Good business resilience in a waning
market
Regulatory News:
- Main financial indicators of the
group
- Total revenues: €1,026 million (-0.4%
vs. 2012)
- Housing revenues: €968 million (-3.3%
vs. 2012)
- Gross margin: €197 million vs. €202
million in 2012 (-2.5%)
- Housing gross margin: €189 million vs.
€195 million in 2012 (-3.0%)
- Attributable net income: €41 million
vs. €48 million in 2012 (-14.2%)
- Housing property portfolio: 15,200 lots
(3 years of business)
- Commercial property portfolio: 53,600
sq. m.
- Limited drop in commercial
activities over the entire fiscal year
- Housing orders: -2.0% in volume, -9.6%
in value
- Housing backlog in value: -11.5% (12
months of business)
- Stronger financial flexibility
- Net financial debt: €50 million, a €31
million improvement
- Borrowing power: €241 million (+16.7%
vs. at end 2012)
The Kaufman & Broad S.A. (Paris:KOF) Board of
Directors reviewed the results, which have not yet been audited,
for fiscal year 2013 (December 1, 2012 to November 30, 2013).
It also noted the mutually agreed resignation of Guy Nafilyan
from the office of Chairman of the Board of Directors, which was
announced last June. The Board of Directors expressed its thanks to
Guy Nafilyan for his commitment to serving the company and for
having transformed Kaufman & Broad into a brand that
sets a benchmark in the real estate market in France. It then
appointed Nordine Hachemi, previously General Manager and Deputy
Chairman of the Board of Directors of Kaufman & Broad
S.A., as Chairman.
Commenting on these results, Nordine Hachemi stated: “In fiscal
year 2013, Kaufman & Broad was able to stabilize its
revenues, and its gross margin fell by only 2.5% in a waning
market. At the same time, it continued to make significant progress
in reducing its debt.
Fiscal year 2014 is expected to be a mixed year. The historic
low levels of orders recorded in the market for the past two years
will have an impact on 2014, while the launch of new commercial
programs will be delayed because of municipal elections in
France.
Over the entire fiscal year 2014, Housing revenue is expected to
be substantially comparable to 2013 levels, while the housing gross
margin is expected to drop slightly.
However, in the second half of the year, sales activities could
experience a gradual upturn in orders in volume, reflecting the
imbalance between a continuously sustained demand driven by
demographic growth and a historic shortage of housing production,
which has amplified in recent years. In this context,
Kaufman & Broad is planning to increase its
commercial offer by approximately 15% in 2014.
In support of this policy, Kaufman & Broad will
intensify its growth efforts in two major directions: developing
its property portfolio in all of its business activities and
strengthening its marketing policy with institutional investors and
specifiers.”
- Sales activities
- Housing segment
During all of 2013, housing orders in volume fell 2.0%
(5,379 housing units ordered versus 5,487 in 2012). In value,
orders totaled €990.3 million (including VAT), down 9.6% compared
to 2012. Orders in Île-de-France accounted for 46.1% in volume and
50.6% in value of total housing orders, compared to 45.5% and 46.2%
for all of 2012.
In the fourth quarter of 2013, 1,436 housing units were ordered,
for a 1.6% drop compared to the fourth quarter of 2012. In value,
orders totaled €246.1 million (including VAT) compared to
€317.6 million (including VAT) in the same quarter of 2012, for a
decline of 22.5%, which can be partially attributed to the relative
weighting of the managed accommodation lots.
Apartments
In fiscal year 2013, 5,031 apartments were ordered versus 5,243
in 2012 (a 4.0% drop), which was more noticeable in the Regions
than in Île-de-France. In value, orders amounted to €884.7 million
(including VAT), versus €1,040.3 million (including VAT) in 2012,
for a 15.0% decrease.
As regards apartment orders, 46.1% in volume and 49.6% in value
were made in Île-de-France compared to, respectively, 45.2% and
45.7% in 2012. The apartments share remains the largest in
Kaufman & Broad orders since it reached 82.0% in
value and 93.2% in volume of its total orders compared to,
respectively, 93.7% and 95.6% in 2012.
More specifically, orders for managed accommodations grew 68.8%
in volume and 72.0% in value (851 orders for €74.7 million
(including VAT) in 2013 versus 504 orders for €43.4 million in
2012).
The group is developing a new offer of housing intended for
people seeking an environment in which everything is streamlined
with services and facilities and affordable charges.
