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Kaufman & Broad SA: 2012 annual results



  Kaufman & Broad SA: 2012 annual results

Business Wire

PARIS -- January 24, 2013

Regulatory News:

            (UNAUDITED AND NOT APPROVED BY THE BOARD OF DIRECTORS)

2012: Results in line with projections announced at the beginning of the year

  * Business level maintained over the entire year

  * Total revenues: €1,030.0 million (-1.4% vs. 2011)
  * Housing revenues: +1.8% vs. 2011, +5.5% in Q4
  * Housing orders in volume: -14.4% over the year, -5.7% in Q4
  * Average take-up rate for new programs launched in Q4: 26.3%

  * Solid financial indicators, net financial debt continues to fall

  * Gross margin rate: +0.2 points, to 19.6%
  * Attributable net income: €47.6 million, stable vs. 2011 (€47.5 million)
  * Net financial debt: €81.2 million (vs. €163.7 million at end 2011)

  * Good outlook for future business

  * Housing property portfolio: over 16,000 lots, 3 years of business
  * Housing backlog in value: €1.1 billion, 13 months of business

2013: Financial performance comparable to 2012 in a challenging economic
climate

Kaufman & Broad SA (Paris:KOF) today announces its financial results for 2012
(from December 1, 2011 to November 30, 2012), and its fourth quarter results
(from September 1, 2012 to November 30, 2012).

Key consolidated data

                     Fiscal    Fiscal
                               Year                 Q4       Q4
(€ million)          Year                 Change    2012     2011     Change
                               2011
                     2012
Revenues             1,030.0   1,044.3    -1.4%     354.4    365.3    -3.0%
(excluding VAT)
Gross margin         202.1     202.8      -0.3%     71.6     71.6     -
Gross margin rate    19.6%     19.4%      +0.2pts   20.2%    19.6%    +0.6pts
Current operating    85.3      89.1       -4.3%     36.8     38.4     -4.1%
profit
Current operating    8.3%      8.5%       -0.2pts   10.4%    10.5%    -0.1pts
margin
Attributable net     47.6      47.5       +0.2%     19.8     19.7     +0.1%
income

Commenting on these results, Guy Nafilyan, Chairman and Chief Executive
Officer of Kaufman & Broad S.A., stated: “As we had announced at the beginning
of the fiscal year, financial performance for 2012 is comparable to 2011 as
regards the gross margin rate, operating margin and attributable net income.
After taking into account €48.5 million in interim dividends, net financial
debt declined by half.

This performance, with a slight rise in Housing revenues, took place in a real
estate market that has been declining sharply in general since the beginning
of the year.

The real estate portfolio remained at a high level, and backlog accounted for
13 months of business.

In this context, Kaufman & Broad will keep developing homes in 2013 that are
designed for first-time buyers who can take advantage of the new
“Zero-interest Plus Loan” program and investors through the new incentive that
was implemented in January 2013. Moreover, Kaufman & Broad will continue to
grow by offering homes designed for students and seniors, who continue to
benefit from the “Censi-Bouvard” incentive.

As regards commercial property, Kaufman & Broad will file building permits for
three projects in Île-de-France - all large-scale - in Boulogne-Billancourt
and Paris, which will contain over 55,000 sq.m of office space.

In a more challenging economic and social climate, in 2013, Kaufman & Broad
wants to keep its financial performance at the same level as 2012 by bringing
its operating expenses under control, its Working capital requirements and
continuing to pay off its debt.”

  * 1.8% increase in Housing revenues over one year

Total revenues for 2012 were €1,030.0 million (excluding VAT), versus €1,044.3
million (excluding VAT) in 2011, down 1.4%.

Housing revenues, which account for 97.1% of total revenues, increased 1.8%
compared to 2011, to €1,000.7 million (excluding VAT). Île-de-France’s share
of those revenues was 45.5%, compared to 38.0% in 2011.

Revenues in the Apartments segment rose 5.6% to €976.7 million, representing
97.6% of total revenues for the Housing business. Revenues for the
Single-family homes in communities segment totaled €23.9 million, versus €58.1
million in 2011. Showroom revenues totaled €6.7 million and revenues from the
Commercial property business totaled €21.1 million.

For the fourth quarter alone, Housing revenues totaled €345.3 million
(excluding VAT), an increase of 5.5% over the fourth quarter of 2011.

During 2012, 5,669 equivalent housing units (EHUs) were delivered, compared to
5,653 EHUs in 2011, an increase of 0.3%.

  * Fall in housing order over the year, slight increase in commercial offer

Over the entire year, housing orders in volume fell 14.4%  (5,487 housing
units ordered versus 6,408 orders in 2011). Orders in value amounted to
€1,096.0 million (including VAT), down 19.2% compared to 2011. This decline
should be considered in connection with the 25% fall in housing starts for the
same period.

