DJ Kaufman & Broad SA: Q1 2021
Kaufman & Broad SA
Kaufman & Broad SA: Q1 2021
15-Apr-2021 / 18:26 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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Press release
Paris, April 15, 2021
Q1 2021 RESULTS
Structural demand for housing still strong in a context of declining building permit allocations
- Overall backlog large and still growing: +5.0% at EUR3,572.4 million
- Housing property portfolio: 36,177 units (+8.2%)
- Financial structure as solid as ever:
- a positive net cash position of EUR21.4 million (excluding IFRS 16 liabilities)
- sizable financing capacity (EUR425.1 million)
- Structurally strong demand from individual buyers and investors for housing and energy-efficient offices
Kaufman & Broad SA has today announced its unaudited results
for the first quarter of fiscal year 2021 (from December 1,
2020 to February 28, 2021). Nordine Hachemi, Chairman and Chief
Executive Officer of Kaufman & Broad, made the following
- Key sales data comments:
(Q1 2021 vs. Q1 2020)
"The results for Q1 2021 came out in line with our expectations
and confirm that Kaufman & Broad's finances are solid, with a
- Total orders: net cash surplus of EUR21.4 million (excluding IFRS 16
liabilities) at the end of the quarter and financing capacity
EUR272.7m incl. VAT vs EUR1,401.5m incl. VAT totaling EUR425.1 million.
- Housing: EUR234.3m incl. VAT vs EUR326.5m incl. VAT They also reflect Kaufman & Broad's capacity to prepare for the
future as the group expanded its land reserve by 8.2% and
1,144 units vs 1,482 units increased overall backlog by +5.0% andHousing backlog by +12.5%
in the Housing segment.
- Commercial: EUR38.4m incl. VAT vs EUR1,075.0m incl. VAT
- Take-up period for Housing*:
In the short term, the calendar of the upcoming elections over
4.9 months vs. 6.8 months (-1.9 months) the next twelve months should add its effects to the absence of
real measures to combat the downward trend in the allocation of
building. In this context, Kaufman & Broad anticipates a level
of its reservations in 2021 comparable to that of 2020.
- Key financial data
(Q1 2021 vs Q1 2020 unless otherwise specified)
In the medium term, Kaufman & Broad is confident that it will
be able to benefit from persistently strong demand from
individual buyers and investors alike. The need for housing is
- Revenue: as substantial as ever, fueled by structural, demographic,
EUR285.9m vs EUR299.2m sociological and environmental factors, and the same applies to
demand for energy-efficient office buildings.
Of which Housing: EUR247.3m vs EUR272.2m
Gross margin: EUR49.4m vs EUR57.1m
- EBIT margin**: 7.7% vs 8.5% Kaufman & Broad made active progress on its strategic
- Attributable net income: priorities throughout the first quarter.
EUR11.8m vs EUR13.2m
- Cash position net of financial debt (excl. IFRS 16 The planning policy continued with the development of projects
liabilities): on industrial, tertiary and commercial wastelands, in
particular on the Reims, Blagnac and Austerlitz station sites.
EUR21.4m vs EUR62.5m at end-Nov. 2020 The success of the sale-before-completion (VEFA) marketing call
for tenders launched by Kaufman & Broad - for a portfolio of
- Financing capacity: 500 housing units nationwide - showed just how apt this new
EUR425.1m development model is.
vs EUR465.2m at end-Nov. 2020
Similarly, the group is currently stepping up efforts to
establish a managed housing portfolio in its capacity as a
developer-investor-operator. Its portfolio of managed housing
- Key growth indicators for students and seniors currently consists of about ten
managed housing units.
(end-Feb. 2021 vs end-Feb. 2020)
Kaufman & Broad has been informed of an appeal against the
- Overall backlog: Austerlitz renovation project. The 2021 guidance range
EUR3,572.4m (+5.0%) announced in January and summarized below will therefore be
fine-tuned mid-July, once the consequences of the appeal lodged
Of which Housing: EUR2,332.6m (+12.5%) against the project's building permit have been fully assessed.
