Nexity - 2024 FY results

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TRANSFORMATION PLAN FINALISED

CONFIRMED RECOVERY IN RETAIL SALES

LEANER BALANCE SHEET AND LIQUIDITY SECURED

OPERATING PROFIT POSITIVE

Transformation plan finalised at year-end 2024; Nexity adapted to new market conditions

• Refocusing: Execution of the disposal plan on schedule with 3 major asset sales: €435m in net sale proceeds, allocated in full to deleveraging the Group; tight WCR management (-€301m)
  • Resizing: Reduction of operating expenses, including implementation of the redundancy plan; total cost savings expected by 2026 and confirmed at €95m, 16% of the Group's cost base, 75% of which is expected to be achieved with effect from 2025
  • Recalibrating: Finalisation of the process to adapt supply for sale to new market conditions 
    • Decreased supply for sale (-27% vs Dec. 2023) and absorption rate (5 months), and virtually no completed homes in inventory (~100 units)
• Redeploying: Launch of "New Nexity” at the beginning of January 2025 - Regional and multi-product organisation, focused on development and urban regeneration and recentred on our roles as a planner, developer and operator

Sustained increase in retail sales over 2024

• Growth of 7% in retail sales over the year (in a market that contracted [-4%]¹), with an acceleration in the second half (+14%)
• Strong momentum among homebuyers (48% increase in H2) driven by improved financing conditions (mortgage borrowing rates down ~100bp since January 2024, providing a ~10% boost to purchasing power) and effective marketing and product offerings over the year

Leaner balance sheet and liquidity secured

• Very significant reduction in debt, down by €369m (44%): Net financial debt of €474m at year-end 2024, below the target level announced at the beginning of the year of €500m at year-end 2025
• €1bn in liquidity, well in excess of the short- and medium-term maturities
• Medium-term bank financing secured, aligned with the Group's needs and resizing, and consequently covenants reviewed to factor in market conditions for the period through to the credit facility's maturity in 2028

Financial performance in 2024

• Revenue: €3.5bn
  • Operating profit positive, in line with guidance, at €2m: Affected as expected by the transformation plan, but fully offset by disposal gains

Outlook for 2025

• Return to profitability: Current operating profit² positive
• Tight grip on the balance sheet maintained: IFRS net debt of less than €380m confirmed³
• Priority focuses on returning to profitable growth and generating cash as a pathway to resuming dividend payments over the medium term⁴, provided that the leverage ratio is under 3.5x.

VÉRONIQUE BÉDAGUE, CHAIRWOMAN AND CHIEF EXECUTIVE OFFICER, COMMENTED:

"Nexity's 2024 annual results were in line with the trajectory that we announced, and the crisis scenario facing our sector is taking place as I have observed for more than a year now. Thanks to our ability to anticipate the crisis and make quick decisions, we were able to begin to take the steps needed to adapt and embark on a far-reaching organisational transformation ahead of our competitors.

Nexity has successfully achieved a leaner balance sheet, driven by the very large reduction in debt and the implementation of our roadmap to resize our cost base and recalibrate our offering. At the same time, our responsiveness meant we were able to return to very strong business momentum, with retail sales in particular growing strongly in the second half of the year, up 14%, despite an ongoing market downturn.

The Group's transformation is now a reality, in line with the original schedule. A deleveraged and agile Nexity is now streamlined to navigate these new market conditions, with its multi-product offering once again available across France's regions, backed by a leaner and trimmer organisational structure focused on growing the business.

Today, Nexity is France's leading urban operator for regional and urban regeneration, and our approach for this new year will be the same: to keep a tight grip on our balance sheet, enhance the quality of our supply and return to profitability in 2025.”

KEY FIGURES FOR 2024

¹ Net debt before lease liabilities and before the adjustment relating to IFRS 5 at end-December 2023

Following the sale of the Property Management for Individuals and Nexity Property Management businesses, finalised on 2 April 2024 and 31 October 2024, respectively, revenue and operating profit for these businesses are presented separately in the following tables within a separate "Discontinued operations” line item for 2023 and 2024. For 2023, this line item also includes indicators relating to the activities in Poland and Portugal, which were disposed of in 2023.

