Regulatory News:

LES NOUVEAUX CONSTRUCTEURS (Paris:LNC), a leading European residential real estate developer, today released its earnings report for the year ended December 31, 2011. The 2011 financial statements have been approved by the Management Board and were reviewed by the Supervisory Board at its meeting on March 23, 2012. The consolidated accounts have been audited and the auditors' report is in the process of being issued.

                               
Key performance indicators (in ? millions) 2011               2010
Net revenue               524.1               540
Gross profit 128.7               110.4
Gross margin               24.60%               20.40%
Recurring operating profit 29.9 24.1
Recurring operating margin               5.70%               4.50%
Net profit, Group share               15.1               15.1

 

               
                Dec. 31, 2011               Dec. 31, 2010
Net cash               29.3               35.3

Olivier Mitterrand, Chairman of the Management Board, said:

"In 2011, we enjoyed a very good level of sales and significantly improved our operating margins. Our sales in France were strong thanks to an extensive product portfolio, supported by a large number of program launches. We had major successes in development project bids and our strengthened, renewed land potential is today at a level that corresponds to our growth objectives. Second-half deliveries went smoothly in Spain and Germany, enabling both countries to make a significant contribution to LNC's profitability. In 2012, Les Nouveaux Constructeurs will continue to refocus the business on France and remain especially attentive to aligning its products with market demand."

REVENUE

Revenue for year ended December 31, 2011 totaled ?524.1 million, largely comparable to the previous year.

REVENUE BY OPERATING SECTOR

                                                
In ? millions excl. VAT               2011               2010               % change
France               266.1               294.8               -10%
Spain               54.7               42.2               +30%
Germany 187.8               159.0               +18%
Of which Concept Bau 62.7 60.1 +4%
Of which Zapf               125.1               98.9               +26%
Other countries               8.3               9.4               -12%
TOTAL HOUSING               516.9               505.4               +2%
Commercial real estate               7.2               34.6               -79%
TOTAL               524.1               540.0               -3%

In France, housing revenue totaled ?266.1 million, down 10% compared with 2010. The decline was due to a temporary reduction in home building activity in 2011 stemming from a shortage of land in 2009. The Toulouse-based property developer Cabrita was consolidated from August 1, 2011 and contributed ?16 million to full-year revenue.

In Spain, revenue amounted to ?54.7 million, compared with ?42.2 million in 2010. This 30% increase resulted mainly from the 2011 delivery of the first two affordable housing programs in Madrid, representing 114 apartments. It also reflected Premier España's block sale to a banking establishment of a lot intentionally kept off the market and 42 completed apartments. The sale helped to reduce the subsidiary's debt by ?14 million.

In Germany, Concept Bau reported revenue of ?62.7 million, a slight year-on-year increase. In all, 149 housing units were delivered during the year (with high-unit price homes accounting for a substantial percentage of the total) compared with 183 units in 2010.

Zapf's revenue rose considerably to ?125.1 million, from ?98.9 million in the previous year. In 2011, Zapf delivered 313 homes and 15,251 garages. Thanks to its production capacity, which was recently strengthened with the acquisition of Estelit's assets, Zapf is clearly the leader in prefabricated garages with a market share of approximately 20%.

In 2011, the commercial real estate segment reported limited revenue following the delivery of two property development programs in Montevrain early in the year.

BUSINESS PERFORMANCE

Total orders in 2011 amounted to ?821 million, up 30% over 2010. Housing orders booked during the year totaled ?753 million, an increase of 21%, and concerned 3,609 apartments and houses.

TOTAL ORDERS

              

 

                               
In ? millions incl. VAT               2011               2010               % change
France 505               409               +23%
Of which individual homebuyers 419 329 +27%
Of which block sales               86               80               +8%
Spain               44               65               -32%
Germany 164 121+36%
Of which Concept Bau 100 65 +54%
Of which Zapf (excl. the garage business)               64               56               +14%
Other countries               40               29               +38%
TOTAL HOUSING               753               624               +21%
Commercial real estate               68               7               NM
TOTAL               821               631               +30%

In France, housing orders rose 23% in value to ?505 million and 24% in volume to 2,247 units.

