Ladies, gentlemen, good evening. Welcome to the 2023 Nexity full year results. Let me tell you that all participants are in silent listening mode, and there'll be Q&A after the presentation. For your information, the call is being recorded over now to Véronique Bédague, Chair and CEO. Madam, you have the floor.
Good evening. Thanks for joining us this evening on our full year result webcast. I'm joined in the room by the same Jean-Claude Bassien, Pierre-Henry Pouchelon, Carine, and the financial communications team. You'll be able to, of course, pose questions after our presentation. So what I suggest is to run through the key developments for 2023. Jean-Claude and Pierre-Henry will return in detail to the commercial activity, financial, non-financial performance. At the end of the presentation, I'll tell you more about the outlook.
To begin, a slide on the commercial and financial performance for 2023. As you know, the market environment deteriorated through 2023, a year marked by the sharp, continuous hike in interest, and of course, the households being increasingly strapped for cash. The crisis is totally unseen. It's very intense. It began in October 2022. It's comprehensively affecting both the supply and demand, both tertiary and housing. On the residential development, the industry data, property developments released last week demonstrate the historic slowdown of residential development, with reservations below the 100,000 housing marks at about 95%. That's down 26% versus 2022, and 41% over two years. It's an impressive number over the two years of crisis. The solvent request for housing is down by over 40%.
In this sharp drop, we recorded close to 15,000 reservations in 2023. That's down 90% of the year in a market that was down 26%. And for Nexity, it's important to look then over two years of the crisis, a decrease over two years of reservations of 30% on a market that was down 41%. We managed to maintain very significant volume of bulk sales, a volume of 9,712 reservations in bulk flat versus 2022, which is already very active year on the bulk. After the accelerated ramp up in the first half in the July webcast, I remember we said to shift a large part of our sales into bulk sales. That's what we did. We'll, of course, return to that during the presentation.
The mix is changing with a share of bulk sales that's now above 60% of our sales and individual customer investors sharply down. Tertiary promotion, the market stalled. There's oversupply in the Paris region. The market's down by over 56%. It's a precipitous decline. Nexity is not that... It was very busy year. We delivered 100,000 square meters of tertiary buildings last year. So the figures that I've just shared with you for 2023 reflect a commercial low point in property development. I've said this several times, I believe that 2023 marked the low point in terms of sales. Services, I'd like to stress the good commercial performance of managed real estates and occupancy rate above 96%. Our financials are in line with the guidance. We have revenue at EUR 4.3 billion, down 9% over the previous year.
Operating profit at EUR 246 million, and we also announced that the priority would focus on debt containment. We have deleveraging levers in 2023 to put net debt down by over EUR 40 million. This year, 2023, was very busy indeed. You recall, we said that we were gonna refocus our roadmap, and what I want to stress before you hear this, Steve, we clearly announced what we were going to do. The roadmap on urban regeneration priority is deleveraging. That's what we did. You'll see we were very agile in our execution around that, very safe and secure in execution. We implemented a very tight management, improved operating efficiency, active risk management of the pre-selling required of a project, 60% on average at the end of the day, thanks to bulk sale.
75% of pre-selling that we saw on the sites undertaken last year. At the same time, for the long term, we refocused on accelerating the rollout of our strategic plan. Two things I'd like to go through with you this evening. Firstly, acceleration of urban regeneration. I love this. We talk about it, and we deliver. In fact, we walk the talk because we launched a brand specialized in urban regeneration and Nexity Heritage. Above all, we won the first major urban regeneration deal, Carrefour, at national. 60 sites, EUR 2 billion over 10 years, 12,000 homes. Urban regeneration at Nexity is not just mere words. They're concrete projects are launched.
We're gonna get the first building permits this year, and as we said, I'm not sure that we've returned to this de-leveraging urban regeneration of far more capital-intensive deals. You've got to buy the land immediately with the Swiss bank Mirabaud, a land banking scheme. In other words, when we want to buy an office building to redevelop it into homes, Mirabaud comes along and carries the land risk. We carry the land up to 90%. The investment amount for Nexity is EUR 200 million over 5 years. We've really given ourselves the means to do urban regeneration, high intensity, but without weighing on Nexity's balance sheet. The de-leveraging levers are underway. We said back in July, we finalized the disposals of Poland and Portugal that had an impact of EUR 100 million on de-leveraging.
