2022 9-month revenue up +8% to €765.6 million – Order intake in line with objectives

Production for the first 9 months: €765.6 million, an organic growth of 8.2%

Over the nine-month period, Hexaom Group’s revenue was up 8.2% to €765.6 million. This like-for-like production growth compares with a record high 2021 activity.

Furthermore, this level of activity is reached in a complex environment of prolonged construction delays due, amongst other things, to supply chain disruptions and a lack of available subcontractors.

For the third quarter of 2022, Hexaom posted revenue of €216.6 million, up +4.2% compared to the same period last year.

With the exception of B2B renovation, all the group’s businesses contributed to this growth. Revenue for the first nine months of the year breaks down as follows:

• The Home Building business shows a revenue of €589.0 million, up 11.5% compared with the same period last year. Despite construction times continuing to suffer from significant delays, performance during the third quarter was excellent at +14.3%.
• The Renovation business posted revenue of €106.1 million, down 13.5% compared with the previous year.
  The B2B segment, undergoing a restructuring process, generated revenue of €68.7 million, compared with €87.2 million over the same period in 2021.
  The B2C segment maintained a good growth rate with a +6.2% increase in revenue to €37.6 million.
• Land Development posted a +53.0% increase in revenue to €27.0 million.
• Finally, the Real Estate Development business contributed €43.6 million to revenue during the period. Despite an increase of +12.5%, this business was also penalized by certain programs being postponed.

Order intake at September 30th, 2022 : In line with group expectations

Home Building Business

The entire construction industry is being affected by difficult market conditions, marked by rising construction costs and tighter financing conditions (rising interest rates, obstructive usury rates, etc.). in this difficult context, the order book for home building proved resilient, with a 15.2% decline in the value of orders at the end of September, compared with a 26.5% drop in the number of orders. Order intake amounted to 4,753 sales, representing revenue of €726.5 million.

Several months ago, the group decided to adjust selling prices to preserve its margins. This policy has helped offset both the increase in construction costs (materials and subcontracting) and the effects of changes in regulatory standards (RE 2020). The average selling price in September 2022 was €156.9k excluding VAT, compared to €132.4k excluding VAT for the same period in 2021, an increase of 18.5% over one year. In comparison, in 2019, the average selling price was €120.4k excluding VAT.

Furthermore, in response to tightening credit conditions, the group has put in place a range of solutions to help its customers find financing.

Finally, as consolidation in the market continues, Hexaom is gaining market share.

Renovation Business

The B2C Renovation business has favorable tailwinds. At the end of September 2022, order intake for Renovert and Camif Habitat stood at €35.1 million. At the same date, intermediated order intake for Illico Travaux franchisees had grown by +32.8% to €58.6 million.

The development plan for the national network of franchisees continues with the arrival of new franchisees for Camif Habitat (2023 target: 40 franchisees) and Illico Travaux (2023 target: 200 franchisees).

While still being monitored closely, sales activity for B2B renovation rebounded strongly in the third quarter (+94.1% compared to Q3 in 2021). At the end of September, the order book reached €76.4 million compared to €77.0 million at the same date in 2021. The restructuring plan put in place by the group to restore the profitability of this subsidiary continues.

Real Estate and Land Development Businesses

At the end of September 2022, the order book (reserved stock for which a notarial deed has not yet been signed) for the Land Development business stood at €28.0 million, representing 388 lots.

At the same date, the Real Estate Development backlog was €82.4 million and the total potential inventory to be delivered represents revenue of €295.5 million, i.e. 1,412 housing units.

Outlook for 2022: Revenue set to exceed €1 billion

For the full year 2022, the group confirms its goal of exceeding €1 billion in revenue.

With regard to earnings, the group remains very vigilant about the impact current projects will have on its margins due to the ever-increasing costs of construction. However, pricing adjustments implemented over the past several months should improve its margins in 2023.

For the B2B segment of the Renovation business, actions to turn around the Atelier des Compagnons subsidiary are continuing. Despite these efforts, this business will post a significant loss in 2022.

In a context made difficult by both external factors (rising construction costs, tighter financing conditions, real estate tensions, etc.) and internal factors (reorganizing the Atelier des Compagnons subsidiary), Hexaom remains confident in its ability to stick to its roadmap. This confidence is based on:

• An order intake that offers good visibility in terms of activity 18 months ahead.
• A model that has already proven itself (variable cost structure thanks to a network of qualified subcontractors).
• Being a historical actor, recognized, and with a strong financial structure that reassures customers concerned about the success of their project in a difficult market that is undergoing consolidation.
• A diversification of activities that continues with Renovation, Real Estate Development, Land Development and Services, all of which offer good prospects for growth.
  For the B2C Renovation business, the group’s objective is to significantly strengthen its positions in a market driven by transactions for existing properties (due to a shortage of new properties), by improvements to reduce energy consumption (energy transition), by compliance requirements for residential units (energy audits), and by renovation subsidies.
• With its solid financial structure, the Hexaom group will continue to increase its market share in all its businesses, further strengthening its position as a major player in the French housing market.