Nexity: 2023 full-year results
FULL-YEAR RESULTS IN LINE WITH
OBJECTIVES
DELEVERAGING LEVERS
INITIATED
ACCELERATING THE GROUP’S TRANSFORMATION
IN 2024
Business activity – Nexity beats the
market
-
New home reservations down 19% by volume – amid a market that
shrank by 26% over one year and by 41% over two years
-
Continued strong growth in managed real estate,
with revenue up 25%
Financial results in line with
objectives:
-
Revenue of €4.3 billion; operating
profit of €246 million
-
Net debt: €776 million (down €43
million vs 2022)
-
Solid liquidity: €882 million in cash flow and
undrawn credit facility of €630 million
2023: A busy year for refocusing the
Group’s roadmap
-
Pivoting towards urban regeneration:
- First market deal
with Carrefour and creation of land banking joint venture:
Expected revenue at termination:
>€2 billion over 10 years
- Launch of Nexity Héritage and land
banking solution with Mirabaud AM
-
Deleveraging levers initiated:
-
Disposal of international activities (Poland and
Portugal)
-
Search for strategic and financial
partners in the management and distribution
businesses
2024: A year of far-reaching
transformation
-
Finalisation of the sale of Property Management for
Individuals business to Bridgepoint for an enterprise
value of €440 million, concerning ~3,100
employees; ongoing process to seek out strategic and
financial partnerships
-
Accelerating the shift in the Group’s business model
towards that of an urban operator:
-
Implementing far-reaching organisational
transformation based around a regional,
multi-product offering and ramping up the
Serviced Properties business
-
Adjusting the workforce in keeping with new market
parameters and changes in scope
-
In view of its adaptation and transformation, the Group has decided
to initiate in the coming weeks an information and consultation
process with employee representative bodies before implementing a
redundancy plan (PSE in French). As such, the Board proposes that
the dividend in respect of financial year 2023 be suspended1
-
Improved profitability from 2025, and as a result, maximum
net debt of €500 million at year-end 2025
-
Dividend policy consistent with the context and reviewed
annually in light of free cash flow
-
Forecast for 2024:
-
Operating profit to remain positive while reaching a low
point, taking into account gains on disposals, the costs
of adjusting supply to new market conditions and costs relating to
the Group’s reorganisation, paving the way for a rebound in
2025
-
Net financial debt considerably lower than at the end of
2023
VÉRONIQUE BÉDAGUE, CHAIRWOMAN AND CHIEF EXECUTIVE
OFFICER, COMMENTED:
“At the end of a year marked by an ongoing
deterioration in the real estate market, with an historic slowdown
in both residential and commercial private investment, Nexity has
once again demonstrated its ability to meet its financial targets
thanks to its commercial agility, the strength of its long-term
relationships with public investors and the exemplary commitment
shown by its staff, whom I’d like to thank in particular. The
sector in which we operate is going through a crisis that is
unprecedented in terms of its intensity, duration and scope,
affecting both supply and demand. Nexity will adapt to this new
reality more quickly in 2024, by making adjustments that will
enable it to sell supply designed during the previous cycle,
scaling its organisation to match new market conditions with
respect to volume, and switching to an operating model focused on
local areas in order to meet the demand for our services as an
urban operator even more effectively. This means that we will
recognise the costs of these transformations, including the
implementation of a redundancy plan, in 2024, and will continue to
refocus the strategic roadmap and deleverage the business. To do
so, we will minimise risk as we ramp up urban regeneration
activities with operational partners, and we will- continue seeking
out strategic and financial partnerships in services, particularly
in the management and distribution businesses.Having reinforced our
financial structure, Nexity is in a position to convert all the
growth opportunities offered by the emerging new real estate cycle,
as evidenced by initial positive indicators, and to extend our
leadership, as we have succeeded in doing after every previous
market crisis.”
