Nexity 2022 half-year results: Resilient first half results

Nexity

Paris – France, 27 July 2022, 17h45 CEST

Resilient first half results
Cautious management of development activities
Strong growth of Services
Annual objectives specified

Cautious management of residential development: commercial launches postponed

• Recovery in permits granted, but commercial launches postponed to manage the consequences of inflation and protect margins

• Anticipation of a 17% market decline in 2022 (estimated at ~130,000 units vs. 157,000 in 2021)

• Nexity's robustness: 7,639 reservations in the first half (-9% in volume, -5% in value)
  
  

Financial performance: resilience in development activities, strong growth in services, indebtedness under control

• Revenue of €1,964 million, with service activities up by 9%

• Current operating profit of €110m, i.e. a half-year margin of 5.6%, not representative of annual performance

• Solid financial structure: net debt of €878m, i.e. 2.3x EBITDA, highest point of annual debt
  
  

2022 targets specified to better reflect the uncertainty of the macro-economic environment

• Confirmation of over 14% market share in 2022, in a new home market now expected to decline

• Maintain a high operating margin around 8% based on revenue at least equal to 2021

Nexity is well-prepared to address the tremendous needs of the sustainable city

• Closing of the acquisition of the Angelotti Group, a leading residential developer in Occitanie (south of France), expected at year-end

• Investor Day on 28 September: accelerating Nexity's integrated real estate operator model for sustainable cities

H1 2022 KEY FIGURES¹

BUSINESS ACTIVITY			FINANCIAL RESULTS
	H1 2022	Change	(€m)	H1 2022	H1 2021	22 vs 21
New home reservations in France		vs. H1 2021	Revenue	1,964	2,063	-5%
Volume	7,639 units	-9%	Operating profit	110	133	-17%
Value	€1,756m	-5%	Operating margin (% of revenue)	5.6%	6.4%	-80 bps
Commercial real estate			Net profit – Group share	54	75	-27%
Order intake	€92m
			(€m)	Jun-22	Dec-21
Development outlook		vs. Dec-21	Net debt2	878	598
Backlog	€6.5bn	-1%	x EBITDA after leases (12 month)	2,3x	1,5x

¹ Data on a like-for-like basis i.e without businesses sold in H1 2021: Century 21 consolidated until 31 March and Ægide-Domitys consolidated until 30 June 2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode ² Net debt before leases.

VÉRONIQUE BÉDAGUE, CHIEF EXECUTIVE OFFICER, COMMENTED:

« The geopolitical and macroeconomic uncertainty leads us to manage our operations with greater caution. To cope with inflationary pressures, we are more selective in launching operations and take the time to work on optimising our products in terms of both cost and selling price. Finally, once the launch has been decided, we capitalise on our diversified offer and our multi-channel marketing capability to ensure optimal time to market. This is how we protect our margins and contain our debt. This tight control of our supply for sale enables us to adapt to changes in demand, which remains strong, both from individuals and institutionals, despite macro-prudential measures aimed at reducing the credit availability to individuals and the rise in interest rates. Nexity's performance demonstrates the strength of its business model, capitalising in particular on its position as France's leading developer and on the very strong growth in the results of its service activities. The volume of our business potential, the strength of our backlog, the solidity of our balance sheet and the quality and commitment of our teams, give us confidence that we will be able to weather this period of uncertainty as well as possible, and we will be able to meet the immense needs in the French housing market. We have also just strengthened our positions in Occitania region (South of France) by acquiring a majority stake in Angelotti and remain in motion to participate in the future consolidation of the sector and better respond to the challenges of sustainable cities. »

RESIDENTIAL REAL ESTATE 

Business activity
The supply shortage, observed for several years on the French market, persists despite a recent recovery in the delivery of building permits for collective housing. The acceleration of the inflationary context recorded in the second quarter lengthens the operations’ set-up time, delays the start of their marketing, thus constraining the supply for sale. The new home market in France is therefore affected despite a still sustained demand, both from individuals and institutional investors. According to the FPI (Fédération des Promoteurs Immobiliers), new home sales fell by around 20% in the first quarter which should continue for the rest of the year.

Against this backdrop, Nexity's business activity held up well in the first half of the year, with 7,639 reservations (-9% in volume compared with H1 2021, -5% in value to €1.8 billion), with its customer base still balanced between retail sales (63% of reservations in the first half of the year) and bulk sales (37%). Sales prices per square metre in supply constrained areas (A and B1), which account for around 80% of reservations during the period, remain on an upward trend, in line with the first quarter (+3.7% vs H1 2021).

As expected, Nexity saw during the first half a recovery in building permits (+19% vs H1 2021), but is keen to secure its margins in a more difficult environment. Therefore, these new permits did not allow to increase the supply for sale as anticipated at the beginning of the year, mainly given the negotiation time required to integrate the inflationary trend in construction costs and validate the selling price. As a result, housing launches fell by 12% over the period. The supply for sale therefore remains low (7,199 units against 7,655 on 31 December 2021) and does not meet demand. This supply is low-risk (no stock of completed homes, and more than 70% of the supply not launched) and the time-to-market remains very fast (4.5 months vs. 4.4 months at 31 December 2021).

