation November 2019
INVESTOR PRESENTATION NOVEMBER 2019
Slide 2: Disclaimer
Disclaimer The information contained in this document has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained
Slide 3: 9M 2019: Nexity overperforms the market
9M 2019: Nexity overperforms the market 2019 guidance* refined Residential Real New home reservations in France Growth in Nexity’s market share in a new home • +8% in volume market in France expected to contract by 2% to 4% Estate • +9% in value with respect to 2018 Services to Serviced residences M
Slide 4: An undersupplied market
INDIVIDUAL CLIENTS Residential Real Estate An undersupplied market (in units) -2% to -4% +10% -7% 168,600 Low mortgage rates: 1.18% in September 2019 153,900 157,600 Demographics 125,600 121,100 Stability of tax incentives 105,900 108,600 107,500 Increase in construction costs and land prices 9M 201
Slide 5: Nexity new home reservations in France
INDIVIDUAL CLIENTS Residential Real Estate Nexity new home reservations in France +8% (in volume - in units, including Ægide from 1st July 2018) in 9M 2019 compared to 9M 2018 (+3% LFL) 19,609 18,351 15,893 6,600 14,043 11,741 -4% in Q3 2019 ▪ Total reservations (incl. Subdivisions and 10,365 4,557
Slide 6: Breakdown by client for Nexity new home reservations
INDIVIDUAL CLIENTS Residential Real Estate Breakdown by client for Nexity new home reservations Volume (in units, excluding international, including Ægide from 1 July 2018) 19,609 18,351 23% 24% 13% 9% 14,043 13,009 Social landlords: +4% 21% 20% Institutional Bulk sales: stable ▪ Individual Investor
Slide 7: Nexity new homes: price trends
INDIVIDUAL CLIENTS Residential Real Estate Nexity new homes: price trends Average prices (in thousand of euros, excl. PERL, iSelection, Ægide, International and bulk sales) 261.5 267.3 Paris region: +2.2% 257.4 264.8 Paris region excl. Paris: +3.1% 256.8 250.5 France: +2.7% 218.0 223.8 213.6 Rest of
Slide 8: New home launches
INDIVIDUAL CLIENTS Residential Real Estate New home launches Number of units launched in France (in units, incl. Ægide from 1 July 2018) 21,607 19,585 13,976 7,977 12,917 +11% 4,583 Q3: +6% 4,331 3,742 5,699 Q2: +52% 3,535 2,635 Q1: -25% 2016 2017 2018 2019 ▪ +7% launches on a like-for-like basis ▪
Slide 9: Nexity new homes: supply for sale
INDIVIDUAL CLIENTS Residential Real Estate Nexity new homes: supply for sale Curent supply for sale (in units, excl. International and including Ægide from 1 July 2018) -2% 9,005 8,790 8,651 8,607 2% 1% ▪ Take-up period* of 5.1 months 6,988 in 9M 2019 (compared to 5.5 6,773 31% 29% 2% 6,438 in 9M 20
Slide 10: Business potential for new homes
INDIVIDUAL CLIENTS Residential Real Estate Business potential* for new homes 3.5 YEARS OF POTENTIAL REVENUE (in units, excl. International and including Ægide from 1 July 2018) +1% 52,944 53,602 54,088 +2% 47,560 vs 9M 18 41,813 40% 44% 34,453 22,824 23,143 23,941 23,100 24,832 21,285 19,057 28% 56%
Slide 11: Property management for individuals and Distribution
INDIVIDUAL CLIENTS Real Estate Services to Individuals Property management for individuals and Distribution PMI – Units under management (in thousands of units) Distribution – Total sales (in units) 4,514 4,293 +6% 2016 2017 2018 9M 2019 4,163 924 701 3,406 Condominium 721 721 710 919 3,205 726 447
Slide 12: Serviced Residences
INDIVIDUAL CLIENTS Real Estate Services to Individuals Serviced Residences Student residences Senior independent living facilities 124 residences and 15,400 managed units at 99 residences and 11,600 managed units at end-September 2019 end-September 2019 4 openings of residences during 9M 2019 in Vil
Slide 13: Commercial real estate market
COMMERCIAL CLIENTS Commercial Real Estate Commercial real estate market Commercial Real Estate investments in France Comparison of prime real estate and government bond (in € billion) yields 10% 35 30 8% 25 6% 2006-2018 average: €20.4bn ~13 20 4% 4,15% 15 2,85% 2% 10 0% -0,25% 5 06 07 08 09 10 11 12
Slide 14: Business potential and order intake
COMMERCIAL CLIENTS Commercial Real Estate Business potential* and order intake Business potential for Commercial Real Estate Order intake at 30 September 2019 (in €m excl. VAT) (in €m) -5% 403 402 356 349 365 2,796 2,643 250 166 2019 target** 1,550 72% 190 303 71% 48% met 151 183 52% 28% 29% 62 2017