KEY FIGURES FOR 2023
Business activity – France |
2022 |
2023 |
Change |
Reservations: Residential Real Estate |
|
|
|
Volume |
18,015 units |
14,602 units |
-19% |
Value |
€3,924m |
€2,964m |
-24% |
|
|
|
|
Development backlog |
€6.1bn |
€5.4bn |
-12% |
|
Financial results (in €m) |
2022 |
2023 |
Change |
Revenue |
4,704 |
4,273 |
-9% |
Operating profit |
367 |
246 |
-33% |
Operating margin (as % of revenue) |
7.8% |
5.7% |
-210 bps |
Group share of net profit |
188 |
19 |
|
Net debt1 |
820 |
776 |
|
x EBITDA after lease payments2 |
1.5x |
2.5x |
|
1 Net debt before lease liabilities and
following application of IFRS 5 after entering into exclusive
negotiations on 21 December 2023 for the sale of the
Property Management for Individuals business.2 Leverage ratio
calculated in accordance with contractual terms set out in
financing agreements (IFRS reporting).
PERFORMANCE BY
DIVISION
RESIDENTIAL REAL ESTATE
DEVELOPMENT
Business activityIn a highly
challenging market, Nexity’s business activity showed resilience:
14,602 reservations were booked, down 19% in a market that declined
by 26%. The total value of these reservations was
€2,964 million (down 24%). The latest FPI statement, dated
15 February, reported 94,828 reservations in the market, a
record low for the past 10 years.
As expected, and in line with market data,
retail sales declined sharply (down 41% compared
with 2022), mainly due to lower solvency among individual clients
arising from the substantial, lasting rise in interest rates and
the drop in implied yields for individual investors. Sales to
individual investors and homebuyers fell to an all-time low,
accounting for 21% and 12% of total sales, respectively.
Bulk sales remained strong,
holding steady year on year: Nexity continued to pursue its dynamic
sales strategy, in place since 2022, earmarking retail sale
reservations for bulk sales, through its long-term partnerships
with private and public landlords. Bulk sales accounted for 67% of
total reservations at year-end 2023, up 13 percentage points from
2022, driven in particular by bulk sales of intermediate housing,
which more than doubled year on year, peaking at 16%.
The difference between the change in
reservations by volume and by value is mainly due to the change in
the product mix.
Supply for sale at year-end 2023 was down 23%
relative to year-end 2022, at 7,778 units, with take-up periods
stable at around 7 months. These trends reflected the Group’s
increasingly selective approach to launching programmes (the
average rate of pre-selling was nearly 75%2 on programmes launched
in 2023) and demonstrated its ability to adapt its supply despite a
slower pace of sales. Developments under construction accounted for
around 46% of the total supply for sale (vs. 60% for the
market as a whole) and the stock of unsold completed units remained
marginal, at around one hundred.
Financial performance
(in millions of euros) |
2022(1) |
2023 |
Change |
Revenue |
3,385 |
2,942 |
-13% |
Operating profit |
280 |
140 |
-50% |
Margin (as % of revenue) |
8.3% |
4.8% |
-350 bps |
(1) Reclassification of Villes & Projets
(historically classified in the Other Activities division) in
Residential Real Estate Development
Revenue declined by 13% in 2023
to €2,942 million, reflecting the slower pace of signings of
notarial deeds of sale since the beginning of the year and fewer
new programmes launched into the construction phase.
Operating profit was €140
million (down 50%), representing a margin of 4.8%, down 350 basis
points. This change was mainly due to the decrease in revenue, the
change in the customer mix with a higher proportion of bulk sales,
higher construction costs affecting the budgets of certain
programmes under construction, and the slowdown in business, which
has affected the balance of overhead costs.
Outlook:
The backlog stands at €5.0 billion,
representing two years’ revenue.
The Carrefour partnership announced in 2023,
which is fully aligned with the Group’s increased emphasis on urban
regeneration, reached a key milestone at the end of November with
the formation of the “Villes et Commerces” land banking joint
venture. As a reminder, this partnership covers the upgrade of 76
Carrefour sites across France through urban mixed-use projects,
including 12,000 homes, and will generate revenue at termination of
over €2 billion over the next ten years (developments will be
included in the backlog with effect from H2 2024).
In early October, the French government made an
initial revision to the country’s zoning map, reclassifying more
than 150 municipalities as supply-constrained areas (A/Abis/B1),
meaning they are now eligible for the “Pinel” scheme, intermediate
rental housing (LLI) and the 2024 PTZ interest-free loan scheme,
and in some cases raising rent ceilings, which in turn improves
rental yields. This zoning extension will enable Nexity to
recalibrate developments currently being set up in the
municipalities concerned, and to sell its available supply more
quickly. For reference, 81% of Nexity’s current supply for sale is
located in supply-constrained areas.