- Housing property portfolio:
36,177 units (+8.2%) Revenue for fiscal year 2021 as a whole should come out at
around EUR1.3 billion. If all the administrative authorizations
required for the Austerlitz renovation project have been
obtained by the end of the appeals process in 2021, this
revenue figure could rise to EUR1.6 billion.
In the first scenario, the EBIT margin would be similar to that generated in 2020; in the second, it could return to the levels achieved in previous years.
All these guidance targets are based on the assumption that the current economic, social and the current health situation stabilized. - Sales activity - Housing
Housing orders in value terms totaled EUR234.3 million (including VAT) in Q1 2021 compared with EUR326.5 million in Q1 2020. In volume terms, they amounted to 1,144 housing units (1,482 in Q1 2020).
The take-up period for projects was 4.9 months over the three months, i.e. a 1.9-month improvement compared with Q1 2020 (6.8 months).
Property supply, with 97% of housing units located in high-demand, low-supply areas (A, A-bis, and B1), totaled 1,809 units at end-February 2021 (3,315 units at end-February 2020).
Breakdown of the customer base
Housing orders placed by first-time buyers accounted for 9% of sales in value terms (including VAT) compared with 11% in Q1 2020. Second-time buyers accounted for 6% of sales versus 9% in Q1 2020. Orders from investors accounted for 35% of sales (of which 24% under the Pinel incentive scheme alone). Lastly, the share of block sales increased significantly and corresponded to 51% of orders by value (including VAT) compared with 36% in Q1 2020. - Commercial
The Commercial segment recorded net orders of EUR38.4 million (including VAT) in Q1 2021.
Kaufman & Broad currently has around 130,000 sq.m of office space and around 68,000 sq.m of logistics space under marketing or under study. It also has close to 95,000 sq.m of office space in the process of being built or due to start up in the coming months, along with more than 78,000 sq.m of logistics space. Lastly, it has around 110,000 sq.m of office space transactions yet to finalize. - Leading sales and development indicators
The Housing backlog at February 28, 2021 totaled EUR2,332.6 million (excluding VAT) versus EUR2,073.2 million (excluding VAT), corresponding to 23.7 months of activity versus 18.6 in Q1 2020. Kaufman & Broad had 140 housing programs on the market at that same date, corresponding to 1,872 housing units (versus 181 programs corresponding to 3,359 housing units at the end of 2020).
The Housing property portfolio consists of 36,177 units. It was up 8.2% compared with end-February 2020 and corresponds to more than 5 years of sales activity.
Housing property portfolio represents 96% projects located in high-demand, low-supply areas, for 34,840 housing units at February 28, 2021.
The group plans to launch 18 new programs in Q2 2021, including 11 in Île-de France (709 units) and 7 in other French regions (425 units).
The Commercial backlog at end-February 2021 totaled EUR1,239.8 million compared with EUR1,048.1 million (excluding VAT) at end-February 2020. - Financial results - Business volumes
Overall revenue totaled EUR285.9 million (excluding VAT) compared with EUR299.2 million in Q1 2020.
Housing revenue amounted to EUR247.3m (excluding VAT) compared with EUR272.2 million (excluding VAT) in 2020. This represents 86.5% of group revenue.
Revenue from the Apartments business came to EUR227.9 million (excluding VAT) versus EUR245.9 million (excluding VAT) in Q1 2020.
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DJ Kaufman & Broad SA: Q1 2021 -2-
Revenue from the Commercial segment totaled EUR36.3 million (excluding VAT) compared with EUR25.2 million (excluding VAT) over the same period in 2020.
The other businesses generated revenue of EUR2.3 million (excluding VAT) compared with EUR1.9 million in 2020. - Profitability highlights
The gross margin reached EUR49.4 million in Q1 2021 compared with EUR57.1 million over the same period in 2020. The gross margin ratio was 17.3% versus 19.1% in 2020.