In October, we launched a process seeking financial and strategic partners for management. We put out a press release in December. We're in exclusive talks with Bridgepoint, with a view to selling the ADB activities. What I'd like to stress this evening, it's not a fix disposal. Very good metrics. It's the sale of similar to the disposal of Francia 10 years ago in the deal. We, of course, we're very proud of this. We leveraged the synergies we managed to build between development and ADB over the years. So we're delivering, we're delivering this fully, both on urban regeneration as well as on de-leveraging. Jean-Claude, tell us about commercial activity.
Thank you, Dominique. First of all, let's start off with the market data published by SPI last week, showing that the number of pre-bookings went below 100,000. We have 95,000 pre-bookings in 2023, which is below since 2020. That's down 26% on 2022, and if we look over a two-year period, this is a decline of 41%. Against this backdrop, Nexity has held up well, outperforming the market. We're suffering on retail sales because this is very much driven towards individual investors, but we have displayed commercial agility in order to channel our orders towards bulk sales, and this was started as early as H2 2022.
There is a base effect here because at the end of 2022, so we were already at a high level, which was maintained in 2023, 67% of total pre-bookings. And bulk sales of social housing were held up well, and this is an interesting indicator for the future, given what Dominique said earlier regarding government action on this. Now, the extension of zoning for us, we've already spoken about this when we talked to you in the end of October. The overhaul of zoning is a good news.
Over 150 localities requalified as supply-constrained localities, becoming eligible for the PINEL scheme in 2024, intermediate rentals with, and this is an improvement of 10 points with the shift of additional localities, and this is good news both for the short and the medium term. Regarding our commercial offering, our commercial offering is not only under control, but it is selective, and we've been saying this for the past 9 months. We only launched a transaction which have been secured in commercial terms. Our pre-commercialization ratios have been increased to 60%, and when you include retail sales and bulk sales, this actually stands at 75%.
We have an increase of our work in progress at 46%, well below market standard, where there's still a 10% gap between the market and ourselves in this field. We're very watchful on unsold property. We're doing everything that is necessary in order to keep this unsold stock at a very low level. Therefore, we have to adjust certain specific parameters in order to absorb the offering that was set up in the previous cycle. Now, coming to Nexity Heritage, we launched, as Yannick said, the Nexity Heritage brand, which includes all our previous know-how on this, with a rehabilitation, a re-qualification of certain areas. The project you can see on the screen, which we have been dealing with, it's the Hôtel de Beauvais Reims, fully illustrates this.
It's the historic building. We're converting car parks, transforming part of the office space into housing. And this is freeing up space for housing. There is definitely potential in the urban regeneration market, and this should stand at 15%-20% of our production by 2030. Yannick referred earlier to Carrefour. You asked last time we met a use case. So here you have a use case, which is Carrefour, which is the first nationwide deal signed with Carrefour and Nexity, 800,000 square meters, 12,000 homes. And this is consistent with zoning regulations. The choice of Nexity by Carrefour was clearly encouraged by our leadership on the low carbon performance.
There is a 69 sites that have been transferred to the JV, and Nexity has a 20% stake in the JV. As soon as the planning permission has been obtained, the land is put into a special purpose vehicle, 50% stake with Nexity, and we have margins of 7%-8%. Now, looking at the mix, the investment for Nexity is less than EUR 50 million, and potential revenue at the end of this, EUR 2 billion. Going back to Nexity, once profit, profits have been shared between the two, there's EUR 140 million for operating profit for Nexity. This enables us to look at additional potential for construction.
There are genuine opportunities here that we will seek to exploit, and having done this first major transaction, this will lead to others, and we're currently competing for other deals, and we hope to achieve a positive result. On the tertiary market, this is a market that is at a standstill. The 2023 market has been such that investors are waiting for a renewed equilibrium in order to position themselves. Against this backdrop, Nexity posted a low, commercial low with pre-bookings of EUR 39 million. But we have many those cases in the pipeline. We've been able to amortize this cyclical low through our transactions that are in progress, in particular, Lagardère and Corum, which generated EUR 250 million of revenue in 2023.