I - TRANSFORMATION PLAN FINALISED AT YEAR-END 2024

After beginning to refocus its business in 2023, Nexity rolled out its far-reaching transformation plan focusing on the "4 Rs” as announced and in doing so accelerated the implementation of its proactive decisions relating to deleveraging as part of the Group's refocusing, reducing operating expenses to resize its cost base, and adjusting supply to fit new market conditions.

Refocusing: Making every possible effort to deleverage

Having finalised, during the first half of 2024, the sale of its PMI business, Nexity continued to roll out a disposal plan during the second half through the following operations:

• NPM: Finalisation of the sale of NPM to Crédit Agricole Immobilier on 31 October (capital gain of €14m).
• Bien'ici: Sale of 50% stake in the Bien'ici property listings platform to the Arche group for €35 million (enterprise value of 100% of the company: €70 million).

The net proceeds of these 3 disposals (€435 million) were allocated in full to deleveraging the Group. Total capital gains were €216 million.

Throughout the year, the Group also maintained a healthy, disciplined level of control over its balance sheet and its liquidity. The amount of confirmed undrawn credit facilities at end-December came to €800 million.

These measures led to a very significant deleveraging of €369 million (44%). Net financial debt amounted to €474 million at year-end 2024, below the target level of €500 million anticipated at year-end 2025.

In 2025, Nexity intends to continue its tight grip on the balance sheet, via close control of the WCR on one hand, and on the other hand, an opportunity-based approach as it refocuses on non-core assets.

Resizing: Execution of the plan to reduce operating expenses to support the Group's transformation

The redundancy plan, for which the information and consultation procedure was initiated in April 2024, was approved in Q3 by all employee representatives and by the French labour administration. Its implementation therefore began in November 2024, in line with the planned schedule and budgeted amount.

• 500 positions, including 227 involuntary departures, after a round of internal transfers to new positions and voluntary departures.
• Savings on the cost base are expected from 2025 onwards and will represent total full-year savings of €45 million.

The overall reduction in the cost base expected by 2026 on a full-year basis is confirmed to amount to €95 million, equating to a 16% reduction, 75% of which is expected to be achieved with effect from 2025.

Recalibrating: Adapting supply for sale

Throughout the year, the Group adjusted supply for sale to fit new market conditions through resolutely proactive measures.

• For supply under construction and supply designed in the previous real estate cycle, the measures mainly involved realigning selling prices with the purchasing power of our clients, which is affected by the current interest rate environment, and construction costs, which have been particularly affected by business insolvencies.

• For supply in the planning stage, the Group abandoned 103 programmes designed in the previous cycle, including 39 in Q4. Abandoning these programmes led to our cancellation of 2,844 reservations that had previously been recorded at 1 January 2024 (451 retail reservations and 2,393 bulk reservations).

All of these measures were reflected in decreased supply for sale (-27% vs December 2023), a swifter absorption rate, brought back down to its 2019 level (5 months), and the virtual absence of unsold completed homes at end-December (~100 units).

Costs of adjustments to supply amounted to €(172) million for the year:

• €(134)m recognised in Current operating profit/(loss), mainly arising from the price effect (reduction of prices on certain programmes and changes in the client mix) and cost price effect.

• €(38)m recognised in Non-recurring items, arising from programme abandonment costs and impairment of land not attributable to a specific programme.

Redeploying: Shifting towards a regional, multi-product organisation, focused on development and urban regeneration and recentred on our roles as a planner, developer and operator

• The new organisation has been operational since 9 January 2025. It relies on the network and regional expertise, as well as the business expertise of central management.
• With regard to the Group's ramp-up in urban regeneration, over 400 Commitment Committee projects were reviewed in 2024, covering the review of nearly 28,000 potential homes, 17% of which as part of mixed-use urban regeneration projects. Our partnerships, including those with Carrefour and Mirabaud, will enable us to scale up our urban regeneration efforts without affecting the Group's balance sheet during the land banking phase. Filing of building permits linked to the Carrefour partnership started in Q4 and will continue in 2025.

