Kaufman & Broad SA: 1ST QUARTER 2023 RESULTS
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Kaufman Broad SA S Press release Press release Paris, 13 April 2023
1st quarter 2023 results
In the 1st quarter of 2023, housing orders amounted to 234.1 million euros (including tax), down 15.8% from 278.0 million euros in 2022. In volume terms, they stood at 1,021 housing units in 2023 compared to 1,237 in 2022, a decrease of 17.5%.
The programme take-up period was 6.9 months in the 1st quarter of 2023, an increase of 2.4 months compared to the same period in 2022 (4.5 months).
The commercial offering, with 98% of homes located in tight areas (A, ABIS and B1), amounted to 2,360 homes at 28 February 2023 (1,873 units at the end of February 2022).
Customer Breakdown
Bookings in value (including tax) for first time buyers accounted for 8% of revenue, compared to 18% over the same period in 2022. First time buyers accounted for 5% of revenue, compared with 12% in 2022. Orders made to investors accounted for 11% of revenue (of which 5% for Pinel alone), compared with 36% compared to February 2022. Block revenue accounted for 75% of orders in value terms (including Vat), compared with 34% over the same period in 2022.
At the end of 28 February 2023, the commercial division recorded net orders of 24.5 million euros (including Vat). No orders were recorded during the same period in 2022.
Kaufman Broad currently has about 105,800 sq.m of office space and approximately 154,160 sq.m of logistics space on the market or under consideration. In addition, 136,400 sq.m. of office space is currently being built or started in the coming months, along with nearly 28,600 sq.m. of logistics space. Lastly, 20,400 sq.m. of office space remains to be signed.
At the end of 28 February 2023, Housing Backlog stood at 2189.2 million euros (excl. VAT) compared to 2278.7 million euros (excl. VAT) for the same period in 2022, i.e., 22.9 months of activity compared to 24.9 months of activity at the end of February 2022. In the 1first quarter of 2023, Kaufman Broad had 143 housing programmes in the process of being marketed, representing 2,360 housing units (145 programmes and 1,873 housing units at the end of February 2022).
The real estate portfolio represents 34,429 units and is up 1.2% compared to the end of November 2022 (34,009 units). At the end of February 2023, it corresponded to over 6 years of commercial activity.
In addition, 88% of the housing units in the land portfolio are located in tight areas, representing 30,351 housing units as of 28 February 2023.
During the 2nd quarter of 2023, the group plans to launch 27 new programs, including 7 in the Paris areas region representing 318 units and 20 in the Other Regions representing 1,421 units.
At the end of February 2023, the Backlog for the Commercial property division was 691.7 million euros excluding VAT compared to 1095.4 million euros excluding VAT for the same period in 2022.
Total Revenue amounted to 586.5 million euros (excl. VAT), compared to 279.0 million euros for the same period in 2022.
Housing activity revenue amounted to 229.3 million euros (excl. VAT), compared to 235.2 million euros (excl. VAT) in 2022. It represents 39.1% of the group's revenue.
Revenue for the Apartments business was 213.6 million euros (excl. VAT) (vs). 229.3 million euros (excl. VAT) at end February 2022). Revenue for the Commercial property division was 353.9 million euros (excl. VAT), compared with 41.3 million euros (excl. VAT) for the same period in 2022. Other activities generated revenues of 3.4 million euros (excl. VAT) (including 1.9 million euros in revenues related to the operation of managed student residences) compared to 2.5 million euros in 2022.
At 28 February 2023, gross profit amounted to 85.0 million euros, compared to 48.3 million euros over the same period in 2022. The gross margin was 14.5% compared to 17.3% in 2022.
Current operating expenses amounted to 35.4 million euros (6.0% of revenue), compared to 27.3 million euros in the same period in 2022 (9.8% of revenue). Recurring operating income amounted to 49.6 million euros, compared to 21.0 million euros in 2022. Recurring operating income stood at 8.4% compared to 7.5% in 2022.
At the end of February 2023, consolidated net income amounted to 34.7 million euros, compared with 15.7 million euros in 2022. Non-controlling interests amounted to 3.1 million euros in the 1st quarter of 2023, compared with 3.9 million euros in 2022. Net income attributable was 31.6 million euros, compared with 11.8 million euros in 2022.
Net cash (excluding IFRS 16 debt and Neoresid put debt) amounted to 121.6 million euros at February 28, 2023, compared with net financial debt of 67.8 million euros at the end of November 2022. Cash and cash equivalents amounted to 292.7 million euros at February 28, 2023, compared with 101.0 million euros at November 30, 2022. Financial capacity amounted to 542.7 million euros at February 28, 2023, compared with 351.0 million euros at the end of November 2022.
Working capital requirements amounted to 50.6 million euros at February 28, 2023, or 3.1% of revenue, compared to 229.4 million euros at the end of February 2022 (either 18.0% of revenue).
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.
The group confirmed its outlook for the full year 2023, announced at the end of January. Revenue is expected to be around 1.5 billion euros, the recurring operating income ratio 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
GLOSSARY
Backlog or (backlog ) : for sales in the future state of completion (VEFA), it covers the undelivered reserved housing units for which the notarized bill of sale has not yet been signed and the undelivered reserved housing units for which the notarized bill of sale has been signed up to the portion not yet taken into revenue (on a 30% advanced program, 30% of the sales 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 orders 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 the Carbon Disclosure Project): Measuring the environmental impact of companies.
