Press release
Paris, January 30, 2018
2017 Annual Results
-
2017: another year of increased
sales performance and higher financial results
-
Increase in Housing Unit
orders: 9,027 units, + 16.3% in value terms
-
12.3% increase in revenues, and
28.4% increase in attributable net income
-
Increase in the proposed
dividend to €2.10 per share
-
The outlook for 2018 looks
favorable, once again
(2017 compared with 2016)
€1,940.5 million including VAT (+6.8%)
Of which Housing Units:
€1,790.1 million including VAT (+16.3%)
In volume terms: 9,027 units, (+12.6%)
5.1 months compared with 6.3 months
(-1.2 months)
Key financial data
(2017 compared with 2016)
Revenues:
€1,390.8 million (+12.3%)
Of which Housing: €1,213.7 million (+14.5%)
Gross margin:
€269.1 million (+14.2%)
€33.1 million vs. €85.1 million end of 2016
(2017 compared with 2016)
Of which Housing:
€1,670.2 million (+22.8%)
|
Kaufman & Broad SA announced its unaudited
results for the 2017 financial year (from December 1, 2016 to
November 30, 2017) today.
Nordine Hachemi, Chair and Chief Executive Officer
of Kaufman & Broad, made the following comments:
"The 2017 results are in keeping with the strong
like-for-like growth momentum that began four years
ago.
Housing Unit orders increased by 16.3% in value
terms, while the overall Backlog (including Commercial Property)
increased by 16%. The Housing property portfolio (+14.2%) increased
in the same proportions as Housing Unit orders, thus maintaining
our growth potential. Furthermore, the marketing period was
shortened once again, and now amounts to around 5
months.
Kaufman & Broad has set up a joint-venture in
order to jointly develop a portfolio of housing for senior citizens
with SERENIS, a senior accommodation and healthcare provider. This
initiative strengthens the Group's commitment to the promising
managed housing sector.
The Commercial Property segment recorded orders
amounting to €144.3 million, including VAT, over the fiscal
year.
The quality of our programs, combined with our
price management, has enabled us to benefit from marketing periods
that are significantly lower than those of the market, and to
increase our orders by 68% in terms of volume over the past four
years. The property portfolio expanded by 81% over the same
period.
This has resulted in tight control over our
working capital and our margins, which is reflected in a decrease
in net debt and an increase in equity capital.
The capital increase resulting from the offer
reserved for the employees raised the percentage of the share
capital held by the group's employees to almost 14%. By
strengthening their position as the largest shareholder in Kaufman
& Broad, our employees are demonstrating their commitment and
their trust.
The market is expected to amount to around 130,000
orders in 2017, in line with our expectations. For 2018, we are
planning on a level of orders comparable to the level in 2017 for
Kaufman & Broad, in a market estimated at between 125,000 and
130,000 housing units.
Against this backdrop, and on the basis of stable
anticipated interest rates, Kaufman & Broad believes that the
increase in its revenues should range between 8 and 10% over the
2018 fiscal year as a whole. The gross margin ratio is expected to
remain around 19%, while the adjusted EBIT ratio is expected to be
between 8.5 and 9%.
The Board of Directors will propose the payment of
a dividend of €2.10 per share to the General Meeting of
Shareholders, including an option for payment in cash, shares, or
in cash and shares. |
Sales activities
Orders for housing units in value
terms amounted to €1,790.1 million (including VAT) for the 2017
fiscal year as a whole, or an increase of 16.3% compared with
2016.
In value terms, orders for housing units amounted to 9,027 housing
units, or an increase of 12.6% compared with 2016.
The marketing period for projects was 5.1 months, or a decrease of
1.2 months compared with 2016 (6.3 months).
The sales offering, 94% of which
is located in areas where there is a shortfall (A, Abis and B1), amounted to 3,835 housing units at the end
of November 2017 (4,196 housing units at the end of 2016).
Breakdown of the customer base
Orders from first-time buyers
accounted for 14% of sales in volume terms, while those
from
second-time buyers accounted for 6%. Orders from investors
accounted for 43% of sales (32% just for the Pinel Scheme), while
block sales accounted for 37%.
In 2017 the Commercial Property
segment recorded net orders of €144.3 million including VAT.