Current operating expenses amounted to EUR27.5 million (9.6% of revenue) versus EUR31.7 million in Q1 2020 (10.6% of revenue).
Current operating income reached EUR21.9 million compared with EUR25.4 million in 2020. The EBIT margin came to 7.7% versus 8.5% in Q1 2020.
Consolidated net income amounted to EUR14.8 million in Q1 2021 compared with EUR18.3 million in 2020. Non-controlling interests totaled EUR3.0 million versus EUR5.1 million in Q1 2020.
Attributable net income was EUR11.8 million versus EUR13.2 million in 2020. - Financial structure and liquidity
The group's financial debt at February 28, 2021 showed a positive net cash position (excluding IFRS 16 liabilities) of EUR21.4 million compared with a positive net cash position of EUR62.5 million at end-November 2020. Cash assets (available cash and investment securities) amounted to EUR175.1m versus EUR215.2m at November 30, 2020. The group's financing capacity amounted to EUR425.1 million compared with EUR465.2 million at end-November 2020.
The working capital requirement was EUR169.3 million at end-February 2021 (14.7% of revenue) compared with EUR122.1 million at November 30, 2020 (10.5% of revenue). - Dividends
At the Shareholders' Meeting of May 6, 2021, Kaufman & Broad SA's Board of Directors will propose the payment of a dividend of EUR1.85 per share. - Governance
The terms of office of Caroline Puechoultres and André Martinez are due to expire, so the upcoming Kaufman & Broad Shareholders' Meeting will be asked to approve the appointment, in replacement of two new directors in the persons of MRS. Annalisa Loustau Elia, Board Member of Legrand and Campari and member of the Supervisory Board of Roche Bobois, as well as of Mr. Michel Giannuzzi, Chairman and CEO of Verallia and Board Member of FM Global.
Kaufman & Broad expresses its thanks to Ms. Puechoultres and Mr. Martinez for their active contributions to the work of the Board of Directors. - 2021 outlook
With respect to the business outlook for Kaufman & Broad's housing segment in 2021, we have noted that the number of building permits granted has continued to trend downwards since 2019 and we therefore expect order levels to remain flat in 2021.
For the whole of 2021 Fiscal year, 2021 revenue should come out at around EUR1.3 billion. If all the administrative authorizations required for the Austerlitz renovation project have been obtained by the end of the appeals process in 2021, the revenue figure could rise to EUR1.6 billion. In the first scenario, the EBIT margin would be similar to that generated in 2020; in the second, it could return to the levels achieved in previous years.
All these guidance targets are based on the assumption that the current economic, social and the current health situation are stabilized.
This press release is available at www.kaufmanbroad.fr - Next regular publication date: - May 6, 2021: Shareholders' Meeting - July 12, 2021: H1 2021 results (after market close)
Contacts
Press Relations
DGM Conseil
Chief Financial Officer Thomas Roborel de Climens - +33 (0)6 14 50 15 84
Bruno Coche thomasdeclimens@dgm-conseil.fr
+33 (0)1 41 43 44 73
Infos-invest@ketb.com
Kaufman & Broad: Emmeline Cacitti
+33 (0)6 72 42 66 24 / ecacitti@ketb.com
About Kaufman & Broad - Kaufman & Broad has been designing, developing, building and selling single-family homes in communities, apartments and offices on behalf of third parties for more than 50 years. Kaufman & Broad is among France's leading builder-developers due to the combination of its size, its profitability and the strength of its brand.
The Kaufman & Broad Universal Registration Document was filed with the French Financial Markets Authority ("AMF") under No. D.21-039 on March 31, 2021. It is available on the AMF (www.amf-france.org) and Kaufman & Broad ( www.kaufmanbroad.fr) websites. It contains a detailed description of Kaufman & Broad's business activities, results and outlook, as well as the associated risk factors. Kaufman & Broad specifically draws attention to the risk factors set out in Chapter 4 of the Universal Registration Document. The occurrence of one or more of these risks might have a material adverse impact on the Kaufman & Broad group's business activities, net assets, financial position, results and outlook, as well as on the price of Kaufman & Broad's shares.
