Neinor Homes Sa · BME:HOME
Neinor Homes Sa — FY2017 Earnings Presentation
35 slides from Neinor Homes Sa's earnings presentation, Feb 22, 2018
Slide 1: Material Fact notice on FY2017 results
Neinor Homes, S.A. (the “Company”), pursuant to article 17 of Regulation (EU) 596/2014 on market abuse and article 228 of the consolidated text of the Securities Market Act, approved by Royal Legislative Decree 4/2015, of October 23th , hereby informs of the following: MATERIAL FACT Neinor Homes has
Slide 2: Annual Results Presentation
February 22nd, 2018 Annual Results Presentation Dehesa Homes – Madrid – Delivered in Q4 2017
Slide 3: Disclaimer
DISCLAIMER This Presentation has been prepared by Neinor Homes, S.A. (“Neinor”) for information purposes only and it is not regulated information or information which has been subject to prior registration or control by the Spanish Securities Market Commission. “Presentation” means this document, it
Slide 4: Today's Agenda
TODAY´S AGENDA Contents 1 2017 Business Review - Juan Velayos Lluis - Chief Executive Officer 2 2017 Financial Overview - - 3 2018 Milestones & Challenges - - Jordi Argemí García - 4 Non-Financial Reporting Chief Financial Officer - 5 Key Take-aways - - Q&A Juan Gómez Vega Chief Investor Relations O
Slide 5: Atria Homes – Madrid (Center)
Atria Homes – Madrid (Center) 5
Slide 6: 2017: Strong Outperformance
2017: STRONG OUTPERFORMANCE CONSOLIDATING AND GROWING THE TANGIBLE FIRST-MOVER ADVANTAGE +3.1% -2% Demand > housing starts by Macro GDP increase Unemployment down to 16.6% c. 70,000 units c.12,500 units €286m Land Bank 176 developments of fully permitted land bank (1.5 million sqm) Or c. 3,100 units
Slide 7: Strong Tailwinds Supporting the Housing Market
STRONG TAILWINDS SUPPORTING Macro THE HOUSING MARKET Macro and Sector Indicators Underpin Continued Recovery +611k jobs created in 2017 – Unemployment at 9 year low Banks increasing lending (mortgages granted still 80% off the peak) Housing starts at c.80k in 2017 – 88% below the peak New Housing Sa
Slide 8: 12,500 Units of Fully-Permitted Land Bank
12,500 UNITS OF FULLY-PERMITTED LAND BANK Land Bank €286M OF ACCRETIVE ACQUISITIONS, AHEAD OF €200M BUDGET Land Bank Snapshot - € 1,610m GAV (1) 2017 Land Acquisition Activity Summary North East € 357m 2,553 units € 374m 1,985 units c. 12,500 units (2) 176(3) developments of fully permitted land ban
Slide 9: NAV Increased by 8% Since IPO
NAV INCREASED BY 8% SINCE IPO Land Bank SAVILLS VALUATION UP ON STRONG PRE-SALES, HPA AND ACCRETIVE ACQUISITIONS GAV: €1,717m NAV: €1,291 / +8% YoY NNAV up to €1,196m Includes €107m GAV of remaining legacy Back to IPO relative valuation following market turbulence +19% Like-for-like +11% 2017 acquis
Slide 10: Confirming Decision to Increase Run-Rate
CONFIRMING DECISION TO INCREASE RUN-RATE Launches TARGETING 4,000+ UNITS FROM 2020 ONWARDS Accelerated Launching Activity in 2017 100% deliveries until 2020 in production c. 8,300 active units 90 sites in production c. 8,300 launched units 5,517 units launched in 2017 Sustaining and increasing first
Slide 11: 2,400+ Units Under Construction
