Nexity Sa · EURONEXT:NXI
Nexity Sa — FY2018 Earnings Presentation
63 slides from Nexity Sa's earnings presentation, Feb 19, 2019
Slide 1: 2018 Full-Year Results
2018 FULL-YEAR RESULTS FEBRUARY 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: Agenda
Agenda # Our Real Estate Services Platform # 2018 Financial results # Business activity — Individual Clients — Commercial and Local Authority Clients # Outlook # Appendix Nexity / 2018 Full-year results 3
Slide 4: Our Real Estate Services Platform
Our Real Estate Services Platform
Slide 5: Our ambition
Our ambition Being useful to the So we need to: world in which we # Provide solutions to demographic, sociological and environmental challenges operate and being # Devise solutions to our Clients’ requirements by harnessing new uses and create shared value useful to others by # Think about all aspec
Slide 6: Our impact on society
Our impact on society Human development Socio-economic impact • > 10,000 employees • 1st partner of social housing, 1st player in intermediate housing, 1st • Women make up 31% of the Club 100 operator in QPV* • 9% of voluntary turnover rate • Territorial network: > 400 geographical locations • 92% o
Slide 7: 2018 financial targets exceeded
2018 financial targets excedeed 2018 Guidance ** NEW HOME RESERVATIONS IN FRANCE +7% +10% In volume In value Continued growth in Nexity’s market share in a French market expected to RESIDENTIAL MARKET SHARE* 12.7% see slight contraction +1.6 pt COMMERCIAL REAL ESTATE €349m €400m ORDER INTAKE REVENUE
Slide 8: Expansion of the services platform strategy
Expansion of the services platform strategy Jul. 18 Nov. 18 Dec. 18 Dec. 18 Jan. 19 French leader in serviced Corporate concierge Digital plateform (sensors Leading player in the Paris ready- Property Manager, Broker senior residences services placed in buildings) to-use office space market and spec
Slide 9: A resilient business model generating cashflows
A resilient business model generating cashflows EBITDA (in €m) Average 2008-2018 : 286 523 461 368 265 260 305 217 224 215 232 228 221 Cash flow from operating activities after financial and tax expenses (in €m) Average 2008-2018 : 173 311 350 239 151 133 132 133 149 182 122 128 117 Free cash flow (
Slide 10: 2018 Financial results
2018 Financial results
Slide 11: 2018 income statement
2018 income statement 2017 In million of euros 2018 restated Revenue 4.135,0 3.571,3 +16% EBITDA 523,0 460,6 +14% % of revenue 12,6% 12,9% Current operating profit 372,7 337,9 +10% Remeasurement of Ægide-Domitys following acquisition of control 79,2 - Operating profit 451,9 337,9 +34% Net financial
Slide 12: 2018 revenue
2018 revenue (in €m) +15.8% +174 4,135 Other activities +175 +215 4 Commercial Clients 3,571 581 +43% 4 407 3,550 Individual Clients 3,160 +12% 2017 Individual Clients Individual Clients Commercial Clients Other activities 2018 restated (like-for-like basis) Ægide-Domitys > Revenue up 16% compared t
Slide 13: 2018 EBITDA
2018 EBITDA EBITDA EBITDA MARGIN (in €m) (in %) 16.5% 13.6% 13.2% 13.4% 12.9% 523 12.3% 12.6% 461 72 +5 M€ 67 +61M€ 477 416 -23 -26 2017 2018 2017 2018 2017 2018 2017 2018 restated restated restated restated Individual Clients Commercial Clients Group Individual Clients Commercial Clients Other acti
Slide 14: Simplified balance sheet at 31 December 2018
