DJ Kaufman & Broad SA: 2019 Annual Results
Kaufman & Broad SA
Kaufman & Broad SA: 2019 Annual Results
30-Jan-2020 / 20:02 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Press release
Paris, January 30, 2020
2019 Annual Results V19
· Confirmation of the capacity to generate profitability and cash flow to
pave the way for future growth:
· Gross margin and EBIT margin in line with expectations
· Financial capacity up by more than EUR 100m at EUR 458.1m
· Significant growth in development indicators:
· Backlog: +16.8% to EUR 2.5bn
· Property portfolio: +9.9% to 33,090 units
· Dividend for 2019: EUR 2.50 per share
Kaufman &
Broad SA
· Key components of sales activity announced
its
results
for the
(2019 vs. 2018) 2019
financial
year
(from
· Orders December
1, 2018
Total: EUR 2,177.1M incl. VAT (-2.4%) to
November
30, 2019)
today.
Of which: Nordine
Commercial: EUR 467.5.0m incl. VAT Hachemi,
(+30.1%) Chairman
and Chief
Executive
Officer
Housing: EUR 1,709.0m incl. VAT of
(-8.7%) Kaufman &
Broad,
made the
following
· Take-up period for Housing*: comments:
5.8 months vs. 5.0 months
(+0.8 months)
"The
results
· Key financial data for
fiscal
2019 are
in line
(2019 vs. 2018) with our
expectati
ons and
confirm
· Revenues: the
quality
Total: EUR 1,472.2m (-5.5%) of
Of which Housing: EUR 1,334.0m (+3.1%) Kaufman &
Broad's
fundament
· Gross margin: als. In
more
EUR 283.9m (19.3% of revenue) muted
market
condition
· Adjusted EBIT: s, they
show that
EUR 139.2m (9.5% of revenue) its
growth
model is
· Attributable net income: capable
of
EUR 76.3m (+4.5%) generatin
g profit
and cash
· Cash net of financial debt: flow.
This
EUR 56.0m (vs. EUR 50.0m at gives us
end-2018) greater
financial
leeway to
· Financing capacity: increase
our
EUR 458.1m (vs. payout
EUR 353.4m at end-2018) capacity,
and also
to choose
our
· Key growth indicators (2019 vs. future
2018) developme
nt
options
in the
face of
· Overall backlog: profound
changes
EUR 2,545.0m (+16.8%) in the
Of which Housing: EUR 2,069.3m market.
(+5.5%)
· Housing property portfolio:
33,090 units (+9.9%)
In 2019,
the new
housing
market,
estimated
at
between
120,000
and
125,000
units,
was
character
ized by
sustained
demand,
but also
by a
significa
nt drop
in
issuance
of
building
permits,
the
effects
of which
will be
felt
above all
in the
first
half of
2020.
The
pre-munic
ipal
election
climate
weighed
more
heavily
on
Kaufman &
Broad's
launches
and
orders in
the
second
half of
2019, due
to a
significa
ntly
higher
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DJ Kaufman & Broad SA: 2019 Annual Results -2-
rate of
sales
than the
market
(Kaufman
& Broad's
take-up
period
was less
than 6
months,
vs. 10
months
for the
market),
which
resulted
in a much
lower
level of
inventory
.
Sustained
sales
resulted
in a
sharp
increase
in the
overall
backlog
(+16.8%),
driven
notably
by the
Commercia
l
business,
which
confirmed
its good
momentum
with
orders
totaling
EUR 467.
5 million
including
VAT.
A
sale-befo
re-comple
tion
agreement
concernin
g the
office
part of
the
Austerlit
z project
(around
50,000
sq.m) is
expected
to be
signed in
the
coming
days,
thereby
making
the
program
fully
marketed.
Final
administr
ative
approvals
are not
expected
to be
granted
until
early
2021.
The
adjusted
EBIT
margin of
9.5%
reflects
solid
operation
al
managemen
t of
selling
prices
and
operating
expenses.
This
resulted
in a
positive
net cash
position
of
EUR 56.0
million,
an
increase
of more
than
EUR 32
million
in
sharehold
ers'
equity
and
financial
capacity
of
EUR 458.
1 million
at
end-Novem
ber 2019.
In 2020,
market
fundament
als will
continue
to
support
demand
for new
housing.
