PRESS RELEASE

from KAUFMAN & BROAD (EPA:KOF)

Kaufman & Broad SA: ANNUAL RESULTS 2022

Kaufman & Broad SA
Kaufman & Broad SA: ANNUAL RESULTS 2022

30-Jan-2023 / 18:12 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

  Press release

 Paris, 30 January 2023

 

             Annual RESULTS 2022

 

 

 

  • Net income up 11.7%
  • Very solid financial structure, Kaufman & Broad the only European developer with an Investment Grade rating  *
  • Proposed dividend for 2022 of €2.40 per share

 

 

 

  • Main elements of commercial activity

 

  • Total reservations: €1481.7M including tax
  • Of which housing : €1433.8M including tax
  • O/w Commercial : €47.9M
  • Housing take-up period: 4.3 months

 

 

  • Key financial data

 

  • Revenue : €1314.9M

O/w housing : €1152.5M

  • Gross profit : €228.2M
  • EBIT margin(a ) : 7.5%
  • EBIT : €98.2M
  • Net income (Group share ) : €49.0M
  • Net financial debt(b ) : €67.8M

Of which investments in managed residences : €25.8M

  • Financial capacity : €351.0M

 

 

  • Key growth indicators

 

  • Global backlog : €3393.3M

O/w housing : €2362.8M

  • Real estate portfolio Housing : 34,009 units

 

 

 

Kaufman & Broad SA today announced its results for 2022 (from December 1 to 30 November 2022). Nordine Hachemi, Chairman and Chief Executive Officer of Kaufman & Broad, said:

 

‘The 2022 results are in line with the guidelines. They confirm Kaufman & Broad's ability to maintain a solid economic performance in a constrained environment.

 

Over the full year, net housing reservations rose by 2.1% in value terms. The commercial offering increased by 10.3%. The pace of marketing remains strong, as evidenced by the 4.3 month take-up period reflecting the adaptation of Kaufman & Broad's offer to demand.

 

The continued strengthening of the CSR policy has enabled Kaufman & Broad to progress in the CDP(c) index with an A- rating versus a sector B rating.

The capital increase reserved for employees was a success, hailed by the 2022 Employee Share Ownership Grand Prix (SME ETI category).

 

2023 presents itself as a period of adjustment of the parameters of the housing market due to the rise in rates observed over the last twelve months. This generates a form of wait and see attitude on the part of all market players which results in a decline in volumes in the short term.

 

Structurally unmet demand continues to accumulate, fuelled by demographic and sociological fundamentals.In addition, the consequences of the energy transition contribute to the reduction of the housing stock of inferior thermal quality.

 

Kaufman & Broad is currently the only European developer with an Investment Grade(c )rating, attesting to the quality of its financial structure. Based on its strong balance sheet  and the high level of its Backlog, the Group has the ability to adapt to this period and, beyond that, take advantage of market adjustments.

 

For the year 2023, turnover is expected to be around 1.5 billion euros, current operating income is expected to be around 8% and the group’s net cash position to be positive.

 

The 2022 results, the strong financial structure of Kaufman & Broad and the high level of its Backlog led the Board of Directors to propose a dividend of euros 2.40 per share for the fiscal year 2022 at the Annual General Meeting to be held on May 4. 

 

 

 

  • Sales Activity

 

  • Housing

 

In 2022, housing reservations in value amounted to 1433.8 million euros (including tax), compared to 1404.5 million euros compared to the same period in 2021, up 2.1%. In volume terms, they stood at 6,214 housing units in 2022 compared to 6,609 in 2021, a decrease of 6.0%.

 

The take-up period for programmes was 4.3 months in 2022, an increase of 0.6 months compared to the same period in 2021 (3.7 months).

 

The commercial offering, with 97% of homes located in tight areas (A, ABIS and B1), amounted to 2,218 homes at the end of 2022 (2,011 units at the end of 2021).

 

 

Customer Breakdown

 

In 2022, bookings in value (including tax) of first time buyers accounted for 13% of sales, compared to 12% over the same period in 2021. First time buyers accounted for 9% of sales, compared with 8% in 2021.

Reservations made to investors accounted for 33% of sales (of which 24% for Pinel alone), compared with 34% in November 2021. At the end of November 2022, block sales accounted for 45% of reservations in value (including Vat), compared with 46% over the same period in 2021.

