Good day, and thank you for standing by. Welcome to the Neinor Homes 1H25 results presentation. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press *1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press *1 and 1 again. Alternatively, you may submit your questions via the webcast. Please be advised today's conference is being recorded. I would now like to hand the conference over to our first speaker today, José Cravo. Please go ahead.
Thank you. Hi, good morning everyone. My name is José Cravo and I'm the Head of Investor Relations at Neinor Homes. Today, we are going to go over results for the first semester of the year 2025. As usual, we are here with Borja García-Egotxeaga, our CEO, Jordi Argemí, our Deputy CEO and CFO, and Mario Lapiedra, our CIO. We'll start the presentation with the key highlights. In section two, we will provide a quick summary of the evolution of the Spanish residential market. In section three, Jordi will review financial results, and in section four, we'll provide a quick update on the voluntary tender offer over Aedas Homes. Finally, Borja will end up with the key takeaways. After the presentation, there will be a Q&A session to answer any questions you may have. Now I'll hand over the presentation to our CEO, Borja García-Egotxeaga.
Thank you, José. During the first half of the year 2025, we have seen probably the best performance in the history of our company. Let's start with the execution. On product launches, construction, and commercialization activity, we have delivered an excellent performance in a business that's gaining momentum day by day. During this period, we have also fully integrated the company that we acquired last year, Habitat, and now we are operating it with absolute normality. Now, looking ahead to the full year, we are reiterating our full year 2025 guidance. By this moment of the year, we have a much better visibility on deliveries as construction has progressed at a strong pace and sales continue to prove just how dynamic the Spanish market is. Now let's talk about strategy.
Following the launch of our voluntary tender offer for Aedas , we are fast forwarding our investment roadmap and de-risking it at the same time. The platform is growing, but in an equity-efficient way, designed to scale returns and to expand return on equity. We keep year by year creating value in a cyclical industry. Finally, let's talk about the market. Spain's residential market continues to outperform. What we have been saying for the last three or four years, it's now crystal clear to everyone. Spain is one of the safest residential markets worldwide, offering best-in-class risk-adjusted returns. Demand is solid, supply is tight, and affordability is healthy, especially in our segment. Construction costs are rising modestly with inflation and interest rates coming down. What does all that mean for us? It means we are executing in a macro environment that supports our plan.
We are one of the very few players with the scale, the strategy, and the balance sheet to capture the upside. In very few words, execution is strong, guidance is solid, our strategy is accelerating, and the market is finally playing in our favor. Please follow me to the next slide. Here in this slide, as always, we provide a snapshot of Neinor Homes' operational and financial performance. On the left, we highlight the main KPIs that are driving the business forward. Today, we are managing a portfolio of 22,000 units, nearly half of which are fully owned by Neinor . Out of that total, close to 11,000 units are under production, scheduled for delivery over the next three years. For the first time in our history, our order book exceeds 4,000 units. This means EUR 1.6 billion in future revenues for Neinor and our joint venture partners.
Pre-sales reached 1,700 units in the first half, representing a 45% increase year on year. While we have delivered strong growth in sales, a clear reflection of how dynamic the market is, we are also being disciplined on pricing. We continue to update prices and are now seeing house price increases of 4% or 5% for the year. This incremental pricing power, combined with construction costs that are rising only in line with inflation, provides a solid foundation for margin expansion in the second half of the year and into 2026. Now, despite the strong operational momentum, deliveries in the first half have been lower, as it was forecasted, given that the majority of deliveries are scheduled for the second half of the year. As a result, financials on the right-hand side of the slide appear softer here today. Let me be clear.
We have very good visibility and full confidence in meeting our full year 2025 guidance. Jordi will elaborate on the financial outlook later in the presentation. Please follow me to the slide number six. Let me walk you through the basics of our business model and explain why Neinor is in the best position to lead in one of Europe's most fragmented housing markets. As we have mentioned in previous presentations, the Spanish housing market produces roughly 100,000 new homes per year and remains highly fragmented. That fragmentation, for us, creates opportunities. Neinor has the scale, structure, and systems to execute with industrial precision. On this slide, you see a summary of our industrialized development model built around a clever five-year estate cycle: land acquisition, project design and marketing, commercialization, construction, and final delivery. Each stage is optimized, and the full cycle typically takes around three or four years.