New scope (€m)	H1 2022	H1 2021	2022/2021 change
Revenue	1,377	1,398	- 2%
Current operating profit	65	81	- 20%
Margin (as a % of revenue)	4.7%	5.8%	-110 bps
	30/06/22	31/12/21
Working capital requirement (WCR)	1,152	1,029

Financial results
Revenue was slightly down in the first half of 2022, reflecting the lower level of new operations starts during the period. The margin rate is down, affected by the cautious management of operations leading to a lower coverage of fixed costs due to operations delay and higher costs related to projects’ exits. Working capital requirement amounted €1.2 billion. Working capital for new homes in France represented 18% of the backlog, in line with historical levels.

Outlook
Given the tougher housing environment observed in the second quarter, Nexity now expects the market to decline by 17% in 2022 (~130,000 units vs. 157,000 units in 2021). Nexity is maintaining its target of over 14% market share, with an acceleration in bulk sales expected in the second half of the year. The contribution to 2022 earnings from the acquisition of the Angelotti Group announced in June 2022 should be small, in the event of a year-end closing. The Group remains confident in its ability to contain the pressure on construction costs for ongoing operations. Expectations of rising real estate mortgage rates lead us to increase our vigilance regarding the relevance of new production in relation to market conditions.

COMMERCIAL REAL ESTATE 

Business activity
In a market context at the bottom of the cycle and still wait-and-see, Nexity recorded, as expected, a low level of order intake in the first half of the year (92 million euros at the end of June). This amount includes 66 million euros in order intake in the regions (+41% compared to H1 2021) where Nexity continues to strengthen its presence.

New scope (€m)	H1 2022	H1 2021	2022/2021 change
Revenue	161	280	- 43%
Current operating profit	21	44	- 53%
Margin (as a % of revenue)	13.0%	15.8%	-280 bps
	30/06/22	31/12/21
Working capital requirement (WCR)	64	24

Financial results
H1 2021 basis of comparison is high, as it included the contribution of the order intake for the Reiwa building in Saint-Ouen, which contributed €124 million to revenue and €16 million to operating profit. The half-year results for 2022 are logically down due to this significant base effect. Restated for this item, revenue is up 3%. The margin rate for the first half of 2022 remains higher than the normative level of the business. The level of WCR remains low and takes into account the rate of customer advances collection during the construction period.

Outlook
The outlook for Commercial real estate business remains unchanged. Given the wait-and-see attitude of companies, order intake should reach a low point in 2022. The backlog consumption should lead to achieve a consolidated revenue of around €400 million in 2022.

SERVICES 

New scope (€m)	H1 2022	H1 2021	2022/2021 change
Revenue	421	385	9%
o/w Property Management	188	186	1%
o/w Serviced Properties	102	70	45%
o/w Distribution	132	130	2%
Current operating profit	36	26	39%
Margin (as a % of revenue)	8.5%	6.7%	+180 bps
	30/06/22	31/12/21
Working capital requirement (WCR)	52	75

Services revenue amounted 421 million in the first half of 2022, up 9% compared to H1 2021, mainly driven by serviced properties activities, particularly coworking (Morning), which saw its revenue double in H1 2022, driven by the increase in the occupancy rate over the period (+11 points) and the 30% increase in the number of managed spaces (9 openings during H1 representing 19,000 sqm). Student residencies (Studea) had also a strong performance with a3 points increase in occupancy rate at 96% compared to 93% at end-December 2021.

Current operating profit rose by 39% to €36 million. The operating margin rate increased by 180 basis points to 8.5%.

Outlook
In the second half of the year, the Services activities should benefit from the continued good momentum of profitable growth recorded in the first half of the year.

CONSOLIDATED RESULTS – OPERATIONAL REPORTING

Reported H1 2021 net profit amounted to €281 million and included non-recurring items relating to the disposal of Ægide-Domitys and Century 21 (€206 million). Restated on a like-for-like basis, H1 2021 net profit amounted to €75 million.

		H1 2021 restated*				H1 2022		2022/2021 change Like-for-like basis
in € million		Reported	Disposed activities and non-recurring items	Like-for-like basis
Consolidated revenue		2,275	211	2,063		1,964		-5%
Operating profit		359	226	133		110		-17%
As a % of revenue				6.4%		5.6%
Net financial income/(expense)		(44)	(13)	(31)		(26)		-18%
Income tax		(31)	(7)	(24)		(24)
Share of profit/(loss) from equity-accounted investments		(1)		(1)		(1)
Net profit		283	206	77		59		-23%
Non-controlling interests		(2)		(2)		(5)
Net profit attributable to equity holders of the parent company		281	206	75		54		-27%
(in euros)
Net earnings per share		€5.07		€1.35		€0.98

*2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

REVENUE

Reported revenue amounted to €1,964 million, down 5% compared to H1 2021 on a like-for-like basis. H1 2021 reported revenue included revenue from disposed activities in 2021 (Century21 and Ægide-Domitys) and amounted to €2,275 million. Restated for the base effect of the Reiwa Commercial real estate order taken in the first half of 2021, revenue rose by 1%.

in € million		H1 2022	H1 2021		2022/2021 change
Development		1,538	1,678		- 8%
Residential Real Estate Development		1,377	1,398		- 2%
Commercial Real Estate Development		161	280		- 43%
Services		421	385		+ 9%
Property Management		188	186		+ 1%
Serviced properties		102	70		+ 45%
Distribution		132	130		+ 2%
Other Activities		5	1		ns
Revenue new scope		1,964	2,063		- 5%
Revenue from disposed activities (1)			211
Revenue		1,964	2,275		- 14%

(1) Disposed activities were consolidated until 31 March 2021 for Century 21 and until 30 June 2021 for Ægide-Domitys.