2,400+ UNITS UNDER CONSTRUCTION Construction THE TANGIBLE FIRST MOVER ADVANTAGE Development Activity Snapshot* Construction Activity Summary # 254 5,647 2,436 8,337 313 + 51 (1) 100 2,400+ units under construction 36 sites on time and on Budget (1) 90 (2) 8+2 80 70 36 N. of developments 60 50 90 Con
Slide 12: Pre-Order Book Doubled to €746M
PRE-ORDER BOOK DOUBLED TO €746M Pre-Sales SALES STRATEGIES ADAPTED TO PROTECT AND MAXIMISE MARGINS 93% GROWTH IN THE ORDER BOOK YoY 2,246 units in pre-order book € Millions 1,353 units (€459m, +39% VS 2016 ) pre-sold in 2017 – # Units 145 units net variation in Q4 800 2.500 ASP €339k +289 pre-sales
Slide 13: Pre-Sales 2017: 3%+ Margin Impact
PRE-SALES 2017: 3%+ MARGIN IMPACT EXISTING LAND BANK WITH EMBEDDED MARGIN OF C.29% Embedded Margins EXTRA REVENUE CAPTURED VS. OBSERVED HPA(1) 3.9% EXTRA REVENUE CAPTURED +€17.3m (Actual Pre-Sales minus BP Sales) 3.9% Extra Revenue 8.5% Observed Captured in 2017 HPA in 2017 5,5% 8.5% OBSERVED HPA IN
Slide 14: 313 Delivered Units On Time/On Budget
313* DELIVERED UNITS ON TIME/ON BUDGET Deliveries C. 28% GROSS MARGIN ON 8 DELIVERED SITES Dehesa Homes €76.6M IN REVENUE IN 2017 2 sites anticipated from 2018 for a total of 3 sites Region Center delivered in Q4 Location San Sebastián de los Reyes, Madrid Units (#) 77 DELIVERIES SINCE 2015**: 432 U
Slide 15: Ancillary Businesses Provided Solid Cash Flows
ANCILLARY BUSINESSES PROVIDED SOLID CASH FLOWS Ancillary Businesses REMAINING LEGACY PORTFOLIO PRESENTS CHALLENGE FOR LIQUIDATION 2018 LEGACY SERVICING €1.5bn AUM €126m(1) sales in 2017 Stable AuM given asset boarding performed as expected 3% gross margin(1) on book values compensating for registere
Slide 16: Alquerías Homes – Valencia (Levante)
Alquerias – Levante - JGD Alquerías Homes – Valencia (Levante) 16
Slide 17: P&L: €8.3M Positive EBITDA Adjusted
P&L: €8.3M POSITIVE EBITDA ADJUSTED Financials CORE BUSINESS WEIGHT GROWING AS THE COMPANY DELIVER UNITS Summary P&L (in €M) €M Revenues1 FY 2017 225,1 €225M REVENUES Gross Margin 61,3 Legacy sales €113.9m8 / Development €76.6m / Servicing €29.2m / Gross Margin (%) 27,2% Other Revenues6 €5.4m OpEx &
Slide 18: CF: Positive Net Cash Flow
CF:POSITIVE NET CASH FLOW Financials OPERATING CASH AND JP MORGAN BRIDGE INVESTED INTO HIGH QUALITY LAND Summary Cash Flow (in €M) €M Profit (Loss) before Tax1,2 FY 2017 -4,7 +€4.5M CF FROM OPERATIONS Adjustments2 9,1 €387M INVESTED IN GROWTH: €271M Amortization 0,7 Finance Costs/Revenues 7,7 IN LAN
Slide 19: BS: Growing Asset Base
BS: GROWING ASSET BASE Financials BUSINESS RAMP-UP REFLECTED IN GROWING INVENTORIES Summary Balance Sheet (in €m) €M €1.3BN BALANCE SHEET FY 2017 FY 2016 Change PPE 1,9 1,6 0,3 20,9% (1) Investment Property 1,6 12,9 -11,3 -87,5% Other Non-Current Assets 1,6 1,1 0,5 47,0% €263M growth during FY Non-C
Slide 20: Net Debt: Prudent Leverage Management
NET DEBT: PRUDENT LEVERAGE MANAGEMENT Financials LOAN-TO-VALUE AT 22% DESPITE ACCELERATION OF ACQUISITIONS Net Debt (in €m) NET DEBT €382M €M FY 2017 FY 2016 Change Gross Debt 417,7 315,6 102,1 32,4% Non-Current Bank Borrowing 17,9 26,6 -8,7 -32,8% Prudent debt policy during the ramp-up phase Corpor
Slide 21: Abra Homes – Santurce, Vizcaya (North)
Abra Homes – Santurce, Vizcaya (North) 21
Slide 22: 2018 Milestones: Stepping Up the Execution