The roll-out of the transformation plan, in compliance with the planned schedule, was made possible by the commitment shown by all employees, and also by the support of shareholders and our financial partners. As a reminder, all the Group's Euro PP bondholders and partner banks agreed in Q1 2024 to waive its obligations with regard to financial ratios until the end of financial year 2024. Moreover, strengthened by the implementation of the transformation plan, the Group was able to adjust its medium-term financing, changing it to reflect the Group's resizing and reviewing the covenant levels.

II - PERFORMANCE BY DIVISION

Planning and Development - Residential Real Estate

Business activity

In a housing market in which reservations are still down, with a 6% overall decrease⁵ at year-end 2024, Nexity booked a total of 13,387 reservations over the period, down 8%.

• Retail reservations recorded in 2024 came to 5,235 units, up 7% against the backdrop of a market down 4%, confirming our assumption that retail sales reached a low point in 2023.

The recovery picked up pace in H2 2024, with a 14% increase driven by strong momentum provided by homebuyers (up 21% in 2024 and up 48% in H2):

• Financing conditions improved (100 bp reduction in the real estate loan rate since January 2024, equivalent to an increase in purchasing power of close to 10% for our clients).
• The effectiveness of the product offering and marketing campaigns run in 2024 and the success of the supply launched in late September in partnership with LCL to help first-time buyers and young people access loans in order to become homeowners. Site traffic on our sales platforms was up 30% and the number of contacts established tripled, reflecting renewed interest from individual investors, especially first-time buyers.

• Bulk sales accounted for 8,152 reservations during the year (vs 9,712 in 2023).

While bulk sales to social housing operators held more or less steady at a significant level (5,748 units), there was a fall in bulk sales to investors, owing mainly to the decline in intermediate rental housing (LLI) investors and greater emphasis again on retail sales.

In addition, the urban planning business accounted for 1,068 reservations for subdivisions in 2024, up 2%.

Supply for sale in 2024 came to 5,683 units, down 27% relative to year-end 2023, with absorption rates improved by almost 2 months since 2022 at 5.1 months (the same level as in 2019).

• These trends reflect the following:
  • The ongoing highly selective approach to launching programmes (with an average rate of pre-selling of 78%⁶ on programmes launched over the year).
  • The Group's ability to sell its new supply for sale, notably thanks to pricing that has been adjusted and is in line with the purchasing power of our customers and the current interest rate environment.
  • The impact of the decision to abandon 103 programmes designed during the previous cycle, the profitability of which was uncertain (with these abandoned programmes representing 2,844 reservations previously recorded at 1 January 2024).
• The stock of unsold completed units remained marginal, at around 100 units, equating to less than 2% of total supply for sale.
• Supply for sale under construction accounted for 47% of total supply, with 88% of projects scheduled to be delivered in more than 6 months.

The backlog stands at €4.4 billion, equivalent to 1.5 years' revenue.

• The level secured by sales for which notarial deeds of sale were signed is 50%.
• This volume does not yet include the initial contributions to the backlog of the Carrefour partnership, the first building permits for which were filed in Q4 2024.
• For reference: The Carrefour partnership announced in 2023, which is fully aligned with the Group's increased emphasis on urban regeneration, covers the upgrade of 74⁷ Carrefour sites across France through urban mixed-use projects, including 12,000 homes, and will generate revenue at termination of more than €2 billion over approximately the next ten years.

Financial performance in 2024

• Revenue declined by 12% to €2,585 million, primarily reflecting the decline in business activity from projects underway.
• Current operating profit/(loss) (a loss of €144 million) included €134 million in costs of adjustments to supply. This item does not include €(38) million in programme abandonment costs recognised in Non-recurring items.

In addition, Operating profit/(loss) does not yet include the positive effects of rescaling the cost base.

Planning and Development - Commercial Real Estate

Business activity

In the second half of the year, the Group delivered close to 115,000 sq.m, including the following two major operations:

• The La Garenne-Colombes green business park (Hauts-de-Seine): a complex of four buildings spanning 95,000 sq.m, delivered to Swiss Life in September.
• The commercial portion of the Carré Invalides programme (Paris), featuring the renovation of the 15,400-sq.m former headquarters of the Greater Paris regional council, delivered to AG2R La Mondiale on 30 September.

