Neinor Homes Sa Ord

Good day and thank you for standing by. Welcome to the Nainor 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 star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 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 your 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 Niner Homes. Today, we are going to go over results for the first semester of the year 25. And as usual, we are here with Borja García-Gottiaga, our CEO, Jordi Artemis, our Deputy CEO and CFO, and Mari Lapiedra, our CIO. We'll start the presentation with the key highlights. Then, on Section 2, we will provide a quick summary of the evolution of the Spanish residential market. On Section 3, Jordi will review financial results, and on Section 4, we'll provide a quick update on the voluntary tender offer over Ayala Homes. And finally, Borja will end up with the key takeaways. after the presentation of the Q&A session to answer any questions you may have. Now I'll hand over the presentation to our CEO, Borja García Ochoa.

Thank you, José. During the first half of the year 25, 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 absorbed 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 25 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 re-skimming 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. And 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. So what does all that mean for us? It means we are executing in a macro environment that supports our plan. And we are one of the very few players with the scale, the strategy, and the balance sheet to capture the upside. So in very few words, execution is strong. Guidance is solid. Our strategy is accelerated. 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 Nainor's 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 Nainor. Out of that total, close to 11,000 units are under production, scheduled for delivery over the next three years. And for the first time in our history, our order book exceeds 4,000 units. This means 1.6 billion in future revenues for Naino and our joint venture partners. PreSales reached 1,700 units in the first half, representing a 45% increase year on year. And while we have delivered a strong growth in sales, a clear reflection of how dynamic the market is, we are also being disciplined on pricing. And we continue to update prices and are now seeing house price increases of 4%, 5% for the year. This incremental pricing power combined with construction costs that are rising only in light 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. But 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. And now please follow me to slide number six. Now let me walk you through the basics of our business model and explain why Neynor is in the best position to lead in one of the 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 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 stage 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 longstanding relationships with the Spanish top banks, we have deep access to a 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. And beyond the operational setup, our geographic reach is key. Nainor 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 give us the flexibility to scale, the efficiency to protect margins, the ability to deliver through the cycles, and to the risk every development from day one, starting with that 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 charts 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 UK, Germany, the Euro area, and even the US. And 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, your arrival has come down from 4% to around 2%. This implies cheaper mortgages and better affordability for homebuyers, thereby supporting and 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. And 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 on 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 Nainor 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. And now I give the word to Jordi to go with the financials and a quick update on the EIDAS transaction.