Simplified balance sheet at 31 December 2018 (in €m) 1,579 1,764 Goodwills Equity (incl. Non-controlling interests) 112 Other assets 967 Provisions 757 Net financial debt WCR before IFRS 16 Total net debt: €1,567m 896 810 IFRS 16 Leases ASSETS EQUITY AND LIABILITIES Nexity / 2018 Full-year results 1
Slide 15: 2018 Change in working capital requirement
2018 Change in working capital requirement (in €m) +€80m +108 +16 896 817 +12 -57 48 Other activities (incl. income tax) 32 87 Commercial Clients 806 762 Individual Clients -21 2017 Individual Clients Individual Clients Commercial Clients Other activities 2018 restated Residential real estate Real E
Slide 16: 2018 Change in net financial debt (before IFRS 16)
2018 Change in net financial debt (before IFRS 16) (in €m) -€414m -158 +508 -102 1.8x -48 2018 EBITDA -343 excl. IFRS 16 (€419m) -351 -757 vs -104 2.5x -140 -20 EBITDA excl. IFRS 16 (targeted threshold Cash flow from Interest and Change in CAPEX External Future lease Dividend Share buyback given in
Slide 17: 2018 cash-flow statement
2018 cash-flow statement FY 2017 In €m FY 2018 restated Cash flow from operating activities before interest and tax expenses 508 448 Cash flow from operating activities after interest and tax expenses 350 311 Change in operating Working capital (excluding tax) (102) (64) Change in tax-related workin
Slide 18: Business activity
Business activity
Slide 19: Individual Clients
Business activity Individual Clients
Slide 20: The most complete offering on the market
The most complete offering on the market Buy BUY / INVEST Individual homebuyers / Individual investors SELL Professional investors Brokerage for individuals New homes / Existing homes / Serviced residences (BtoC and BtoBtoC) Sell Invest CUSTOMER EXPERIENCE MANAGE RENT Private areas / Common areas Re
Slide 21: The Individual Clients services platform
The Individual Clients services platform More than 100 land opportunities provided to 35% of condominium management mandates and 20% of rental developement teams management mandates come from Residential Real Estate 70% of the buildings delivered by Nexity are kept for condominium More than €200m of
Slide 22: Individual Clients
Individual Clients Margin rate (as a % of REVENUE EBITDA revenue) (In €m) (in €m) # 2018 KEY FIGURES +12% +15% 13.4% ▪ Residential Real Estate 3,550 477 Vs 13.2% in 2017 – 19,609 new home reservations, +7% in volume, +10% in value 3,160 902 417 – 12.7% market share* (compared to 11.1% in 2017) 810 (
Slide 23: New home reservation market in France
New home reservation market in France (in units) +8% ~ -6% ~ -6% 165,000 Low interests rates 153,300 ~155,000 ~145,000 Demography 121,100 125,700 Stability of fiscal incentives 105,900 108,800 107,800 Increase in construction costs and land prices Municipal elections approaching Phasing out of fisca
Slide 24: New homes: successful multi products, multiservices and multi brand strategy
New homes: successful multi products, multiservices and multi brand strategy VOLUME NEXITY MARKET SHARE* (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) +1.6 pt +7% 12.7% 19,609 11.1% 18,351 Professional 10.3% +17% 9.4% 9.6% 9.6% 15,051 36% landlords 33% 32% 9.3% 9.3% Indivi
Slide 25: Live in the sky… in a vertical village: Emblématik
Live in the sky… in a vertical village : Emblématik Maître d’œuvre : Castro Denissof Associés Useful, desirable, affordable, minimal and vegetal Nexity / 2018 Full-year results 25
