9M 2008 Revenue & Business activity - Nexity

9M 2008 Revenue & Business activityNovember 6, 2008

Disclaimerhe information contained in this document has not been independently verified. No representation, warranty or undertaking,xpress or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness ofhe information or opinions contained herein. None of the Company, its shareholders, its advisors or representatives nor anyther person shall have any liability whatsoever for any loss arising from any use of this document or its contents or otherwiserising in connection with this document.his document does not constitute an offer to sell or an invitation or solicitation of an offer to subscribe for or purchase anyecurities, and this shall not form the basis for or be used for any such offer or invitation or other contract or engagement in anyurisdiction.he information, assumptions and estimates that were used to determine these objectives are subject to modification due toconomic, financial and competitive uncertainties. Furthermore, it is possible that some of the risks described in chapter 4 in theocument de Référence, filed with the AMF under number D.08-0295 on April 25, 2008, could have an impact on the company’sbility to achieve these objectives. Accordingly, the Company cannot give any assurance as to whether it will achieve thebjectives described, and makes no commitment or undertaking to update or otherwise revise this information.o assurance is given as to the fairness, accuracy, completeness or correctness of the information or opinions contained in thisocument.

Index1. Residential2. Commercial3. Services and Distribution4. 9M Revenue & Backlog5. Adaptation and restructuring measures6. Outlook

Residential« Parc de la Tèse » - La Ciotat (1

Sharp market downturn2007: 127,420 (+0.9%)Reservations and price of new homes 1985 - 2008 2007: €3,279 (+6.8%)1992: 62,279 reservations4,000Number of new homes115115,0009595,0007575,0005555,00035,00035 2008(e): 75,000 units86 88 90 92 94 96 98 00 02 04 06 08e3,5003,0002,5002,0001,5001,000€per sq.m2005 2006 2007 2008Number of new homes30,00000020,00000010,0000000Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 084,3003,8003,3002,800€per sq.mSource: MedadPriceper sq.m FranceNumber ofreservations

New collective housing permitNew collective housing permit - private development & social housing(Number of units)80 00070 00060 00050 00040 00030 00020 00010 0000Q1 2004Q2 2004Q3 2004Q4 2004Q1 2005Q2 2005Q3 2005Q4 2005Q1 2006Q2 2006Q3 2006Q4 2006Q1 2007Q2 2007Q3 2007Q4 2007Q1 2008Q2 2008Q3 2008New collective housing permit• Q3 08 vs Q3 07 : - 26%• 9M 08 vs 9M 07 : - 20%Source: Medad

New collective housing start trendNew collective housing start - private development & social housing(Number of units)60 00050 00040 00030 00020 00010 0000Q1 2004Q3 2004Q1 2005Q3 2005Q1 2006Q3 2006Q1 2007Q3 2007Q1 2008Q3 2008New collective housing start• Q3 08 vs Q3 07 : - 21%• 9M 08 vs 9M 07 : - 14%Source: Medad

Low inventoriesFrench commercial offer 1995 - 2007(Number of units, apartments)00 00090 00080 00070 00060 00050 00040 00030 00020 00010 00001995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 June 30,2008CompletedNew homesNew homes underconstructionNew homesin projectompleted new homes: 28%nder construction: 44%n project: 28%Completed new homes: 3%Under construction: 45%In project: 52%Source: Medad

Government Housing Support Plan Housing support plan announced on October 1 st : 30,000 new homesto be purchased by social housing operators First 10,000 homes purchase ongoing Homes off plans, not built yet Block sales Deal to be completed through Société Nationale Immobilière (SNI),a subsidiary of Caisse des Dépôts dedicated to social housing Main developers have already submitted programs portfolios Agreement on volume & price to be reached before year end 20,000 additional homes purchase to be completed Buyers: Social housing operators and 1% Logement State local representatives (préfets) to coordinate operations locally Operators will release their needs, in localization, volume and price 3F, a leading operator, committed for 3,000-5,000 homesStrong Government implication

First steps towards easier credit Reinforced bank capacity French state equity injection in the bank industry:• €10.5bn equity injection completed, up to €40bn available• Equivalent to ≈ €75bn credit capacity Easing of bank funding :• French State-owned SPV set up to guarantee bank funding• First €5bn already disbursed, up to €320bn authorized Banks committed to 3-4% yearly increase of loans outstandings Strong Governmental pressure, control by préfets on a local basis Banks required to justify any credit refusal

