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Kaufman & Broad SA : 2015 First Half Results

PARIS, July 8, 2015 (GLOBE NEWSWIRE) --
2015 FIRST HALF RESULTS

  • New increase in orders in value:

+23.6% in the first half of 2015 following +32.1% throughout 2014

  • Confirmation of the reassuring nature of the new tax incentives

Key sales activity items
Orders in value including Commercial property Services segment: €663.2M (including VAT), +23.6% vs H1 2014



Housing orders: 3,030 housing units,
+16.5% vs H1 2014



Key financial items
Revenues:
€465.3M vs €426.6M in H1 2014
Gross margin:
€88.2M vs €80.9M in H1 2014
Attributable net income:
€12.0M vs €11.2M in H1 2014
Net cash position: €26.9M vs €2.1M at end-2014



Key growth indicators
Total backlog:
€1,262.6M (+19.5% vs H1 2014) including Housing:
€1,074.5M (+6.7% vs H1 2014)



Housing property portfolio:
20,236 lots (+14.4% vs end-2014)
Today, Kaufman & Broad SA is announcing its results for the first half of fiscal year 2015 ended May 31, 2015. Nordine Hachemi, Chairman and Chief Executive Officer of Kaufman & Broad, made the following statement:



"Following an increase of 32.1% throughout 2014, orders in value in the Housing and Commercial property Services segments were up 23.6% in the first half of 2015. This is in line with the growth and marketing momentum, which Kaufman & Broad committed to two years ago.



In Housing, the property portfolio increased by almost 14% compared to end-2014 and reached 20,236 lots.



Driven by highly attractive interest rates and benefiting from reassuring tax incentives, the share of private investors in terms of orders in value totaled €195.4 million excluding VAT, up 31.0% compared to the first half of 2014.



The Commercial property Services segment in particular recorded the sale before completion of the 7,500 sq.m"UNITED" office building located in Clichy, in addition to a sale before completion contract with Saint-Brieuc Agglomération for the construction of the local authority's future inter-administrative center.



Furthermore, developments continue on all of the 70,000 sq.m of office, retail and hotel space in the Paris Rive Gauche (Austerlitz) district awarded by tender at the start of the period.



Finally, the subsidiary Concerto European Developer had a very active period, with the sale of 43,000 sq.m of logistics platforms.



These transactions confirm Kaufman & Broad's capacity to design and develop major urban planning projects, in both Île-de-France and in the Regions.



This operational performance was achieved while maintaining satisfactory profitability and improving the financial structure.



We are on track to achieve the annual prospects for revenues and a gross margin comparable to those of 2014."

  • Sales activity
  • Housing segment

In the first half of 2015, housing orders totaled 3,030 housing units, up 16.5% compared to the first half of 2014. In value, they recorded a rise of 5.2% and amounted to €552.7 million (including VAT), this smaller increase is explained by the upper managed housing orders in the product mix compared to the 1st half of 2014.

Throughout the first half of 2015, 2,921 apartment units were ordered for a sum of €531.3 million (including VAT), up 16.1% in volume and 6.8% in value. Orders for single-family homes in communities totaled 109 units, compared to 85 units in the first half of 2014 (€21.4 million (including VAT) versus €27.9 million (including VAT) in the first half of 2014).

Structure of the customer-base

Throughout the first half of 2015, investors' orders in value were up 9 points compared to the first half of 2014, representing 41% of the total (including 35% as part of the "Pinel" incentive). Orders from homebuyers were 36% including 24% from first-time homebuyers, and 12% from second-time homebuyers. The proportion of block orders remained stable (24% versus 25% in the first half of 2014).

  • Commercial property Services segment

In the first half of 2015, the Services segment recorded orders of €110.5 million (including VAT).

Construction works are in progress on the "YOU" building (9,300 sq.m), located in the EcoQuartier - Île Seguin - Rives de Seine in Boulogne-Billancourt and sold before completion at end-2013 to Boursorama for its future headquarters.

Kaufman & Broad also finalized the sale before completion of the 7,500 sq.m "UNITED" office building located in Clichy (92), to Amundi Immobilier on behalf of SCPI Rivoli Avenir Patrimoine and Edissimmo.

Moreover, Kaufman & Broad and Saint-Brieuc Agglomération signed a sale before completion contract for the construction of the local authority's future inter-administrative center on the island of La Providence. This project involves three buildings with 8,775 sq.m in floor space and 126 parking spaces. Work on this services sector complex will begin in summer 2015, for delivery by early 2018 at the latest.

Finally, concerning the logistics business, the subsidiary Concerto European Developer marketed 43,000 sq.m in logistics platforms.

  • Forward indicators of the sales and development activity

At May 31, 2015, the Housing backlog amounted to €1,074.5 million (excluding VAT), i.e., close to 14 months of business. The Commercial property Services backlog amounted to €187.9 million (excluding VAT).