Under IFRS, reported revenue was €1,800 million. It excludes revenue from joint ventures in application of IFRS 11, which requires their recognition by equity accounting of proportionally integrated joint ventures in operational reporting. Reported revenue in H1 2021 (€2,099 millions) is not comparable as it included the revenue of the disposed activities in 2021 (Century21 and Ægide-Domitys).

As a reminder, 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

Current operating profit amounted to €110 million and the current operating margin reached 5.6% of revenue, at a level not representative of annual performance. Half of the decline in the margin rate (-80 bps) is due to the base effect from the Reiwa Commercial real estate order taken in H1 2O21.

		H1 2022			H1 2021*
in € million		Operating profit	Margin rate		Operating profit	Margin rate
Development		86	5.6%		125	7.4%
Residential Real Estate Development		65	4.7%		81	5.8%
Commercial Real Estate Development		21	13.0%		44	15.8%
Services		36	8.5%		26	6.7%
Other Activities		(11)	ns		(18)	ns
Current operating profit new scope		110	5.6%		133	6.4%

*2021 figures have been restated following the IFRS IC decision of March 2021 on the costs of software used in Saas mode

OTHER INCOME STATEMENT ITEMS

Financial expense amounted to -€26 million in H1 2022 and improved by €5 million compared to 30 June 2021 on a like-for-like basis. The increase in interest expenses on leases (€2 million vs. H1 2021) following the growth in coworking activities is largely offset by the decrease in the cost of financial debt for €7 million. The average cost of financing is down to 1.8% from 2.1% at end 2021. Given its mainly fixed-rate debt structure, the Group has little exposure to an increase in interest rates on the 2022 financial result.

Tax expense (including the Cotisation sur la Valeur Ajoutée des Entreprises, CVAE) on a like-for-like basis was stable at - €24 million. The current effective tax rate (excluding CVAE) was 27% at end-June 2022 in line with the normative fiscal rate.

Net profit Group's share on a like-for-like basis during H1 2022 was €54 million (compared to €75 million at 30 June 2021).

CASH FLOW AND BALANCE SHEET ITEMS

CASH FLOWS

Cash flow from operating activities after lease payments but before interest and tax expenses was €125 million at end-June 2022, comparable to the contribution in the first half of 2021.

Operating working capital (excluding tax) rose by €196 million, which is comparable to the usual increase in the first half of the year, still marked by expenditure flows on construction sites, which exceeds the inflows for the period. The change in WCR in H1 2021, which amounted to €355 million, took into account €238 million related to the consumption of advances paid for Commercial real estate on 2020 orders (mainly the Eco-campus in La Garenne Colombes).

Nexity’s free cash-flow was a net outflow of €136 million at end-June 2022 compared to a net outflow of €95 million at 30 June 2021 restated for the effect of the consumption of customer advances. This reflects a controlled increase in working capital in H1 2022.

in € million		H1 2022	H1 2021*
Cash flow from operating activities before interest and tax expenses		188	233
Repayment of lease liabilities		(63)	(117)
Cash flow from operating activities after lease payments but before interest and tax expenses		125	116
Change in operating working capital		(196)	(355)
Interest and tax paid		(36)	(71)
Net cash from/(used in) operating activities		(107)	(310)
Net cash from/(used in) operating investments		(29)	(23)
Free cash-flow		(136)	(333)
Net cash from/(used in) financial investments		(7)	185
Dividends paid by Nexity SA		(138)	(111)
Net cash from/(used in) financing activities, excluding dividends		22	(165)
Change in cash and cash equivalents		(259)	(423)

*2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

Net cash from/(used in) financial investments totalled €7 million in H1 2022. It mainly included in H1 2021, the disposal of 100% of Century 21 and 45% of Ægide.

Net cash flow from/(used in) financing activities totalled only €22 million as there were no repayments during the period. In H1 2021, they included the repayment at maturity of a bond.

WORKING CAPITAL REQUIREMENT

in € million		30 June 2022	31 December 2021	2022/2021 change
Development		1,215	1,053	162
Residential Real Estate Development		1,152	1,029	123
Commercial Real Estate Development		64	24	39
Services		52	75	(23)
Other Activities		46	(7)	52
Total WCR excluding tax		1,313	1,121	192
Corporate income tax		5	(2)	7
Working capital requirement (WCR)		1,318	1,119	199

At 30 June 2022, WCR excluding tax increased by €192 million compared to end-December 2021, driven by Residential real estate (+€123 million).

Land commitments considered as Landbank totalled around €250 million at 30 June 2022 (compared to around €280 million at 31 December 2021).

BALANCE SHEET AND FINANCIAL STRUCTURE

The Group’s net debt before lease liabilities amounted to €878 million at end-June 2022, up €280 million compared to end-2021. This increase came in particular from the dividend payment in the first half of the year (€138 million) and the increase in working capital requirement (€192 million).

The level at end-June represents the highest point in annual indebtedness.

Leverage ratio was 2.3x EBITDA at 30 June 2022, well below the bank covenant thresholds (3.5x).

The Group has a solid financial situation as of 30 June 2022, with a total cash position of €914 million, to which are added €600 million of confirmed and undrawn credit lines.