I should emphasize that we're talking about the diversification of the offering in tertiary. Looking at our offering over the past five years, 700,000 square meters delivered over the past five years, and over 50,000 square meters concern higher education projects, which are in vogue at present. And finally, on services, we recalled that we have a similar momentum in T3 to T3, and the core business of ADB, recurring revenue, which offsets the underperformance of rentals and leases. And property management is dynamic. We're still winning significant calls for tender, which 4,000 are our sites. On the operational side, we have the extension of the portfolio on the one hand, and very high occupancy rates on the tower side, over 95%, in particular, for coworking and student residences.
So this is procyclical, this business, this, of course, is being impacted by the withdrawal of individual investors. Not much is said about this, but on this particular segment, we are at a low since 2003, which is a historical low. And there's a slowdown, marked slowdown in this business, but we're outperforming our competitors. We've picked up a 2%, 2% of market share in this business. And finally, I would like to talk to you about another use case that you asked about, which was Studéa, which illustrates the property developer-operator model. How does this work? Well. We have development margins on the short cycle that you're familiar with. This stands on average at EUR 1.5 million on a standard deal.
Then with a studio, we'll move into the operational phase on the basis of a 12-year lease on average, and on this basis, we've doubled the margins that we've had on development. So that means that we have EUR 1.5 million, which, you know, with 3-4 years, which is double over a 10-year period by the operating slide. So I'll hand over now to Pierre, who will talk.
Thank you, Jean-Claude. Good evening to you all. As was said, our financial results are in line with our guidance. Revenue coming in at EUR 4.3 billion, down 9%. Operating profit at EUR 246 million, a margin rate of 6%. We also announced that the priority would, of course, focus on containing leverage. We have major de-leveraging for 2023. Our net debt is down EUR 40 million. Very solid liquidity at the end of 2023, with cash at EUR 882 million, with undrawn credit lines of over EUR 600. Working caps under control and an increasingly de-risked, with the land bank down 40% versus 2022. Detail of the revenue, residential development, that's seventy percent, is down 13%, EUR 2.9 billion, because of the slowdown on housing. Revenue of tertiaries up 21%, EUR 459 million.
Progress on large-scale deals, eco-campus of La Garenne-Colombes, EUR 250 million. Nexity head office at EUR 55 million. For services, sharp increase in operating activities, +25%, driven by growth and good performance in high occupancy rate, co-working and student residences. This performance is offset by revenue for distribution, down -36%. Retail investors are down. Management revenue is stable for recurring business. Turning now to operating income, down 33% versus 2022, 44% recurring, 40% capital gains on the disposal of Portugal and Poland, booked at non-recurring. Significant drop of residential development, -50%, EUR 140 million. Changing revenue mix in favor of bulk sales, rising construction costs and activity slowdown weighing on our structures. The earnings is pretty much flat on tertiary development because of large-scale services in line with the previously mentioned numbers.
Flat for management, up for operations because of growth of the morning and record financial performance at Studéa is down for retail, in line with the new housing start. Several comments on working capital requirements. The end of December, it's under control, pre-tax and before applying IFRS 5 on property management activities, negotiations with Bridgepoint, working cap down EUR 39 million versus end of December 2022. Working cap essentially of secured operations, loans with our customers, guaranteed with banking loans and also institutional receivables, first-rank counterparties. There's a reduction of 40% of the land bank. On net debt at the end of 2023, comes out at EUR 776 million, down EUR 43 million.
This drop incorporates all our deleveraging levers underway, but also good cash in Q4 and all our actions on the working capital, of course, restating the debt of property management for EUR 67 million, the application of IFRS 5 disposals. Poland and Portugal reduced the debt by EUR 100 million, all proactive initiative put in place in H2. The second commitments, signing of deeds, call ups, better recovery of receivables for bulk sales. Financial structure balance between fixed rate and variable rate, and of course, rate hedging in increments. We have a coverage ratio of gross debt at 60%. Two further major points, the total cash, EUR 882 million, to which we have the undrawn credit line for EUR 630 million at the end of 2023.