COMMERCIAL REAL ESTATE
DEVELOPMENT
Business activityWith the
market at a cyclical low, marked by higher interest rates and
changes in usage for commercial real estate (according to CBRE,
investment in France was down 56% in 2023), as forecast, Nexity
recorded a low volume of new orders in 2023 (€39 million).
In 2023, the Group delivered 12 developments
totalling over 100,000 square metres, including the following
iconic developments:
- Deloitte University: 23,385-square-metre
low-carbon business park standing on 14.7 hectares of land in a
natural setting,
- Aqueduc business park: Nearly 40,000 square
metres of office space developed in Gentilly,
- Facette development: 5,200 square metres of
office space at the heart of the Belvédère development in Bordeaux,
Nexity’s new regional head office.
These developments bring total deliveries over
the past five years to nearly 700,000 square metres, including
almost 200,000 square metres of logistics facilities, warehouses
and business parks and over 50,000 square metres of higher
education facilities, reflecting continuing diversity in the new
business written by the Group.
Financial performance
(in millions of euros) |
2022 |
2023 |
Change |
Revenue |
380 |
459 |
+21% |
Operating profit |
45 |
41 |
-9% |
Margin (as % of revenue) |
11.9% |
8.9% |
-300 bps |
At year-end 2023, revenue totalled €459 million
and operating profit was €41 million, driven, as in 2022, by the
contribution of the green business park in La Garenne-Colombes,
which is 75% completed.
Outlook
15 developments in progress at
year-end 2023, totalling more than 200,000 square
metres and ~€350 million, including
the following:
- Green business park in
La Garenne-Colombes: 95,000-square-metre project
scheduled for delivery in Q2 and Q4 2024, contributing
€250 million to secure 2024 revenue.
- Carré Invalides
(Paris): Renovation of the 15,400-square-metre former headquarters
of the Greater Paris regional council
- Confluence business
park (Lyon): Mixed development incorporating a
15,000-square-metre higher education campus.
- Reiwa: New
construction of Nexity’s future head office, totalling around
25,000 square metres, in Saint-Ouen (Seine-Saint-Denis).
While the market for off-plan sales remained
buoyant outside the Paris region, the Group continued to capitalise
on its integrated expertise and positioning to step up its role
supporting institutional clients with urban regeneration projects
under delegated project ownership and CPI development
contracts.
The backlog stood at €349 million at year-end
2023.
Services
Services revenue was €872
million at year-end 2023, down very slightly and once again driven
by Managed Real Estate (Serviced Properties):
(in millions of euros) |
2022 |
2023 |
Change |
Revenue |
938 |
872 |
-7% |
o/w: Property Management3 |
382 |
385 |
+1% |
o/w: Serviced Properties |
217 |
270 |
+25% |
o/w: Distribution |
340 |
217 |
-36% |
Operating profit |
92 |
73 |
-21% |
Margin (as % of revenue) |
9.8% |
8.3% |
-150 bps |
Revenue from Property
Management (Property Management for Individuals and
Property Management for Companies) grew slightly, up 1% to
€385 million, confirming the resilience of the condominium and
rental management businesses, with a portfolio of nearly 825,000
units under management at year-end 2023 and significant contracts
renewed or signed, an example being Nexity Property Management’s
successful bid to manage over 4,000 sites on behalf of the Orange
group. Meanwhile, rental intermediation-related business lines
(sales and lettings) were affected in 2023 by the rise in interest
rates and very tight supply in the rental market.
The Serviced Properties
business (serviced residences for students, coworking spaces)
posted €270 million in revenue (up 25%), driven in particular by
the strong growth momentum of the portfolio of coworking businesses
(16 new sites and an increase of nearly 24,000 square metres under
management), as well as occupancy rates, which remained high at
end-December for both coworking spaces (96%4) and student
residences (97%).
Lastly, as expected, revenue from
Distribution activities (down 36%) reflected the
downturn in the new home market. It should however be noted that
reservation volumes decreased less than did the individual investor
market, and that the market share for distribution activities grew
by two points (totalling 10.3%).
Operating profit for the
Services business totalled €73 million at year-end
2023, down 21%, mainly due to lower profitability in the
Distribution business, reflecting the downturns in the new home and
brokerage markets. Excluding Distribution, profit grew by 8%.