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: The EBIT corresponds to the operating income for the period, calculated at the gross margin deducted by operating costs for the current period.
Gross financial debt or financial debt: gross financial debt consists of long term and short term financial liabilities, hedging financial instruments relating to liabilities constituting gross financial debt and accrued interest on the balance sheet items constituting gross financial debt.
Net debt or net financial debt: the net debt or net financial debt of a company is the balance of its gross financial debt (or gross financial debt), on the one hand, and available financial investments forming its ‘Active cash’ on the other hand. It represents the credit or debit position of the company vis-à-vis third parties and outside the operating cycle.
Investment grade : investment grade means that a financial instrument or a company has a relatively low risk of default.
LEU (Equivalent Units delivered) is a direct reflection of business activity. The number of ‘LEU’ is equal to the product (I) the number of housing units in a given programme for which the notarial deed of sale has been signed and (II) the ratio between the amount of land and construction expenditure incurred by the group on the said program and the total budget of the expenditures of the said program.
Gross margin : corresponds to sales less cost of sales. The cost of sales includes the price of land, related land costs and construction costs.
Commercial offer : it is represented by the sum of the stock of available for sale dwellings on the date in question, i.e. all dwellings not reserved at that date (net of unopened commercial tranches).
Property portfolio: It includes land to be developed (otherwise known as the “land portfolio”), i.e. land for which a deed or a promise to sell has been signed, as well as land under study, i.e. land for which a deed or a promise to sell has not yet been signed..
Gearing ratio: this is the ratio of net debt to consolidated shareholders' equity. It measures the risk of the company’s financial structure.
Orders : measured in units or units and in value, they reflect the Group's business activity. Their inclusion in revenues is conditional on the time required to transform a order into a notarized deed of sale, which generates the income statement. In addition, in multi-family housing programs including mixed-use buildings (apartments, business premises, shops, offices), all surfaces are converted into housing equivalents.
Orders (in value ) : they represent the value of real estate assets resulting from order contracts signed, including all taxes for a given period. They are mentioned net of the withdrawals noted during the said period.
Managed residences : managed residences, or service residences, are real estate complexes consisting of housing (houses or apartments) for residential use offering a minimum of services such as reception, supply of linen, cleaning and maintenance of housing as well as the provision of breakfast. There are several types of residences: student residences are apartment complexes, mostly studios equipped with a kitchenette and furnished, located near schools and universities and close to public transportation; Tourist residences, located in tourist areas with high potential, offer in addition to the usual services such as swimming pools, sports grounds, sometimes saunas, hammams, whirlpools, children’s club; business residences are an alternative to traditional hotels, composed of studios (about 80%) and 2-room apartments, located in the city center or near major business centers and systematically well served; finally, senior residences (also including residences for dependent or non-dependent elderly people - EHPAD), which make it possible to anticipate the aging of the population, accommodate people aged 55 and over; their clientele is mixed: renters and owners.
CSR (Corporate Social Responsibility): corporate Social Responsibility (CSR) is the contribution of companies to the challenges of Sustainable Development. The approach consists of companies taking into account the social and environmental impacts of their activity in order to adopt the best possible practices and thus contribute to the improvement of society and the protection of the environment. CSR makes it possible to combine economic logic, social responsibility and eco-responsibility (definition of the Ministry of Ecology, Sustainable Development and Energy).
Sell-Through rate: The Sell-Through rate (Rst) represents the percentage of initial inventory that sells monthly on a real estate program (sales/month divided by initial inventory); i.e., monthly net orders divided by the ratio of beginning-of-period inventory plus end-of-period inventory divided by two.
EBIT rate: expressed as a percentage, it corresponds to current operating income cad at the gross margin less current operating expenses divided by revenue
Cash and cash equivalents Cash and cash equivalents on the assets side of the balance sheet include all available cash and cash equivalents, marketable securities (short term investments and term deposits) and deposit balances.
Net cash: It corresponds to ‘negative’ net debt, or ‘negative’ net financial debt, as for the company the balance of cash and financial investments forming its ‘active cash’ is greater than the amount of its gross financial debts (or gross financial debt).
Units : units or Units are used to determine the number of housing units or equivalent units (for mixed programmes) in a given programme. The number of housing equivalent units is determined by relating the surface area by type (business premises, shops, offices) to the average surface area of the housing units previously obtained.
Off balance sheet sales are contracts under which the seller immediately transfers to the buyer its land rights and ownership of the existing buildings. The future works become the property of the purchaser as they are executed; the purchaser is obliged to pay the price as the works progress. The seller retains the powers of the project owner until the work is accepted.
APPENDICES
Primary consolidated data*
* The EBIT corresponds to the operating income for the period, calculated at the gross margin deducted by operating costs (OCR) for the current period). * *Based on the number of shares comprising the share capital of Kaufman Broad S.A, i.e. 21,313,023 shares as of 28 February 2022 and 21,113,022 shares as of 28 February 2023. * * * including 1.9 million euros in revenues from the operation of student residences).
Consolidated income statement*
* Unaudited and not approved by the Board of Directors Consolidated balance Sheet
* Unaudited and not approved by the Board of Directors
Regulatory filing PDF file File: Kaufman & Broad SA : 1ST QUARTER 2023 RESULTS |
1607301 13-Apr-2023 CET/CEST