Lastly, we have no major reimbursement maturities before 25, so we have a solid liquidity position at the end of 2023. A word now on our CSR strategy, non-financial performance, differentiating and generate business, recognition of know-how, low carbon. Well, we validated the 1.5 trajectory, SBTI. We joined the CAC SBTI 1.5, an improved note from the CDP, we're now A-. The low carbon pathway, the group's ambitious. In fact, it was the subject of say on pay, diversity, reduction of 42% of carbon by 2024—ten percent better than in force of the 2020 in our promotion activities. The results at the end of the year, trending well. Planning permissions, 25% more efficient than the power. We're two years ahead of the regulation.
That's a real business opportunity, and it's this low carbon know-how that was crucial in Carrefour picking Nexity for the 67 sites. On the right, our customer relationship. It's fundamental to reach customer excellence for all our corporates, local authorities in cost containment. We don't. The cost of non-quality can have a major business cost. Over to Véronique for outlook.
Now, for the outlook, we in 2024, we're being quite conservative in our assumptions, but we should emphasize that there is a gleam of light at the end of the tunnel. First of all, mortgage rates have stopped going up. They're actually coming down slightly, but we're seeing the beginning of a decline. Now, of course, none of us, including me, can say what speed and by how much rates will decline, but at some point, clearly, they should be coming down by 1%, which is an extra 10% of purchasing power for our clients. So any decline of interest rates will be good news whenever it happens.
Another thing you may not have in mind is that economic trick calculations show that total salary increases on average in France in 2022 and 2023, and potentially in 2024, more or less cover half of the decline in property purchasing power since 2022, the 20%-25% loss that is so often referred to. Third good piece of news is the fact that the government is... the Prime Minister has taken into account real estate in his presentation, his policy discourse. And the minister, the Housing Minister, is in agreement with the profession in terms of the diagnosis, the crisis in supply and demand on all these areas.
They're announcing a major simplification upcoming, and this, if it happens, could really help us in some areas to reduce the production cost of housing, so the planets are beginning to line up. I don't know how quickly this is going to happen and to what extent, but I think we're going to improvements. It's a bit too early for us to talk about the tangible impact on the business, because we know that rates are going to decline, but we don't know when and by how much. What we're also seeing is some inertia over time. We'll see this between the decline in rates and the repercussion on mortgage rates. There's always a lag and also uncertainty surrounding the Pinel scheme, and there's uncertainty over what the government is going to do and when. So, but there are things happening.
Next slide, the market. You will recall the market has a shortage in the offer and supply, and we have around 50,000 present. Now, you'll recall that 200,000-250,000 pre-bookings for individual and collective bookings. I think we're going to be below, in fact, 200,000. Now, we're beginning to see consensus in parliament. The National Housing Committee, which reports to the Housing Minister, shows that the requirements are anything from 450,000-500,000 to meet demographic social change. So this, of course, for us, is a catalyst over the long term, which is very attractive indeed. Now, in 2024, the important thing is the transformation of the group.
If you could put up the right slide, that would be great. Thank you very much. We have reorganized Nexity. We're going to adapt the structure to new market data, as we said earlier. The slowdown in the business has been such that the pre-bookings are down by, or reservations are down by 25% versus a five-year average. We'll have to draw some conclusions from this in terms of the client mix, with an increasing share of block sales. We also have to draw some conclusions from the changes in the group's scope, the discontinuation of business outside France, the scale of the property management for individuals, and we're also going to completely overhaul our business model, because what we want to be able to do is to do what we did for Carrefour, but all the time.
In other words, to be able to come up with the most efficient product mix at any given time, which means that we have to build a multi-product territorial offering to have, in other words, have multi-product regional managers. This is what we're working on, and I think that we will be pretty much clear on this in terms of headcount and organization by mid- to late April. Against this backdrop, we've decided to hire. This is going to have an impact on our headcount. We're going to try to have a redundancy plan.