Outlook:
After announcing at end-October that it had
initiated a process to seek out strategic and financial
partnerships in its management and distribution
businesses, Nexity announced on 21 December that it had
entered into exclusive negotiations with a view to selling 100% of
its Real Estate Services to Individuals activities to Bridgepoint,
a European leader in alternative asset management, based on an
enterprise value of €440 million. This transaction, expected
to be finalised in the first half of the year, involves the launch
of a long-term5 strategic partnership aimed at amplifying existing
synergies with Nexity’s businesses and securing their long-term
future. The agencies will continue to assist with the
pre-deliveries of our new buildings and provide condominium
management services, we will offer dedicated rental management
services to our individual investors, we will be the preferred
developer for land banking and real estate projects (such as
extensions to existing buildings through additional storeys), and
we will have access to the client base to promote our range of
services and solutions.
CONSOLIDATED
RESULTS – OPERATIONAL REPORTING
Due to the process underway for the sale of Real
Estate Services to Individuals activities, which is expected to be
finalised in the first half of the year, the Group is applying IFRS
5 (on assets held for sale), which requires the assets and
liabilities of these activities to be presented separately from
other continuing operations in the balance sheet. The income
statement has not been restated.
(in millions of euros) |
|
2022 |
|
2023 |
|
Change |
Consolidated
revenue |
|
4,704 |
|
4,273 |
|
-9% |
Operating profit |
|
367 |
|
246 |
|
-33% |
% of
revenue |
|
7.8% |
|
5.7% |
|
|
Net financial
income/(expense) |
|
(65) |
|
(108) |
|
-67% |
Income tax |
|
(90) |
|
(51) |
|
+43% |
Share of
profit/(loss) from equity-accounted investments |
|
(7) |
|
(49) |
|
x6.6 |
Net
profit |
|
204 |
|
37 |
|
N/A |
Non-controlling
interests |
|
(16) |
|
(18) |
|
+7% |
Net profit attributable to equity holders of the parent
company |
|
188 |
|
19 |
|
N/A |
REVENUE
(in millions of euros) |
|
2022(1) |
2023 |
|
Change |
Development |
|
3,766 |
3,401 |
|
-10% |
Residential Real
Estate Development |
|
3,385 |
2,942 |
|
-13% |
Commercial Real
Estate Development |
|
380 |
459 |
|
+21% |
Services |
|
938 |
872 |
|
-7% |
Property
Management |
|
382 |
385 |
|
+1% |
Serviced
Properties |
|
217 |
270 |
|
+25% |
Distribution |
|
340 |
217 |
|
-36% |
Revenue |
|
4,704 |
4,273 |
|
-9% |
o/w: External growth in Residential Real Estate Development
(Angelotti) |
|
45 |
147 |
|
N/A |
(1) Reclassification of Villes & Projets (historically
classified in the Other Activities division) in Residential Real
Estate Development
Revenue in 2023 totalled
€4,273 million, down 9% relative
to 2022 (down 10% on a like-for-like basis6).
-
Revenue for the Development business was down 10%,
mainly driven by the revenue generated through major projects in
Commercial Real Estate (the green business park in La
Garenne-Colombes and Nexity’s headquarters in Saint-Ouen). Revenue
from Residential Real Estate Development was down 13%, due to the
slowdown in business in a highly unfavourable environment.
-
Revenue from Services was down 7%, with the surge
in revenue for the Serviced Properties business (up 25% compared
with 2022) not enough to offset the decline in revenue from
Distribution, which was affected by the downturn in the new home
market.
In IFRS terms, revenue in 2023
totalled €3,964 million, down 9% relative to 2022. This figure
excludes revenue from joint ventures, in accordance with IFRS 11,
which requires these ventures – proportionately consolidated in the
Group’s operational reporting – to be accounted for using the
equity method. It should be noted that revenue generated by the
development businesses from VEFA off-plan sales and CPI development
contracts is recognised using the percentage-of-completion method,
i.e. on the basis of notarised sales and pro-rated to reflect the
progress of all inventoriable costs.