Gross debt is mainly fixed rate (56%), reducing the Group's exposure to rising interest rates.

in € million		30 June 2022	31 December 2021	2022/2021 change
Bond issues and others		999	994	5
Bank debt and commercial papers		793	768	26
Net cash and cash equivalents		(914)	(1,163)	249
Net financial debt before lease liabilities		878	598	280

At 30 June 2022, the average debt maturity was high at 2.6 years (compared to 3.1 years at end-2021) with an average cost of debt down to 1.8% compared to 2.1% in 2021 given the refinancing policy pursued in 2021.

Lease liabilities rose during H1 2022 by €51 million, to reach €677 million, reflecting the growth in the number of managed coworking office spaces. Net debt including lease liabilities amounted to €1,554 million at 30 June 2022, compared to €1,224 million at 31 December 2021.

2022 OUTLOOK

2022 targets specified ¹ to better reflect the uncertainty of the macro-economic environment

• Confirmation of over 14% market share in 2022, in a new home market now expected to decline

• Maintain a high operating margin around 8% based on revenue at least equal to 2021

Nexity will continue to closely monitor the current economic, social and health situation.

ACQUISITION OF A MAJORITY STAKE IN THE ANGELOTTI GROUP

As the regional leader in residential development and urban planning in Occitania region (South of France), this acquisition is a major step forward for Nexity. Fully in line with the Group's strategic ambition, this transaction will strengthen Nexity's urban planning offer, a business that has been in place for a long time and that transforms territories to serve our local authority clients. It will also enable Nexity to strengthen its market share in residential development in Occitania and PACA regions, two regions with strong growth prospects, by relying on reputable and well-established local partners. In 2021, the Angelotti group totalled revenue of €150 million (+20% compared to 2020) and has a pipeline of projects representing around 6 years of activity.

***

FINANCIAL CALENDAR & PRACTICAL INFORMATIONS

Investor Day (only with invitation)                                Wednesday 28 September 2022
Q3 2022 business activity and revenue                                Wednesday 26 October 2022 (after market close)

A conference call will be held today in French with a simultaneous translation into English at 6.30 p.m. (Paris Time), available on the website https://nexity.group/en/ in the Finance section and with the following numbers:

Calling from France	+33 (0) 1 70 37 71 66
Calling from elsewhere in Europe	+44 (0) 33 0551 0200
Calling from the United States	+1 212 999 6659

Code: Nexity en

The presentation accompanying this conference will be available on the Group’s website from 6:15 p.m. (Paris Time) and may be viewed at the following address: Nexity H1 2022 webcast

The conference call will be available on replay at https://nexity.group/en/finance from the following day.

The French version of the 2022 interim financial report is filed today with the Autorité des Marchés Financiers (AMF) and is available on the Group’s website.

Avertissement: 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.22-0248 on 6 April 2022, 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:
Domitille Vielle – Head of Investor relations / +33 (0)6 03 86 05 02 – investorrelations@nexity.fr

ANNEX : OPERATIONAL REPORTING

Quarterly reservations – Residential Real Estate

		2022			2021					2020
Number of units		Q2	Q1		Q4	Q3	Q2	Q1		Q4	Q3	Q2	Q1
New homes (France)		4,149	3,490		7,658	4,092	4,843	3,508		7,299	3,848	5,402	3,450
Subdivisions		423	337		772	367	439	338		660	244	297	360
International		100	133		216	247	404	249		503	193	74	165
Total new scope		4,672	3,960		8,646	4,706	5,686	4,095		8,462	4,285	5,773	3,975
Reservations carried out directly by Ægide							348	389		143	336	392	207
Total (in number of units)		4,672	3,960		8,646	4,706	6,034	4,484		8,605	4,621	6,165	4,182

		2022			2021					2020
Value, in €m incl. VAT		Q2	Q1		Q4	Q3	Q2	Q1		Q4	Q3	Q2	Q1
New homes (France)		992	764		1,447	845	1,056	792		1,534	855	1,141	750
Subdivisions		37	27		55	33	42	29		57	19	25	30
International		2	18		31	48	72	41		91	29	11	26
Total new scope		1,032	808		1,533	927	1,170	862		1,682	903	1,177	806
Reservations carried out directly by Ægide							85	90		32	70	90	41
Total (in €m incl. VAT)		1,032	808		1,533	927	1,255	952		1,713	974	1,267	847

Breakdown of new home reservations in France by client

In number of units, new scope	H1 2022		H1 2021		H1 2022/H1 2021 change
Homebuyers	1,513	20%	1,778	21%	-15%
o/w: - First time buyers	1,317	17%	1,514	18%	-13%
- Other home buyers	195	3%	264	3%	-26%
Individual investors	3,335	44%	3,686	44%	-10%
Professional landlords	2,791	37%	2,887	35%	-3%
O/w : - Institutional investors	727	10%	936	11%	-22%
- Social housing operators	2,064	27%	1,951	23%	6%
Total	7,639	100%	8,351	100%	-9%

Services

		June 2022		December 2021		Change
Property Management
Portfolio of managed housing
- Condominium management		675,000		672,000		+ 0.4%
- Rental management		158,000		155,000		+ 1.9%
Commercial real estate
- Assets under management (in millions of sq.m)		20.2		20.4		- 1%
Serviced properties
Student residences
- Number of residences in operation		129		129		0
- Rolling 12-month occupancy rate		96%		93%		+ 3 pts
Shared office space
- Managed areas (in sq.m)		76,000		57,000		+ 19.000
- Rolling 12-month occupancy rate		85%		74%		+ 11 pts
Distribution		June 2022		June 2021		Change
- Total reservations		2,425		2,731		- 11%
- Reservations on behalf of third parties		1,497		1,770		- 15%