Slide 15: Real Estate services to Companies
COMMERCIAL CLIENTS Real Estate services to Companies Real Estate services to Companies Property Management Morning Coworking (in millions of sq.m under management) (Revenue in €m) 20 6.7% 17 19.9 X3.4 18.6 11 12.3 10.6 10.9 5 11.3 8.0 8.0 1.0 1.0 2017 2018 9M 2019 2016 2017 2018 9M 2019 Rental manag
Slide 16: Porte de Montreuil (Paris)
Porte de Montreuil (Paris) ▪ The consortium composed of Nexity, Engie and Crédit Agricole Immobilier was selected as a winner in September 2019 to transform the Porte de Montreuil district of Paris into a carbon- neutral area starting in 2023 ▪ It reaffirms Nexity’s ability to win complex calls for
Slide 17: La Garenne-Colombes (Hauts-de-Seine)
La Garenne-Colombes (Hauts-de-Seine) Engie: a financial and strategic development partnership ▪ Acquisition with Engie in July 2018 of a 9-hectares plot of PSA group industrial land in La Garenne-Colombes (92), and a further 2 hectares with RATP group ▪ Conclusion of a technological partnership to d
Slide 18: 9M 2019 revenue
9M 2019 revenue* (in €m) +12.4% -2 2,805 Other Activities +177 -91 +29 2,497 +195 352 Commercial Clients -15% 3 413 2,452 Individual Clients +18% 2,080 ▪ Consolidated revenue: +12% 9M 2018 Individual Clients Individual Clients LFL Ægide-Domitys Commercial Clients Commercial Clients Other activities
Slide 19: Nexity's Backlog at 30 September 2019
Nexity’s Backlog* at 30 September 2019 In €m, excl. VAT, including Ægide from 2018 18 MONTHS OF POTENTIAL IFRS 15 standard applied from January 2018 (2017 has been restated accordingly) REVENUE (DEVELOPMENT) +10% 4,911 4,469 401 4,008 3,991 308 3,355 544 465 3,283 3,293 3,085 486 449 487 383 4,161 4
Slide 20: Development business potential at 30 September 2019
Development business potential* at 30 September 2019 Development business potential Residential Real Estate Commercial Real Estate €14.7 €12.1bn €2.6bn bn 75,152 units 4.4 years of potential revenue New homes Subdivisions International €10.1bn €1.1bn €0.8bn 54,088 units 14,132 units 6,932 units * Co
Slide 21: 2019 guidance refined
2019 guidance(1) refined FINANCIAL INDIVIDUAL COMMERCIAL LOCAL AUTHORITY PERFORMANCE CLIENTS CLIENTS CLIENTS ▪ Revenue and EBITDA ▪ New homes in France: Market ▪ Commercial Real Estate order ▪ Initiation of the largest expected to grow share growth for the Group in intake: at least equal to 2018 pri
Slide 22: Our medium-term goals (2017-2021)
Our medium-term goals (2017-2021) FINANCIAL PERFORMANCE INDIVIDUAL CLIENTS ▪ Compound annual growth in revenue and EBITDA of 10% ▪ Reservations for new homes in France: continued market share gains for Nexity (up 3 percentage points) in a stable market compared to 2017 (2) +10% CAGR ▪ Growth in the
Slide 23: A constantly improving CSR performance
A constantly improving CSR performance 2019: Overall rating progress 4th place overall (230 companies) compared to 12th place in 2018 France’s #1 low-carbon developer Nexity / Investor presentation - November 2019 23
Slide 24: Appendix
Appendix
Slide 25: Our real Estate Services platform: development, management, advisory, brokerage
Our real Estate Services platform: development, management, advisory, brokerage... INDIVIDUAL CLIENTS COMMERCIAL CLIENTS ‒ Development of new homes ‒ Commmercial development (offices, (homebuyers, investors, professional logistics, hotels, retail premises...) landlords) ‒ Property management, commer
Slide 26: Nexity in 2018
Nexity in 2018 2018 REVENUE* 2018 EBITDA ** (in €m) (in €m) ▪ Services represent: €971m revenue and 69 65 7 €201m EBITDA 512 ▪ Or: 23% of total revenue and 902 €4,135m €523m 284 38% of total EBITDA 2,648 194 2.267 74% ▪ Contribution of services * o/w Other activities for €4m ** o/w Other activities
Slide 27: Leadership positions in development and in services activities
Leadership positions in development and in services activities(1) N0.1 N0.3 IN RESIDENTIAL REAL ESTATE IN COMMERCIAL REAL ESTATE Market share: 12.4% Grand Paris’ market share Market share: 6.2%(2) • Retail sales: 9.8% (Paris region): 15.4% • Bulk sales: 24% (Reservations in the Paris region represen