Orders in Île-de-France accounted for 45.5% in volume and 46.2% in value for
all housing orders, compared to 33.9% and 39.8% for all of 2011.

In the fourth quarter of 2012, housing orders in volume totaled 1,460, down
5.7% compared to the same quarter in 2011. In value, they totaled
€317.6 million (including VAT) versus €347.5 million (including VAT) in the
fourth quarter of 2011.

The average monthly take-up rate for new programs launched during the fourth
quarter of 2012 was 26.3%.

The commercial offer totaled 3,222 housing units versus 3,067 housing units as
of November 30, 2011.

Office orders in value accounted for €13.8 million (including VAT) during
fiscal year 2012.

  * Stability of gross margin and increased gross margin rate

During all of 2012, the gross margin totaled €202.1 million, almost unchanged
from 2011 (€202.8 million). As a percentage of revenues, it totaled 19.6%,
versus 19.4% in 2011. In the fourth quarter of 2012, the gross margin rate was
20.2%, up 0.6 points compared to the fourth quarter of 2011.

Current operating expenses came to €116.9 million (11.3% of revenues),
compared to €113.7 million in 2011 (10.9% of revenues).

Current operating income totaled €85.3 million for the year, compared to €89.1
million in 2011. In the fourth quarter of 2012 alone, it totaled €36.8
million, down 4.1% compared to the same period in 2011. The current operating
margin rate was, respectively, 8.3% in 2012 and 10.4% in the fourth quarter.

The cost of net financial debt totaled €4.1 million, versus €11.5 million in
2011. The €7.4 million drop can be explained mostly by the reduction in
average net financial debt.

Attributable net income totaled €47.6 million, compared to €47.5 million in
2011. In the fourth quarter, net income was €19.8 million, versus €19.7
million in the same quarter of 2011.

  * Continued deleveraging and working capital requirements reduction

Operating cash flow amounted to €156.0 million in 2012, compared to €70.6
million in 2011, and experienced considerable improvement in operating working
capital requirements, which went from €168.3 million to €109.8 million the
following year.

As of November 30, 2012, cash and cash equivalents (available cash and
investment securities) amounted to €153.8 million, compared to €138.9 million
as of November 30, 2011. The group’s financial capacity at end November 2012
totaled €206.7 million.

Working capital requirements totaled €144.4 million, down nearly 30% compared
to November 30, 2011, and represented 14.0% of revenues, compared to 19.7% at
end November 2011.

Net financial debt totaled €81.2 million as of November 30, 2012, half of its
amount as of November 30, 2011. This deleveraging may be explained by good
control over working capital requirements resulting from the group’s selective
policy applied to the launching of new programs since the fourth quarter of
2011.

  * Good outlook for future business

The group actively continued to regenerate the Housing property portfolio. As
of November 30, 2012, it represented 16,049 lots, of which 6,188 are in
Île-de-France and 9,861 in the Regions, for potential revenues corresponding
to three years of business.

Commercial property reserves include 55,000 sq.m of office space. They
represent potential revenues of €365 million over the next three years.

As of November 30, 2012, total backlog amounted to €1,122.6 million (excluding
VAT), down 6.9% compared to November 30, 2011. The Housing backlog totaled
€1,091.1 million (excluding VAT), representing 13.1 months of business.

As of the same date, Kaufman & Broad had 163 housing programs on the market, 
of which 39 were in Île-de-France and 124 in the Regions, compared to 168
programs as of November 30, 2011.

In the first quarter of 2013, Kaufman & Broad will develop 18 new programs (7
in Île-de-France and 11 in the Regions) amounting to a total of 786 housing
units. Throughout 2013, the group plans to develop 96 new programs amounting
to nearly 5,800 housing units.

The financial statements for the fiscal year will be approved by the Board of
Directors on February 15, 2013.

  * Next regular publication: first quarter 2013 results on April 25, 2013.

Glossary

Orders: measured in volume (Units) and in value, orders reflect the group’s
commercial activity. Orders are recognized in revenue based on the time
necessary for the “conversion” of an order into a signed and notarized deed,
which is the point at which income is generated. In addition, for 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 the said program and the total expense budget for said 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, which enables a forecast of future
revenues for the coming months.

Property portfolio: all real estate for which a deed or commitment to sell has
been signed.

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.

                            website: www.ketb.com

This document contains forward-looking information. This information is liable
to be affected by known or unknown factors that KBSA cannot easily control or
forecast, which may render 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.12-0252 on March 30, 2012.

Kaufman & Broad S.A.