Quarterly figures - Revenue

	2022			2021					2020
in € million	Q2	Q1		Q4	Q3	Q2	Q1		Q4	Q3	Q2	Q1
Development	839	699		1,279	815	827	851		1,747	703	680	524
Residential Real Estate development	750	626		1,146	735	742	655		1,216	642	434	467
Commmercial Real Estate development	89	72		133	79	85	195		530	61	247	57
Services	226	195		270	198	209	176		237	198	161	171
Property management	149	141		141	140	129	126		129	133	114	126
Distribution	77	54		129	58	80	50		108	65	47	45
Other activities	4	1					1
Revenue - New scope	1,069	895		1,549	1,013	1,036	1,027		1,983	901	842	695
Revenue from disposed activities*						107	104		134	120	88	92
Revenue	1,069	895		1,549	1,013	1,143	1,132		2,118	1,021	929	787

* Disposed activities are consolidated until 31 Mars 2021 for Century 21 and until 30 June 2021 for Ægide-Domitys

Backlog

	2022			2021					2020
In € million, excluding VAT	H1	Q1		FY	9M	H1	Q1		FY	9M	H1	Q1
Residential Real Estate development	5,541	5,551		5,565	5,610	5,504	5,399		5,509	5,100	4,986	4,522
Commercial Real Estate development	906	935		974	1,013	1,059	1,138		1,032	321	373	398
Total Backlog	6,447	6,485		6,538	6,622	6,563	6,536		6,541	5,421	5,359	4,920
Restatement of operations carried out directly by Ægide							242		280	298	300	274
Total Backlog new scope	6,447	6,485		6,538	6,622	6,563	6,778		6,820	5,719	5,659	5,194

Half-year figures
Reservations – Residential Real Estate

		2022		2021				2020
Number of units		H1		FY	H2	H1		FY	H2	H1
New homes (France)		7,639		20,101	11,750	8,351		19,999	11,147	8,852
Subdivisions		760		1,916	1,139	777		1,561	904	657
International		233		1,116	463	653		935	696	239
Total new scope		8,632		23,133	13,352	9,781		22,495	12,747	9,748
Reservations carried out directly by Ægide		-		737	-	737		1,078	479	599
Total (in number of units)		8,632		23,870	13,352	10,518		23,573	13,226	10,347

		2022		2021				2020
Value, in €m incl. VAT		H1		FY	H2	H1		FY	H2	H1
New homes (France)		1,756		4,140	2,292	1,848		4,281	2,389	1,892
Subdivisions		64		159	88	71		131	76	55
International		20		192	79	113		156	120	36
Total new scope		1,840		4,491	2,459	2,032		4,568	2,585	1,983
Reservations carried out directly by Ægide				175	-	175		233	102	131
Total (in €m incl. VAT)		1,840		4,666	2,459	2,207		4,802	2,687	2,115

Revenue

		2022		2021				2020
in € million		H1		FY	H2	H1		FY	H2	H1
Development		1,538		3,771	2,094	1,678		3,654	2,449	1,204
Residential Real Estate development		1,377		3,279	1,882	1,398		2,759	1,858	901
Commmercial Real Estate development		161		492	212	280		895	592	303
Services		421		853	468	385		767	435	333
Property management		289		537	281	256		503	263	240
Distribution		132		316	186	130		265	172	92
Other activities		5		1		1
Revenue - New scope		1,964		4,625	2,562	2,063		4,421	2,884	1,537
Revenue from disposed activities*				211		211		434	254	179
Revenue		1,964		4,836	2,562	2,275		4,855	3,139	1,716

* Disposed activities are consolidated until 31 Mars 2021 for Century 21 and until 30 June 2021 for Ægide-Domitys

Current operating profit

		2022		2021*				2020*
In € million		H1		FY	H2	H1		FY	H2	H1
Development		86		330	205	125		275	213	61
Residential Real Estate development		65		271	191	81		203	195	8
Commmercial Real Estate development		21		59	15	44		72	19	54
Services		36		74	48	26		41	27	14
Property management		23		37	23	14		20	12	8
Distribution		13		37	25	12		21	15	6
Other activities		(11)		(33)	(16)	(18)		(35)	(26)	(9)
Current operating profit - New scope		110		371	238	133		281	215	66
Non-current operating profit				157	116	41		(2)	14	(16)
Operating profit		110		528	353	174		279	228	50