 

 

  • Commercial Property

 

At 30 November 2022, the commercial division recorded net reservations of 47.9 million euros (including Vat) compared to 53.7 million euros (including Vat) at the end of November 2021.

 

Kaufman & Broad currently has about 105,800 m ² of office space and approximately 154,200 m ² of logistics space on the market or under consideration. In addition, 40,900 sq.m. of office space is currently being built or started in the coming months, as well as nearly 28,600 sq.m. of logistics space. lastly, nearly 115,900 sq.m of office space remains to be signed (of which 95,500 sq.m related to the renovation of the Austerlitz station was signed in December 2022).

 

 

  • Leading indicators of business activity and growth

 

In 2022, Backlog Logement stood at 2362.8 million euros (excl. VAT) compared to 2385.3 million euros (excl. VAT) for the same period in 2021, i.e. 24.6 months of activity compared to 25.8 months of activity at the end of November 2021. At the end of November 2022, Kaufman & Broad had 142 housing programmes under marketing, representing 2,218 housing units (146 programmes and 2,011 housing units at the end of 2021).

 

The real estate portfolio represents 34,009 units and is down 3.2% compared to the end of November 2021 (35,149 units). At the end of November 2022, it corresponded to over 5 years of commercial activity.

 

In addition, 90% of the housing units in the land portfolio are located in tight areas, representing 30,678 housing units as of 30 November 2022.

 

In the 1st quarter of 2023, the Group plans to launch 20 new programs, including 3 in the Paris region representing 127 units and 17 in the Regions representing 766 units.

 

At 30 November 2022, the Backlog for the Commercial division was 1030.5 million euros excluding tax compared with 1133.4 million euros excluding tax for the same period in 2021.

 

  • Financial performance

 

  • Activity 

 

Total sales amounted to 1314.9 million euros (excluding Vat), compared to 1281.8 million euros for the same period in 2021.

 

Residential property sales amounted to 1152.5 million euros (exclusive of tax), compared to 1109.1 million euros (exclusive of tax) in 2021. It represents 87.7% of the Group's revenue.

 

Revenue for the Apartments business was 1076.3 million euros (excluding Vat) (vs). 1054.7 million euros (excl. VAT) at end November 2021). Revenue for the Commercial Division was 150.2 million euros (excluding Vat), compared with 165.5 million euros (excluding Vat) for the same period in 2021. Other activities generated revenues of 12.2 million euros (excluding Vat) (including 6.7 million euros in revenues related to the operation of student residences) compared to 7.2 million euros in 2021.

 

 

  • Profitability data 

 

At 30 November 2022, gross profit amounted to 228.2 million euros, compared to 222.6 million euros over the same period in 2021. The gross margin was 17.4%, as in 2021.

 

Current operating expenses amounted to 130.0 million euros (9.9% of sales), compared to 124.2 million euros in the same period in 2021 (9.7% of sales). Recurring operating income amounted to 98.2 million euros, compared to 98.4 million euros in 2021. Recurring operating income stood at 7.5% compared to 7.7% in 2021.

 

At the end of November 2022, consolidated net income amounted to 69.3 million euros, compared with 66.3 million euros in 2021. Non controlling interests amounted to 20.2 million euros at 30 November 2022, compared with 22.5 million euros in 2021.

Net income attributable to equity holders of the parent was 49.0 million euros, compared with 43.9 million euros in 2021.

 

 

  • Financial structure and liquidity

 

Net financial debt (excluding IFRS 16 debt and Neoresid put debt) at 30 November 2022 was 67.8 million euros, compared with a positive net cash position of 35.9 million euros at the end of November 2021. Cash and cash equivalents amounted to 101.0 million euros at 30 November 2022, compared with 189.5 million euros at 30 November 2021. Financial capacity amounted to 351.0 million euros at 30 November 2022, compared with 439.5 million euros at the end of November 2021.

 

In 2022, working capital requirements amounted to 190.0 million euros at 31 November 2022, or 14.5% of sales, compared to 113.7 million euros at the end of November 2021 (or 8.9% of sales).

 

 

  • Capital reduction by cancelling treasury shares

 

Pursuant to the authorisation granted at the Shareholders' Meeting of 5 May 2022, the Board of Directors' meeting of 27 January 2023 reduced the capital of Kaufman & Broad SA by cancelling 500,000 treasury shares, compared with 299,999 shares created as part of the October 2022 Employee Share Ownership Operation (ORS).