In 2011, thanks to its success in building up the land potential, LNC launched 39 new programs on the market, compared with 30 in the previous year.

Sales to individual homebuyers represented 83% of the total in value with block sales accounting for the remainder, most of which involved sales to public housing developers. Sales to individual homebuyers were up 27% for the year in a market that contracted overall but which benefited in the fourth quarter from the announced reduction in the Scellier tax incentive. Sales to buy-to-let investors were slightly higher, accounting for 57% of sales to private buyers, compared with 53% in 2010 and 55% in 2009. In 2011, the average unit price of home orders was stable at ?225,000.

In Spain, the subsidiary had 10 programs on the market at December 31, 2011 compared with 12 a year earlier. Orders for the year totaled ?44 million (for 239 housing units) versus ?65 million (314 units) in 2010. Orders in 2011 mainly concerned 159 affordable apartments and 42 completed homes sold in block to a banking establishment. The remainder involved unsold, completed homes and a few units sold off-plan at market price.

Premier España had 46 completed homes that were unsold as of December 31, 2011, compared with 115 units a year earlier. Selling these homes remains the subsidiary's top priority.

In Germany, orders booked by Concept Bau rose considerably thanks to lively sales of programs brought to market in the Munich region. Orders totaled ?100 million (compared with ?65 million in 2010) and represented 274 units (versus 147).

Zapf's housing sales were slightly higher at ?64 million (versus ?56 million in 2010) with 401 units ordered in 2011 (357 in the previous year).

In the commercial real estate segment, a building in Boulogne with usable floor area of 6,650 square meters was sold to an institutional investor in the fourth quarter.

BACKLOG

At December 31, 2011, backlog stood at ?784 million, compared with ?518 million one year earlier, a strong 51% rise.

Housing backlog totaled ?733 million, representing 17 months of revenue compared with 12 months at year-end 2010.

BACKLOG AT 31 DECEMBER

                                                
In ? millions excl. VAT               2011               2010               % change
France               504               331               +52%
Spain               55               61               -10%
Germany 153               115               +33%
Of which Concept Bau 94 66 +42%
Of which Zapf (incl. the garage business)               59               49               +20%
Other countries               21               10               +116%
TOTAL HOUSING               733               517               +42%
Commercial real estate               51               1               NM
TOTAL               784               518               +51%

In France, housing backlog amounted to ?504 million at December 31, 2011, up 52% from one year earlier. The sharp rise was due mainly to the high level of orders booked in the fourth quarter.

In Spain, backlog declined by 10%, reflecting the substantial revenue generated during the year.

In Germany, backlog stood at ?153 million at year-end 2011. Concept Bau's backlog rose by 42% to ?94 million as housing orders exceeded deliveries. Zapf's backlog amounted to ?59 million, versus ?49 million at December 31, 2010. Of the 2011 total, 60% was for the construction business and 40% for the garage business.

Backlog in the commercial real estate segment rose sharply to ?51 million, following the new order received from an investor for the Boulogne program in fourth-quarter 2011.

LAND POTENTIAL

LNC's land potential amounted to ?1,441 million at December 31, 2011, with France accounting for 85% of the total. Housing land potential totaled ?1,301 million and represented 6,945 units, compared with ?1,002 million and 4,730 units at year-end 2010. Based on housing revenue over the past 12 months, the potential represents 2.5 years of business.

CONFIRMED LAND POTENTIAL AT DECEMBER 31

                                                
In ? millions excl. VAT               31-12-2011               31-12-2010               % change
France               1,092               708               +54%
Spain               66               91               -28%
Germany 102               178               -43%
Of which Concept Bau 102 178 -43%
Of which Zapf               0               0               0%
Other countries               41               25               +67%
TOTAL HOUSING               1,301               1,002               +30%
Commercial real estate               140               76               +84%
TOTAL               1,441               1,077               +34%

In France, land potential at December 31, 2011 amounted to ?1,092 million, an increase of 54% from one year earlier thanks to LNC's active yet selective land acquisition policy. At year-end 2011, land potential stood at 5,497 units compared with 3,525 units at December 31, 2010. The rise reflects the success of development project bids, in particular the recent contract won in Nanterre for a major program of 220 homes, comprising both family and student housing units, as well as shops.