Slide 26: Eugénie connects…
Eugénie connects… # 2018 KEY FIGURES ▪ 9 residences delivered ▪ 221 housing units connected Nexity / 2018 Full-year results 26
Slide 27: Energy efficiency works
ENERGY EFFICIENCY WORKS # NEXITY IS A COMMITTED OPERATOR THAT WORKS CLOSELY WITH PUBLIC BODIES 2018 : signing of a Green Deal with Plan Bâtiment Durable & signing of the Habiter Mieux Charter of commitment of Anah (National Agency for the Improvement of Habitat) - 2018: more than 350 employees train
Slide 28: Serviced residences
Serviced residences Studéa residences (in number of residences) (in number of residences) +24% CAGR 83 72 59 52 41 36 25 15 2011 2012 2013 2014 2015 2016 2017 2018 # Average occupancy rate of 97% for the 48 « cruising speed » residences* # Average age of residents: 78-85 years old # Average stay: 6
Slide 29: Franchises
Franchises CHANGE IN PROVISIONNAL SALES AGREEMENTS WINNERS OF THE 2019 CLIENT RELATIONS PRIZE (Les Echos Entreprise - HCG France) +5% 62,735 66,037 53,479 58,627 49,002 2014 2015 2016 2017 2018 CHANGE IN NUMBER OF AGENCIES Century 21 ranked n°1 for the 4th year in a row +5% 1,242 1,292 1,361 1,206 1
Slide 30: Commercial and Local Authority Clients
Business activity Commercial and Local Authority Clients
Slide 31: Adapting our solutions to meet client needs
Adapting our solutions to meet client needs NEXITY ADVISORY ENTRERPRISE BROKERAGE SOLUTIONS CLIENT DEVELOPMENT PLANNING BUSINESS OPERATIONS PROPERTY MANAGEMENT FACTORY Nexity / 2018 Full-year results 31
Slide 32: Meet, Inspire, Break Free
MEET INSPIRE BREAK FREE Breakfasts, aperitif drink, conferences, events,… From redesigned school to design open space, Morning Coworking offers spaces without long- Creating opportunities to meet is part of each place in Morning is unique and figured out term commitment, to remain free and agile at
Slide 33: Commercial Clients
Commercial Clients Margin rate REVENUE EBITDA (as a % of (In €m) (in €m) revenue) +43% # 2018 KEY FIGURES +7% 72 12.3% 581 67 Vs 16.5% in 2017 69 7 ▪ Commercial Real Estate (12%) 5 (10%) (7%) – €349m order intake 407 – Business potential: €2.8bn (+80% compared to2017) 63 10.0% (16%) Vs 7.8% in 2017
Slide 34: Business potential for Commercial Real Estate
Business potential* for Commercial Real Estate AT 31 DECEMBER 2017 AT 31 DECEMBER 2018 (in €m) (in €m) 5.5 YEARS OF ACTIVITY 3.9 YEARS OF ACTIVITY 775 (28%) 739 +80% €2,796m 811 €1,551m (48%) (52%) 2,021 (72%) Paris region Rest of France > Major operation in La Garenne-Colombes (92) future eco-campu
Slide 35: Smart Side
Smart Side # OFFICES TAILORED TO CLIENT REQUIREMENTS CLICHY (HAUTS-DE-SEINE) ~40,000 SQ.M DELIVERED IN SEPTEMBER 2018 FOR EDF USER CLIENT Nexity / 2018 Full-year results 35
Slide 36: Local Authority Clients
Local Authority Clients # 2018 KEY FIGURES AÉROG’ART Restoration project of the largest Air France sales agency Architect: Dominique Perrault – DP Architecture ▪ Portfolio: ~635,000 sq.m, +8% Réinventer Paris 2 joint-venture with Emerige ▪ Land bank: €130 million* ~7,500 sq.m including an arts and c
Slide 37: La Garenne-Colombes – Projected schedule
La Garenne-Colombes (Hauts-de-Seine) – Projected schedule 2020 Start of 13 July 2018 construction Land acquisition works 2022 2024 2019 2021 2023 Building permits preparation Scheduled Permissions obtention delivery of the Engie sales launch of the campus campus Nexity / 2018 Full-year results 37