First signs of credit tension releaseCentral Banks rates cutsMoney market tensions released(ECB main refinancing rate)(Euribor 3 months)5,0%4,5%4,0%3,5%3,0%2,5%2,0%1,5%1,0%January1999January2000January2001January2002January2003January2004January2005January2006January2007January2008 Fed (1) : 1.50% 1.00% Bank of China (2) : 6.93% 6.66% Bank of Japan (3) : 0.50% 0.30%5,600%5,400%5,200%5,000%4,800%4,600%4,400%08/14/2008 08/29/2008 09/12/08 09/26/2008 10/10/08 10/24/2008(1) Federal funds rate (2) One year benchmark loan rate (3) Uncollateralized overnight call rate

Mortgage production contractionMortgage production to individuals(€m)Total mortgageproduction toindividuals permonth16 00014 00012 00010 0008 0006 0004 000janv.-06juil.-06Average mortgage rates to individuals(%)janv.-07juil.-07janv.-08July 2008:€12,290mjuil.-08October 2008: 5.15%• July 2008 mortgageproduction: -13% yoy• October 2008 mortgagerates : +77bp sinceSeptember 20072001 2002 2003 2004 2005 2006 2007 2008Sources : Banque de France, Crédit Logement, Observatoire du financement des marchés résidentiels

Residential reservationsResidential reservations-Volume(Units)Residential reservations-Value(€m incl. VAT)8,92322%78%9,55123%77%-28%6,89719%81%1,57610%90%1,70610%90%-29%1,2068%92%9M 20069M 2007 9M 20089M 20069M 20079M 20089M 06 9M 07 9M 08• Pre-commercialization rate: 61% in average at construction start over 9M 2008• 186 completed unsold units at Sept. 30, 2008New homesPlots of land

Negative impact of cancellationsReservations – New homes(Units, excl. reservations from institutional investors and Iselection)Grossreservations7,9351,8316,1048,5822,4026,1806,9752,865Reservationscancelled4,110Net reservations9M 20069M 20079M 2008• Decrease of gross reservations (9M 2008 vs 9M 2007): -19%• Increase of cancellations (9M 2008 vs 9M 2007): +19%

Le Village Bacalan - BordeauxBordeaux Le Bassin à Flots – “Le Village Bacalan”• Main characteristics: €2,884 per sqm, 65.5 sqm in average, delivery November 2010• 800 visitors in one week-end• 64 reservations / 101 homes for sale• Specific Caisse d’Epargne financing offer

Leadership confirmedNew homes in H1 2008 (1)(in number of reservations)Nexity market shares in H1 2008Paris region8,730WestNorth East8,8526,11115.4%7.5%*15.7%14.6%*7.8%7.4%*South WestSouth EastRhône Alpes6,14018,2793.0%3.5%*8.0%6.3%*FranceNexity(1) Source: Medad48,112 (-31%)4,432 (-16%)Market share in H1 20089.2% vs 7.6%* Market share in H1 2007

Strong fundamentals for future recoveryNumber of households - FranceFertility rate - France(Millions)CAGR +1.1%(Number of children per woman)pprox. prox. 250,000ew householdsper yearbetween 2005and 202021.523.825.727.11990 1999 2005 2010E29.72020E1.892.001.481.522000 2005Home ownership(% of population) Spain 88% UK 71% US 70% France 57%Household indebtness(In % of disposable income) UK 146% US(e) 135% Spain 115% France 72%Source: INSEE, OECD, Natixis

Commercial« Trading room building »-La Défense (Pari

Investment market updateInvestment in France(€m)Paris Region take-up(thousands sq.m)21,800-57%736720 722577 5825936589,4009M 20079M 2008Q12007Q22007Q32007Q42007Q12008Q22008Q32008Downturn accelerationDifficult fundingInstitutional investors still activeConfirmed preference for newbuilt assets (44%of transactions) Low office vacancy rate: 5.0%Office take-up 9M 2008: 1.8 Msq.m (-10% vs9M 2007)A few big transactions, slowdown for smalleroffice areasImmediate available offer: 2.5 Msq.m (Takeup2007: 2.7 Msq.m)Source: CB Richard Ellis, Immostat (www.webimmo.com)

Commercial orders and backlogCommercial orders(in €m, Nexity share)Commercial backlog(in €m)579x2 +44%4% 4%7681,1055%7%5%2925%18%14%19%81%38%14%96%96%95%68%95%88%48%9M 20079M 2008Dec. 31, 2007Sept. 30, 2008Warehouses& logistics parksOfficesParisRegionRegionsInternational

Gennevilliers - ZAC Coeur de SeineGennevilliers – “Pointe Métro”• Speculate investor: Hines European Value Added Fund• Office building – HEQ - 25,067 sq.m• Delivery: September 2010