Consolidated income statement*

(in € thousands)

*Unaudited and not approved by the Board of Directors
                                                                 
                                                    Fiscal year   Fiscal year
                                                                 
                                                    2012          2011
Revenues                                            1,030,046     1,044,255
Cost of sales                                       (827,912)     (841,460)
Gross margin                                        202,134       202,795
Selling expenses                                    (29,242)      (27,375)
General and administrative expenses                 (62,935)      (62,086)
Technical and customer service expenses             (16,301)      (15,634)
Other income and expenses                           (8,375)       (8,632)
Current operating profit                            85,281        89,069
Other non-recurring income and expenses             1,528         782
Operating income                                    86,809        89,851
Cost of net financial debt                          (4,121)       (11,522)
Other financial income and expenses                 (109)         6,915
Income tax (expenses)/income                        (25,814)      (28,709)
Share of income (loss) of equity affiliates and     (61)          955
joint ventures
Income (loss) attributable to shareholders          56,704        57,490
Minority interest                                   9,080         9,977
Attributable net income                             47,624        47,513
Earnings (loss) per share (€)                       2.21          2.20

Kaufman & Broad S.A.

Consolidated balance sheet*

(in € thousands)

*Unaudited and not approved by the Board of Directors
                                                              
ASSETS                                         Nov. 30, 2012   Nov. 30, 2011
Goodwill                                       68,511          68,511
Intangible assets                              84,897          83,010
Property, plant and equipment                  5,604           5,883
Equity affiliates and joint ventures           4,373           3,473
Other non-current financial assets             1,262           2,551
Non-current assets                             164,647         163,428
Inventories                                    284,469         235,556
Accounts receivable                            268,189         305,673
Other receivables                              180,141         189,766
Cash and cash equivalents                      153,763         138,878
Prepaid expenses                               1,008           805
Current assets                                 887,570         870,678
TOTAL ASSETS                                   1,052,217       1,034,106
                                                                              
EQUITY AND LIABILITIES                         Nov. 30, 2012   Nov. 30, 2011
Capital stock                                  5,612           5,612
Additional paid-in capital                     135,910         95,251
Interim dividends                              (48,455)        -
Attributable net income                        47,624          47,513
Attributable shareholders’ equity              140,691         148,376
Minority interest                              8,420           8,470
Shareholders’ equity                           149,111         156,846
Non-current provisions                         24,510          24,424
Borrowings and other non-current financial
liabilities                                    234,535         283,284
(> 1 year)
Deferred tax liabilities                       55,586          35,205
Non-current liabilities                        314,631         342,913
Current provisions                             1,000           -
Other current financial liabilities (< 1       458             19,337
year)
Accounts payable                               473,624         409,668
Other liabilities                              111,776         103,985
Deferred income                                1,616           1,357
Current liabilities                            588,474         534,347
TOTAL EQUITY AND LIABILITIES                   1,052,217       1,034,106

Kaufman & Broad S.A.

Additional information

(Cumulative as of November 30)
                                          
                                           Single-family homes
                                           in communities
                                           2012        2011        2010
Net orders (in units)                      244         91          334
Net orders (in € thousands, including      55,655      30,148      101,832
VAT)
Backlog (in € thousands, excluding VAT)    53,484      30,350      62,132
Backlog (in months of business)            26.8        6.3         5.9
Deliveries (in EHUs)                       102         239         508
                                                                              
                                           Apartments
                                           2012        2011        2010
Net orders (in units)                      5,243       6,317       6,317
Net orders (in € thousands, including      1,040,325   1,326,735   1,291,906
VAT)
Backlog (in € thousands, excluding VAT)    1,037,621   1,130,031   954,768
Backlog (in months of business)            12.7        14.7        14.5
Deliveries (in EHUs)                       5,567       5,414       4,886
                                                                              
                                           Commercial property
                                           2012        2011        2010
Net orders (in sq.m)                       -           -           -
Net orders (in € thousands, including      13,791      106,652     3,165
VAT)
Backlog (in € thousands, excluding VAT)    30,974      41,016      1,469

Kaufman & Broad S.A.

Additional information

(Quarterly)
                                                                              
                                          Single-family homes in communities
                                          Q4 2012       Q4 2011     Q4 2010
Net orders (in units)                     56            26          70
Net orders (in € thousands, including     16,082        7,244       21,334
VAT)
Deliveries (in EHUs)                      42            47          115
                                                                              
                                          Apartments
                                          Q4 2012       Q4 2011     Q4 2010
Net orders (in units)                     1,404         1,522       1,584
Net orders (in € thousands, including     301,567       340,212     335,637
VAT)
Deliveries (in EHUs)                      2,030         1,764       1,812
                                                                              
                                          Commercial property
                                          Q4 2012       Q4 2011     Q4 2010
Net orders (in sq.m)                      -             -           -
Net orders (in € thousands, including     -             64,992      3,165
VAT)

Contact:

Kaufman & Broad SA
Chief Finance Officer
Bruno Coche
01 41 43 44 73
Infos-invest@ketb.com
Press Relations
Delphine Peyrat - Wise Conseil
06 38 81 40 00
dpeyratstricker@wiseconseil.com
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