Nexity confirms its objectives for 2023
Nexity unveiled its first quarter financial results. In this context, the group confirmed its 2023 objectives announced last February: 2023 revenue of more than €4.5 billion, stable compared to 2022 excluding international activities; and operating profit of more than €300 million, reflecting both an adjustment phase in the new housing market and a refocusing of the portfolio on France.
In Q1 2023, Nexity posted revenue under IFRS of €819 million compared to €815 million at March 31, 2022 at constant scope, stable compared to Q1 2022. “This revenue excludes that of joint ventures in application of IFRS 11, which requires them to be accounted for using the equity method, with the latter being integrated proportionally into the operational reporting”, specifies the group.
Residential real estate development: 8% drop in turnover
In the residential property development division, Nexity’s commercial activity reached 2,811 reservations at the end of March 2023 (-19% compared to the end of March 2022) for an amount of €575 million (-25%). “As expected, retail sales are in line with Q4 2022 (-33% compared to Q1 2022), due to a wait-and-see attitude by customers linked to the economic context and the level of interest rates on loans which impact still strongly in demand”, observes the group.
On the other hand, Nexity “benefits from strong partnerships with private or public lessors, making it possible to post a volume of bulk sales up slightly over the quarter (+2%)”, he adds. “The difference between changes in reservations in volume and in value is mainly due to the product mix over this quarter, with a higher proportion of sales to social landlords. »
At the end of March 2023, the good management of the commercial supply (-7% compared to the end of 2022 at 9,435 lots) and the downturn times (-0.3 months to 6.5 months) demonstrate the capacity of the group to adapt its offer despite a slower pace of marketing, indicates Nexity.
Revenue was down 8% to €577 million, “mainly explained by a low level of deeds signed at the start of the year, a consequence of the large volume of deeds signed at the end of 2022 linked to the end of the Pinel device in its historical form. »
In terms of outlook, Nexity assures that it “will maintain its leading position” thanks to its ability to adapt its new production taking into account the financial capacities of its customers and the evolution of uses. “The group’s low-risk commercial offer (only 34% of the offer is under construction) and its backlog, which represents nearly two years of activity and €5.2 billion, provide it with good visibility on the 2023 revenue, expected to be substantially the same as in 2022.”
Business real estate development: 72% increase in turnover
In the commercial real estate development division, as expected, Nexity did not record any significant order intake at the end of March 2023 “in a market context at the bottom of the cycle and still on the lookout. »
Commercial real estate revenue amounted to €125 million in Q1 2023, up 72% compared to the first quarter of 2022 which amounted to €72 million, “driven in particular by the progress of the La Garenne-Colombes project. »
According to the group, the outlook for business real estate “still remains marked by the wait-and-see attitude of investors, tertiary order intake should remain limited in 2023.” “The flow of major backlog operations (Eco campus in La Garenne-Colombes and Reiwa in Saint-Ouen) will ensure growth in turnover,” he adds.
Services: stable revenue
At the end of March 2023, revenue from Nexity’s services activities was stable compared to the end of March 2022 at €194 million, “growth in operating activities offsetting the decline in distribution activities. » Revenue from management activities (property administration and property management) increased slightly by 1% over the quarter to €92 million, supported by the good performance of the property administration activity (trustee and management ). Leasing and transaction activities are impacted by the tensions present on the market (rise in credit rates, low turnover of occupants, wait-and-see attitude of potential buyers).
In addition, operating activities are well oriented and represent a turnover of €61 million, up 24% compared to the end of March 2022, “reflecting the growth in the managed base both for coworking spaces and for student residences. »
Lastly, revenue from distribution activities was down (-26%) as a result of a low number of deeds signed, “consequence of the acceleration of deeds at the end of 2022 following the end of the Pinel device in its historic form. »
According to the group, operating activities “will continue the dynamic of profitable growth recorded in 2022” while distribution activities “will suffer from less favorable business conditions. »
An adjustment during the year?
Véronique Bédague, Chairman and CEO of Nexity, declares: “2023 is a year of transition and adjustment of the major variables of the real estate market. Unsurprisingly, commercial activity in the first quarter is a continuation of the fourth quarter of 2022, reflecting the ongoing adaptation of the market to new economic conditions. In this context, we are working on each of our operations, both on their set-up and on their marketing, to adapt to the economic situation. In the first quarter of 2023, the group’s turnover is stable, in line with our forecasts. Services activities bring recurrence to the group and managed real estate activities are still growing strongly. »
“In this context, Nexity confirms at this stage the outlook announced at the start of the year, relying on the diversity of its businesses, its financial solidity thanks to the renewal of the corporate credit line, and its strategic plan, the orientations of which as a global real estate operator are fully validated by the crisis (acceleration of the sustainable city, displacement of the value of the product towards use, premium for size). However, the prolonged continuation of the market deterioration could lead the group, during the year, to adjust the schedule for the execution of the financial results associated with Imagine 2026. I will have the pleasure of meeting our shareholders at our general meeting on May 16, during which the payment of a dividend of €2.50 per share, stable compared to last year, will be put to the vote. »
