Neinor Homes Sa Ord

Hi, good morning, everyone. My name is Jose Cravo and I'm the Head of Investor Relations at Nainor Homes. Today, we are going to go over results for the fiscal year 2025. And as usual, we are here with Borja Garcia-Gottiaga, our CEO, Jordi Argemi, our Deputy CEO and CFO. We will start the presentation with a key highlight in section one. Then on section two, we will provide an update on the closing of the Aedes transaction. On section three, we will review financial results. And on section four, we'll finish with key takeaways. After the presentation will be a Q&A session to answer any questions you may have. Now I hand over the presentation to our CEO, Borja Garcia-Gochara. Thank you, Jose.

Good morning, and thanks everyone for joining. Let me be very clear about the most important message we want to convey during this presentation. We are executing today, and we are accelerating tomorrow. That is the story. Let's break it down. First, results. Full year 2025 is the seventh year in a row that we delivered on our operational and financial targets. Seven years, not one or two, seven. In a fragmented market, through cycles and through volatility, we have consistently done what we said that we will do. That is the value created by this management team. It is discipline, it's execution, and focus. Second, AEDAS. In less than eight months, we have secured full control, doubled the scale of the platform. This is not incremental, this is transformational. With AEDAS, we created the national champion in a highly fragmented market. We moved from being a strong operator to being the clear consolidation leader. Third, the market. The macro is strong. GDP in Spain is growing fast, employment is solid, population is increasing, and household leverage remains low. At the same time, supply is structurally tight, and when supply is scarce, price move up. But, and this is important, affordability for our clients remains healthy. We operate in a market where demand fundamentals are real and sustainable, not speculative. That is what we call HALO, heavy assets, low obsolescence, in a structurally scarce environment. That combination creates resilience and long-term value. And fourth, growth. We are very well positioned. We have a scale. We have the best land. we have visibility, and we have a proven capital allocation framework. We will continue to grow, but we will do so the same way we have delivered seven consecutive years of results, with discipline, with focus, and with equity-efficient execution. So again, we are executing today. We are very focused in AEDAS integration, and we are accelerating tomorrow. Now let's move to slide number five, and let's see the numbers. We have closed the year with a land bank of almost 38,000 units. Around 25,000 of those are currently under production, and more than 12,000 are in work in progress or already finished. That is production capacity. That's multi-year visibility. Our order book stands at record levels of nearly 9,000 units. representing more than $3 billion of future revenues. And during the year, we have delivered close to 3,000 homes to our clients. On the right side of the slide, you have the financials. Jordi will go through them in detail later, but let me highlight three points. First, we reached the high end of our guidance. Second, operating margins remained solid with 27% gross margins. Third, at the bottom line, net income came in 7% above guidance, excluding AEDAS. On the balance sheet, leverage increased versus last year as expected, but it remains fully aligned with our strategy and supported by a strong cash flow visibility. Finally, shareholder value creation has been strong, with 25% growth in NAV per share, plus dividends distributed. So when we say we are executing today, This is exactly what we mean. Please follow me to the next slide to see how the platform has transformed in just three years. Now, let's zoom out. The Spanish residential market is highly fragmented. Even the largest players have a very small market share. Nino's platform today is two, three, or four times larger than most of our peers. And in a fragmented market, a scale wins. Look at the evolution since 2023. Our order book is up by almost seven times. Our units under construction tripled. Our active portfolio is up by four times. And our total land bank has more than doubled. This is not incremental growth. That is a structural expansion. But let me be clear. This is not growth for the sake of growth. It's rooted in a disciplined strategy. It's grounded on our equity-efficient model, and it is designed to create value for our shareholders. Yes, scale is important, but quality is even more. Please, let's go to the next slide. Now let's turn to the quality because the scale with the quality doesn't create value. More than 80% of our GAV is concentrated in eight regions. These are the areas with the strongest economic growth strongest demographics, and the tightest supply in Spain. This quality land bank is worth more than $10 billion in future revenues. And more important, it was acquired through a disciplined investment strategy. This provides meaningful downside protection and a clear upside in the current market environment. It is important to highlight also the segment in which we operate. We focus on the mid- to mid-high segment, selling homes at 300,000 to 400,000 euros, more than 90% to Spaniards who are buying a residence where they will live. Around 30% of our clients buy with cash, while those that use leverage do so conservatively with an average loan-to-value of 65%. As a result, our buyers enjoy structurally strong affordability metrics with house price to income 40% below the national average. Moreover, in recent years, when house prices started to accelerate due to the structural imbalance of demand and supply, affordability for nano clients remains at the same levels or even is improving a little bit. This combination of premium locations, disciplined land acquisition, and resilient demand positioning underpins the quality of our earnings profile. Please follow me to the next slide so that we can explain why Spain continues to be one of the safest residential markets worldwide, which further strengthens our current setup. For many years, we have been saying that Spain is one of the safest residential markets worldwide. And we say so for structural reasons. It is true that most residential markets in developed countries are undersupplied. Spain is not the unique in that sense. The real difference lies on the demand side and in the financing structure. The Spanish economy is performing well. Employment is growing. Population is increasing. But more important, the Spanish housing market is much less leveraged than the others. In Spain, typical loan-to-value ratios are around 70% to 80%, while in many other countries it is normal for buyers to get 90% to the purchase price. Moreover, the cost of financing is also very different. In Spain, our clients are signing long-term fixed mortgages close to 2%, while in other markets, mortgage rates can easily be doubled that level. So, lower leverage and lower financing costs. Financing costs make the Spanish market more resilient to shocks. So when we think about the housing cycle and evolution of house prices, the key variable is not only supply. It is affordability under stress. In markets with high leverage and higher mortgage rates, affordability can deteriorate quite quickly when interest rates move. In Spain, the impact is much more limited. Buyers use 20% to 30% less leverage when buying. They lock in long-term fixed rates 30 years versus mixed rate to more short-term in UK, for instance. And household balance sheets are stronger than in previous cycles. That is why we believe Spain is structurally more resilient. And that is why we believe this market can sustain moderate price growth without undermining affordability, especially in our segment. Now let me step back and explain why we believe Spain offers a structural growth opportunities beyond the economic cycles. Over the last years, Spain has accumulated a housing production deficit of more than 800,000 units. To put that into perspective, this deficit is equivalent to roughly eight years of current annual housing production. As you can see on the chart, household formation is exceeding year by year housing production, especially after 21. The gap keeps increasing and it is expected to do so in the following years. This tells us something fundamental. Spain simply doesn't build enough homes to meet underlying demographic demand. And as population growth accelerates and household formation continues, this deficit does not correct itself. That's why we believe Spain Residencial is supported by structural fundamentals, not just macro-momentum. For a scaled industrial platform like ours, in a quality land bank and embedded execution, this creates a long runway for disciplined growth and value creation. And now let me pass the word to Jordi to see a little bit more of Haida's transaction and financials.

