DJ Kaufman & Broad SA: H1 2021 Results
Kaufman & Broad SA
Kaufman & Broad SA: H1 2021 Results
12-Jul-2021 / 18:45 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, July 12, 2021
H1 2021 results
- Housing land portfolio of 35,000 units, i.e. approximately EUR7.9 billion, incl. VAT, in potential revenue
- Total backlog: EUR3.5 billion
- Sound financial structure
- Financing capacity: EUR447.3 million
- Positive net cash (excluding IFRS 16): EUR46.4 million
- 2021 guidance confirmed, suggesting that the 2021 dividend will be at least EUR1.85 per share
- Key sales data
(H1 2021 vs H1
2020)
- Total orders:
- EUR609.2m incl.
VAT
- Housing:
EUR569.7m incl.
VAT vs EUR872.0m
incl. VAT
- Commercial
Property:
EUR39.5m incl.
VAT
Kaufman & Broad SA today reported its results for the first half of the 2021 fiscal year (from
- Take-up period December 1, 2020 to May 31, 2021). Nordine Hachemi, Chairman and Chief Executive Officer of Kaufman
[1] for & Broad, made the following comments:
Housing:
4.0 months (stable)
year-on-year "In Q2 2021, new project development remained on track and the Housing portfolio represented 35,000
units in volume terms, or approximately EUR7.9 billion, including VAT, of potential business.
- Key financial
data However, as expected, sales were affected by the contraction in supply due to the more than
18-month decline in building permits granted. In contrast, as shorter take-up periods have shown,
(H1 2021 vs H1 demand from both individual buyers and private and public institutional investors remained robust.
2020)
With Kalilog, Kaufman & Broad has launched a business focused on social housing across the entire
- Total revenue: country. The aim is to offer highly affordable housing units meeting Kaufman & Broad's strictest
EUR605.8m vs environmental standards. This portfolio currently comprises approximately 600 housing units.
EUR385.0m
Of which Housing:
EUR519.1m vs EUR352.3m Kaufman & Broad won the bid for the first real estate project to be awarded the Frugal[3] label
(the Malbec project in Bordeaux), demonstrating its ability to adapt to the local authorities'
- Gross margin: evolving expectations.
EUR104.7m vs
EUR73.5m
- EBIT margin*:
7.6% vs 3.2% In response to high demand from international institutional investors for residential housing
- EBIT: EUR45.9m vs portfolios, Kaufman & Broad is developing portfolios of managed senior and student housing based on
EUR12.3m a unique developer / investor / operator model. These portfolios may be marketed based on
- Attributable historical operations.
net income:
EUR22.7m vs EUR2.1m
- Net cash[2]:
With regard to the senior residence program, Kaufman & Broad and Banque des Territoires (Caisse des
EUR46.4m vs EUR62.5m at Dépôts) expect to finalize the creation of a joint venture by the end of 2021, which will develop a
end-2020 portfolio of about 10 senior residences for an investment of approximately EUR150 million over the
next few years. These residences will be managed by Cosy Diem, a joint venture between Kaufman &
- Financing Broad and Serenis, a major player in the "ageing well" market.
capacity:
EUR447.3m vs EUR465.2m
at end-2020 And finally, Kaufman & Broad confirms its ability to design commercial property projects that meet
customers' new requirements for both location and use. The development of a total of 27,500 sq.m of
- Key growth office space in Marseille, to be used primarily by a major French group, a tenant under a
indicators lease-before-completion (BEFA),
- Total backlog
EUR3,490.3m vs
EUR3,788.7.1m at
end-May. 2020
Of which Housing:
EUR2,289.9m (vs
EUR2,464.2.2m)
- Housing
property
portfolio:
35,000 units vs
34,864 units at
end-May 2020
[1] Based on the first six months of the year
[2] Based on net debt excluding IFRS 16 lease liabilities
[3] The aim of the "Bâtiment frugal" label is to promote buildings that preserve existing natural spaces and fit into the surrounding area, make us of local industries, and take into account their occupants' quality of life, all while reducing the buildings' impact on the climate.
* expressed as a percentage, it corresponds to current operating income, i.e. gross margin less current operating expenses divided by revenue
Overall, in the first half of the fiscal year, Kaufman & Broad was able to preserve its short-term financial balances, with positive net income of EUR22.7 million (a 10.6x increase from H1 2020), positive net cash of EUR46.4 million (excluding IFRS 16 liabilities) and financing capacity of EUR447.3 million, while maintaining strong momentum in preparing for the future.