At end-May 2015, Kaufman & Broad had 187 housing programs on the market, representing 3,924 housing units, compared to 170 programs for 3,480 housing units at end-May 2014.

The Housing property portfolio comprises 20,236 lots, representing potential revenues corresponding to over 3 years of business. It rose 13.7% compared to revenues at end-November 2014.

In the third quarter of 2015, the group plans to launch 12 new programs, seven of which are to be launched in Île-de-France representing 567 lots and 5 in the Regions representing 219 lots.

Financial results

  • Operating activities

Total revenues amounted to €465.3 million (excluding VAT), up 9.1% compared to the first half of 2014.

Housing revenues amounted to €413.5 million (excluding VAT), compared to €410.0 million (excluding VAT) in the first half of 2014. This corresponds to 88.9% of the group's revenues.

Revenues from the Apartments business were up 4.6% compared to the first quarter of 2014 to €386.8 million (excluding VAT). Revenues generated by the Single-family homes in communities segment totaled €26.7 million (excluding VAT), compared to €40.4 million (excluding VAT) in the first half of 2014.

Revenues from the Commercial property Services segment totaled €48.7 million (excluding VAT) in the first half of 2015. Other businesses generated €3.1 million (excluding VAT), remaining stable compared to the first half of 2014.

  • Profitability indicators

Gross margin totaled €88.2 million compared to €80.9 million in the first half of 2014.
The gross margin rate was 19.0%, at a level comparable to the 18.7% recorded for the same period in 2014.

Current operating expenses amounted to €58.4 million (12.6% of revenues) versus €59.5 million in the first half of 2014 (13.9% of revenues).

Current operating income totaled €29.8 million, compared to €21.4 million in the first half of 2014. The current operating margin was 6.4% versus 5.0% in the first half of 2014.

Attributable net income was €12.0 million, up 6.9% compared to thefirst half of 2014
(€11.2 million).

  • Financial structure and liquidity

Net financial debt was reduced by €71.0 million compared to end-May 2014 and, accordingly, net cash flow was €26.9 million at May 31, 2015.

Cash assets (available cash and investment securities) totaled €170.6 million, compared to
€150.0 million at November 30, 2014.

Working capital requirement totaled €91.3 million (8.1% of revenues over 12 months rolling), compared to €108.4 million at November 30, 2014 (10.0% of revenues).

Finally, it is reminded that the balance of the dividend of €1.36 for fiscal year 2014, i.e., €0.68 per share, will be paid on July 22, 2015, representing a total amount approximately of €14.0 million.

This press release is available from the website www.ketb.com

  • Next regular publication date:

September 30, 2015: 2015 third quarter results (after market close)

Contacts

Chief Finance Officer Press Relations
Bruno Coche

+33 (1).41.43.44 73

Infos-invest@ketb.com
Camille Petit

Burson-Marsteller

+33 (1).56.03.12 80

contact.presse@ketb.com

About Kaufman & Broad - For more than 40 years, Kaufman & Broad has been designing, building and selling single-family homes in communities, apartments and offices on behalf of third parties. Kaufman & Broad is a leading French property builder and developer measured by its size, earnings and the strength of its brand.

Warning: This document contains forward-looking information. This information is liable to be affected by known or unknown factors that KBSA cannot easily control or forecast, which may render the results materially different from those stated, implied or projected by the company. These risks specifically include those listed under "Risk Factors" in the Registration Document filed with the AMF on March 31, 2015 under number D.15-0258.

Glossary

Housing segment: covers the development of Single-family homes in communities (grouped homes), Apartments (including mixed-use buildings containing apartments/business premises/retail space/offices), corporate, tourist and student housing.

Commercial property Services segment: includes real estate property/office, business premise (excluding small areas, in particular building ground floors), hotel and logistics activities.

Orders: measured in volume (Units) and in value, orders reflect the group's sales activity. Orders are recognized in revenue based on the time necessary for the "conversion" of an order into a signed and notarized deed, which is the point at which income is generated. In addition, for apartment programs that include mixed-use buildings (apartments/business premises/retail space/offices), all floor space is converted into housing equivalents.

Units: Units are used to define the number of housing units or equivalent housing units (for mixed programs) of any given program. The number of equivalent housing units is calculated as a ratio of the surface area by type (business premises/retail space/offices) to the average surface area of the housing units previously obtained.

EHU: EHUs (Equivalent Housing Units delivered) directly reflect sales. 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.

Take-up rate: the number of orders in relation to the average commercial offer for the period.

Commercial offer: the total inventory of properties available for sale as of the relevant date, i.e., all unordered housing units as of such date (less the programs that have not entered the marketing phase).

Gross margin: corresponds to revenues less cost of sales. Cost of sales consists of the price of land, the related property costs and construction costs.

Backlog: a summary at any given moment used for forecasting future revenues for the coming months.