 

 

  • Dividend

 

At the Shareholders' Meeting of 4 May 2023, the Board of Directors of Kaufman & Broad SA will propose the payment of a dividend of €2.40 per share.

 

 

  • Outlook for 2023

 

For the year 2023, turnover is expected to be around 1.5 billion euros, current operating income is expected to be around 8% and the group’s net cash position to be positive.

 

This press release is available at www.kaufmanbroad.fr

 

 

  • Next periodic information date:
  • Thursday, 13 April 2023: Publication of the 1st quarter 2022 results (after trading)

 

 

Contacts

 

Chief Financial Officer

Bruno Coche -01 41 43 44 73/infos-invest@ketb.com

Press relations

PRIMATICE: Thomas de Climens -06 78 12 97 95/thomasdeclimens@primatice.fr

Kaufman & Broad: Emmeline CACITTI -06 72 42 66 24/ecacitti@ketb.com

 

About KAUFMAN & BROAD

For more than 50 years, KAUFMAN & BROAD has been designing, developing, building and selling apartments, single-family homes in communities, managed housing, retail areas, business spaces and offices buildings.

 

As a designer and a true urban builder alongside regional authorities to develop new neighbourhoods and major urban projects, KAUFMAN & BROAD is one of the first French Developers-Builders by the combination of its size, profitability and the strength of its brand.

 

Let us create a more virtuous city together.

 

For more information : www.kaufmanbroad.fr   

 

GLOSSARY

 

Backlog or (backlog): it covers, for sales in the future state of completion (VEFA), the undelivered reserved housing units for which the notarial bill of sale has not yet been signed and the undelivered reserved housing units for which the notarial bill of sale has been signed up to the portion not yet taken into revenue (on a 30% advanced program, 30% of the revenue of a housing unit for which the notarized bill of sale has been signed is recorded in revenue, 70% are included in the backlog). The backlog is a summary at a given time that makes it possible to estimate the revenue remaining to be recognised in the coming months and thus reinforce the Group's forecasts - it being specified that there is an uncertain proportion of transformation of the backlog into revenue, particularly for reservations not yet recorded.

 

BEFA: the building under completion consists of renting a building before it is built or restructured.

 

Working capital requirement (WCR ): This arises from cash flow mismatches: Disbursements and receipts corresponding to operating expenses and revenues required for the design, production and marketing of real estate programs. The resulting simplified expression for WCR is as follows: these are current assets (inventory + trade receivables + other operating receivables + advances received + prepaid income) less current liabilities (trade payables + tax and social security payables + other operating liabilities + prepaid expenses). The size of the WCR will depend in particular on the length of the operating cycle, the size and duration of storage of work-in-progress, the number of projects launched and the payment terms granted by suppliers or the profile of payment schedules granted to customers.

 

Free cash flow:  free cash flow is equal to cash flow less net operating investments

For the year.

 

Cash flow from operations: cash flow from operations after finance costs and taxes is equal to consolidated net income adjusted for the share in net income of associates, joint ventures and income from discontinued operations and calculated income and expenses.

 

Available for sale financial assets: corresponds to cash and cash equivalents plus undrawn credit facilities

 

CDP:  (formerly Carbon Disclosure Project): Measuring the environmental impact of companies.    

 

Senior Credit (lines of credit): banks use senior debt to finance leveraged buy Out (LBO) transactions. The financing of LBOs by banks is a risky operation in the bank credit market. It is characterized by loans of the “amortizable” type and/or, in the most frequent case, of the “bullet” type, but also by lines of credit intended for the financing of working capital needs and the development policy of the company concerned by this mode of acquisition. Senior debt is debt that benefits from specific guarantees and whose repayment has priority over other, so-called subordinated debt. It is therefore a preferred debt.

 

Take-up period: The take-up period for inventories is the number of months required for available housing units to be sold if sales continued at the same pace as in previous months, i.e. the outstanding number of units (available offer) per quarter divided by reservations per quarter elapsed themselves divided by three.

 

Dividend: The dividend is the portion of the Company's net income distributed to shareholders. Its amount, proposed by the Board of Directors, is submitted to the shareholders for approval at the General Meeting. It is payable within a maximum of 9 months after the end of the financial year.

 

EBIT: corresponds to current operating income cad to gross margin less current operating expenses.

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