What sets our platform apart is how industrialized and externalized it is and how we have refined it over more than a decade. Project design is led by our in-house architecture team and executed through a network of over 100 approved studios. Sales and commercialization are outsourced to more than 20 trusted brokerage partners, giving us national reach in an addressable market of 600,000 housing transactions annually. Financing is another strategic strength. Thanks to long-standing relationships with the Spanish top banks, we have deep access to a EUR 20 billion CapEx lending market that consistently supports well-structured residential projects. On the construction side, we operate through a diversified network of 30 contractors currently managing over 60 active projects. Beyond the operational setup, our geographic reach is key.
Neinor Homes has built true capillarity through a network of seven regional offices, ensuring local presence and market insight at every stage of the value chain. This structure, externalized, decentralized, and perfectly designed, gives us the flexibility to scale, the efficiency to protect margins, the ability to deliver through the cycles, and to risk every development from day one, starting with land acquisition and continuing through design, sales, and construction. We have the best teams and professionals, the strongest land bank in the country, and a business model that is fully equipped to deliver at scale. Now, let's move to the next section where we will review the fundamentals of the Spanish housing market, which continue to provide the ideal backdrop for our growth. Spain continues to lead the growth charge across developed markets.
As you can see on the left side of the slide, GDP is expected to grow by 2.4% in 2025 and 1.8% in 2026, well ahead of the U.K., Germany, the Europe area, and even the U.S. What's important here is not just the level of growth, but the quality behind it. It's growth driven by a growing population, strong job generation, rising wages, solid private consumption, and accumulated savings. Please follow me to the next slide. Adding to the strength of the economy, the Spanish housing market is benefiting from a combination of lower household leverage and falling interest rates. Since 2008, household debt to GDP has been cut in half, dropping from 85% to just 43% today. At the same time, over the last year, Euribor has come down from 4% to around 2%.
This implies cheaper mortgages and better affordability for home buyers, thereby supporting an increasing housing demand. Beyond lower leverage, another defining feature of the Spanish housing market is its structurally limited supply. Today, Spain is producing only around 100,000 new houses per year, and that figure has remained broadly stable in recent years. To put it in context, before the financial crisis, the country was producing 500,000 to 600,000 units annually. The 30-year historical average still sits at around 200,000 homes per year. Looking ahead, even in a context of a strong and sustained demand, with more than 600,000 transactions per year, we do not expect a material increase in supply. This supply situation, combined with healthier household fundamentals, is what makes the Spanish market resilient to external macroeconomic shocks like the ones we have seen in recent years.
In addition to strong macro fundamentals, declining leverage, lower interest rates, and limited housing supply, it's important to highlight that real house prices in Spain remain 20% to 20% below pre-crisis levels in real terms. Only in 2024, price grew faster than the overall inflation. Furthermore, if we look at the house price-to-income ratios, they remain healthy. Among Neinor clients, this ratio typically sits between four to five times annual income, which is well below peak levels and reflects our positioning in the mid to high segment of demand. All of this supports our view that the Spanish housing market continues to offer upside and remains well-positioned for several more years and healthy performance. I give the word to Jordi to go with the financials and a quick update on the Aedas transaction.
Thank you, Borja. Let me start with the key operational and financial highlights in slide 13. We have notarized a total of 803 units during the semester, of which 421 were fully owned by Neinor and 381 were delivered through our asset management platform. This delivery level is fully in line with our internal forecast since the vast majority of our developments are scheduled to complete in the second half of the year. On the revenue side, we recorded EUR 148 million, broken down as follows: EUR 112 million from our core build-to-sell business, with 323 units delivered at an average selling price of EUR 348,000 per unit; EUR 9 million in management fees from our asset management division; and EUR 27 million from ancillary revenues, which basically includes land sales, construction services, and rental income. In terms of margins, I would like to highlight that this was our best first half in five years.
We achieved gross margin, gross development margin of over 30%, driven by 28% to 29% margin in our build-to-sell business and higher margin contributions from the asset management and ancillary divisions. Below gross margins, financial performance reflects the seasonality in which we have lower delivery volume in H1, adjusted EBITDA of EUR 18 million and net income of EUR 6 million. Now, looking at the balance sheet, we ended the semester with EUR 334 million in net debt, which implies a loan-to-value of 22.9%, right in line with our target range of 20% to 30%. It's important to note that this figure excludes EUR 228 million of equity raised for the Aedas transaction since, from a conservative point of view, we treat it as restricted cash.