Following the delivery in the first half of the year of Reiwa, Nexity's future head office, a development totalling 25,000 sq.m, in Saint-Ouen (Seine-Saint-Denis), and the Lilo project in Puteaux (Hauts-de-Seine), a coliving development totalling almost 21,000 sq.m, these deliveries bring the total floor area delivered in 2024 for commercial use to over 175,000 sq.m, illustrating the Group's capacity to complete large-scale mixed-use projects.

With the market still challenging, reflected by a 53% fall in investments since 2022, Nexity recorded €70 million in new orders during the period, higher than the amount recorded for full-year 2023 (€39 million) but still much lower than the level before the crisis.

However, the backlog reflects the continuing buoyant market outside the Paris region and the accelerating commercial business diversification. In particular, this includes:

• €32 million for 8,000 sq.m of higher education facilities sold to a top-tier institutional investor as part of the Confluence project in Lyon (Rhône),

• €11 million for 5,000 sq.m of business premises in Saint Priest (Rhône).

The Group also continues to capitalise on its integrated expertise and its positioning as a planner-developer by offering local authorities integrated products for mixed-use developments, including diversified commercial business. For example, in Q1, Nexity won a tender for the planning of the Gruen industrial mixed-use development area in Sierentz (Haut-Rhin). This mixed-use operation involves industrial activities, a small-business centre and a services centre, as well as public areas. It illustrates perfectly New Nexity's regional, multi-product dimension, combining the detailed regional knowledge of our regional teams and the specific expertise of the central real estate offerings:

Financial performance in 2024

At year-end 2024, revenue totalled €369 million and operating profit was €22 million, driven, as in 2023, by the contribution of the green business park in La Garenne-Colombes.

Services

Revenue from Services, excluding discontinued operations (PMI in April 2024 and NPM in October 2024), amounted to €471 million at end-December 2024, down 8%, still buoyed by Serviced Properties but affected by the slowdown in Distribution.

Financial performance in 2024

• The Serviced Properties business (serviced residences for students, coworking spaces) posted €288 million in revenue (up 7%), driven in particular by the strong growth momentum in the portfolio of coworking businesses (11 new sites in 2024 for a total of nearly 150,000 sq.m under management⁸), as well as occupancy rates, which remained high for both coworking spaces (87%⁹) and student residences (97%).
• Revenue from Distribution activities (down 26%) reflected the lower number of reservations made in 2023 due to the downturn in the new home market and the withdrawal of individual investors. However, 2024 saw a recovery in off-plan sales (up 30% vs 2023).
• Following the sales finalised in 2024 of PMI, NPM and Bien'ici, revenue from Property Management was €23 million.

Current operating profit for the Services business, excluding discontinued operations, came to €23 million (vs €44 million in 2023), with this decrease mainly due to lower profitability in the Distribution business, reflecting the downturns in the new home and brokerage markets. The margin was driven by Serviced Properties, which achieved a margin of 9.3% (vs. 8% in 2023), representing an uplift across both student residences and coworking spaces.

III - CONSOLIDATED RESULTS - OPERATIONAL REPORTING

• The financial data and indicators used in this press release are based on Nexity's operational reporting, with joint ventures proportionately consolidated.
• To simplify reporting procedures, the Group will align its financial communication with the IFRS accounts from 1 January 2025.

Revenue

⁽¹⁾ Discontinued operations: Poland/Portugal in 2023 and PMI and NPM in 2024

Revenue in 2024 totalled €3,535 million, down 17% relative to 2023 and down 12% on a like-for-like basis¹⁰.

• Revenue from Development fell by 13%, mainly as a result of the slowdown in the residential and commercial businesses in a deteriorated environment, and the reduced recognition of revenue on a percentage-of-completion basis for major commercial property projects.
• Revenue from Services, excluding discontinued operations, was down 8%, with the strong performance by the Serviced Properties business (up 7%) 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 2024 totalled €3,333 million, down 16% relative to 2023. 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