We're going to be agile, and our belief is that in today's market, where we do not expect a very fast recovery, we can't just wait for things to happen, and we have to be able to create affordable housing solutions. Now, of course, we continue the de-leveraging. We're going to finalize the sale, the disposal of ADB. We have to go to closing, which will be in the first half. We're going to continue to look, seek out partnerships in property management for companies in distribution, as we told you. We're going to continue with our actions to control debt and working capital. We have an action plan on working capital that we will continue to roll out in 2024. We're going to have increased use of land banking along the lines of the Carrefour Mirabaud model.
We're stopping our international business. We're going to close down Belgium, and we're going to be selling Italy and Germany once we've completed our projects. The dividend policy will remain consistent with the context and reviewed annually in light of free cash flow. As we indicated earlier, we propose to suspend the dividend payment regarding 2023, which is consistent with the redundancy plan that we are currently working on. This is the model that we're showing here on the screen. This is the model we're going to use. We're going to have a plan to develop a model for local authorities. So, okay, the Carrefour land has to be reorganized, redeployed, and we have to be able to generate an overall margin.
The initial margin is when we have the development phase, and then the second margin comes up from the service segment over 10 years. So to complete this presentation, the outlook for 2024, bearing in mind that a commercial low was breached in 2023, we expect a low point in 2024. We have a positive operating income, but it's going to be lower. So we have a slowdown in commercial activity. There's a sort of a lag in all this, which is anything from 12-24 months from the reservation, which is the key indicator for the commercial activity and residential development, and then the recognition of the sale once upon completion of the sales. So we have the built-in effects from the bulk sales.
We also have lowered the property development, and we have to rescale, and we have to abandon, in actual fact, some projects. I said that we're going to adjust the parameter, that means that we can absorb products from the previous cycle. When this will be necessary, we will reduce our prices, prices that are standard, and so given new market data, and we'll have the impact from the reorganization of the group that I outlined a few moments ago. We're going to seek to maintain the de-leveraging trajectory with financial debt that will be significantly lower than in 2023. Looking at the medium-term outlook for 2025, after this in-depth transformation year, Nexity will be more flexible, more agile in order to position itself.
We're looking at improved profitability from 2025, continuing deleveraging with maximum net debt of EUR 500 million as soon as 2024. Thank you all very much, and we're very happy to answer any questions you may have.
Ladies, gentlemen, if you have a question, please press star one on your phone keypad. First question comes from Christophe Chapiu from Oddo BHF. Your line is open.
Good evening to you all. I hope you can hear me.
Hi, Christophe.
Thanks for taking my questions. I've got four, if I may. The first was to return to Nexity's transformation plan. Thus far, I had EUR 30 million in savings to ... That package is getting bigger with the projects you're announcing this evening. Do you already have numbers or some figures to share, with us? Secondly, on housing operating margin, 4.8% in 2023, could you tell us a bit more about the landing expected in 2024 on the housing? And third, on debt in 2024, down, obviously, if we take account of the disposal of property asset management. If we reason before that, the EUR 400 million in net ... how might the debt evolve?
Last technical question on housing WCR, it's broadly stable, but as percentage of the backlog of the housing, it's up slightly to something like 24%-25%. I wanna be sure why there was a slight increase there, if my figures are right, and how we must view 2024 on the housing, WCR as a percentage of backlog. I know if you could, a trend, that'd be great.
Pierre-Henri, yeah, on the, on the savings, on the efficiency. So the efficiency plan, the number mentioned EUR 30 million, that was the number we gave full year for all the efforts we were doing of, containing our operating cost base, throughout the year 2023.
If we now talk of the expected impact once we've executed a redundancy plan, we're not there yet, as you'll understood, but at one point, with the expected impact is the order of EUR 50 million. Just to be clear, I've understood, so this saving efficiency plan, EUR 30 million, was built in 2023, will have the full effect of the EUR 30 million in 2024, right? And this thirty, it becomes 50, not 80, becomes 50 in 2025. It's cumulative. We have EUR 30 million full year on the efficiency plan launched in 2023. Now we have a new real plan that's gonna generate full year effects in 2025. We have to wait for the implementation. That will, of course, be cumulative with the EUR 30 million already achieved.