With this said, and given that we generate the vast majority of the results in the second half of the year, let me reiterate our full year 2025 guidance. EBITDA should range EUR 100 million to EUR 110 million as promised. Now, please follow me to the next slide where I will provide an update on Neinor's asset rotation program. As you may remember, the crystallization of the build-to-rent portfolio was one of the critical decisions in our strategic plan. Today, we can proudly say that we are done. We have successfully closed agreements for a total amount of EUR 325 million, covering more than 1,300 units and achieving a gross development margin of around 25%. The remainder of the portfolio, which means around 400 units and EUR 18 million of value, will be monetized through a granular build-to-sell strategy.
This investment has supported the execution of the two pillars of our strategic plan defined in 2023. On one side, shareholder remuneration and on the other, equity-efficient growth, which at the end of the day, what we look for is to recycle capital into higher IRR projects above 20%, or alternatively, accelerate distributions to shareholders, optimizing the balance sheet. In the next slide, you can see where we have recycled the capital. As you can see on the left-hand side of this slide, since 2023, we have acquired land for more than 31,000 housing units, strategically located across Spain's most dynamic regions, with Madrid being the most relevant region, accounting for almost 50% of total units. In terms of value, we have already executed EUR 1.8 billion in land investment in only two years. This compares to the five-year target of EUR 1 billion.
I would say that this is the direct result of the track record we have built and the confidence we have earned from both public and private investors. With such relevant investment, we are not in a rush to continue investing. Having said this, it's true that we still see compelling opportunities in the Spanish market. As you can see in this slide, we currently have around EUR 350 million of potential land deals under analysis, representing about 3,000 new units. That said, we remain as disciplined and selective as ever. We will only deploy capital where it's attractive for our shareholders. Now, please follow me to slide number 17 so that we can provide an update on the Aedas Homes transaction. As said in previous calls, this is a transformational move for Neinor Homes.
Despite it doesn't depend on us, we are on track to close it by the end of 2025. Let me begin with the offer price. Following the EUR 136 million dividend paid by Aedas in July, which means EUR 3.15 per share, the offer price has been adjusted from EUR 24.485 to EUR 21.334 per share. On the funding side, execution has been outstanding. We completed an accelerated book build at EUR 15.25 per share, a 10% premium to pre-deal levels, raising EUR 228 million and issuing close to 15 million new shares. Demand was exceptionally strong. This deal was six times oversubscribed, with solid support from institutional investors, which also has implied an increase of the free float and liquidity. Since the announcement, Neinor Homes' share price has increased by more than 25%. This is a clear sign that the market recognizes the strategic and financial rationale of the deal.
Now, in terms of regulatory and execution steps, we have submitted all required filings to the FDI authority and to the CNMC, which, as you know, is the antitrust regulator. Also, the tender offer application has already been submitted to the CNMC. Once it arrives, the prospectus will be published. Following that, the acceptance period will begin. Within that window, Aedas Homes board should publish its formal opinion on the offer. Finally, Neinor Homes will seek shareholder approval at the general shareholders' meeting, which we expect to hold before the settlement of the deal. In summary, the timeline is progressing as planned. The funding is secured, the shareholder support is strong, and the market has clearly endorsed the transaction. Now, I will hand the presentation back to Borja for the closing remarks.
Thank you, Jordi. Before we move to the Q&A, let me leave you with four key messages that define who we are and where we are headed. First, Neinor Homes is operating a fully scalable industrialized platform. After a decade of refinement, we have built a model that delivers consistently, efficiently, and at scale across regions, across cycles, and across partners. Second, we are exposed to one of the strongest housing markets in Europe. The Spanish residential market is structurally undersupplied, demographically supported, and fundamentally healthy. This is not cyclical. It's sustainable growth, and we are perfectly positioned to lead it. Third, we are growing with profitability. Margins are expanding forward by pricing discipline, cost control, and operational leverage of a platform that we can easily scale. Fourth, we remain, like always, very disciplined.
We maintain conservative leverage, make selective capital allocations, and run a flexible model that adapts quickly, no matter the macro conditions. That's how we scale without compromising returns, and that's how we protect shareholders' value. In summary, we are growing with intention, we are performing with margin, and we are investing with a clear focus on long-term value creation. Now, let's move, please, to your questions.
Thank you. If you would like to ask a question over the phone lines, you will need to press *1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press *1 and 1 again. If you wish to ask a question via the webcast, please type it into the box and click Submit. We will start with a question from the phone lines. Your question is from the line of Fernando Abril- Martorell from Alantra. Please go ahead.