In February, Kaufman & Broad
was the winning bidder in a consultation process organized by EPA
Bordeaux Euratlantique, to build a 27,000 sq.m office property
complex below the
Saint-Jean TGV Station. In May, Kaufman & Broad was selected
following a limited consultation process in the La Défense
District, to carry out a project, ultimately enabling around 30,000
sq.m of floor area to be developed.
Furthermore, Kaufman & Broad
signed two off-plan agreements for the realization of logistic
platforms: one in Châtres (36,000 sq.m) with Groupama GAN REIM, for
the French Army, and one in Montbartier (72,000 sq.m) with INVESCO,
for Easydis (Casino group).
Kaufman & Broad is
commercializing or having under study around 150,000 sq.m of office
space and 210,000 sqm of logistic plateforms.
Otherwise, more than 50,000 sq.m
of office space are currently under construction (SNI Paris
13th , ORA Paris
17th , EDF
Bordeaux).
The Commercial Property backlog
amounted to €174.7 million (excluding VAT) at the end of November
2017.
The Housing backlog amounted to
€1,670.2 million (excluding VAT), i.e. 16.5 months of business at
November 30, 2017. Kaufman and Broad had 218 housing programs on
the market at the same date, which represent 3,835 housing units,
compared with 207 programs representing 4,196 housing units at
the end of November 2016.
The Housing property portfolio
amounted to 27,775 units, and increased by 14.2 % compared with the
portfolio at the end of 2016. The portfolio corresponds to
potential revenues for around 4 years of business, and was stable
compared with November 30, 2016 (4 years).
The Group is planning to launch 17
new programs in the 1st quarter of 2018, including 3 in
the
Île-de-France Region, which represent 137 units, and 14 programs in
the French Regions representing 985 units.
Total revenues amounted to
€1,390.8 million (excluding VAT), an increase of 12.3 % compared
with 2016.
Housing revenues amounted to
€1,213.7 million (excluding VAT), compared with €1,060.0 million
(excluding VAT) in 2016. They accounted for 87.3% of the Group's
revenues.
Revenues from the Apartments
business were up 14.9% compared with 2016, and amounted to
€1,169.1 million (excluding VAT).
The Commercial Property segment's
revenues amounted to €165.3 million (excluding VAT), compared with
€171.1 million (excluding VAT) in 2016.
The other businesses generated
revenues of €11.8 million (excluding VAT).
The gross margin for the 2017
fiscal year amounted to €269.1 million compared with €235.6 million
in 2016. The gross margin ratio was 19.4%, or slightly higher than
the level in 2016 (19.0%).
Current operating expenses
amounted to €151.2 million (10.9% of revenues), compared with
€134.3 million for 2016 (10.9% of revenues).
Income from current operations
amounted to €118.0 million, compared with €101.3 million in 2016.
The current operating margin ratio was 8.5% compared with 8.2% in
2016.
The Group's adjusted EBIT amounted
to €126.1 million in 2017 (compared with €108.7 million in 2016).
The adjusted EBIT margin was 9.1% (compared with 8.8% in 2016).
Attributable net income for the
year 2017 amounted to €59.1 million compared with €46.0 million in
2016.
Financial debt amounted to €33.1
million at November 30, 2017, a decrease of €52 million compared
with the end of 2016. Cash assets (available cash and investment
securities) amounted to €221.1 million, compared with €118.1
million at November 30, 2016. The Group's financing capacity was
€321.1 million (€218.1 million at November 30, 2016).
Working capital amounted to €147.6
million (10.6 % of revenues), compared with €129.2 million at
November 30, 2016 (10.4% of revenues). The tight control on working
capital primarily relies on the very short marketing period for the
Group's programs.
The "KB Actions 2017" share
ownership offer in the autumn of 2017 reserved for the Group's
employees who are members of the savings plan met with great
success, including a take-up rate of 65.4%; a total of 236,496
shares were subscribed via the "KB Actions 2017" Company Savings
Plan, with a value of €7,357,390.56. The shares rank entirely
pari passu with the existing shares, and are
currently eligible for dividends.
The capital increase resulting
from the offer increases the percentage of the share capital held
by the Group's employees via the various shareholding systems to
almost 14%.
Our employees are strengthening
their position as the largest shareholder in Kaufman & Broad SA
via this transaction, thereby demonstrating their commitment and
their trust.