Okay, thanks. On the three other questions, on the operating housing operating margin, you'll have understood in Véronique's opening remarks. It's an adverse context. It's a full-blown crisis that's lasting, so visibility, we can't really see clearly on the housing margin. We wanted to reflect in our guidances, yes, there'll be positive operating income. We've given ourself all the necessary leeway to weather crisis and adjust the operations that were configured in the previous context. Everything that concerns issues of sale, price, you saw that Jean-Claude referred to the offer under construction, where our priority is a priority placed on WCR and deleveraging, and to have insignificant unsold stock at the end of the year. We'll keep a close watch on that and do what it takes, so as not to have completed stock sitting on our hands.
We'll see how the year pans out with the encouraging signs that also can allow us to tweak and adjust things. We're gonna stay prudent at this stage to see how we can best manage that, and we've also allowed ourselves the possibility of discarding deals higher than those brought in by the commercial. We know the operational doesn't want to jettison the deal. We've given ourselves a wherewithal. We have what it takes to weather crisis. We've activated levers in 2023 to be able to do that in 2024. So today, we're gonna stay cautious, see how the year pans out, and keep you informed of all these effects depending on how must be acted. Let me insist on what Pierre-Henry said. We have an approach, and Véronique said that from the outset, conservative on the forecast for 2024.
Our concern is to be able to face whatever the market throws at us and have onboarded everything in our forecast, so we could be comfortable in managing the low point in the cycle that we announced it being our financial low point. Then, Christophe, you had a question on how net debt was going to trend. No. So you can't do EUR 76 million, more 400. That's not how you must look at it, because you've got to see it, what the EBITDA of 2024 will land at, and the EBITDA will be far lower than what it was. So there'll be an issue to finance on that. There'll be financial costs, the CapEx that we're maintaining. CapEx on our IT projects launch contribute to modernizing and securing all our IT systems, and also the move to our future head office at Saint-Ouen.
So we can't just do EUR 776 - EUR 400. We'll have a net debt far lower in 2024, but not in the proportion of EUR 776 - EUR 400. Yeah. Maybe I misspoke. No, I wasn't saying that you'll be at EUR 776 - EUR 400. If we don't factor in the disposal of the property management—Could you give us an idea of the scale of the debt? Why not? I mean, the deal, that's a key point here, too. There was a condition that was lifted on that by the Competition Antitrust Authority, the consultative—
... process will supply an opinion from the unions next week, so we hope to have a closing at the latest, early Q2. No reason why we can't take into account the deleverage. Even less reason, 'cause when Véronique announced that we were gonna refocus the plan in the search for partners for certain service businesses, one of the conditions was deleveraging. No, that's my question was to have an idea of the free cash flow you could generate, is another way of putting the question more directly, more bluntly, if you like. Everything we're putting in place in 2023, because the deleveraging levers were kickstarted in 2023, done in 2024 to improve our profitability and plan for our rebound in 2025, limiting our net debt at EUR 500 million, generating free cash flow, of course. That goes hand in hand.
On the final point on the ratio, WCR housing, backlog, it's pretty mechanical. We've got things sharply under control. WCR in adverse context, where the reservations aren't being transformed into deeds. A decrease in the backlog, we didn't chase after the backlog. It's only a profitable chase, so there's the shrinking backlog, and that increases the overall net debt, but it's a long-term effect with inertia that's gonna shrink over the coming months.
Thanks for that.
Next question is from Emmanuel Tau, from [Guess} Michele Devot . Please go ahead.
Good evening, everybody. I hope you can hear me. My first question is on the ESC, with savings of EUR 20 million... additional EUR 20 million. My next question is on debt. Now, as I understand it, this is a pre-deal leverage. We have net debt 176, we removed the 440, and you're talking about EUR 500 million. So in terms of the change, from 2023, we're up EUR 160 million. A question on the P&L, if we could have a comment on operating income of EUR 40 million. Could we have some detail on that? And my last point on guidance for 2024, you're saying that this will decline from EUR 246 million, so the base effect is above zero. So my question is, are we closer to 0 or closer to 246? Because this really is a huge range.