Single-family homes in communities
During all of fiscal year 2013, orders for Single-family homes
in communities amounted to 348 units, versus 244 for all of 2012.
The increase of 104 units includes 28 orders in Île-de-France and
76 orders in the Regions.
In value, the orders amounted to €105.6 million (including VAT),
compared to €55.7 million (including VAT) in 2012, for an 89.7%
increase.
Customer base structure
In 2013, the structure of the group’s customer base remained
unchanged. Traditionally catering to homebuyers, almost half of
Kaufman & Broad orders were made by first-time
homebuyers (33%) and second-time homebuyers (14%), which clearly
indicate the reliability of the quality of its programs and
products.
The share of orders intended as investments in rental property
was 34% (including 23% under the “Scellier” and “Duflot”
incentives) versus 33% in 2012. Block orders remained unchanged at
20%.
- Commercial property segment
In the Commercial property segment,
Kaufman & Broad’s strategy is still based on a very
selective choice of projects and the 100% pre-sale principle.
During fiscal year 2013, the group recorded Commercial property
orders in the amount of €87.5 million (including VAT), versus €13.8
million (including VAT) in 2012. This includes the office building
program “YOU”, with a surface area of 9,300 sq. m., located in the
EcoQuartier - Île Seguin - Rives de Seine in Boulogne-Billancourt
(Hauts-de-Seine) and purchased before completion (VEFA) by
Boursorama for its future headquarters.
Moreover, Kaufman & Broad will apply for building
permits for two projects of significant size in Paris, representing
more than 46,000 sq. m. in office space.
- Advanced indicators of sales
activity
As of November 30, 2013, total backlog amounted to €1,018.6
million (excluding VAT), down 9.3% compared to the same period in
2012. The Housing backlog totaled €965.1 million (excluding
VAT), which is equal to 12 months of business.
As of the same date, Kaufman & Broad had 167
housing programs on the market, of which 44 were in Île-de-France
and 124 in the Regions, compared to 163 programs as of November 30,
2012.
The Housing property portfolio represented 15,213 lots, of which
5,401 were in Île-de-France and 9,812 in the Regions, for potential
revenues corresponding to close to three years of business.
The regeneration of the property portfolio is an important
aspect of Kaufman & Broad’s strategy. This
regeneration is done both with respect to quantity and types of
products. It relies on the ability of the group to develop building
complexes of significant size and mixed use (commercial, hotels,
housing, etc.).
Beyond Kaufman & Broad’s leadership in the sales
offices network, its enhanced marketing to private customers,
particularly through the development of the institutional investor
and specifier channels, should enable it to take full advantage of
the strength of the Kaufman & Broad brand.
Over the next 12 months, more than 90 program launches are
planned, representing 6,626 housing units (including 37
launches in Île-de-France representing 2,693 housing units and
54 launches in the Regions representing 3,933 housing
units).
- Financial results
- Business activities
Total revenues in fiscal year 2013 were €1,026.0 million
(excluding VAT) versus €1,030.0 million (excluding VAT) in 2012,
down 0.4%. In the fourth quarter alone, total revenues were €346.6
million (excluding VAT), down 2.2% compared to the fourth quarter
of 2012.
For the entire fiscal year, Housing revenues, which account for
94.3% of total revenues, recorded a drop of 3.3% compared to 2012
to €967.5 million (excluding VAT). Île-de-France’s share of those
revenues was 44.2%, compared to 45.5% in 2012.
Revenues for the Apartment segment were down 5.9%, to 919.3
million (excluding VAT). It represents 95.0% of total revenues for
the Housing business. Revenues for the Single-family homes in
communities segment was €48.2 million (excluding VAT), compared to
€23.9 million (excluding VAT) in 2012.
Revenues for the Commercial property business were €51.2 million
(excluding VAT) compared to €21.1 million (excluding VAT) in 2012.
The Showroom business generated revenues of €6.5 million (excluding
VAT).
- Elements of profitability
Gross margin was €196.8 million, compared to €202.1 million in
2012. As a percentage of revenues, it totaled 19.2%, versus 19.6%
in 2012. The Housing gross margin rate remained unchanged at
19.5%.
In the fourth quarter 2013, gross margin was €66.5 million
versus €71.6 million in the same quarter of 2012.
Current operating expenses amounted to €120.7 million, compared
with €116.9 million in 2012. They represent 11.8% of revenues
versus 11.3% in 2012.