Regarding the building permit obtained for the Gare d'Austerlitz project on December 14, 2020, two proceedings have been brought before the Paris Administrative Court of Appeals concerning this. The summary proceedings for the suspension of work was dismissed on July 6th. A ruling on an appeal of the work permit itself should be handed down in 2022. We therefore believe it would be best to assume that the contracts will take effect, at the earliest, in the second half of 2022.
Revenue for full-year 2021 is in line with our guidance, forecast at approximately EUR1.3 billion with an EBIT margin equivalent to the 2020 figure.
The earnings outlook for fiscal year 2021, the soundness of Kaufman & Broad's financial structure and its high backlog suggest that the dividend payable for fiscal year 2021 will be at least EUR1.85 per share.
The outlook as a whole is based on a stabilization of the current economic and health situation." - Sales activity - Housing
In H1 2021, housing orders in value terms totaled EUR569.7 million (incl. VAT), a 34.7% decrease compared with H1 2020. In volume terms, 2,780 units were ordered, a 23.5% decline compared with the same period in 2020.
Breakdown of the customer base
In H1 2021 as a whole, orders from buyers in value terms (incl. VAT) fell by 12% (first-time buyers) and 7% (second-time buyers) and accounted for 16% of sales compared with 11% in H1 2020.
Orders from investors accounted for 37% of sales (29% for the Pinel incentive alone), up 13% from one half-year period to the next.
Block sales represented 47% of housing orders, i.e. EUR268.2 million. They were down by 54% compared with H1 2020, when they represented 67% of orders.
Take-up period and property supply
The take-up period for programs was 4.0 months in H1 2021, up from 3.1 months in H1 2020.
The property supply, 97% of which is located in high-demand, low-supply areas (A, Aa and B1), stood at 1,825 housing units at end-May 2021 (versus 1,850 housing units at end-May 2020, i.e. 98% in high-demand, low-supply areas). - Commercial Property
In H1 2021, the Commercial Property segment recorded net orders of EUR39.5 million (incl. VAT).
Kaufman & Broad currently has approximately 248,000 sq.m of commercial property projects being marketed or under consideration, of which 129,000 sq.m of office space and approximately 119,000 sq.m of logistics space.
It also currently has over 88,000 sq.m of office space under construction, along with more than 42,000 sq.m of logistics space. Lastly, it has around 98,000 sq.m of office space transactions to be finalized.
At end-May 2021, the commercial property backlog stood at EUR1,200.4 million. - Leading indicators for sales and growth
At May 31, 2021, the Housing backlog stood at EUR2,289.9 million (excl. VAT), i.e. 24.3 months of business. At the same date, Kaufman & Broad had 155 housing programs in the marketing phase, representing 1,876 housing units (compared with 156 programs representing 1,881 units at end-May 2020).
The Group's total backlog is close to EUR3.5 billion, of which 39% of the revenue still to be recognized is based on land already acquired. Of the remainder to be acquired, 52% relates to projects for which a building permit was filed, was obtained or was under review, or was being cleared of any claims. Lastly, within the share of projects for which permits have only been filed, the A7/A8 Gare d'Austerlitz project alone represented nearly 29% of the Group's total backlog at May 31, 2021.
The Housing property portfolio represents nearly 35,000 units. It is up 0.4% compared with the end of May 2020, corresponding to potential revenue of close to five years of business. - Financial results - Business volumes
Total revenue stood at EUR605.8 million (excl. VAT), up 57.4% compared with H1 2020, and was affected mainly by the sharp contraction in overall business for two months, from mid-March to mid-May.
Housing revenue was EUR519.1 million (excl. VAT), versus EUR352.3 million (excl. VAT) in H1 2020. This represents 85.7% of group revenue. Revenue from Apartments was up by 52.7% compared with H1 2020 and stood at EUR487.2 million (excl. VAT). Revenue from Single-family Homes in Communities amounted to EUR31.9 million (excl. VAT), versus EUR33.2 million (excl. VAT) in H1 2020. - Profitability data
Gross margin in H1 2021 was EUR104.7 million, compared with EUR73.5 million in H1 2020.
Current operating expenses totaled EUR58.7 million (9.7% of revenue), versus EUR61.2 million in H1 2020 (15.9% of revenue).
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