Now, Emmanuel, on the debt load, I will give the same answer. This is not re-leveraging. We have items of business that we have to finance. We have interest expenses, which have grown with high rates. We have CapEx, which we're continuing to invest in our IT, in our premises, in the operation of the company. So this is not re-leveraging, this is just our ongoing operations. On the non-recurring result, I said EUR 246 million of operating income, which includes the non-recurring item, which is the disposal of Portugal and Belgium.
And on your question for the equity method, this is mainly due to an impact of 18% of our stake in Igedo Multidis. And on the guidance, I'll go back to what I said earlier, which is we'll see how the year pans out. We have budget items to adjust our sale price or a discontinuation price. We'll do that if we have to, and it's difficult to give you a range on this at this stage. And what we're committing to is positive operating income, which will be the low point financially for Nexity, but which will enable us to do what we have to do in terms of our commercial offering and on the transactions that have to be kept or on the contrary, abandoned.
If necessary, reorganization and restructuring costs will have an impact on 2024, and this is all in order to prepare the recovery in 2025. Now, regarding reorganization, I'll go back to the figures here to I recall that in 2023, we were very aggressive in terms of reducing our cost base of overheads, non-replacement of personnel retiring, working on all overheads in the company, which on a full year basis, in 2024, will produce EUR 13 million in cost savings further to people leaving. The redundancy plan will be implemented, and it will have a full impact to the tune of EUR 50 million.
The main problem, to be more specific, regarding guidance, seems to be the adjustment cost of the supply and of certain projects, and you're not able, on that basis, to provide full guidance. Well, yes, specifically, as we have told you, as Véronique and I have told you, our approach has been extremely prudent on setting up our financial forecast for 2024, taking into account as much as possible, the required adjustments in order to adapt our offering. And of course, this means that we will be at a financial low. There is room for improvement if we have a pickup in momentum, if this materializes, but indeed, we are being extremely conservative.
That's very clear. Thank you very much.
No further questions in the queue, so we... Final call. If you have a question, press star one on your telephone keypad. We have another question. Marie Faure from SocGen, you have the floor. Yes. Hi, good evening. Couple of follow-ups. Would it be possible to get an idea of the one-off cost of the redundancy plan in 2024? And just picking up on this debt, sorry, but EUR 500 million, there's an increased working cap for the resumption of operations. So can you confirm that idea or not? And I'm thinking of third question. Oh, yes. We had bulk sales that were very high in 2022, 2023. Do you think that that volume is likely to continue in 2024? Thanks.
So on the cost, well, on the redundancy costs, et cetera, I'm not going to ask specifically on the plan because we haven't begun the consultation process, and I'd be speaking out of turn on this one. But if we factor in the carve-out cost linked to exiting the property management from Nexity for Bridgepoint and the redundancy, we're looking at a cost of EUR 30 million-EUR 50 million. On the debt, Marilyn, it's a maximum 500 million at the end of 2025, so the fact is in a decrease in the WCR because we're working all the items that we mentioned, and we've reduced activity, so WCR is set to decline over the coming months.
Bulk sales, high level of bulk sales, but I think we've always said this, we're the leading, the first, player to direct it massively on bulk sales back in December 2022. We continued in 2023. We're gonna continue 2024, 2025, a different bulk mix. We've got the social housing version. Could we've built an intermediary housing? That's interesting in terms of margin. So there'll be a higher bulk than retail over a longer period, but of course gonna work on intermediary bulk, institutional, and of course, the cost price. We've always said that. We're working on the cost price so as to improve our margins still further on bulk and offer affordable products in that segment and very tight cost to improve our margins on bulk sales.
All that, of course, really, harks back to what we said right at the beginning of the, There will be no going back to yesterday's world, so we're adapting to tomorrow's world.
Thanks. Just one last question on the financial cost next year, do you see them increase significantly? Can you give us some... An order of financial expenses, we got an average cost of debt at 3.7%, end of 2023. It was 2.2, end of 2023. So we've seen the shift, 60% of our gross debt is fixed rate, either directly fixed rate or covered, so we're, we're protected 60%, and our leverage is shrinking. We'll have, financial expenses broadly similar to those in 2022, 2023. Thanks.