Kaufman & Broad's Board of
Directors will propose the payment of a dividend of €2.10 per share
to the General Meeting of Shareholders on 3 May 2018, i.e. an
increase of 13.5% compared with the dividend paid for 2016 (€1.85
per share). A proposal will also be made to this General Meeting to
give Kaufman & Broad's shareholders the option to receive this
dividend in cash, in shares, or in cash and shares.
The Group believes that its
revenue growth should range between 8 and 10% for the 2018 fiscal
year. The gross margin ratio is expected to remain around 19%,
while the adjusted EBIT ratio is expected to be between 8.5 and
9%.
This release is available on the
www.kaufmanbroad.fr website
Contacts
Chief Financial
Officer
Bruno Coche
01 41 43 44 73
Infos-invest@ketb.com
Media Relations:
Hopscotch Capital: Violaine
Danet
01 58 65 00 77/ k&b@hopscotchcapital.fr
Kaufman & Broad: Emmeline
Cacitti
06 72 42 66 24 / ecacitti@ketb.com
About Kaufman
& Broad - Kaufman & Broad has been designing,
building, and selling single-family homes in communities,
apartments, and offices on behalf of third parties for 50 years.
Kaufman & Broad is one of the leading French Property
Development & Construction companies due to the combination of
its size and profitability, and the strength of its brand.
The Kaufman &
Broad Registration Document was filed with the French Financial
Markets Authority ("AMF") under No. D.17.0286 on March 31, 2017. 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 prospects, as well as of
the related risks factors. Kaufman & Broad specifically draws
attention to the risk factors set out in Chapter 1.2 of the
Registration Document. The materialization of one or several of
these risks may 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, a sale offer or a subscription offer, or as
intended to seek a purchase or subscription order in any
country.
Backlog: In
the case of-Off-Plan Sales, this 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 for which a notarized deed of sale has been
signed for the portion not yet recorded in revenues (in the case of
a program for which an advance of 30% has been received, 30% of the
revenues from a housing unit for which a notarized deal has been
signed is recognized as revenues, while 70% is included in the
backlog). The backlog is a summary at a given time, which enables
the revenues yet to be recognized over the coming months to be
estimated, and so support the Group's forecasts - on the
understanding that the turning of a percentage of the backlog into
income remains uncertain, primarily for orders that have not yet
been signed.
Off-plan lease
(BEFA): an off-plan lease involves a customer leasing a
building before it is even built or redeveloped.
Marketing
period: the inventory marketing period is the number of months
required for the available housing units to be sold, if sales
continue at the same rate as for the previous units, or the number
of housing units (available supply) per quarter divided by the
orders for the previous quarter, and divided by three in turn.
Adjusted
EBIT: corresponds to income from current operations restated
for capitalized "IAS 23 revised" borrowing costs, which are
deducted from the gross margin.
EHU: The EHUs
(Equivalent Housing Units) delivered are a direct reflection of
business volumes. The number of EHUs is obtained by multiplying (i)
the number of housing units in a given program for which notarized
sale 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.
Gross margin:
Gross margin corresponds to revenues less cost of sales. The cost
of sales consists of the price of the land, and the related
property costs (levies, etc.), the commissions paid to developers
and to Kaufman & Broad's sales staff, the fees and commissions
included in the mandates issued by Kaufman & Broad in order to
sell the property programs, construction costs, and the borrowing
costs that can be directly allocated to the development of
programs.
Commercial
offer: is represented by the total inventory of housing units
available for sale at the relevant date, i.e. all housing units
that have not been ordered on that (minus the sales tranches that
have not been released for marketing).
Property
portfolio: represents all of the land for which any commitment
(contract for sale, etc.) has been signed.
Orders:
measured in volume (Units) and in value terms; orders reflect the
Group's sales activity. Their inclusion in revenues is conditional
on the time required to turn an order into a signed and notarized
deed, which is the triggering event for booking the income. In
addition, in the case of multiple-dwelling programs that include
mixed-use buildings (apartments, business premises, retail space,
and offices), all of the floor space is converted into housing
equivalents.
Land stock:
This includes land to be developed (which is alternatively called
"property portfolio"), i.e. land for which a deed or promise of
sale has been signed, as well as land under review, i.e. land for
which a deed or a promise of sale has not yet been signed.