2018 MILESTONES STEPPING UP THE EXECUTION FOCUS ON SECURING THE 8,300 ACTIVE UNITS PROGRESS ON TIME / ON BUDGET € 200m+ FIRST STRATEGIC Land Bank OF LAND ACQUISITION LAND ACQUISITIONS 2,500+ OPTIMIZE DESIGN TO VALUE AND DESIGN TO COST TO Launches LAUNCHES MAXIMIZE /SECURE MARGINS 5,000+ IMPROVE TIMI
Slide 23: 2018 Challenges: Sustaining Market Leadership
2018 CHALLENGES SUSTAINING MARKET LEADERSHIP MAINTAIN AND INCREASE 2-YEAR ADVANTAGE AMIDST GROWING COMPETITION Competition ✓Fragmented market, room for more disciplined competitors ✓Forecasted consolidation starting to happen 3 listed players + newcomers Land Price Inflation ✓Discipline and track re
Slide 24: Plaza Europa Homes – Hospitalet, Barcelona (East)
Plaza Europa 38 Homes – Hospitalet, Barcelona (East) 24
Slide 25: Transforming the Sector, Really
TRANSFORMING THE SECTOR, REALLY SEVERAL MILESTONES ACHIEVED HIGHLIGHTING THE COMPANY’S STRONG ETHICAL COMMITMENTS Environmental Dehesa Homes first site to obtain BREEAM certification for finished product / 27 BREEAM certificates for projects in design phase 100% of developments launched in 2017 with
Slide 26: Can Mates Homes III – Sant Cugat, Barcelona (East)
Can Mates Homes III – Sant Cugat, Barcelona (East) 26
Slide 27: Key Take-Aways
KEY TAKE-AWAYS Continued strong recovery in the Excellent operational progress in Spanish homebuilding sector and 2017 consolidating first mover Confirmation of increased run-rate supply-demand imbalance advantage: only Spanish listed to 4,000+ units per year providing visibility for long term homeb
Slide 28: Q&A
S&S Neinor ... Q&A
Slide 29: Amara Homes – Las Rozas, Madrid (Center)
Amara Homes – Las Rozas, Madrid (Center) 29
Slide 30: Acquisition: Quatre Carreres, Valencia (Levante)
Acquisition: Quatre Carreres, Valencia (Levante) Launched WIP Delivery 9 weeks Land Marketing Plan Design / Procurement / Commercialisation Under Construction Post Acquisition Sale Quatre Carreres is a consolidated residential area of Valencia with more than 75,000 inhabitants and is located 2 km So
Slide 31: Launched: Amara Homes, Las Rozas de Madrid (Center)
Launched: Amara Homes, Las Rozas de Madrid (Center) Launched 32 weeks WIP Delivery Land Marketing Plan Design / Procurement / Commercialisation Under Construction Post Acquisition Sale The project comprises 316 residential units located in Las Rozas, a consolidated residential area located 20 km Nor
Slide 32: WIP: Atria Homes, Alcobendas (Center)
WIP: Atria Homes, Alcobendas (Center) Launched WIP 17-20 months Delivery Land Marketing Plan Design / Procurement / Commercialisation Under Construction Post Acquisition Sale Atria Homes is a residential complex located in Alcobendas, a municipality located 10 km North from the city centre Alcobenda
Slide 33: Appendix
S&S Neinor ... APPENDIX
Slide 34: Savills Appraisal December 2017 – Regional Detail
APPENDIX Savills Appraisal December 2017 – Regional Detail Valuation in accordance with RICS(1) Valuation Professional Standards Bottom-up appraisal valuation on a unit by unit basis, employing DCF, sales comparison or residual static methods depending on the type of asset Valuation assumes 0% House
Slide 35: Riverside Homes – Madrid (Center)
Riverside Homes – Madrid (Center)