Current operating income totaled €76.0 million for the year
2013, compared to €85.3 million in 2012. In the fourth quarter
alone, it totaled €30.7 million, down 16.6% compared to the same
period in 2012. The current operating margin rate was,
respectively, 7.4% in the entire fiscal year 2013 and 8.9% in the
fourth quarter alone.
The cost of net financial debt amounted to €2.8 million,
compared to €4.1 million in 2012. This improvement may be
explained for the most part by the reduction in average net
financial debt.
Attributable net income totaled €40.8 million, compared to €47.6
million in 2012. In the fourth quarter alone, it was down 13.7% to
€17.1 million.
- Financial structure and
liquidity
Balance sheet elements
Net financial debt was €50.0 million, down 38.4% compared to
November 30, 2012 when it was €81.2 million.
The gearing ratio (net debt to consolidated shareholders’
equity) was 26.6% as of November 30, 2013, compared to 54.5% as of
November 30, 2012, reflecting both the decline in net debt of €31.2
million and the increase in shareholders’ equity of €39.1
million.
Working capital requirements was down 12.2% compared to November
30, 2012 (€126.8 million vs. €144.4 million). It represents 12.4%
of revenues, versus 14.0% as of November 30, 2012.
As of November 30, 2013, active cash flow (available cash and
investment securities) totaled €188.3 million, compared to
€153.8 million as of November 30, 2012.
Borrowing power
As of November 30, 2013, the group had €290.6 million in
syndicated bank credit facilities (including the Senior B and C
lines drawn in the amount of €237.7 million). The unused
€52.9 million of the RCF line that was added to the €188.3
million in cash bring the group’s borrowing power as of
end-November 2013 to €241.2 million.
This press release is available from the
website www.ketb.com
- Next regular publication
dates:
April 9, 2014: First quarter 2014 results (after market
close)
April 11, 2014: Annual Shareholders’ Meeting
- 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 in view of its size, earnings and power of its
brand.
Disclaimer - This document contains forward-looking
information. This information is liable to be affected by known or
unknown factors that KBSA cannot easily control or project, which
may make 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 under number D.13-0247 on April 2,
2013.
Orders: measured in volume (Units) and in value, orders
reflect the group’s commercial activity. Orders are recognized in
revenue based on the time needed for the “conversion” of an order
into a signed and notarized deed, which is the point at which
income is generated. In addition, in apartment programs that
include mixed-use buildings (apartments/business premises/retail
space/offices), all floor space is converted into housing
equivalents.
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 the
notarized sales deeds have been signed by (ii) the ratio between
the group’s property expenses and construction expenses incurred on
this program and the total expense budget for this 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 date in question, i.e., all unordered
housing units as of this 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 parcels, the related
property costs and construction costs.
Backlog: a summary at any given moment that enables a
projection of future revenues for the coming months.
Property portfolio: all real estate for which a deed or
commitment to sell has been signed.
APPENDICES
Key consolidated data
In € millions
Q4 Year Q4
Year 2013 2013
2012 2012
Revenues
346.6 1,026.0
354.4 1,030.0 -- of which Housing
307.3
967.5
345.3
1,000.7
-- of which Showroom
1.6
6.5
2.0
6.7
-- of which Commercial property
37.7
51.2
6.4
21.1
-- of which Other
-
0.8
0.6
1.6
-- of which Île-de France housing
43.6%
44.2%
43.5%
45.5%
-- Of which Regions housing
56.4%
55.8%
56.5%
54.5%
Gross margin
66.5 196.8 71.6 202.1 Gross margin rate
(%)
19.2%
19.2%
20.2%
19.6%
Current operating profit
30.7
76.0
36.8 85.3 Current operating margin (%)
8.9%
7.4%
10.4%
8.3%
Attributable net income
17.1
40.8
19.8 47.6
Attributable net income per share
(€/share) *
€0.79
€1.89
€0.92 €2.21
* Based on the number of shares composing the capital of