Marketing period
ratio: the marketing period ratio represents the percentage of
the initial inventory that is sold on a monthly basis for a
property program (sales per month divided by the initial
inventory), i.e. net monthly orders divided by the ratio between
the opening inventory and the closing inventory, divided by two.
NB: The inverse of the marketing period ratio (1/MPR) gives the
expected timeframe (in months) for the marketing of a program, i.e.
the marketing period. For instance, a marketing period ratio of
4.0% corresponds to an expected marketing period of 25 months.
Units: units
are used to define the number of housing units or equivalent
housing units (for mixed programs) in a given program. The number
of equivalent housing units is calculated as a ratio between the
surface area by type (business premises, retail space, or offices)
and the average surface area of the housing units previously
obtained.
Off-plan sale
(VEFA): an off-plan sale is an agreement via which the vendor
transfers their rights to the land and their ownership of the
existing buildings to the purchaser immediately. The future
structures will become the purchaser's property as they are
completed: the purchaser is required to pay the price of these
structures as the works progress. The vendor retains Project
Management powers until the works are accepted.
APPENDICES
Key consolidated data
| In € million |
Q4
2017 |
Fiscal
2017 |
Q4
2016 |
Fiscal
2016 |
|
Revenues |
442.9 |
1,390.8 |
402.7 |
1,238.0 |
|
|
397.9 |
1,213.7 |
367.5 |
1,060.0 |
|
|
42.4 |
165.3 |
33.3 |
171.1 |
|
|
2.6 |
11.8 |
1.9 |
6.9 |
| |
|
|
|
|
| Gross margin |
87.4 |
269.1 |
77.3 |
235.6 |
| Gross
margin ratio (%) |
19.7% |
19.4% |
19.2% |
19.0% |
| Current operating
income |
42.6 |
118.0 |
35.5 |
101.3 |
| Current operating margin (%) |
9.6% |
8.5% |
8.8% |
8.2% |
| Adjusted EBIT* |
45.5 |
126.1 |
37.8 |
108.7 |
| Adjusted EBIT margin (%) |
10.3% |
9.1% |
9.4% |
8.8% |
| Attributable net
income |
25.9 |
59.1 |
18.3 |
46.0 |
|
Attributable net earnings per share (€/share)** |
1.23 |
2.81 |
0.88 |
2.21 |
* Adjusted EBIT corresponds to income from current operations
restated for capitalized "IAS 23 revised" borrowing costs, which
are deducted from the gross margin.
**Based on the
number of shares that make up Kaufman & Broad's share capital,
i.e. 20,837,039 shares at November 30, 2016, and 21,073,535 shares
at November 30, 2017, following the issue of 236,496 shares for the
capital increase reserved for employees' on November 30,
2017.
Consolidated income statement*
| € '000s |
Q4
2017 |
Fiscal
2017 |
Q4
2016 |
Fiscal
2016 |
| Revenues |
442,858 |
1,390,798 |
402,699 |
1,238,002 |
| Cost of sales |
-355,488 |
-1,121,666 |
-325,432 |
-1,002,397 |
| Gross
margin |
87,370 |
269,132 |
77,267 |
235,605 |
| Selling expenses |
-10,573 |
-37,655 |
-11,562 |
-34,891 |
| Administrative
expenses |
-16,391 |
-64,340 |
-18,132 |
-58,214 |
| Technical and
after-sales service expenses |
-5,538 |
-20,582 |
-5,073 |
-19,477 |
| Development and
program expenses |
-12,293 |
-28,599 |
-7,035 |
-21,765 |
| Income from current operations |
42,576 |
117,956 |
35,465 |
101,258 |
| Other non-recurring
income and expenses |
- |
- |
- |
- |
| Operating income |
42,576 |
117,956 |
35,465 |
101,258 |
| Cost of net financial
debt |
-2,382 |
-5,779 |
-794 |
-3,203 |
| Other financial income
and expense |
- |
- |
- |
- |
| Income tax |
-7,657 |
-28,430 |
-9,930 |
-30,365 |
Share of income
(loss)
of equity affiliates and joint ventures |
613 |
1,120 |
-23 |
-211 |
| Net
income of the consolidated entity |
33,149 |
84,867 |
24,718 |
67,479 |
|
Non-controlling interests |
7,232 |
25,749 |
6,439 |
21,445 |
| Attributable net income |
25,918 |
59,118 |
18,279 |
46,034 |
*Not approved by the Board of
Directors and not audited.