OPERATING PROFIT
|
|
2022(1) |
2023 |
|
|
(in millions of euros) |
|
Current operatingprofit |
Margin |
Current operatingprofit |
Margin |
|
|
Development |
|
326 |
8.6% |
181 |
5.3% |
|
|
Residential Real
Estate Development |
|
280 |
8.3% |
140 |
4.8% |
|
|
Commercial Real
Estate Development |
|
45 |
11.9% |
41 |
8.9% |
|
|
Services |
|
92 |
9.8% |
73 |
8.3% |
|
|
Other
Activities |
|
(51) |
N/A |
(48) |
N/A |
|
|
Operating profit |
|
367 |
7.8% |
246 |
5.7% |
|
|
(1) Reclassification of Villes & Projets (historically
classified in the Other Activities division) in Residential Real
Estate Development
Operating profit was
€246 million, in line with guidance.
OTHER INCOME STATEMENT
ITEMS
The net financial expense
totalled €108 million. In particular, it comprised an
increase of nearly €25 million in financing costs due to the rise
in interest rates (with 51% of total debt made up of floating-rate
debt at year-end 2023) and an €8 million increase in finance costs
on lease liabilities driven by growth in the portfolio of managed
real estate.
The tax expense (including the
CVAE7) amounted to €51 million. The current effective tax rate
(excluding the CVAE) was 35% (28% at year-end 2022). This rate,
which was 9 points higher than our normative rate, mainly resulted
from international losses that were not recoverable against French
taxes, as well as the tax on the long-term disposal gain following
the transfer of Studéa shares from Property Management for
Individuals to Nexity SA.
The decrease in “Share of profit/(loss) from
equity-accounted investments” primarily arose from the 18% stake in
Ægide Domitys.
The Group share of net profit
came to €19 million at 31 December 2023.
FINANCIAL
STRUCTURE
The Group’s net debt before lease
liabilities amounted to €776 million at year-end 2023,
down €43 million compared to 2022, in line with its debt management
policy announced at the beginning of the year.
This decrease notably reflects the
following:
-
Strict management of working capital in an adverse environment due
to a more selective approach before projects are launched and the
simultaneous start of construction work and signing of deeds when
new land is purchased
-
Discontinuation of business outside France and disposal of
activities in Poland and Portugal finalised in Q3, with a €100
million impact on net debt
Debt at 31 December 2023 takes into
account the impact of IFRS 5 application on Property
Management for Individuals and thus includes a corresponding
€67 million adjustment.
The Group was in compliance with all its
financial ratios as at end-December 2023. The leverage ratio8,
calculated in accordance with contractual terms set out in
financing agreements, stood at 2.5x, below the limit set out in the
financial covenant (3.5x).
(in millions of euros) |
|
31 Dec. 2022 |
31 Dec. 2023 |
Change |
Bond issues and
other |
|
976 |
821 |
(155) |
Bank borrowings
and commercial paper |
|
874 |
837 |
(37) |
Net cash and
cash equivalents |
|
(1,030) |
(882) |
+149 |
Net financial debt before lease liabilities |
|
820 |
776 |
-43 |
Overall, nearly 50% of the Group’s gross debt is
fixed-rate debt, limiting its exposure to rising interest rates.
The Group has also put in place interest rate hedges, bringing the
proportion of its gross debt that is either well hedged or at fixed
rates to over 60%.
At 31 December 2023, the average maturity of the
Group’s debt remained above two years (2 years and 4 months), with
an average cost of borrowing of 3.8%.
The Group’s liquidity is solid, with total cash
and cash equivalents of €882 million, and €630 million in
confirmed undrawn credit lines.
As a reminder, in February 2023, the Group
renewed its corporate credit line for a period of 5 years with an
expanded pool of banks and for an increased amount (€800 million
versus €500 million).
