Release Date: July 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Significant deleveraging of EUR264 million, reducing debt by 31%.
- Positive operating profits of EUR55 million, in line with annual guidance.
- Stable retail reservations despite market downturn, indicating strong market position.
- Successful disposal of PMI business, generating EUR183 million in capital gains.
- High occupancy rates in serviced properties, with sales up 4%.
Negative Points
- Total sales down 14% excluding divested activities, reflecting market challenges.
- Significant transformation costs of EUR128 million impacting financials.
- Decline in bookings and distribution activities due to market headwinds.
- High construction costs and price adjustments impacting profit margins.
- Deferred cash inflow of EUR85 million from key project affecting working capital.
Q & A Highlights
Q: Could you please tell us more about the costs you'll have to post for the entire year? Could you break it down between current costs and noncurrent costs, recurring and nonrecurring costs?
A: We have provisioned EUR40 million for reorganization, including redundancy plans. Additionally, we posted abandonment costs and divestment of land that we don't intend to build. The cost of adapting the offering is managed daily to ensure we sell our inventory and avoid unsold completed homes.
Q: Regarding bookings, do you expect better stability for the full year?
A: The trend is not linear over the year. We maintain our target of bulk sales accounting for 65% towards the end of the year. We are disciplined in keeping our commercial offer well under control and recalibrating efficiently.
Q: Could you give us some color on the sale of Nexity Property Management (NPM)?
A: We are in exclusive negotiations with Credit Agricole Immobilier. NPM's revenue is around EUR55 million. We will disclose more details once the negotiations are finalized.
Q: What is your outlook for net financial debt at the end of 2024?
A: Our guidance remains unchanged. We aim for a significantly lower debt trajectory than in 2023. The seasonal effect in our business gives an idea of our debt profile at the end of the year.
Q: On your efforts to cut prices, are you still close to the lower end of the bracket?
A: Yes, we are monitoring this carefully. Prices can come down between minus 4% and minus 6%, depending on construction progress and delivery dates. We aim to sell our property and avoid unsold completed units.
Q: What about the strategic terms for Morning and coworking?
A: Morning is a growth business, but it comes at a cost. We are considering deconsolidation and looking for a strategic or financial partner.
Q: How much of your cash position can be used to reimburse debt due in 2025?
A: About EUR150 million is immediately available, plus EUR750 million in undrawn credit lines, totaling EUR1 billion. There are no limitations on the use of the credit line.
Q: Could you provide more details on the disposal of NPM and its impact on your deleveraging trajectory?
A: We are in exclusive talks and will disclose the price element in due time. The disposal will contribute to our deleveraging efforts, and we aim for a maximum net debt of EUR500 million by the end of 2025.
Q: Do you plan to buy back the 2028 convertible bonds trading at a discount?
A: No, we are focusing on protecting our immediate cash supply and addressing shorter-term deadlines. The 2028 bond is not costing much due to low rates, so there's no point in buying it back.
Q: Will the adaptation costs be less in H2?
A: Yes, the amounts will be adjusted based on market conditions and our needs to sell off property. We aim to complete the year without any units remaining unsold.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