*2020 and 2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

Consolidated income statement - 30 June 2022

In € million		30/06/2022 IFRS		Restatement of joint ventures	30/06/2022 Operational reporting		30/06/2021 Restated* Operational reporting   New scope before non-recurring items
Revenue		1,800.2		163,5	1,963.7		2,063.5
Operating expenses		(1,623.6)		(1,772.0)	(1,772.0)		(1,853.4)
Dividends received from equity-accounted investments		2.2		(2.2)	-		-
EBITDA		178.8		12.9	191.7		210.1
Lease payments		(63.5)		-	(63.5)		(60.8)
EBITDA after lease payments		115.3		12.9	128.2		149.3
Restatement of lease payments		63.5		-	63.5		60.8
Depreciation of right-of-use assets		(63.0)		0.0	(63.0)		(59.3)
Depreciation. amortisation and impairment of non-current assets		(16.6)		(0.0)	(16.6)		(15.6)
Net change in provisions		4.0		0.2	4.1		4.1
Share-based payments		(6.1)		-	(6.1)		(6.3)
Dividends received from equity-accounted investments		(2.2)		(0.0)			-
Current operating profit		94.9		15.2	110.1		133.0
Capital gains on disposal		-		-	-		-
Operating profit		94.9		15.2	110.1		133.0
Share of net profit from equity-accounted investments		9.8		(9.8)			-
Operating profit after share of net profit from equity-accounted investments		104.7		5.4	110.1		133.0
Cost of net financial debt		(14.1)		(1.2)	(15.3)		(22.8)
Other financial income/(expenses)		(2.0)		(0.3)	(2.2)		(2.4)
Interest expense on lease liabilities		(8.1)		-	(8.1)		(5.9)
Net financial income/(expense)		(24.2)		(1.4)	(25.6)		(31.1)
Pre-tax recurring profit		80.5		4.0	84.5		101.9
Income tax		(20.5)		(4.0)	(24.4)		(24.2)
Share of profit/(loss) from other equity-accounted investments		(1.0)		-	(1.0)		(0.9)
Consolidated net profit		59.0		0.0	59.0		76.7
Attributable to non-controlling interests		4.9		-	4.9		1.9
							-
Attributable to equity holders of the parent company		54.2		0.0	54.2		74.8
(in euros)
Net earnings per share		0.98			0.98		1.35

*2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

Simplified consolidated balance-sheet - 30 June 2022

ASSETS (in € million)		30/06/2022 IFRS		Restatement of joint ventures		30/06/2022 Operational reporting		31/12/2021 Operational reporting
Goodwills		1,358.2		-		1,358.2		1,356.5
Other non-current assets		873.8		0.2		874.1		817.7
Equity-accounted investments		126.8		(65.3)		61.5		62.5
Total non-current assets		2,358.8		(65.1)		2,293.7		2,236.7
Net WCR		1,150.2		168.2		1,318.4		1,118.9
Total Assets		3,509.0		103.1		3,612.1		3,355.6
Liabilities and equity (in € million)		30/06/2022 IFRS		Restatement of joint ventures		30/06/2022 Operational reporting		31/12/2021 Operational reporting
Share capital and reserves		1,794.4		(0.0)		1,794.4		1,603.6
Net profit for the period		54.2		0.0		54.2		324.9
Equity attributable to equity holders of the parent company		1,848.6		(0.0)		1,848.6		1,928.6
Non-controlling interests		24.9		0.0		24.9		19.6
Total equity		1,873.5		(0.0)		1,873.5		1,948.2
Net debt		1,463.4		91.0		1,554.5		1,223.8
Provisions		99.0		1.7		100.6		104.2
Net deferred tax		73.1		10.4		83.5		79.5
Total Liabilities and equity		3,509.0		103.1		3,612.1		3,355.6

Net debt - 30 June 2022

(in € million)	30/06/2022 IFRS	Restatement of joint ventures	30/06/2022 Operational reporting		31/12/2021 Operational reporting
Bond issues (incl. accrued interest and arrangement fees)	809.7	-	809.7		806.3
Loans and borrowings	904.1	78.2	982.3		955.3
Loans and borrowings	1,713.8	78.2	1,792.0		1,761.6
Other financial receivables and payables	(163.3)	157.5	(5.8)		4.7
Cash and cash equivalents	(782.9)	(164.8)	(947.7)		(1,204.2)
Bank overdraft facilities	19.0	20.2	39.2		36.2
Net cash and cash equivalents	(763.9)	(144.6)	(908.5)		(1,168.0)
Total net financial debt before lease liabilities	786.5	91.0	877.6		598.3
Lease liabilities	676.9	-	676.9		625.5
Total net debt	1,463.4	91.0	1,554.5		1,223.8

Simplified statement of cash flows - 30 June 2022

(in € million)	30/06/2022 IFRS (6-month period)	Restatement of joint ventures	30/06/2022 Operational reporting		30/06/2021 Operational reporting Restated *
Consolidated net profit	59.0	-	59.0		283.0
Elimination of non-cash income and expenses	72.1	9.6	81.7		(123.5)
Cash flow from operating activities after interest and tax expenses	131.1	9.6	140.8		159.5
Elimination of net interest expense/(income)	22.2	1.2	23.4		41.4
Elimination of tax expense, including deferred tax	20.2	4.0	24.2		31.0
Cash flow from operating activities before interest and tax expenses	173.5	14.8	188.3		231.9
Repayment of lease liabilities	(63.5)	-	(63.5)		(116.7)
Cash flow from operating activities after lease payments but before interest and tax expenses	110.1	14.8	124.8		115.2
Change in operating working capital	(200.3)	4.4	(195.9)		(355.2)
Dividends received from equity-accounted investments	2.2	(2.2)	-	-
Interest paid	(7.7)	(1.1)	(8.8)		(15.5)
Tax paid	(26.2)	(1.3)	(27.6)		(50.9)
Net cash from/(used in) operating activities	(122.0)	14.6	(107.4)		(306.4)
Net cash from/(used in) net operating investments	(28.9)	-	(28.9)		(22.2)
Free cash flow	(151.0)	14.6	(136.4)		(328.6)
Acquisitions of subsidiaries and other changes in scope	(2.8)	(0.0)	(2.9)		208.1
Other net financial investments	(3.7)	(0.1)	(3.8)		(27.4)
Net cash from/(used in) investing activities	(6.5)	(0.1)	(6.7)		180.7
Dividends paid to equity holders of the parent company	(138.1)	-	(138.1)		(110.6)
Other payments to/(from) minority shareholders	0.2	-	0.2		(6.3)
Net disposal/(acquisition) of treasury shares	(1.5)		(1.5)		2.0
Change in financial receivables and payables (net)	18.3	4.5	22.8		(160.8)
Net cash from/(used in) financing activities	(121.2)	4.5	(116.6)		(275.8)
Impact of changes in foreign currency exchange rates	0.2	-	0.2		0.4
Change in cash and cash equivalents	(278.5)	19.0	(259.4)		(423.3)