WORKING CAPITAL REQUIREMENT
(in millions of euros) |
|
31 Dec. 2022 |
31 Dec. 2023 |
|
Change |
Development |
|
1,322 |
1,316 |
|
(6) |
Residential
Real Estate Development |
|
1,199 |
1,240 |
|
+41 |
Commercial
Real Estate Development |
|
123 |
76 |
|
(47) |
Services |
|
36 |
62 |
|
+27 |
Other
Activities |
|
(23) |
(39) |
|
(15) |
Total
WCR excluding tax |
|
1,335 |
1,340 |
|
+5 |
Corporate
income tax |
|
(11) |
7 |
|
+17 |
Working capital requirement (WCR) |
|
1,324 |
1,346 |
|
+23 |
The Group’s working capital requirement, after
adjusting working capital in the Property Management for
Individuals business in accordance with IFRS 5, stood at
€1,346 million at year-end 2023, mainly due to the slowdown in
business and thus in sales of inventory. Excluding tax and before
the adjustment relating to IFRS 5, the working capital
requirement declined €39 million.It mainly consists of secure
operating items (receivables due from individual clients guaranteed
by banks, and receivables due from institutional clients relating
to top-tier counterparties) and includes an almost 40% reduction in
the land bank, which stood at €171 million at 31 December 2023.
CLIMATE AND
BIODIVERSITY: STRONG PERFORMANCE IN 2023
In 2023, Nexity continued to roll out its
ambitious strategy in support of resilient low-carbon
cities, thus helping accelerate the sustainability
transition in the real estate sector.
- 1.5°C carbon trajectory
validated by SBTi (the Science Based
Targets initiative) in July 2023, with the Group joining the
Euronext CAC SBT 1.5 index
- CDP
score9 upgraded to A-
“Leadership”, notably in recognition of the Group’s carbon
reduction targets across its entire value chain and high-quality
environmental reporting
- Partnership between Nexity and the
Net Zero Initiative for Real Estate, which aims to
draw up guidelines so that the real estate sector helps achieve the
global net-zero target
Lower carbon emissions – Regulatory
requirements met or outperformed nearly two years ahead of
time: The Group’s aim is to achieve a 42%
reduction in its carbon impact per square metre delivered between
2019 and 2030, 10% above the level required by France’s RE2020
environmental regulations10. On average in 2023, the Group’s
developments at building permit stage outperformed RE2020
requirements by 25% (representing the equivalent of
300,000 metric tons of CO2 avoided), thus meeting the new
regulatory thresholds nearly two years ahead of time. This
performance was notably made possible by the following:
- Large-scale rollout of heat pumps
as well as low-carbon and bio-sourced materials
- Work on new construction processes
and innovations pursued for many years, as seen in the low-carbon
performance of the Athletes’ Village (60,000 square metres), at
under 700 kg of CO2 per square metre
Nexity, at the forefront of biodiversity
footprint measurement: The Group
measured its biodiversity footprint for the first time in
2022 and identified actions across the entire real estate
value chain (wood supplies, support from sustainability
experts, etc.), which were included in the Act4Nature
commitments, renewed in 2023 for 2024-2026.
A Climate and Biodiversity
Report presenting the Group’s business strategy and
implementation approach will be made available ahead of the
Shareholders’ Meeting to be held in May 2024.
2023: A BUSY
YEAR FOR REFOCUSING THE GROUP’S ROADMAP
Even before the persistent market downturn
throughout 2023, Nexity had begun proactively concentrating on
refocusing its roadmap, speeding up its
execution, in line with the following announcements:
Discontinuation of business outside France:
- Disposal of Polish and Portuguese
subsidiaries completed in July and September 2023
- Sale proceeds of around
€100 million went towards deleveraging the Group
Pivoting more quickly towards urban
regeneration:
- Launch of Nexity
Héritage, a subsidiary specialising in urban
regeneration
- First market deal
aimed at upgrading 76 Carrefour sites and
launching a land banking company: The 76 sites to be regenerated
total approximately 800,000 sq.m, and their development will lead
to the creation of 12,000 homes, for estimated revenue of over €2
billion spread over 10 years.
- Land banking solution with
Mirabaud AM: The land banking solution offered by
Mirabaud AM will cover predominantly residential large-scale
property renovation, transformation and/or refurbishment projects
and will enable Nexity to outsource up to 90% of the carry risk,
for a total investment of up to €200 million over
5 years.
Process initiated to seek out strategic and financial
partnerships in management and distribution
businesses:
- At year-end 2023, Nexity entered into
exclusive negotiations with a view to selling 100% of its
Real Estate Services to Individuals activities to
Bridgepoint, based on an enterprise value of
€440 million. This transaction involves a strategic
partnership aimed at amplifying existing synergies with Nexity’s
businesses and securing their long-term future.