Property portfolio: all real estate for which a deed or contract of sale has been signed.

APPENDICES

  • Financial data

Key consolidated data

In € thousands H1 2015 H1 2014
restated **
Revenues 465,255 426,567
of which Housing 413,486 410,028
of which Commercial property Services 48,654 12,998
of which Other 3,115 3,542
Gross margin 88,175 80,917
Gross margin rate (%) 19.0% 19.0%
Current operating income 29,763 21,424
Current operating margin (%) 6.4% 5.0%
Attributable net income 12,005 11,229
Attributable net income per share (€/share) * 0.56 0.52

* Based on the number of shares composing the capital of Kaufman & Broad SA, i.e., 21,584,658 shares.
** Financial statements restated following a change in accounting method: recognition under operating expenses of the marketing costs of sales offices and model areas previously recognized under cost of sales.

Consolidated income statement*

In € thousands H1 2015 H1 2014
restated **
Revenues 465,255 426,567
Cost of sales (377,080) (345,650)
Gross margin 88,175 80,917
Selling expenses (14,567) (14,593)
Administrative expenses (26,902) (25,542)
Technical and customer service expenses (9,202) (9,338)
Development and program expenses (7,741) (10,020)
Current operating income 29,763 21,424
Other non-recurring income and expenses - 135
Operating income 29,763 21,559
Cost of net financial debt (811) 381
Other income and expenses - -
Income tax (8,921) (6,052)
Share of income (loss) of equity affiliates and joint ventures 743 693
Income (loss) attributable to shareholders 20,774 16,581
Minority interests 8,769 5,352
Attributable net income 12,005 11,229

* Approved by the Board of Directors. Limited review procedures on the financial statements were made by the statutory auditors. The review report is being issued.
** Financial statements restated following a change in accounting method: recognition under operating expenses of the marketing costs of sales offices and model areas previously recognized under cost of sales.

Consolidated balance sheet*

In € thousands May 31, 2015 November 30, 2014 restated**
ASSETS
Goodwill 68,511 68,511
Intangible Assets 84,099 85,075
Property, plant and equipment 5,997 4,323
Equity affiliates and joint ventures 6,687 11,376
Other non-current financial assets 1,965 1,843
Non-current assets 167,259 171,127
Inventories 303,183 320,540
Accounts receivable 286,473 336,561
Other receivables 138,642 176,604
Cash and cash equivalents 170,581 149,993
Prepaid expenses 1,450 1,437
Current assets 900,329 985,135
TOTAL ASSETS 1,067,588 1,156,262
EQUITY AND LIABILITIES
Authorized capital 5,612 5,612
Additional paid-in capital 185,370 163,410
Attributable net income 12,005 37,930
Attributable shareholders' equity 202,987 206,952
Minority interests 10,934 8,667
Shareholders' equity 213,921 215,621
Non-current provisions 21,917 21,485
Borrowings and other non-current financial liabilities (> 1 year) 131,218 135,815
Deferred tax liabilities 48,438 42,303
Non-current liabilities 201,573 199,603
Current provisions 1,139 2,168
Other current financial liabilities (< 1 year) 12,486 12,101
Accounts payable 564,655 618,202
Other payables 72,135 106,858
Deferred income 1,679 1,709
Current liabilities 652,094 741,038
TOTAL EQUITY AND LIABILITIES 1,067,588 1,156,262

* Approved by the Board of Directors. Limited review procedures on the financial statements were made by the statutory auditors. The review report is being issued.
** Financial statements restated following a change in accounting method: recognition under operating expenses of the marketing costs of sales offices and model areas previously recognized under cost of sales.

Operational data

Housing Segment 1st half 2015 1st half 2014
Revenues (€m, excluding VAT) 413.5 410.0
of which Apartments 386.8 369.6
of which Single-family homes in communities 26.7 40.4
Deliveries (EHUs) 2,537 2,470
of which Apartments 2,433 2,320
of which Single-family homes in communities 104 150
Net orders (number) 3,030 2,601
of which Apartments 2,921 2,516
of which Single-family homes in communities 109 85
Net orders (€m, including VAT) 552.7 525.2
of which Apartments 531.3 497.3
of which Single-family homes in communities 21.4 27.9
Commercial offer at period end (number) 3,924 3,480
Backlog at period end
In value (€m, excluding VAT) 1,074.5 1,007.4
of which Apartments 1,032.1 930.6
of which Single-family homes in communities 42.4 76.8
In months of business 13.9 12.8
Property portfolio at period end 20,236 19,707
Commercial property Services 1st half 2015 1st half 2014
Revenues (€m, excluding VAT) 48.7 13.0
Net orders (€m, including VAT) 110.5 11.5
Backlog at period end (€m, excluding VAT) 187.9 49.0

HUG#1935612

Source:Kaufman & Broad SA