HEXAOM : 2023 9-month revenue up +8.4% to €755.6 million – Confirmed outlook

Over nine months, Hexaom's group production brought in €755.6 million, representing organic growth of 8.4%.

For the third quarter of 2023, Hexaom posted revenue of €203.6 million, up +3.5% compared to the same period last year.

Revenue for the first nine months of the year can be broken down by business segment as follows:

• The Home Building business brought in revenue of €647.2 million, up 9.9% compared with the same period last year. Despite an expected drop in activity in the second half of 2023, production levels as of the end of September remain buoyant, showing robust performance with a +7.6% increase in revenue.
• The B2C Renovation business is growing steadily, primarily due to the expansion of its sales network. Its revenue increased by +8.5% to €40.8 million.
• Revenue from intermediated business, carried out via the franchise network, increased by +22.4% to €6.1 million. Revenue from the "general contractor" business increased by +6.4% to €34.6 million.
• The Land development business is performing according to the trends in the real estate market and the group's forecasts, with revenue of €20.4 million.
• Finally, revenue from the Real Estate Development business reached €47.2 million, growing over the nine-month period even though there was an 11.5% drop in the third quarter. This decrease was due to a significant market slowdown and delays in some projects.

In the challenging real estate market characterized by persistent high inflation for more than two years, increasing interest rates, and stricter financing conditions, the Group Hexaom is prioritizing profit margins over sales volume. Additionally, the group is enhancing its business-to-consumer renovation segment to capitalize on this more buoyant market.

Home Building Business:

Order intake at September 30th, 2023 amounted to €436.8 million, down 39.9% in value and 44.6% in volume. They remain on the same trend as at June 30th, 2023 and are in line with the market.

The significant increase in construction costs experienced in recent years is now showing signs of slowing down. In this context, the average selling price has remained steady for three months at €166k excluding tax.

B2C Renovation Business:

The B2C Renovation business benefits from a more favorable market, efforts to expand franchise networks, and the phased introduction of a general contractor "renovation/extension" offering across all the group's construction divisions.

The general contractor business brought in €30.7 million over the period. Order intake for intermediated business stood at €74.7 million.

Land and Real Estate Development Businesses:

The Real Estate Development business backlog, at September 30th, 2023, was €136.0 million and the total potential inventory to be delivered represented revenue of €398.9 million, or 1,819 housing units. The group remains vigilant about the reservation rate for its projects and the mix of bulk and retail sales. The group underlines that it does not have any high-risk land purchase agreements (regarding either the price or potential future sales), nor is it involved in projects with selling prices that deviate significantly from current market rates.

For the Land Development business, the order book (reserved inventory not yet signed) stands at €14.8 million, representing 198 lots, in line with group forecasts and trends in the home-building market.

For 2023, the group confirms annual revenue growth (on a like-for-like basis) of between 5% and 7%, with improved operating profitability.

In 2024, in a still challenging market, especially in the first quarter, the group anticipates a decrease in production by 25 to 30% as projected several months earlier. An ambitious action plan is being rolled out, specifically targeting the adjustment of the cost structure to the market downturn, while aiming at preserving profit margins and effectively controlling working capital.

In the current market, Group Hexaom, as a leading player in home building, is well placed to acquire sites from defaulting builders. This positions Hexaom advantageously to expand its market share in a sector undergoing consolidation.

The group will also benefit from the contribution of its diversified Real Estate Development, Land Development and Services businesses, and from an acceleration in the B2C Renovation business.

Considering these factors and its solid financial structure, the group is confident in its ability to navigate this market cycle and come out even more resilient in all its business lines.