Nexity (NXI) Q3 2024 TU earnings summary

Executive summary

• Retail sales rebounded, up 4% year-to-date and 11.5% in Q3 2024, driven by first-time buyers and new loan products, with mortgage production up 16% and improved client purchasing power from a 75 bps ECB rate cut.

• Group revenue for the first nine months was €2.6bn, down 8% like-for-like, with Residential revenue stabilizing in Q3 and managed real estate revenue up 4%.

• Transformation plan is progressing on schedule, focused on deleveraging, cost reduction, and supply recalibration, with visible financial impacts expected by end of 2025.

• Backlog stands at €4.5bn, representing nearly two years of residential real estate revenue, but down from €5.4bn at end-2023.

Financial highlights

• Group revenue for 9M 2024: €2.57bn, down 8% like-for-like; IFRS revenue: €2.43bn, down 12% year-over-year.

• Residential Real Estate revenue: €1,804m, down 8%; Commercial Real Estate revenue: €349m, stable; Services revenue down 11%, but Serviced Properties up 4%.

• Retail sales up 4% year-over-year, with Q3 up 11.5%; new home reservations in France down 12% by volume, but retail reservations up 4%.

• Q3 commercial property sales up by €70m, with over 170,000 sqm delivered in flagship projects.

• Distribution revenue fell 36% due to prior market downturn, but off-plan sales reservations in 2024 were 1.5x higher than 9M 2023.

Outlook and guidance

• 2024 outlook unchanged: operating profit to remain positive but at a low point, with a rebound in profitability and lower net financial debt targeted for 2025.

• Net financial debt expected to be significantly lower at year-end 2024, with a target of maximum €500m by end-2025.

• Improved profitability anticipated from 2025, contingent on stable macroeconomic conditions.