Next question from Gilbert Laurent from BNP, you have the floor.
Good evening. Three questions. First, do you think that the government will come up with a successor to the Pinel scheme? That's my first question. Number two. Regarding the mechanics of the leveraging, there's no dividend that will be paid in 2024. So in 2025, do you expect to be paying the dividend in 2025 for 2024? And third, the government has said that in 2023, the social housing operators have. There's this social housing being purchased, or are we well below the expected figures?
Now, regarding the government, quite frankly, it's very difficult to say what they will do. I think the only thing I'm sure about is that there is a full awareness of the situation. Intuitively, I think I don't think there'll be a PNO. I think there's an analysis underway of the private operators. A promo proposal has been made by the Property Developers Federation, and the idea being that if you buy a new residence, you can hand it down to your heirs, and this is the Pinel law regarding inheritance. So various measures are being considered here, and I'm unable to answer your question as to whether yes or no. I think if the Quester de Bourges said it is going to be done, then that will happen.
But of course, there are firm purchases, and then there are commitments which are rolled out gradually once the land is ready, once planning permission has been given, and I think commitments will be kept at least at last year's levels. But what I can say, speaking for us, is that we were the number one in terms of sellers and with Quester de Bourges. That wasn't your question, but I'm saying that anyway. Now, regarding dividends, we have our the dividend policy as we presented it. We want a dividend policy that's consistent with the overall situation, so we'll see how much visibility and looking at how many encouraging signals that we get.
So it's rather difficult to say what will happen on the dividend for 25 and on free cash flow, meaning the dividend no longer has any impact on the dividend.
Next question from Emmanuel Parot, from Gilbert Dupont.
Hi, excuse me much? Yes, sorry to come back. A quick one on the capital gains disposable for 2024, be possible to have an idea of the amount? No, Emmanuel, as always, you'll get it in the financials, disclosed at the end of 2024. Is it above the cost, higher than the cost of the redundancy plan and the carve-out?
Yes.
Okay, thank you. That was the last. Last question comes from Jean-Pierre Levai, from LLM Associates. Over to you.
Hi, can you hear me?
Yes, perfectly. Hi.
Two quick ones. The first on the reasons to be hopeful. You've clearly detailed those, but you didn't talk about changes in construction costs and the price of land. Are there positive developments for you on those fronts? Second question, of course, when you talk in your release where you state that you want to be focused on territories, what does that mean, territories?
Is it everything that's not Paris, Paris region, the provinces? Don't you find in Paris what you can now find in the province? And answer, it's an interesting. It's not very clear, but what we want to do, but of course, Paris region, very important for us. We're very present in the Paris. We're going to shift to an organization where the regional heads, including, will be multi-product chief.
In other words, they'll be able to develop hospitality, urban... We're very vertical, and so we have bosses who cover a range of products. That's the transformation that we're going to bring about. Nothing to do with the Paris region. It's really an organization where the regional heads, whatever region, Paris, to develop their toolbox, and we'll be there in support mode to the regional bosses. There are a lot of companies who work like that, who shifted to that regional multi-product setup. Now, your first question on the price of land, there's declining construction costs slightly. What we're worried about is the growing frequencies of business failures. That's very costly for us.
Price cuts, yes, but a greater risk of business failure, because when the market shrinks by 40%, it has an impact on the small companies with whom we work. And on the price of land, I mean, we're not seeing any price drops. That's normal because with non-net soil sealing, in fact, the lands become even scarcer. So I don't see the price of land dropping. That's very clear. Thank you.
Well, there are no further questions. I'm gonna hand the floor back to our host to wrap up today's presentation. Thank you all very much. Don't hesitate, you know, Anne-Sophie and Geraldine are available if you have any further questions, and same for us, too. Thanks for listening. Have a pleasant evening. Bye.
Ladies and gentlemen, this brings the call to an end. Thank you all for your attendance. You can hang up.