In Spain, land potential continued to decline, falling by 28% due to ongoing sales of completed homes and to the sale of units in affordably priced housing programs. It stood at 358 units at year-end 2011, compared with 395 at December 31, 2010. At end-December 2011, LNC also had six lots in Spain that were intentionally being kept of the market.

In Germany, Concept Bau's land potential fell sharply to ?102 million at December 31, 2011, from ?178 million one year earlier. It corresponded to 260 housing units at December 31, 2011, versus 483 at end-December, 2010, mainly due to the expiry of a call option on a lot in Frankfurt that represented 179 apartments.

At year-end 2011, land potential in the commercial real estate segment was comprised of the Montrouge and Chatenay-Malabry programs, which are currently being launched on the market.

FINANCIAL REVIEW

  • Income statement

Gross profit amounted to ?128.7 million in 2011, an increase of 17% over the previous year despite a slight decline in revenue. Gross margin rose 4.2 points to 24.6%.

The geographic breakdown in gross profit is as follows:

GROSS PROFIT BY COUNTRY

                                
In ? millions excl. VAT               2011               2010
France - Housing 63.1               54.8
France - Commercial real estate 3.0 2.7
Spain 7.9 9.3
Germany - Concept Bau 13.6 11.9
Germany - Zapf 39.2 30.7
Other countries               1.9               1.0
TOTAL               128.7               110.4

In France, gross profit from the Housing business rose by ?8.3 million, a significant increase related to the improved margins on programs in production. Gross margin stood at 23.7% of revenue, compared with 18.6% in 2010.

In Spain, gross profit totaled ?7.9 million while gross margin stood at 14.4% of revenue, compared with 22% in 2010. The decline resulted from the sales of 69 unsold, completed units and a lot that had been intentionally kept off the market. Both transactions generated very low margins and together accounted for nearly 45% of the year's revenue. On the other hand, two affordably priced housing programs delivered in 2011 generated margins of 27% and 36% respectively.

In Germany, Concept Bau's gross profit rose by ?1.7 million, led by slight increases in both revenue and gross margin for the year.

ZAPF's gross profit rose by ?8.5 million due to the ?26.2 million increase in revenue and a gross margin that remained high at around 31%. This performance results from the heavy weighting of the generally more profitable garages business in the subsidiary's 2011 revenue.

Recurring operating profit amounted to ?29.9 million, an increase of 24% that reflected the improvement in margins. Recurring operating margin also rose to 5.7% of revenue, from 4.5% in 2010.

Net finance costs and other financial income and expense represented a net expense of ?6.4 million, an improvement of ?2 million over 2010, due to the decline in gross debt to ?141 million, from ?162 million in the previous year.

As a result, profit from operations before tax was up ?7.9 million, an increase of 51% over 2010.

In 2011, income tax totaled ?7.7 million, or 33% of income before tax, versus ?0.2 million in 2010, a year in which tax expense was especially low because of significant deferred tax benefits.

Net profit, Group share amounted to ?15.1 million, the same as in 2010. Earnings per share came to ?1.04.

  • Balance sheet structure

At December 31, 2011, working capital requirement stood at ?161 million, ?12.5 million higher than at year-end 2010. The slight increase was due to the rebuilding of land potential in France. On the other hand, the sale of unsold homes in Spain drove a further decline in the country's working capital requirement.

At year-end 2011, LNC had net cash totaling ?29.3 million compared with net cash of ?35.3 million one year earlier.

At year-end, consolidated equity totaled ?208.3 million - ?13.66 per share - compared with ?196.3 million at December 31, 2010. Equity in France amounted to 79% of the consolidated total at December 31, 2011.

DIVIDEND

At the Annual Meeting on Friday, May 25, the Management Board will ask shareholders to approve a dividend of ?0.50 per share.