Slide 38: Outlook
Outlook
Slide 39: Long term trends for housing
Long term trends for housing Estimated number of homes required per year by 2040 (in thousands of units – excl. Bulk sales) 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
Slide 40: A resilient business in upbeat market conditions
A resilient business in upbeat market conditions // Clear operational outlook // Clear regulatory outlook // Economic uncertainties • Development backlog of 4,5 Mds€ • Development “pipeline” of around 15 Mds€ • 2018 finance Law: Pinel and PTZ interest- • 2020 municipal elections • Undelying strong m
Slide 41: 2019 guidance
2019 guidance FINANCIAL PERFORMANCE >>>>>>>>>>>>>>>>> # Revenue and EBITDA expected to grow by at least 5% # Dividend per share: €2.50 payable in 2019(1) INDIVIDUAL CLIENTS >>>>>>>>>>>>>>>>>>>>>>> # New homes in France: Continued growth in Nexity’s market share, in a market that should see slight co
Slide 42: Real estate development backlog at 31 December 2018
Real estate development Backlog* at 31 December 2018 17 MONTHS REVENUE FROM DEVELOPMENT In €m, excl. VAT, International, Edouard Denis, Primosud and Ægide ACTIVITIES IFRS 15 standard applied from January 2018 (2017 has been restated accordingly) +12% 4,754 4,469 562 4,008 3,991 308 3,355 544 465 3,2
Slide 43: Our goals for 2018–2021
Our goals for 2018–2021 FINANCIAL PERFORMANCE INDIVIDUAL CLIENTS >>>>>>>>>>>>>>>>> >>>>>>>>>>>>>>>>> # Reservations for new homes in France: continued market share gains for # Compound annual growth in revenue and EBITDA of 10% Nexity (up 3 percentage points) in a stable market (160,000 reservations
Slide 44: Strong and sustainable dividend policy
Strong and sustainable dividend policy In € per share 2.4 2.5 2.5 ≥2.5 ≥2.5 ≥2.5 2.2 2.0 2.0 2.0 Paid in: 2013 2014 2015 2016 2017 2018 2019* 2020* 2021* 2022* Payout ratio (in % of EPS) : ~100% 79% 71% * Pending the decision of Nexity’s Board of Directors and approval of the Shareholders’ Meeting N
Slide 45: Corporate Social Responsibility
Corporate Social Responsibility # 2018 KEY CSR INDICATORS Non-financial ratings ▪ Women make up 31% of Nexity’s Club 100 members ▪ 79% of employees have an annual interview with their manager ▪ -7% decrease in carbon footprint per employee relative to 2014 ▪ 90% of (residential) development projects
Slide 46: Nexity's ownership structure
Nexity’s ownership structure 31 DECEMBER 2018 Crédit Mutuel Arkéa 5.4% Concert 56,129724 shares(1) group 5.4% A. Dinin, New Port (2) and other Nexity managers 19.1% 13.7% belonging to the concert group 13.7% 3.2% 6.4% FCPE and other employees(3) 3.2% Crédit Agricole Assurances 6.4% Free float 70.3%
Slide 47: Appendix
Appendix
Slide 48: Ægide-Domitys - key figures
Ægide-Domitys - key figures > Business activity > Financials (IFRS standards) Total Ægide Total Ægide excl. joint venture with Nexity incl. Nexity H2 2018 FY 2018 FY FY DEVELOPMENT H1 2018 H2 2018 2018 2018 Revenue €175m €331m New home reservations in volume 856 units 549 units 1,405 units 2,456 uni
Slide 49: Building permits and housing starts
INDIVIDUAL CLIENTS Residential Real Estate Building permits and housing starts BUILDING PERMITS HOUSING STARTS (in units, 12 months rolling) (in units, 12 months rolling) -7.1% -7.0% 495,600 428,100 460,500 398,100 Dec-15 Dec-16 Dec-17 Dec-18 Dec. 16 Dec. 17 Dec. 18 Dec.15 > Building permits down 8.