Slide 28: Long term trends for housing
Long term trends for housing Estimated number of homes required per year by 2040 (in thousands of units) 4 million 32 million 400-450k units people in substandard housing and 12.1 million people in fragile households by 2030, +4 million (Nexity estimate) Plugging the construction situations(1) compa
Slide 29: A unique developer-operator concept creating value
A unique developer-operator concept creating value Serviced residences example: recurring result generation during the Synergies between residential development and Real Estate lease almost equal to the real estate development margin* Services to Individuals ∑ current operating profit generated duri
Slide 30: Our CSR commitments
Our CSR commitments Create social, environmental and economic value through Targets in terms of reducing GHG emissions by 2030: 5 committments: • -35% per employee • -30% per new home delivered • -21% per sq.m of floor area for office space Be recognised as a preferred employer Designing sustainable
Slide 31: New reporting standard: IFRS 15 Revenue from contracts with customers
New reporting standard: IFRS 15 Revenue from contracts with customers ▪ Percentage-of-completion principle maintained for real estate development activities in France, but percentage of completion must be calculated based on all inventoriable costs (including land) ▪ Faster recognition of revenue an
Slide 32: Cash flow profiles for VEFA off-plan sales
Cash flow profiles for VEFA off-plan sales RESIDENTIAL REAL ESTATE RESIDENTIAL REAL ESTATE COMMERCIAL REAL ESTATE for individual clients for social housing operators, with progress payments 110 110 107 99 94 95 Cash inflows 83 70 66 62 55 55 35 34 28 17 19 14 15 15 9 10 6 7 10 4 0 0 5 5 0 0 -2 -5 -9
Slide 33: Simulated IFRS 15 impact – commercial development
Simulated IFRS 15 impact – commercial development Pattern of revenue recognition for a typical commercial development in the inner suburbs of Paris (land: 30% of cost) Delivery 100.0% Off-plan sale agreed 61.1% 42.9% 37.5% Revenue recognition pre-IFRS 15 Revenue recognition post-IFRS 15 5.0% M0 M3 M
Slide 34: New standard: IFRS 16 Leases
New standard: IFRS 16 Leases Figures at 31 December 2017 # Scope: Leases of buildings used for business operations, IT equipment, future lease payments for serviced residences # Current standard: information provided off balance sheet in the notes to the financial statements # New standard: the amou
Slide 35: Income statement of a cruising speed serviced residence
Income statement of a “cruising speed” serviced residence including average debt under IFRS 16 BUSINESS CASE STUDENT RESIDENCES SENIOR RESIDENCES (in euros) (% of revenue) (% of revenue) Term of operating leases 10 years 12 years Number of units in the residence 110 120 Average monthly rent excl. VA
Slide 36: Control of production cost of new homes
INDIVIDUAL CLIENTS Residential Real Estate Control of production cost of new homes* Costs structure Medium-term Nexity’s responses development 100% Borrowing costs 1% 7% # Innovative marketing methods Marketing & Advertising 8% # Digitisation Professional fees & insurance 8% # Operating efficiency I
Slide 37: A differentiating know-how on large urban projects
A differentiating know-how on large urban projects « Inventer Bruneseau » - Project « Nouvel R » La Fabriq – Saint-Ouen (93) ▪ 95,000 sq.m between Paris (75) and Ivry-sur-Seine (94), ▪ 2 symmetrical buildings, 10 floors at a height of 47 meters, located on part 25,000 sq.m of offices / 50,000 sq.m o
Slide 38: Real estate advertisement portal
Real estate advertisement portal (existing homes and new homes, rentals) created in 2016 already #3 of the market Generalist and digital real estate brand with strong potential €13m invested in marketing and advertising (incl. TV) in 2019 8 million visits and 4 million unique visitors a month Unique
Slide 39: Nexity's ownership structure
Nexity’s ownership structure 31 OCTOBER 2019 56,129,724 shares(1) Crédit Mutuel Arkéa 5.3% 5.3% Concert 14.6% A. Dinin, New Port (2) and other Nexity’s group managers belonging to the concert group 14.6% 20.0% 3.2% 6.4% FCPE and other employees (3) 3.2% Crédit Agricole Assurances 6.4% Free float 69.