Services & Distribution

Services: resilient businessCommercial activityServices revenueResidentialCommercial(€m)1 millionhomes8.8 millionsq.m3234414324391578%26527022%Sept. 30, 2008RentalmanagementSept. 30,2008Condominiummanagement9M 2007 PF 9M 2008LamySaggelKeopsOngoing restructuring: 10% operating profit target confirmed(1) Gross contracts withdrawal over 9 months / total contract # at Jan. 1st, 2008

Existing homes marketExisting homes prices figuresFNAIM)2502001501005018%14%10%6%2%01995 1997 1999 2001 2003 2005 2007-2%Existing homes price indexBase 100: Q1 2000IndexAnnual change in %• Existing homes transaction in Paris region: -14% yoy end of July• Big cities: -25% over 6 months 2008 vs 6 months 2007Source: Notaires

Resistance of distribution networksReal estate broker networks1,642726271,64665653943928Dec. 31, 2007Sept. 30, 2008• Transactions of franchisees networks: -12% vs 9M 2007• Iselection fully consolidated in 9M 2008: 853 units sold (on behalf of thirdparties)

« Le Delage » - Gennevilliers (929M 2008 Revenue & Backlog

9M 2008 Group revenueRevenue+8% (1)(1) 4(€m)31,623169283+1811,8046348283+144 -54 +2 +511,9464012291,1681,1681,3129M 2007reported9M 2007proforma9M 2008+20%9M 2008 revenue compared to 9M 2007pro forma revenue which includesrevenue of services activities brought byCaisse d'Epargne Group in July 2007Residential Commercial Services& DistributionOthersGCEIIselecti

Backlog at September 30, 2008Backlog(€m)3,229+6 %19.5 months3,413-1%18.5 months3,374621768 1,1052,6082,645 2,269Sept. 30, 2007Dec. 31, 2007Sept. 30, 2008ResidentialBacklogCommercialBacklog

« Jardin Saint-Nicolas » - WasquehAdaptation & restructuring measure

Sales & pipeline Short term Adjust prices to deliver most competitive offer on local basis Increase offer visibility through internet comparison tools Open commercial offer to all distribution channels Accelerate sales notarization to limit cancellation risk Long term Focus on big cities Develop lower cost offer Increase development of combined offer with attractive financing(Caisses d’Epargne, Crédit Foncier)

Cost base reassessed Thorough review of residential operations Land price renegotiation whenever possible Organization & structure adjusted Significant workforce reduction with a proposed layoff plan affecting some150 people employed in development activities Leaner organization: shorter route from local to central Closure of international subsidiaries: Portugal and the Czech Republic Central overheads reviewed Focus on most profitable activities

Managing working capital requirement Avoid building up unsold achieved units Withdrawal of 110 operations with insufficient salesleading to cancellations of 204 reservations in Q4 Cut program launches: maximum of 47 launches in H2 vs 77 initially planned Freezing of 19 plots of land for a net value of around €20m, leading tocancellations of 123 reservations in Q4 Active pricing policy for completed unsold units Tight control of work in progress Reduce average tranche size Two new committees to monitor WCR- Land purchase committee- Start of construction work committee

OutlookJoue-les-tours (France

Nexity: reactive & confident Strong reaction to address market downturn Sizeable backlog giving genuine visibility Resilient business activity in Services Healthy financial situation : financing secured and liquidityassured Positive government initiatives Strong fundamentals to support future market recovery Leading positions consolidated to benefit from future marketrecovery

Assumptions & Guidance2008ResidentialCommercial Market: around 75,000 reservations (1) Nexity: target market share of 9% (2) minimum Expected contraction by half in the French commercial investmentmarket compared to 2007 levels (3) ,at best Favorable outlook for commercial division thanks to strong backlogFinancialsMedium term 2008 revenue slightly above 2007 PF (4) 2008 net profit: ca. €140m (5) Payout ratio: 35% minimum of Group share of net profit End 2008 backlog slightly above €3bnReal Estate marketFinancials Low point in 2009 Recovery by Mid 2010 Operating margin: more than 8% (6) on average over 2008-2010 Payout ratio: 35% minimum of Group share of net profit(1) 127,420 in 2007 - Source: Medad – excl. Government sponsored purchase program (2) 8.6% in 2007(3) €27bn in 2007 - Source: CBRE (4) 2007 PF revenue: €2,576.3m(5) Taking into account the Net Asset Value (NAV) assumptions of Eurosic as of June 30, 2008(6) Based on comparable accounting standards

9M 2008 Revenue & Business activityNovember 6, 2008