Consolidated balance sheet
| € '000s |
Nov 30, 2017 |
Nov 30, 2016 |
| ASSETS |
|
|
|
Goodwill |
68,661 |
68,661 |
| Intangible assets |
89,442 |
87,570 |
| Property, plant and
equipment |
7,699 |
7,449 |
| Equity affiliates and
joint ventures |
14,815 |
5,634 |
| Other non-current
financial investments |
2,311 |
2,504 |
| Deferred tax
assets |
4,227 |
- |
| Non-current assets |
187,155 |
171,818 |
| Inventory |
384,882 |
371,381 |
| Trade receivables |
340,142 |
375,669 |
| Other receivables |
198,968 |
159,772 |
| Cash and cash
equivalents |
221,065 |
118,108 |
| Prepaid expenses |
1,079 |
1,345 |
| Current assets |
1,146,136 |
1,026,275 |
| TOTAL ASSETS |
1,333,291 |
1,198,093 |
| |
|
| LIABILITIES |
|
|
| Share capital |
5,479 |
5,418 |
| Additional paid-in
capital |
132,670 |
79,119 |
| Attributable net
income |
59,118 |
46,034 |
| Attributable equity capital |
197,268 |
130,571 |
| Non-controlling
interests |
18,174 |
15,196 |
| Equity capital |
215,442 |
145,767 |
| Non-current
provisions |
24,952 |
23,229 |
Borrowings and other
non-current financial liabilities
(portion maturing in > 1 year) |
249,615 |
191,362 |
| Deferred tax
liability |
60,105 |
45,471 |
| Non-current
liabilities |
334,672 |
260,062 |
| Current
provisions |
1,191 |
1,499 |
| Other current
financial liabilities (portion maturing in < 1 year) |
4,542 |
11,840 |
| Trade payables |
652,012 |
675,146 |
| Other payables |
125,177 |
97,382 |
| Current tax due to the
Government |
- |
5,858 |
| Prepaid
income |
255 |
539 |
| Current liabilities |
783,177 |
792,264 |
| TOTAL EQUITY AND LIABILITIES |
1,333,291 |
1,198,093 |
*Not approved by the Board of Directors and not
audited.
| Housing |
Q4
2017 |
Fiscal 2017 |
Q4
2016 |
Fiscal 2016 |
| |
|
|
|
|
| Revenues (€ million,
excluding VAT) |
397.9 |
1,213.7 |
367.5 |
1,060.0 |
|
|
381.5 |
1,169.1 |
357.1 |
1,017.7 |
|
|
16.4 |
44.6 |
10.3 |
42.3 |
| |
|
|
|
|
| Deliveries (EHUs) |
2,591 |
7,843 |
2,301 |
6,545 |
|
|
2,503 |
7,619 |
2,255 |
6,360 |
|
|
88 |
224 |
46 |
185 |
| |
|
|
|
|
| Net orders
(number) |
3,148 |
9,027 |
2,789 |
8,017 |
|
|
3,043 |
8,712 |
2,686 |
7,779 |
|
|
105 |
315 |
103 |
238 |
| |
|
|
|
|
| Net orders (€ million,
including VAT) |
623.4 |
1,790.1 |
525.2 |
1,539.6 |
|
|
594.9 |
1,700.2 |
499.9 |
1,479.0 |
|
|
28.5 |
89.8 |
25.3 |
60.6 |
| |
|
|
|
|
| End-of-period
commercial offer (number) |
3,835 |
4,196 |
| |
|
|
|
|
| End-of-period
backlog |
|
|
|
|
|
|
1,670.2 |
1,360.2
1,312.3
47.9
15.4
24,314 |
|
|
1,591.5 |
|
|
78.7 |
|
|
16.5 |
| |
|
|
End-of-period land bank (number) |
27,775 |
| Commercial property |
Q4
2017 |
Fiscal 2017 |
Q4
2016 |
Fiscal 2016 |
| |
|
|
|
|
| Revenues (€ million,
excluding VAT) |
42.4 |
165.3 |
33.3 |
171.1 |
| Net orders (€ million,
including VAT) |
35.7 |
144.3 |
23.3 |
274.6 |
|
End-of-period backlog (€ million, excluding VAT) |
174.7 |
230.4 |
Annual Results 2017
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Kaufman & Broad SA via Globenewswire
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