Assuming
a
resumptio
n of the
issuance
of
building
permits
after the
municipal
elections
, the
market is
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expected
to
represent
between
115,000 and 120,000 units. However, current trends will continue to impact
Kaufman & Broad's launches in the first half, leading us to anticipate
stable order intake over the full year.
As regards Kaufman Broad's business and earnings outlook for fiscal 2020,
out of caution and due to the municipal election context, we do not expect
order intake in the Commercial segment to have an impact until 2021.
After a slower first half, full-year revenue is expected to remain stable
compared with 2019. The gross margin is expected to be around 18.5%[1] and
the EBIT margin[2] between 8.0% and 8.5%, both reflecting the return to
normative margins in the Commercial business.
Reflecting the quality of Kaufman & Broad's financial structure and the
strength of its medium-term outlook, the Board of Directors will propose the
payment of a dividend of EUR 2.50 per share in respect of 2019 to the
General Meeting of Shareholders, including an option for payment in cash,
shares, or in cash and shares.
Assuming a stabilized economic environment, the Board of Directors also
envisages a dividend of the same amount for the financial year 2020."
Sales activity
· Housing
In 2019, housing orders were down 8.7% by value compared with 2018 at
EUR 1,709 million (including VAT). By volume, 8,222 units were ordered, a
9.9% decrease compared with 2018.
The program take-up period was 5.8 months in 2019, compared with 5.0 months
in the previous year, an increase of 0.8 months.
Housing supply, with 95% of projects located in high-demand, low-supply
areas (A, Abis, and B1), totaled 3,990 units at the end of 2019 (3,781 units
at end-2018).
Breakdown of the customer base
In 2019, orders from first-time buyers accounted for 16.8% of sales by value
(excluding VAT), 1.1 points less than in 2018. Orders by second-time buyers
were also down 1.5 points, accounting for 8.0% of sales. Orders by investors
increased by 3.0 points to 34.2% of sales (26.0% for the Pinel scheme
alone). Block sales were stable at 41.0%, of which more than 49.2% were
managed accommodation (for tourists, students, business travelers, and
seniors).
· Commercial Property
Over the 2019 financial year, the Commercial Property segment recorded net
orders of EUR 467.5 million including VAT, corresponding to three office
complexes, a logistics platform and two property development contracts.
In particular, Kaufman & Broad signed sale-before-completion agreements or
property development contracts for:
· a 27,000 sq.m office building complex in Bordeaux Euratlantique, the
future headquarters of Caisse des Dépôts for its pension management arm,
· an office building of approximately 13,000 sq.m at La Défense,
· The Austerlitz project, for the part of the business and commercial
premises,
· a new logistics platform of approximately 36,000 sq.m located in La
Chapelle d'Armentières on the outskirts of Lille.
Kaufman & Broad (through its subsidiary Concerto) also delivered two
new-generation XXL logistics platforms in 2019:
· a platform with a total surface area of 74,000 sq.m in MER, created on
behalf of its user, the LAPEYRE Group and its investor DWS (Deutsche Bank
Asset Management),
· a platform with a total surface area of 70,000 sq.m in MONTBARTIER built
on behalf of its user EASYDIS (Groupe Casino) and its investor Invesco.
Kaufman et Broad currently has around 266,000 sq.m in office space and
around 74,500 sq.m in logistics space under marketing or under study. In
addition, nearly 73,000 sq.m of office space and more than 36,000 sq.m of
logistics space are currently under construction.
· Leading sales and development indicators
At the end of 2019, the Housing backlog amounted to EUR 2,069.3 million
(excluding VAT), the equivalent of 18.4 months of business. Kaufman & Broad
had 191 housing programs on the market at that date, representing 3,990
housing units, compared with 203 programs representing 3,781 housing units
at the end of November 2018.
The Housing property portfolio represents 33,090 units. It was up 9.9%
compared with end-2018 and corresponds to more than 4 years of sales
activity.
The Group plans to launch 22 new programs in the first quarter of 2020, of
which 11 in ?Zle-de France (883 units) and 11 in the other French regions
(742 units).
At the end of 2019, the commercial backlog amounted to EUR 475.6 million.
· Financial results
· Business volumes
Total revenue amounted to EUR 1,472.2 million (excluding VAT), down 5.5%
compared with 2018.