Good morning. Thank you for taking my questions. I have four, please. First, on the construction activities, how many units did you start constructing in the first half on your core build-to-sell and fully owned land bank? Also, how many units did you have in WIP and finished by the end of this first half? Second, regarding asset rotation that you've mentioned before, have you included any more land sales in your fiscal 2025 guidance? Third, on your NAV bridge, can you confirm that the capital increase proceeds are included in the working capital and auto line? If so, excluding, I think you paid out around EUR 100 million dividends this year. NAV appears broadly flat, more or less, excluding the dividend payment. Is that correct?
Last one, in the event you fully acquire Aedas , could this allow you to accelerate your JV investment commitments tied in Neinor's with Aedas Land bank? Thank you.
Fernando, Borja will start with the first question on the construction activity.
Those are a lot of questions, Fernando. Okay. First, on the construction activity that you were asking, right now, we have under construction nearly 7,000 houses. The exact number is like 6,700 or something like this. During the first part of the year, we have started the commercialization of around 1,300 units, and we still expect to launch another 2,200 units to start commercialization. That will mean the new cranes that we will be putting. Regarding the first goals, you know that our first goals are just the units that we start the design, so the real launches. During the first half, we have approved 13 new developments, which represent 1,500 units. Basically, I would say, also, just to complement a little bit your question, that from the point of view of construction, all the construction for the delivery of this year is advancing well.
The finish, the end of the construction of the last developments that we have to deliver this year is expected to happen during summer. We have an important development, a couple of important developments in the area of Marbella called Santa Clara and Selene that we expect CFO by the last week of August, first week in September. We should have time enough to deliver in Q4.
Okay. I take the second question, Fernando. In regards to asset rotation or land sales, for this year, in our internal numbers, we had EUR 25 million in value. Regarding your third question on the net asset value, that is flat. You are right. It's true that basically we have had a negative impact coming from Los Carriles that has implied EUR 20-30 million of impact negative or reduction, let's say, no? Excluding that, because there is a delay. I know that you might be aware of that, no? If you exclude this EUR 20-30 million impact, that implies the net asset value could have increased by 2% roughly, which, you know, for six months, it makes sense and pretty conservative.
Okay. The last one, I don't know, Mario, no?
I'm taking the fourth one regarding the acceleration of JVs. Yes, we commented that on the base case in the underwriting of Aedas Homes portfolio, we are assuming around 3,000, 4,000 units that would go for sale as is, mostly to feed our JV business. This is still in place. We will analyze the evolution of the portfolio as settlement, and we will close the final strategy and allocation to the different JVs and partners.
Okay,
Thank you very much.
Thank you. We'll now take our next question. This is from Manuel Martin from Oddo BHF. Please go ahead.
Hello. Good morning. Thank you for taking my questions. Two questions from my side. You had a gross margin of 30% in the first half year, if I saw that correctly. The guidance for 2025 is heading towards 28%. That means that in H2, the gross margin should be below 28%. Can you give us a bit of flavor on what's going to drive that margin coming down?
It is a matter of product mix. Obviously, each development has its own margin, and depending on what we deliver, we recognize one gross margin or another. H1 is not representative because it is a very low level of deliveries. If you look at the annual guidance, 27%, 28%, whatever you want to consider, it is quite similar to what we did in the past. In the last year, that was 27%.
Okay. Understood. Second question, it's on the upcoming merger of Aedas . What's your scenario given that Casablanca is going to tender 79%?
What do you think will happen with the other shareholders, the remaining 21%? Have you heard anything about whether they would like to tender or not? Which scenarios could you imagine including a possible squeeze-out and at which price? Maybe you can elaborate on that, please.
You know that we did a voluntary tender offer, and we go for 100%. In regards to the price, for us, it's obvious that it's an equitable price, basically, because there has been a process in the market trying to sell the company, and we have been the ones putting the best offer on the table. For us, it's equitable. What the minority shareholders will do, we don't know. We will have opened the acceptance period. Let's see. In any case, for us, it's voluntary. Either if they accept and we do squeeze out, it's fantastic. If they don't accept, there will not be a squeeze out. We are quite open there.
Okay, thank you.
Thank you. As a reminder, if you would like to ask a question over the phone line, you can press *1 and 1 on your keypad. To ask a question via the webcast, please type it into the box and click Submit. There are no questions on the phones at the moment, so I will hand back to José to check for any questions from the webcast.
Thank you, operator. We have here some questions that I'll go through in different groups. The first question is on commercialization, if we can provide some indication of where the coverage ratios for the year 2025, 2026, and 2027 stand as of today. Mario.