This press release does not amount to, and cannot be construed as amounting to, a public offering, sale offer or subscription offer, or as intended to seek a purchase or subscription order in any country. - Glossary
Backlog (order book): in the case of sales before completion (VEFA), the backlog covers orders for housing units that have not been delivered and for which a notarized deed of sale has not yet been signed, and orders for housing units that have not been delivered and for which a notarized deed of sale has been signed for the portion not yet recorded in revenue (in the case of a program that is 30% complete, 30% of the revenue from a housing unit for which a notarized deal has been signed is recognized as revenue, while 70% is included in the backlog). The backlog is a summary established at a given time, making it possible to estimate the amount of revenue yet to be recognized over the coming months and thus upholding the group's forecasts - with the proviso that there is an element of uncertainty in the conversion of the backlog into revenue, particularly for orders for which a deed of sale has not yet been signed.
Cash assets: this corresponds to cash and cash equivalents on the assets side of the balance sheet, i.e. all available cash (bank balances and cash on hand), investment securities (short-term investments and term deposits) and order balances.
Cash flow: cash flow after cost of financial debt and taxes is equal to consolidated net income adjusted for the group's share of the income of equity affiliates and joint ventures, the income from discontinued operations, and estimated income and expenses.
CSR (Corporate Social Responsibility): Corporate Social Responsibility (CSR) is the contribution made by businesses to sustainable development issues. For businesses, this strategy consists in taking into account the social and environmental impacts of their activities and adopting best practices, thus helping to better society and protect the environment. CSR makes it possible to combine economic thinking, social responsibility and environmental responsibility (as defined by the French Ministry of Ecology, Sustainable Development and Energy).
Debt (or gearing) ratio: ratio of a company's net debt (or net financial debt) to its consolidated shareholders' equity. It is a measure of the risk to the company's financial structure.
Dividend: the dividend is the share of a company's annual net profit distributed to shareholders. Its amount is proposed by the Board of Directors and is subject to approval at the Shareholders' Meeting. It is payable within a maximum period of nine months after the end of the fiscal year.
EBIT: corresponds to current operating income, i.e. gross margin less current operating expenses.
EBIT margin: expressed as a percentage, it corresponds to current operating income, ie gross margin less current operating expenses divided by revenue.
EHU: EHUs (Equivalent Housing Units) are a direct reflection of business volumes. The number of EHUs is a function of multiplying (i) the number of housing units of a given program for which notarized sales deeds have been signed by (ii) the ratio between the group's property expenses and construction expenses incurred on said program and the total expense budget for said program.
Financing capacity: corresponds to cash assets plus lines of credit not yet drawn.
Free cash flow: free cash flow is equal to cash flow minus net operating investments made during the period.
Gross financial debt or financial debt: gross financial debt consists of long-term and short-term financial liabilities, financial hedging instruments relating to liabilities constituting gross financial debt, and the interest accrued on balance sheet items constituting gross financial debt.
Gross margin: corresponds to revenue less cost of sales. The cost of sales is made up of the price of land and any related costs plus the cost of construction.
Lease-before-completion (BEFA): a lease-before-completion involves a customer leasing a building before it is built or redeveloped.
Managed housing: managed housing, or serviced housing, refers to a property complex consisting of housing units (homes or apartments) for residential use and offering a minimum number of services such as a reception, the supply of linen, house cleaning and maintenance, and breakfast. There are several different types of housing in this category: student housing including apartment complexes, mostly furnished studios with a kitchenette located in the vicinity of schools and universities and close to public transportation; tourist accommodation located in high-potential tourist areas offering, in addition to the usual services, amenities such as swimming pools, sports fields, sometimes saunas, steam rooms, jacuzzis and children's clubs; corporate housing as an alternative to traditional hotels, including studios (about 80%) and two-room apartments located in city centers or close to major business hubs with convenient access to everything; and lastly, senior residences (including both assisted and non-assisted living facilities for the elderly) designed to
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