Thank you, Borja. Let's go through the key milestones of the AIDAS transaction, which we have successfully executed in just eight months. In December, we acquired almost 80% of AIDAS by purchasing the stake from Castle Lake. At the end of January, the CNMV authorized the mandatory tender offer and confirmed the price as equitable. Shortly after, we reorganized the board of directors, securing full operational control of the company. And since then, we have already implemented decisive actions. First, we have restructured the corporate debt using the Polos facility. Second, we signed a management agreement so that we are in charge of the key strategic decisions and have full control of cash management. And third, we canceled AEDA's shareholder remuneration policy to fully align capital allocation with NENOR's strategy. As you know, the acceptance period of the mandatory tender offer will finish tomorrow and the final results will be published next week. Regardless of the final percentage that we will own, the strategic objective of this transaction has already been achieved. We have control, integration is well advanced and synergies are underway. With that said, let's move to section number three to review the 2025 financial results. On the left-hand side of the slide 13, you see three columns. First, our original guidance for the year. Second, the reported results excluding GAEDAS, which are fully comparable to our guidance. And third, the actual results including the impact of GAEDAS from the 22nd December onwards. Let's start with deliveries. We notarized around 1,900 units. out of which 1,565 units correspond to build-to-sell projects with an average selling price of 421K euros. And 352 units correspond to build-to-run projects. As anticipated during the year, the higher average selling price reflects the delivery of Santa Clara development, where units are sold above 1 million euros each. In addition, the Build to Rent projects divested were for an amount of 70 million. And remember that these are recorded directly as margin in the P&L due to the applicable accounting standards. As you can see, revenues from the asset management business are amounting around 20 million euros, while construction and other revenues contributed approximately 30 million. In total, revenues reached close to 700 million euros. And this is basically the higher end of our 6 to 700 million euros guidance range. In terms of profitability, gross margin stood at 27%, also above our 24-25% objective. EBITDA reached 110 million, also at the high end of guidance. And at the bottom line, net income came in at 70 million, representing a 7% bid versus guidance of 65 million euros. Regarding leverage, we closed the year with an LTV of 16%, which is below our target of 23%. And this already includes the dividend distribution executed earlier this month of 92 million. So overall, solid operational execution and cash flow generation from the underlying business. Now, looking at the third column, which includes the impact of the transaction, you can see that AIDA has contributed 26 units at an average a selling price of 412K. Basically, it adds 12 million euros of revenues and bringing group revenues to 709 million euros. At the BDA level, the impact is minimal, around negative 1 million euros, mainly due to the structure cost and the margins for finished product, which are lower. The most relevant impact is at net income level, I would say. Due to the purchase price allocation accounting, with a positive contribution net of transaction costs and net of one-offs of €52 million. That implies that the net income increases from €70 million in a standalone to €122 million at a consolidated basis. Note that this is a non-cash item that was triggered by the badwill arising from the M&A transaction. This extraordinary profit represents an anticipation of the 450 million euros target net income we announced in June of last year. And if you look at the net debt, it increases to 1.1 billion. This basically implies a loan to value of 36%, which again is slightly below to our 37.5, 40% target, including AIDAS. So with that said, let's move to the slide number 14. Let's zoom out for a moment and go back to basics. We operate a highly industrialized and scalable platform in a fragmented market. Our business consists of buying raw land and transforming plots into new homes for our clients. As you can see, over the last nine years, we have perfected this model, delivering more than 16,000 homes across Spain. Financially, this translates into more than 5 billion of revenues, industry-leading gross margins of 28%, more than 900 million years of EBITDA, and more than 600 million years of net income. And that profitability has not remained in our balance sheet. It has been returned to shareholders through dividends and share buybacks. If we focus on our strategy plan, we have distributed 450 million with a further 400 million years forecasted for the upcoming two years. In practical terms, these companies will return approximately 80% of its market cap as of March 2023 to shareholders in only five years. And we have done this while doubling the size of their company. Originally the plan contemplated to reduce the size of the company by 30%, but instead we are doubling earnings per share. So we have demonstrated that we are disciplined and be sure we will continue being. And now I hand over the presentation back to Borja for the key takeaways.