*2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

Capital employed

In € million					30 June 2022
		Total excl. right-of-use assets	Total incl. right-of-use assets		Non-current assets		Right-of-use assets			WCR		Goodwill
Development		1,274	1,322		59		48			1,215		-
Services		163	715		111		552			52		-
Other Activities and not attributable		1,466	1,492		56		26			51		1,358
Group capital employed		2,903	3,529		226		626			1,318		1,358
In € million					31 December 2021
		Total excl. right-of-use assets	Total incl. right-of-use assets		Non-current assets		Right-of-use assets			WCR		Goodwill
Development		1,086	1,135		33		49			1,053
Services		179	678		104		499			75
Other Activities and not attributable		1,430	1,463		82		33			(9)		1,356
Group capital employed		2,694	3,276		219		582			1,119		1,356

ANNEX: IFRS

Consolidated income statement - 30 June 2022

In € million		30/06/2022 IFRS		30/06/2021 IFRS Restated*
Revenue		1,800.2		2,099.0
Operating expenses		(1,623.6)		(1,867.1)
Dividends received from equity-accounted investments		2.2		2.5
EBITDA		178.8		234.4
Lease payments		(63.5)		(116.7)
EBITDA after lease payments		115.3		117.7
Restatement of lease payments		63.5		116.7
Depreciation of right-of-use assets		(63.0)		(59.4)
Depreciation. amortisation and impairment of non-current assets		(16.6)		(16.0)
Net change in provisions		4.0		4.9
Share-based payments		(6.1)		(6.6)
Dividends received from equity-accounted investments		(2.2)		(2.5)
Current operating profit		94.9		154.8
Capital gains on disposal		-		184.7
Operating profit		94.9		339.5
Share of net profit from equity-accounted investments		9.8		13.3
Operating profit after share of net profit from equity-accounted investments		104.7		352.8
Cost of net financial debt		(14.1)		(24.2)
Other financial income/(expenses)		(2.0)		(2.0)
Interest expense on lease liabilities		(8.1)		(16.3)
Net financial income/(expense)		(24.2)		(42.5)
Pre-tax recurring profit		80.5		310.3
Income tax		(20.5)		(26.4)
Share of profit/(loss) from other equity-accounted investments		(1.0)		(0.9)
Consolidated net profit		59.0		283.0
Attributable to non-controlling interests		4.9		2.1
Attributable to equity holders of the parent company		54.2		280.9
(in euros)
Net earnings per share		0.98		5.07

*2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

Simplified consolidated balance-sheet - 30 June 2022

ASSETS (in € million)		30/06/2022 IFRS		31/12/2021 IFRS
Goodwills		1,358.2		1,356.5
Other non-current assets		873.8		817.6
Equity-accounted investments		126.8		124.9
Total non-current assets		2,358.8		2,299.0
Net WCR		1,150.2		943.8
Total Assets		3,509.0		3,242.8
Liabilities and equity (in € million)		30/06/2022 IFRS		31/12/2021 IFRS
Share capital and reserves		1,794.4		1,603.6
Net profit for the period		54.2		324.9
Equity attributable to equity holders of the parent company		1,848.6		1,603.6
Non-controlling interests		24.9		19.6
Total equity		1,873.5		1,948.2
Net debt		1,463.4		1,122.1
Provisions		99.0		102.4
Net deferred tax		73.1		70.2
Total Liabilities and equity		3,509.0		3,242.8

Consolidated net debt - 30 June 2022

(in € million)		30/06/2022 IFRS		31/12/2021 IFRS
Bond issues (incl. accrued interest and arrangement fees)		809.7		806.3
Loans and borrowings		904.1		865.7
Loans and borrowings		1,713.8		1,672.0
Other financial receivables and payables		(163.3)		(133.0)
Cash and cash equivalents		(782.9)		(1,061.6)
Bank overdraft facilities		19.0		19.2
Net cash and cash equivalents		(763.9)		(1,042.4)
Total net financial debt before lease liabilities		786.5		496.6
Lease liabilities		676.9		625.5
Total net debt		1,463.4		1,122.1