RECENT EVENTS: DISPOSAL OF THE BUSINESS IN INDONESIA

On March 21, 2012, Les Nouveaux Constructeurs sold its subsidiary Premier-LNC-Singapore, which owned 51% of Premier Qualitas Indonesia, a real estate developer. The two companies do not have a significant impact on the results of the Company or the Group. The transaction marks the end of LNC's operations in Indonesia, where it still has a few non-material lots to be delivered, which are held by Premier Indonesia, its other subsidiary that is due to be wound up.

OUTLOOK

In 2011, the company actively pursued new projects, while diligently complying with its land acquisition criteria. As a result, the product portfolio was strengthened and housing sales were sustained throughout the year, especially in the fourth quarter.

In France, the Company can look to the future with confidence, thanks to its substantial backlog, high-quality land potential and ability to continue selectively taking advantage of opportunities in the commercial real estate segment. In Germany, business and backlog both increased substantially in 2011.

Les Nouveaux Constructeurs has begun 2012 with good visibility while pursuing its selective land development policy and continuing to align the product portfolio with market demand. It intends to continue refocusing the business on France, where the land potential now accounts for 85% of the total. LNC will continue to develop in French regions that have high potential for population growth and offer excellent property markets.

FINANCIAL CALENDAR

  • First-quarter financial data: Thursday, May 3, 2012, (before the opening of the NYSE-Euronext Paris stock exchange).

LES NOUVEAUX CONSTRUCTEURS

Les Nouveaux Constructeurs, founded by Olivier Mitterrand, is a leading developer of new housing, as well as offices, in France and two other European countries.

Since 1972, Les Nouveaux Constructeurs has delivered nearly 60,000 apartments and single-family homes in France and abroad. It has an extensive presence in France, where its operations in the country's six largest metropolitan areas and high-quality programs have made Les Nouveaux Constructeurs one of the most well known names in the industry.

Les Nouveaux Constructeurs has been listed on the NYSE Euronext Paris, compartment C, since November 16, 2006 (code LNC; ISIN code: FR0004023208) and is included in the SBF 250 index.

All LNC press releases are posted on its website at: http://www.lesnouveauxconstructeurs.fr/fr/communiques

APPENDICES

QUARTERLY REVENUE - BY COUNTRY

                                
In ? millions excl. VAT 2011 2010
  Q1               Q2               Q3               Q4 Q1               Q2               Q3               Q4
France (Housing) 50.3               65.0               56.4               94.4 52.7               76.4               75.8               89.9
France (Commercial real estate) 1.3               0.5               0.0               5.4 6.5               10.3               11.4               6.3
Spain 2.2               5.5               16.3               30.7 16.0               10.9               3.6               11.8
Germany (Concept Bau) 6.1 4.9 21.1 30.6 12.6 2.5 8.7 36.4
Germany (Zapf) 14.3               25.5               29.7               55.6 10.2               20.7               24.5               43.4
Other countries 0.6               1.8               0.9               5 0.4               0.8               0.7               7.5
TOTAL 74.8               103.2               124.4               221.7 98.4               121.6               124.7               195.3
 

AVERAGE UNIT PRICE - HOUSING ORDERS

In ? thousands incl. VAT               2011               2010               % change
France - including block sales(1)               225               225               0%
France - excluding block sales(1)               241               240               0%
Spain(2)               186               208               -11%
Germany(3)               242               241               1%
Other countries(4)               90               111               -19%
LNC               209               216               -3%

(1) Including VAT of 5.5% or 19.6%. (2) Including VAT of 7% for first-time homebuyers. (3) No VAT. (4) Including 10% sales tax in Indonesia.