2024: A YEAR OF
FAR-REACHING TRANSFORMATION
Although interest rates now appear to have plateaued, the sector
is likely to continue to face an unfavourable market environment in
2024.
After beating the market in 2023, backed by its solid
liquidity, Nexity intends to step up actions to adjust its roadmap
to adapt to changes in scope and the new market reality,
including:
Finalisation of the first strategic and financial
partnership dealing with real estate services in the first half of
the year
-
Real Estate Services to Individuals activities to be sold to
Bridgepoint in the first half of the year The only closing
condition for authorisation by the European Commission in respect
of merger control was met on 20 February 2024.
-
Proceeds from sale to be used to reduce the Group’s debt
level, with the gains made on this transaction helping
Nexity adapt more quickly to new market conditions
- Transaction affecting around
3,100 employees11
- Nexity also
continuing to seek out strategic and financial partnerships for the
Property Management for Companies and Distribution businesses
Far-reaching organisational transformation
- Accelerated shift towards urban
regeneration and managed real estate
- Decentralised business model, adapted to local and
regional planning priorities
- Multi-product range of solutions and services
adapted to emerging patterns of use
Adjustment of the Group’s workforce:
Rescaling the organisation to reflect the following:
- Market environment and slowdown in private investment in
residential and commercial real estate (with reservations recorded
by Nexity down 25% with respect to the average over the past five
years)
- Changes in the product mix (with bulk sales continuing to make
up more than 60% of total sales, compared with an average of 50%
over the past five years)
- Changes in the Group’s scope: disposal of international
activities, and of the Property Management for Individuals
business; continued search for strategic and financial
partnerships
In view of its adaptation and transformation,
the Group has decided to initiate in the coming weeks an
information and consultation process with employee representative
bodies before implementing a redundancy plan (PSE in French). As
such, the Board proposes that the dividend in respect of financial
year 2023 be suspended.12
Through these transformation
initiatives, Nexity is aiming for improved profitability from 2025,
and as a result, maximum net debt of €500 million at year-end
2025.
The dividend policy will be conducted so
as to be consistent with the context and reviewed annually in light
of free cash flow.
Thanks to an
agile,
deleveraged, regionally
focused multi-product
organisation, at the end of this year of
transformation Nexity will be in a position to seize the
opportunities offered by the impending change in the real estate
cycle.
Forecast for 2024
-
Operating profit to remain positive while reaching a low
point, taking into account gains on disposals, the costs
of adjusting supply to new market conditions and costs relating to
the Group’s reorganisation, paving the way for a rebound in
2025
-
Net financial debt considerably lower than at the end of
2023
*****
FINANCIAL CALENDAR & PRACTICAL
INFORMATION
- Q1 2024 revenue and business
activity Thursday,
25 April 2024 (after market close)
- Shareholders’
Meeting Thursday,
23 May 2024
- 2024 interim results
Thursday,
25 July 2024 (after market close)
- Q3 2024 revenue and business
activity Thursday,
24 October 2024 (after market close)
A conference call will be held
today in French, with simultaneous translation into English, at
6:45 p.m. (Paris time), which can be joined
via the “Finance” section of our website,
https://nexity.group/en/finance, or by calling one of the following
numbers:
|
+33 (0)1 70 37 71 66 |
- Calling from elsewhere in
Europe
|
+44 (0)33 0551 0200 |
- Calling from the United States
|
+1 786 697 3501 |
Code: Nexity FR / Nexity EN
The presentation accompanying this conference
will be available on the Group’s website from 6:30 p.m. (Paris
time) and may be viewed at the following address: Nexity FY 2023
webcastThe conference call will be available on replay at
www.nexity.group/en/finance from the following day.
Disclaimer:
Audit procedures by the Statutory Auditors for
the consolidated financial statements are being finalised and the
corresponding report will be issued shortly.
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.23-0251 on 6 April 2023 could have an impact on the Group’s
operations and the Company’s ability to achieve its targets.
Accordingly, the Company cannot give any assurance as to whether it
will achieve its stated targets, and makes no commitment or
undertaking to update or otherwise revise this information.
Contact:Géraldine Bop – Head of
Financial Communications / +33 (0)6 23 15 40 56Anne-Sophie Lanaute
– Head of Investor Relations and Financial Communications / +33
(0)6 58 17 24 22investorrelations@nexity.fr
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