Perfect. We are close to 90% of coverage ratios for the units to be delivered in 2025. For 2026, we are reaching the 60%. For 2027, we have touched the 20%. In our view, and based on the curves of the business plan, we are a bit ahead of the sales curve. We are maintaining this balance between volume and HPA caption. We are comfortable with the performance of this semester. We will try to keep as disciplined as possible with the sales curve, not anticipating too much volume.
Thank you, Mario. We have here another question on the land market, saying if we expect any acquisitions beyond the transaction we are currently doing with Aedas Homes, and what's the overall environment that you see on the Spanish market.
Our main focus is to close the Aedas Homes transaction, as you can imagine, and digest that portfolio that would generate a lot of alternatives and a lot of possibilities to feed our JVs, as we have commented before. Once said that, we have already a pipeline of EUR 350 million and more than 3,000 units, 50% in Madrid and the rest between Málaga, Valencia, and Basque Country mainly. Depending on the cash available and the different alternatives that we had post-closing of the Aedas Homes transaction, we will execute. Always, as commented, very, very disciplined and with this 20% IRR and 1.8 times multiple as target. Regarding the global environment, we see good momentum on the macro, as Borja García-Egotxeaga commented in the presentation. There are few opportunities as there is a high scarcity of land.
We feel that we are the main player to get to that opportunity due to our granularity, due to our size, due to our capacity to generate that business. As commented, we have a good pipeline. All in all, we are in good shape.
Thank you, Mario. Now I see here some questions for Jordi. One on, you know, if we are seeing further consolidation opportunities in the Spanish market and, you know, how Neinor will approach this.
Yes, I mean, still, there are big funds behind some corporates that they will need to exit at some point in time. It's quite obvious that there will be opportunities sooner than later. In our case, I mean, I think that we first need to digest the Aedas , but still, we are in the process to get the settlement. In any case, it must be active for our shareholders. It's not that we will jump to the opportunities because we need to grow. It's not the case. It's a matter of trying to put a solution and structure that makes sense for our shareholders. If it applies to the opportunity, we will jump.
Thank you, Jordi.
Another one, if we could remind the finance policy post-merger regarding leverage and the credit rating.
Yes, absolutely. Remember that our policy was to have a 20% to 30% loan-to-value at Neinor Homes. This is what we committed always, no? In the last 10 years, also in the last bond issuance done in November of 2024. This has not changed. It's true that if we have the non-recourse or reinvented structure of Aedas transaction, which we put more leverage there. Combining or considering also the non-recourse there, loan-to-value would be between 37.5% and 40% in the next one year, two years. Given that there is a leverage profile, assume in the transaction, after these two years, we will come back to the 20% to 30% loan-to-value, also including the non-recourse debt.
Thank you . We have here a question, perhaps for thank you, Jordi.
We have here a question for Borja on the impact of the 100% tax on the property purchased by non-chief residents of the demand for timber, particularly in the markets with higher foreign buyer activity.
Really, we don't expect any impact at all. First, because less than 3% or 4% on a yearly basis of our sales are to non-EU residents. Even if these measures could be approved, it wouldn't have any impact in our normal activity. Moreover, we don't really think that this measure could be implemented in any region. At the end, in Spain, the decision to increase such taxes is not on the Spanish government. It's more on the regions. Basically, the regions who want to protect more these types of transactions with non-EU foreigners are the touristic regions, and they are not interested at all in approving or implementing such a measure. No impact at all.
Thank you, Borja. Here is another question on the market. How do you see the market and the cycle evolving in the next few years? After several years where house prices have been going up year after year, how much longer can this go? How do we see affordability in the market and for Neinor clients?
As we have explained many times in the past, the Spanish residential sector has little leverage. The supply is very limited, and demand has been growing as the economy is strong and interest rates started to decline. In terms of housing prices, we will note that real prices, that is to say adjusted for inflation, they have barely recovered since 2014. More importantly, when you look at the ratios of affordability, they don't look straight. The problem young families have to buy an apartment is not to pay the mortgages. It's to make the down payment. These people are being forced to be in the rental market even though they could afford to pay mortgages. This creates an excess of demand in the rental market that looks way more expensive.
If you look at the rental market in Spain, it has been growing from 17% to 21% in the last five years. This is what is creating this expensive in prices. As we have explained, we see room still for house prices on sales to keep increasing in the coming years.
Thank you, Borja. We don't have any further questions, operator. I guess we will finish the session with the first half results. If you have any questions or doubts, we are ready to take it offline. Okay? Thank you, everyone.
Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.