Housing revenue amounted to EUR 1,334.0 million (excluding VAT), compared
with EUR 1,293.8 million (excluding VAT) in 2018. This represents 90.6% of
group revenue. Revenue from the Apartments business rose by nearly 1.0% year
on year to EUR 1,232.4 million (excluding VAT). Revenue from Single-family
Homes in Communities totaled EUR 101.6 million (excluding VAT), compared
with EUR 73.0 million (excluding VAT) in 2018
Revenue from Commercial Property amounted to EUR 130.4 million (excluding
VAT), compared with EUR 254.2 million (excluding VAT) in 2018.
· Profitability highlights
Gross margin for the 2019 fiscal year was EUR 283.9 million, compared with
EUR 300.0 million in 2018. The gross margin ratio was 19.3%, stable
compared with 2018 (19.3%).
Current operating expenses amounted to EUR 155.1 million (10.5% of
revenue), compared with EUR 162.8 million for the same period in 2018
(10.4% of revenue).
Current operating profit amounted to EUR 128.8 million, compared with
EUR 137.2 million in 2018. The current operating margin ratio was 8.7%,
compared with 8.8% in 2018.
The group's adjusted EBIT amounted to EUR 139.2 million in 2019, down 6.5%
compared with 2018. The adjusted EBIT margin was stable at 9.5% (9.6% in
2018).
Attributable net income was EUR 76.3 million, compared with EUR 73.0
million in 2018, an increase of 4.5%.
· Financial structure and liquidity
Gross debt stood at EUR 152.1 million, down EUR 51.3 million compared with
end-2018. After taking into account cash assets totaling EUR 208.1 million,
net cash stood at EUR 56.0 million as of November 30, 2019, an increase of
EUR 6 million compared with end-2018. This includes EUR 6.6 million in
share buybacks in 2019. The group's financing capacity was EUR 458.1
million (EUR 353.4 million at the end of 2018).
Working capital requirement amounted to EUR 151.5 million (10.3% of annual
revenue), compared with EUR 110.8 million at the end of 2018 (7.1% of
revenue).
· Dividends
At the General Meeting of Shareholders of May 5, 2020, Kaufman & Broad SA's
Board of Directors will propose the payment of a dividend of EUR 2.50 per
share, in line with the dividend paid in respect of 2018. A proposal will
also be made to this Shareholders' Meeting to give Kaufman & Broad's
shareholders the option to receive this dividend in cash, in shares, or in
cash and shares.
· Governance
At the meeting of the Board of Directors of Kaufman & Broad of January 29,
2020, Frédéric Stévenin, a member of the Executive Committee and the
Investment Committee of PAI partners, expressed his desire to resign from
his position as Director, which was due to expire at the General Meeting of
Shareholders called to approve the financial statements for 2020. The Board
of Directors of Kaufman & Broad expressed its warmest thanks to Mr. Stévenin
for his contribution to the development of the company throughout his eleven
years as director.
On the proposal of the Compensation and Nominating Committee, the Board
co-opted André Martinez as director on the same day. He will sit on the
Board for the remainder of Mr. Stévenin's term of office, i.e. until the
close of the General Meeting of Shareholders called to approve the financial
statements for the 2020 financial year.
The next Annual General Meeting of Shareholders, to be held on May 5, 2020,
will be asked to ratify this co-optation in accordance with the provisions
of Article L. 225-24 of the French Commercial Code.
A graduate of HEC and Sciences Po Paris, Mr. Martinez has served notably as
Managing Director of the budget hotel business and then as member of the
Accor group's Management Board, Director and Chairman of global lodging at
Morgan Stanley Real Estate from 2006 to 2009, Special Advisor to Minister
for the Economy and Finance Pierre Moscovici, and Minister for Foreign Trade
Nicole Bricq, and from 2015 to 2019 as Chairman of the Board of Directors of
Icade. Since January 1, 2020, Mr. Martinez has been a member of the Board of
Directors and Chairman of the Strategy and Investments Committee of SNCF SA.
· 2020 outlook
After a slower first half, full-year revenue is expected to remain stable
compared with 2019. The gross margin is expected to be around 18.5%[3] and
the EBIT margin between 8.0% and 8.5%[4], both reflecting the return to
normative margins in the Commercial business.
This press release is available at www.kaufmanbroad.fr [1]
· Next regular publication date:
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