Kaufman & Broad .SA, i.e., 21,584,658 shares
Consolidated income statement*
In € thousands
Q4 Year Q4
Year 2013 2013
2012 2012
Revenues 346,641
1,025,954 354,374 1,030,046 Cost of sales
(280,131) (829,185) (282,738) (827,912)
Gross margin
66,510 196,769 71,636 202,134 Selling
expenses (9,092) (30,619) (7,896) (29,242) General and
administrative expenses (18,222) (65,058) (18,190) (62,935)
Technical and customer service expenses (4,696) (18,052) (4,710)
(16,301) Other income and expenses (3,760) (7,011) (3,996) (8,375)
Current operating profit 30,740 76,030
36,844 85,281 Other non-recurring income and expenses
6 (1) 1,545 1,528
Operating income 30,746
76,029 38,389 86,809 Cost of net financial
debt (2,027) (2,807) (1,342) (4,121) Other income and expenses
(959) (109) Income tax (expenses)/income (8,868) (21,961) (13,702)
(25,814) Share of income (loss) of equity affiliates and joint
ventures 288 642 (257) (61)
Income (loss) attributable to
shareholders 20,140 51,903 22,130
56,704 Minority interest 3,079 11,055
2,349 9,080
Attributable net income
17,061 40,848 19,780
47,624
*Unaudited and not approved by the Board of Directors
Consolidated balance sheet*
In € thousands
Nov. 30, Nov. 30,
2013 2012 ASSETS
Goodwill 68,511 68,511 Intangible assets 85,376 84,897
Property, plant and equipment 4,713 5,604 Equity affiliates and
joint ventures 8,181 4,373 Other non-current financial assets
20,139 1,262
Non-current assets 186,920
164,647 Inventories 324,963 284,469 Trade receivables
291,778 268,189 Other receivables 153,404 180,141 Cash and cash
equivalents 188,258 153,763 Prepaid expenses 867 1,008
Current
assets 959,270 887,570 TOTAL
ASSETS 1,146,190 1,052,217
EQUITY AND LIABILITIES
Capital stock 5,612 5,612 Additional paid-in
capital 130,932 135,910 Interim dividends - (48,455) Attributable
net income 40,847 47,624 Attributable shareholders’ equity 177,391
140,691 Minority interest 10,811 8,420
Shareholders’ equity
188,202 149,111 Non-current provisions 33,422 24,510
Borrowings and other non-current financial liabilities (> 1
year) 218,959 234,435 Deferred tax liabilities 40,365 55,586
Non-current liabilities 292,746 314,631
Current provisions 1,724 1,000 Other current financial liabilities
(< 1 year) 19,340 458 Accounts payable 550,233 473,624 Other
liabilities 92,729 111,777 Deferred income 1,217 1,616
Current
liabilities 665,242 588,475
TOTAL EQUITY AND LIABILITIES 1,146,190
1,052,217
*Unaudited and not approved by the Board of Directors
Housing Q4 Year
Q4 Year 2013 2013
2012 2012
Revenues (€ millions)
307.3 967.5 345.3 1,000.7
-- of which Apartments
288.4
919.3
321.3
976.8
-- of which Single-family homes in
communities
18.9 48.2
8.5
23.9
Delivered EHUs
1,937 5,839 2,072 5,669
-- of which Apartments
1,844
5,606
2,230
5,567
-- of which Single-family homes in
communities
93
233 42 102
Net orders (units)
1,436 5,379 1,460 5,487
-- of which Apartments
1,367
5,031
1,404
5,243
-- of which Single-family homes in
communities
69
348
56
244
Net orders (€M, including VAT)
246.1 990.3 317.6 1,096.0
-- of which Apartments
218.6
884.7
301.6
1,040.3
-- of which Single-family homes in
communities
27.5
105.6
16.1
55.7
-- of which first-time homebuyers
30%
33%
29%
32%
-- of which other homebuyers
10%
14%
18%
15%
-- of which investors / block
60%
53%
53%
53%
-- of which Île-de France
53.9%
50.6%
42.9%
46.2%
of which Regions
46.1%
49.4%
57.1%
53.8%
Commercial offer at period end (units) 3,550 3,222
Backlog end of period -- In value (€M, excluding VAT) 965.1 1,091.1
-- of which Apartments
870.4 1,037.6
-- of which Single-family homes in
communities
94.7 53.5 -- In months of business 12.0 13.1 Property portfolio end
of period -- Number of lots 15,213 16,049
-- of which Île-de France
5,401 6,188
-- of which Regions
9,812 9,861 -- In years of business 3 3
Commercial property
Q4 Year Q4
Year 2013 2013
2012 2012
Revenues (€ millions) 37.7 51.2
6.4
21.1 Net orders (€M, including VAT) 76.0 87.5 - 13.8 Backlog end of
period (€m, excluding VAT) 52.7 31.0
Chief Finance OfficerBruno Coche+33 (1) 41 43 44
73Infos-invest@ketb.comPress RelationsDelphine Peyrat - Wise
Conseil+33 (6) 38 81 40 00dpeyratstricker@wiseconseil.com
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