Simplified statement of cash flows - 30 June 2022

(in € million)	30/06/2022 IFRS		30/06/2021 IFRS Restated*
Consolidated net profit	59.0		283.0
Elimination of non-cash income and expenses	72.1		(136.8)
Cash flow from operating activities after interest and tax expenses	131.1		146.2
Elimination of net interest expense/(income)	22.2		40.5
Elimination of tax expense, including deferred tax	20.2		26.0
Cash flow from operating activities before interest and tax expenses	173.5		212.7
Repayment of lease liabilities	(63.5)		(116.7)
Cash flow from operating activities after lease payments but before interest and tax expenses	110.1		96.0
Change in operating working capital	(200.3)		(333.1)
Dividends received from equity-accounted investments	2.2		2.5
Interest paid	(7.7)		(14.7)
Tax paid	(26.2)		(45.3)
Net cash from/(used in) operating activities	(122.0)		(294.7)
Net cash from/(used in) net operating investments	(28.9)		(22.2)
Free cash flow	(151.0)		(316.8)
Acquisitions of subsidiaries and other changes in scope	(2.8)		208.2
Other net financial investments	(3.7)		(23.5)
Net cash from/(used in) investing activities	(6.5)		184.7
Dividends paid to equity holders of the parent company	(138.1)		(110.6)
Other payments to/(from) minority shareholders	0.2		(6.3)
Net disposal/(acquisition) of treasury shares	(1.5)		2.0
Change in financial receivables and payables (net)	18.3		(176.8)
Net cash from/(used in) financing activities	(121.2)		(291.8)
Impact of changes in foreign currency exchange rates	0.2		0.3
Change in cash and cash equivalents	(278.5)		(423.5)

*2021 figures have been restated following the IFRS-IC decision of March 2021 on the costs of software used in Saas mode

GLOSSARY

Business potential: The total volume of potential business at any given moment, expressed as a number of units and/or revenue excluding VAT, within future projects in Residential Real Estate Development (New homes, Subdivisions and International) as well as Commercial Real Estate Development, validated by the Group’s Committee, in all structuring phases, including the projects of the Group’s urban regeneration business (Villes & Projets); this business potential includes the Group’s current supply for sale, its future supply (project phases not yet marketed on purchased land, and projects not yet launched associated with land secured through options)

Current operating profit: Includes all operating profit items with the exception of items resulting from unusual, abnormal and infrequently occurring transactions. In particular, impairment of goodwill is not included in current operating profit

Development backlog (or order book): The Group’s already secured future revenue, expressed in euros, for its real estate development businesses (Residential Real Estate Development and Commercial Real Estate Development). The backlog includes reservations for which notarial deeds of sale have not yet been signed and the portion of revenue remaining to be generated on units for which notarial deeds of sale have already been signed (portion remaining to be built)

EBITDA: Defined by Nexity as equal to current operating profit before depreciation, amortization and impairment of non-current assets, net changes in provisions, share-based payment expenses and the transfer from inventory of borrowing costs directly attributable to property developments, plus dividends received from equity-accounted investees whose operations are an extension of the Group’s business. Depreciation and amortization include right-of-use assets calculated in accordance with IFRS 16, together with the impact of neutralising internal margins on disposal of an asset by development companies, followed by take-up of a lease by a Group company.

EBITDA after lease payments: EBITDA net of expenses recorded for lease payments that are restated to reflect the application of IFRS 16 Leases

Free cash flow: Cash generated by operating activities after taking into account tax paid, financial expenses, repayment of lease liabilities, changes in WCR, dividends received from companies accounted for under the equity method and net investments in operating assets

Joint ventures: Entities over whose activities the Group has joint control, established by contractual agreement. Most joint ventures are property developments (Residential Real Estate Development and Commercial Real Estate Development) undertaken with another developer (co-developments)

Land bank: The amount corresponding to acquired land development rights for projects in France carried out before obtaining a building permit or, in some cases, planning permissions

Net profit before non-recurring items: Group share of net profit restated for non-recurring items such as change in fair value adjustments in respect of the ORNANE bond issue and items included in non-current operating profit (disposal of significant operations, any goodwill impairment losses, remeasurement of equity-accounted investments following the assumption of control)

New scope: Scope of consolidation excluding the contribution of disposed activities (Century 21 and Ægide-Domitys) and capital gains. Disposed activities have been consolidated until 31 March 2021 for Century 21 and until 30 June 2021 for Ægide-Domitys.

Order intake: Development for Commercial Real Estate: The total of selling prices excluding VAT as stated in definitive agreements for Commercial Real Estate Development projects, expressed in euros for a given period (notarial deeds of sale or development contracts).

Operational reporting: According to IFRS but with joint ventures proportionately consolidated. This presentation is used by management as it better reflects the economic reality of the Group’s business activities

Pipeline: sum of backlog and business potential; could be expressed in months or years of activity (as the backlog and the business potential) based on the last 12 months revenue.

Property Management: Management of residential properties (rentals, brokerage), common areas of apartment buildings (as managing agent on behalf of condominium owners), commercial properties, and services provided to users.

Reservations by value: (or expected revenue from reservations) – Residential Real Estate: The net total of selling prices including VAT as stated in reservation agreements for development projects, expressed in euros for a given period, after deducting all reservations cancelled during the period.

Revenue: 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.

Serviced properties: the Group’s business activities in the management and operation of student residences as well as flexible workspaces.

Time-to-market: supply for sale compared to reservations for the last 12 months, expressed in months, for new home reservations segment in France

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1 Objectives for the full year 2022 communicated last February: a market share of over 14% in a new home market expected to slightly grow (c.150,000 units) and a current operating profit of at least €380 million, enabling the operating margin to be maintained at around 8%.

Attachment

• 20220727_PR H1 2022_vdef