Slide 50: Nexity new home reservations
INDIVIDUAL CLIENTS Residential Real Estate Nexity new home reservations VOLUME VALUE (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) (in €m incl. VAT TTC, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) +3.1% +7.8% 22,037 Subdivision 4,116 21,372 2,063 Internat
Slide 51: Nexity reservations: quarterly change
INDIVIDUAL CLIENTS Residential Real Estate Nexity reservations: quarterly change +15% NEW HOME RESERVATIONS IN FRANCE (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) -1% +8% +3% 6,600 5,736 5,201 4,821 4,634 4,757 4,237 4,288 3,581 3,653 3,506 3,618 3,052 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 52: Nexity key client segments performance
INDIVIDUAL CLIENTS Residential Real Estate Nexity key client segments performance VOLUME BREAKDOWN OF RESERVATIONS TO PROFESSIONAL LANDLORDS (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) +7% 19,609 +1
Slide 53: Nexity reservations in France by area
INDIVIDUAL CLIENTS Residential Real Estate Nexity reservations in France by area VALUE VOLUME (in €m incl. VAT TTC, incl. E.Denis and Primosud from 2017, Ægide from 1 (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) July 2018) +7% +10% 19,609 3,915 18,351 3,564 +2% 15,051 37%
Slide 54: Launches
INDIVIDUAL CLIENTS Residential Real Estate Launches NUMBER OF UNITS LAUNCHED (in units, incl. E.Denis and Primosud from 2017, Ægide from 1 July 2018) -9% 21,607 19,585 5,768 7,977 Q4 13,976 12,938 5,390 4,331 Q3 7,524 3,742 Q2 2,925 3,535 Q1 2015 2016 2017 2018 > Q4 2018: 38% more units launched vs
Slide 55: Nexity new homes: price trends
INDIVIDUAL CLIENTS Residential Real Estate Nexity new homes: price trends AVERAGE PRICE (in thousand of euros, incl. E.Denis and Primosud from2017, excl. PERL, iSelection, Ægide, International and bulk sales) 267 Paris region: +2.2% 257 261 265 Paris region excl. Paris: +3.1% 257 250 France: +2.7% 2
Slide 56: 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 incl. iSelection and PERL from2015, E.Denis from 2016, Primosud from 2017 and Ægide from 1 July 2018) +4% 8,651 9,005 2% 2% 6,988 6,773 2% 6,438 28% 31% 5,058 5,313
Slide 57: Business potential for new homes
INDIVIDUAL CLIENTS Residential Real Estate Business potential for new homes 2.7 YEARS OF ACTIVITY (in units, excl. International and incl.iSelection, PERL and Villes & Projets from 2015, E.Denis from 2016, Primosud from 2017 and Ægide from 1 July 2018) +13% 53,602 47,560 41,813 44% 34,453 46% 22,824
Slide 58: Real Estate Services to Individuals
INDIVIDUAL CLIENTS Real Estate Services to Individuals Real Estate Services to Individuals PROPERTY MANAGEMENT TO INDIVIDUALS Units under management (in thousands of units) FRANCHISES > Change in number of agencies: +5% 2016 2017 2018 1,242 1,206 1,217 1,292 1,361 Condominium management 726 721 721
Slide 59: 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 (in € billion) BOND YIELDS 35 10% 30.5 9% 30 8% 25 7% 2006-2018 average: €20.4bn 6% 20 5% 15 4% 4,50% 10 3% 3,00% 2% 5 1% 0,80% 0 0% 200
Slide 60: New order intake and backlog
COMMERCIAL CLIENTS Commercial Real Estate New order intake and backlog ORDER INTAKE BACKLOG (in €m) (in €m) -34% 544 +349 403 402 400 -512 356 349 250 166 190 +6 465 183 308 151 2013 2014 2015 2016 2017 2018 2018 31 Dec. 2018 order 2018 revenue Additional 31 Dec. Target 2017 intake work and other 20
Slide 61: 2018 Current operating profit
2018 Current operating profit CURRENT OPERATING PROFIT CURRENT OPERATING MARGIN (in €m and margin rate in %) (in %) 14.9% +10.3% 373 338 11.0% 64 10.1% 10.0% 61 +3 M€ 9.5% 9.0% 321 353 +33 M€ -43 -45 2017 2018 2017 2018 2017 2018 2017 2018 retraité restated restated restated Individual Clients Comme
Slide 62: Financial debt schedule (before IFRS 16) at 31 December 2018
Financial debt schedule (before IFRS 16) at 31 December 2018 (in €m) 456(2) 436(3) 351(4) Drawn at 31/12/2018 97 164 (1) 5 41 Corporate borrowings 2019 2020 2021 2022 2023 2024 2025 Project related loans -1,231 >25% of debt with maturity > 5 years -319 >Average maturity: 3.7 years -1,549 >Cost of fi
Slide 63: 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