 

NUMBER OF HOUSING ORDERS, NET

Number of units               2011               2010               % change
France               2,247               1,817              

+24%

Spain               239               314               -24%
Germany (Concept Bau) 274 147

+86%

Germany (Zapf)               401               357              

+12%

Other countries               448               254              

+76%

TOTAL               3,609               2,889              

+25%

 

QUARTERLY ORDERS BY COUNTRY

                               
In ? millions incl. VAT 2011 2010
  Q1               Q2               Q3               Q4 Q1               Q2               Q3               Q4
France (Housing) 82               112               116               195 76               119               95               119
France (Commercial real estate) 0               0               0               67 0               6               0               1
Spain 5               7               4               28 15               14               21               15
Germany (Concept Bau) 26 15 41 18 13 17 14 21
Germany (Zapf) 22               19               11               13 9               19               23               5
Other countries 8               7               7               18 3               8               9               8
TOTAL 143               159               179               340 116               184               161               169
 

BACKLOG BY QUARTERs

    
In ? millions excl. VAT 2011 2010
  Q1               Q2               Q3               Q4 Q1               Q2               Q3               Q4
France (Housing) 347 373 440 504 297 322 331 331
France (Commercial real estate) 0               0               0               51 28               19               8               1
Spain 63               64               52               55 42               43               59               61
Germany (Concept Bau) 86 95 116 94 60 75 81 66
Germany (Zapf) 70               88               97               59 57               78               87               49
Other countries 16               16               18               21 10               15               21               10
TOTAL 582               636               723               784 494               552               586               518
 

LAND POTENTIAL - HOUSING AT DECEMBER 31

Number of units               2011               2010               % change
France               5,497               3,525               +56%
Spain               358               395               -9%
Germany (Concept Bau)               260               483               -46%
Germany (Zapf)               0               0               0%
Other countries               830               327               +154%
TOTAL               6,945               4,730               +47%
 

LAND POTENTIAL BY QUARTER (period end)

                             
In ? millions excl. VAT 2011 2010
  Q1               Q2               Q3               Q4 Q1               Q2               Q3               Q4
France (Housing) 710               831               952               1,092 617               684               619               708
France (Commercial real estate) 190               189               186               140 29               29               29               76
Spain 90               118               71               66 116               116               97               91
Germany (Concept Bau-Premier) 169               181               83               102 162               142               186               178
Germany (Zapf) 0               0               0               0 2               1               0               0
Other countries 21               18               33               41 12               15               15               25
TOTAL 1,179               1,337               1,325               1,441 938               986               946               1,077
 

DISCLAIMER

The statements on which the Company objectives are based may contain forward-looking statements. Such forward-looking statements involve risks and uncertainties regarding the economic, financial, competitive, and regulatory environment and the completion of investment programs and asset transfers. In addition, the occurrence of certain risks [see chapter 4 in the Document de Base registered with the French Stock Exchange Commission (AMF) under number I.06-155] could affect the business of the Company and its financial performance. Moreover, the achievement of the objectives supposes the success of the marketing strategy of the Company (see chapter 6 of the Document de Base). Therefore, the Company hereby makes no commitment nor gives any guarantee as to the fulfillment of objectives. The Company does not undertake to update any forward-looking statement subject to the respect of the principles of the permanent information as provided by articles 221-1 et seq. of the AMF's general regulations.

 

CONSOLIDATED INCOME STATEMENT

 
INCOME STATEMENT            
(in ? thousands) 2011 2010
                 
 
Revenue 524,083 539,964
Cost of sales (395,372) (429,605)
Gross profit 128,711 110,359
Payroll costs (49,542) (46,156)
Other recurring operating income and expense, net (43,384) (34,937)
Taxes other than on income (1,765) (1,685)
Net depreciation and amortization expense and impairment (4,078) (3,489)
                 
Recurring operating profit       29,942       24,092
 
Other operating income and expense 0 0
                 
Operating profit       29,942       24,092
 
Finance costs (5,498) (7,054)
Income from cash and cash equivalents 1,510 874
Net finance costs (3,988) (6,180)
Other financial expense (3,458) (3,984)
Other financial income 1,035 1,717
                 
Net finance costs and other financial income and expense       (6,411)       (8,447)
Profit from operations before tax       23,531       15,645
Income tax (7,656) (199)
Shares of profits and losses in associates (609) 563
                 
Net profit of fully consolidated companies       15,266       16,009
Minority interests       118       866
Net profit, Group share       15,148       15,143
Basic earnings per share (in ?)       1.04       1.08
Diluted earnings per share (in ?)       1.04       1.03
 

