EXCELLENT HALF-YEAR PERFORMANCE AND SALES MOMENTUM

SHARP RISE IN PROFITABILITY

CONFIRMING 2021 GROWTH GOALS: ANNUAL REVENUE OF AROUND €1 BILLION

HEXAOM’s Board of Directors approved the accounts for the first half of 2021 during its meeting on September 20th, 2021.. The Statutory Auditors have carried out a limited review of these consolidated financial statements

Revenue growth is accelerating

As previously announced, the half year group revenue grew strongly, up +25.3% compared to the first half of 2020 to €499.6 million. On a like-for-like basis, revenue grew by +22.7%.

All of the group’s business lines contributed to this growth:

• The Home Building business benefited both from a positive base effect in comparison with last year and a catch-up effect after openings of construction sites were delayed in 2020. This business grew by +14.9% during this period, to €386.0 million.
• The Renovation business (B2B and B2C) added €81.1 million (+59.0%) to group revenue during the first six months of the year.
• Revenue from the Real Estate Development and Land Development businesses rose respectively to €26.7 million (+233.8%) and €5.9 million (+64.9%).

The ramp-up of the new businesses reflects our changing business portfolio: Real Estate Development and Land Development accounted for 6.5% of total revenue in the first six months of the year (compared to 2.9% in the first six months of 2020), Renovation contributed 16.2% (12.8% in the first six months of 2020), and Home Building made up the remaining 77.3% (84.3% in the first six months of 2020).

Operating margins more than doubled

Driven both by strong production growth, allowing improvement of the amortization of fixed costs, and by the expected gradual profitability improvements of our growth drivers, group profitability rose sharply in the first half. Operating income grew +165.6% to €16.2 million. Operating margins more than doubled rising to 3.2% for the first half of the year, compared to 1.5% last year.

A business sector analysis revealed the following changes:

• The net contribution margin in the Home Building business remained mostly stable, despite higher material costs during the first half of the year. The review of the group’s pricing policy last year has limited the impact of the inflation of production costs. Fixed costs were also kept under control in a context of sharply increasing production. The business’ operating margin grew significantly, reaching 4.3% for the first half of 2021, compared to 3.2% one year earlier.
• Operating losses in the Renovation business were cut down by nearly half, to -€2.2 million.
  The B2C business returned to normal profitability levels: with €1.6 million in operating income, a more than five-fold increase compared to the first half of 2020, and an operating margin of 6.6%. The B2B business remained in the red for the 6-month period, due to normal seasonality effects in this sector, but it should be profitable by the end of 2021. Measures to improve margin control are also being implemented.
• Real Estate Development and Land Development posted €1.8 million in operating income, for an operating margin of 5.5% over the first six months of the year: the profitability of these two growth drivers has continued to improve, approaching the target annual operating margins of over 7%.

Annual net income amounted to €11.6 million, up +197.4%, for a net margin of 2.3%, compared to 1.0% in the first half of 2020. Net earnings stood at €1.64 per share, compared to €0.63 at the end of June 2020.

At June 30th, 2021, the group’s financial structure is strong, with €210.1 million in group equity, a cash position of €149.2 million, and net cash of €137.6 million. The net cash position at June 30th, 2021 was €11.6 million, lower than the €29.5 million at December 31st, 2020 due to the dividend payout and the ramp up of the Real Estate Development and Land Development businesses, which require more working capital.

Sales momentum remains strong

Heralding continued strong growth over the coming months, advanced group business indicators are largely positive:

• The Home Building business made 5,637 sales by the end of August 2021, an increase of +29.4% in the number of houses sold, and of +36% in value. These figures confirm that Hexaom meets the requirements of its customers.
• benefiting from the buoyant renovation market and from the group’s both strategically and commercially attractive offers, order intake in the B2C Renovation business rose by +41.7% by the end of August 2021, to €33.2 million. The group’s brokerage business, franchised as Illico Travaux, also saw steady growth, thanks to its original business model that continues to attract new franchisees. Finally, order intake in the B2B Renovation business generated €70.8 million by the end of August 2021, a decrease of -29.3%, in line with expectations. As previously announced, the group wants to steady its order book, in order to focus on improving margins.
• At the end of August 2021, order intake for the Land Development business has continued to grow, with €36.3 million on the order book (reserved stock for which notarial deeds of sale have not yet been signed), compared to €29.9 million at the end of March 2021, and €22.2 million at the end of December 2020.
• Finally, in the Real Estate Development business, backlog at the end of August 2021 amounts to €96 million, compared to €60.1 million (Claimo Group not included) at the end of December 2020. This business continues to show its vitality, despite ongoing administrative issues.

Outlook

Given these positive results for the first half of the year and the rising order intakes that give the group good visibility, Hexaom remains confident that strong growth will continue throughout the rest of the year. The group anticipates generating around €1 billion in revenue in 2021.

Despite the rising cost of materials and tensions around rising labor costs, which have led the group to monitor its Home Building business margins closely, Hexaom is nevertheless expecting greater profitability throughout the rest of the year, driven by higher production volumes that will allow it to better absorb fixed costs and by the ramp up of its accretive growth drivers.