Slide 40: H1 2019 Results
H1 2019 Results In million of euros H1 2019 H1 2018 Revenue 1,840.4 1,556.4 +18% EBITDA 226.4 186.2 +22% % of revenue 12 .3 % 12 .0 % Current operating profit 125.4 135.8 -8% % of revenue 6.8 % 8 .7% Remeasurement of Ægide-Domitys following acquisition of control 79.2 Operating profit 125.4 215.1 -4
Slide 41: H1 2019 Revenue
H1 2019 Revenue (in €m) +18.2% 1,840 Other Activities -21 -8 +18 -1 1,556 +177 229 Commercial Clients -4% +118 2 239 1,611 Individual Clients +22% 1,315 H1 2018 Individual Clients Individual Clients Commercial Commercial Commercial Other Activities H1 2019 ▪ Consolidated revenue: +18% LFL Ægide-Domi
Slide 42: H1 2019 EBITDA
H1 2019 EBITDA EBITDA EBITDA margin (in €m) (in %) 15.8% +21.6% 13.0% 226 11.8% 12.0% 12.3% 11.5% 27 Commercial Clients 186 -€11m 38 +€58m 209 Individual Clients 151 -€7m -3 -10 Other Activities H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019 Individual Clients Commercial Clients Gro
Slide 43: Reconciliation between H1 2019 EBITDA and current operating profit
Reconciliation between H1 2019 EBITDA and current operating profit (in €m) -€101m 226 -76 -20 125 +2 -7 H1 2019 Right-of-use leased Depreciation, Provision charges Share-based Borrowing costs directly H1 2019 EBITDA assets depreciation amortisation (-) / reversals (+) payments attributable to proper
Slide 44: H1 2019 Current operating profit
H1 2019 Current operating profit Current operating profit Current operating margin (in €m) (in %) 14.8% -7.7% 136 125 17 Commercial Clients 35 -€18m 8.5% 8.7% 7.8% 7.4% 6.8% 112 125 Individual Clients +€13m -12 -€4m -16 Other Activities H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019 H1 2018 H1 2019
Slide 45: Simplified balance sheet at 30 June 2019
Simplified balance sheet at 30 June 2019 (in €m) Goodwills 1,591 1,661 Equity (incl. non-controlling interests) 105 Provisions 1,023 865 Lease liabilities Other assets (IFRS 16) Total net debt: €1,985m WCR 1,137 1,120 Net financial debt before lease liabilities ASSETS EQUITY AND LIABILITIES Nexity /
Slide 46: H1 2019 WCR
H1 2019 WCR Change in Working Capital Requirement (in €m) +€241m ▪ Individual Clients: expansion in line with this segment’s -6 -1 +45 1,137 strong activity levels and the increase in the backlog, which +€80m Other Activities 93 points to higher revenue in the upcoming quarters. The 896 +203 86 Comm
Slide 47: Change in net financial debt before lease liabilities
Change in net financial debt before lease liabilities (en M€) +€363m -757 -1,120 2.7x EBITDA excl. IFRS 16 +212 -209 12-month rolling basis -107 (€408m) -26 -82 -138 -20 7 2018 EBITDA excl. result Change in Interest and CAPEX Repayment of Dividend Share buyback Financial investments 30 June 2019 of
Slide 48: H1 2019 cash-flow statement
H1 2019 cash-flow statement H1 2017 In €m H1 2018 restated Cash flow from operating activities before financial and tax expenses 207 182 Cash flow from operating activities after financial and tax expenses 142 121 Change in operating WCR (excluding tax) (209) (149) Change in tax-related working capi
Slide 49: 19, rue de Vienne 75 008 Paris Tél. : +33 (0)1 85 55 12
19, rue de Vienne 75 008 Paris Tél. : +33 (0)1 85 55 12 12