CONSOLIDATED BALANCE SHEET

 
ASSETS

 

 

(in ? thousands)

At Dec. 31, 2011

At Dec. 31, 2010

                 
 
Net goodwill 6,844 6,433
Net intangible assets 292 95
Net property, plant and equipment 38,889 35,321
Other non-current investments 2,885 2,014
Deferred tax assets 6,625 5,102
                 
Total non-current assets       55,535       48,965
 
Inventories and work in progress 324,782 261,530
Trade receivables and related accounts 46,225 49,452
Tax receivables 135 135
Other current assets 46,605 37,090
Current available-for-sale securities 808 1,002
Other current financial assets 15,129 12,914
Cash and cash equivalents 151,613 172,514
                 
Total current assets       585,297       534,637
Total assets       640,832       583,602
                 
LIABILITIES

 

 

(in ? thousands)

At Dec. 31, 2011

At Dec. 31, 2010

                 
 
Contributed capital 15,242 14,532
Additional paid-in capital 77,115 77,115
Reserves and retained earnings 95,952 88,242
Net profit, Group share 15,148 15,143
                 
Shareholders' equity before minority interests       203,457       195,032
Minority interests       4,809       1,306
Shareholders' equity       208,266       196,338
 
Non-current borrowings 71,071 47,497
Non-current provisions 2,570 2,898
Deferred tax liabilities 6,921 5,622
                 
Total non-current liabilities       80,562       56,017
 
Current borrowings 63,313 102,042
Current provisions 15,428 15,982
Trade and other payables 117,852 114,282
Tax liabilities 2,389 763
Other current liabilities 140,646 87,927
Other current financial liabilities 12,376 10,251
                 
Total current liabilities       352,004       331,247
Total shareholders' equity and liabilities       640,832       583,602
                 
 

CONSOLIDATED STATEMENT OF CASH FLOWS

 
(in ? thousands) 2011 2010
                 
15,266 16,009
Net profit of fully consolidated companies
 
Adjustments to reconcile profit to net cash provided by operating activities 271 631
Elimination of depreciation, amortization and provisions (592) (819)
Elimination of fair value adjustments 849 2,822
Elimination of capital gains and losses 12 (99)
Elimination of earnings of associates 609 (563)
 

= Cash flow after finance costs and tax

16,415 17,981
 
Elimination of net finance costs 3,988 6,180
Elimination of tax expenses, including deferred tax 7,656 199
 

= Cash flow before finance costs and tax

28,059 24,360
 
Impact of changes in operating working capital requirement (4,490) 121,942
Net interest payments (4,006) (7,026)
Tax payments (7,887) (11,076)
                 
Net cash provided (used) by operating activities       11,676       128,200
 
Effect of changes in the scope of consolidation* (5,878) (2,144)
Disposals of consolidated companies, after deducting disposals of cash (709) (80)
Acquisition of intangible assets and property, plant and equipment (3,200) (2,056)
Acquisition of financial assets (2,799) (81)
Disposal of intangible assets and property, plant and equipment 12 210
Disposal and repayment of financial assets 400 532
Dividends received 691 410
                 
Net cash used by financing activities       (11,483)       (3,209)
 
Effect of changes in the scope of consolidation** (200) (450)
Dividends paid to parent company shareholders (7,349) (6,996)
Dividends paid to minority shareholders in consolidated companies (806) (884)
Acquisition and disposal of treasury shares (86) (51)
Changes in borrowings (12,797) (98,937)
                 
Net cash provided (used) by financing activities       (21,238)       (108,170)
 
Effect of exchange rate fluctuations on cash and cash equivalents 180 179
                 
Change in net cash and cash equivalents       (20,865)       17,852
                 
Opening net cash and cash equivalents       171,922       154,070
                 
Closing net cash and cash equivalents       151,057       171,922
of which Cash and cash equivalents 151,613 172,514
of which Bank overdrafts       556       592
Closing net cash and cash equivalents       151,057       171,922

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