2017 RESULTS AND OUTLOOK JANUARY 31, 2018

Transcription

1 2017 RESULTS AND OUTLOOK JANUARY 31, 2018

2 HOUSING BUSINESS

3 CONTINUED GROWTH MOMENTUM > Orders (No. of units) +68% 9, > Marketing period (months) -2.8 months 5, % months > Property portfolio (no. of units) > Housing Backlog > / Global ( million, (M, excluding HT) VAT) Logement Global +81% 27, % 1, ,848 Commercial 15, % % End of 2013 End of 2014 End of 2015 End of 2016 End of 2017 End of 2013 End of 2014 End of 2015 End of 2016 End of

4 OUR VIEW OF THE NEW-BUILD HOUSING MARKET Favorable factors Stability of the tax arrangements (Pinel and PTZ) in areas where there is a housing shortage Low interest rates Economic recovery Confidence of households at the highest level for 10 years (INSEE) Demographic factors (population growth, people living apart, longer life expectancy, etc.) Shortage factors Fall in purchasing power of social housing landlords Increase in land prices Increase in sale prices Heavy taxation on Housing 2

5 HOUSING MEASURES VOTED (2018 Finance Act vs Revised Finance Act) PINEL arrangements: Zones A, A bis and B1: extension until Zones B2 and C: Extension for sales before completion signed before if planning permit submitted before ; Thereafter, exclusion for planning permits submitted as from PTZ arrangements for new-build: Zones A, A bis and B1: extension to Zones B2 and C: extension to , though loan percentage reduced by decree from 40% to 20% VAT: increase in the rate for social housing from 5.5% to 10% Extension of Non-Professional Landlord Status until

6 DRAFT LOI ELAN* : End of contributions to the draft law March 2018: Preparation of draft Housing Law June and July 2018: Review and discussion of the draft by Members of the French Parliament Among new measures: BUILDING PERMIT establish time schedule for interim suspensions and building permit and reinforce the requirement for judges to provide reasons for refusing. simplify the conduct of actions for liability against abusive appeals, class action appeals and others, and accept orders for fines, currently very rare; establish a framework for financial settlements aimed at obtaining a withdrawal, in the event of appeals for the benefit of organizations, for instance (obligation to file settlements agreed before the lodging of an appeal); limiting the impact of cancellations of zoning documents: Local Development Plans (PLUs) and Regional Consistency Schemes (SCoTs), etc. REVIEWING ACCESSIBILITY STANDARDS Keep 10% of housing accessible to the disabled; Design new kinds of housing that can be scaled on an ongoing basis. LEASE AGREEMENT Creation of a mobility lease agreement (bail mobilité) from 1 to 10 months non renewable. LAND Create new Development Partnership Projects; Authorize the sale of public land below the market price. *Change in the Housing Unit and Digital Development 4

7 THE NEW-BUILD MARKET: KBSA vs. MARKET Orders (number of units) Market Kaufman & Broad 127,056 Market estimated around 130,000 units +12.6% 9,027 8,

8 EXPANSION OF THE PROPERTY PORTFOLIO Property portfolio - No. of units + 81% over 4 years +16% per year 24,314 27,775 15,300 17,792 18, % Nov 2013 Nov 2014 Nov 2015 Nov 2016 Nov 2017 Kaufman & Broad land bank at end November 2017: 98% in housing shortage areas 6

9 INCREASE IN ORDERS million incl. VAT Number of units % over 4 years 16.0% per year + 68% over 4 years 14.7% per year 1,790 (+16,3%) 1,540 1,212 1, ,027 (+12.6%) 8,017 6,901 5,871 5,379 Breakdown of orders in 2017 vs 2016, in numbers 17% 51% 2016: 5% 8,017 units 27% First-time buyer Second-time buyer Block 43% Investor 2017: 9,027 units 14% 6% 37% 7

10 REDCUCTION IN THE MARKETING PERIOD Marketing period in months Market average* Kaufman & Broad months over 4 years (9 months) months *Source: ECLN 8

11 STRONG BUSINESS OUTLOOK Backlog Housing million, excl. VAT +73% over 4 years +14.8% per year , % Nov Nov Nov Nov Nov

12 CONTINUED GEOGRAPHICAL ROLL-OUT Already well established in regions with strong growth momentum (Paris Region and the Mediterranean and Atlantic Coasts), etc. Kaufman & Broad is actively developing its activity in densely populated areas with between 200,000 and 600,000 inhabitants Lille Lille Caen Le Havre Rouen Reims Rennes Paris Rennes Angers Paris Tours Nantes Lyon Annecy Nantes La Rochelle Dijon Lyon Annecy Bordeaux Grenoble Bordeaux Grenoble Bayonne Toulouse Montpellier Marseille Nice Toulon Bayonne Toulouse Montpellier Marseille Toulon Perpignan 10

13 STRONG SALES ACTIVITY IN Lille Haute Normandie At November 30, programs were being marketed representing 3,835 housing units Rennes 10 Nantes La Rochelle Caen Val de Loire Paris & area 1 Dijon Annecy Strasbourg & area Bordeaux 10 Lyon Bayonne 7 12 Toulouse & area 14 Montpellier 10 Marseille 13 Nice 10 Toulon 11

14 GOOD COMMERCIAL PROSPECTS FOR 2018 Expected growth around 20% ( 11,100 units) mainly on second half of 2018 Châtenay-Malabry sq.m 337 housing units 2 retail outlets Chilly Mazarin 47,000 sq.m 562 housing units 1 serviced residence for seniors, 100 housing units 1 hotel, 120 rooms As part of a joint development with Bouygues Immobilier Longjumeau 17,230 sq.m 310 housing units At the structuring stage Bordeaux (Tour Silva) 17,640 sq.m, of which 3,005 sq.m of office space 14,130 sq.m of housing 184 apartments Toulouse 21,420 sq.m 376 units, of which 241 housing units 117 hotel residences 18 retail outlets Strasbourg/Starlette 35,000 sq.m of which 20,000 sq.m of offices > 200 apartments Roissy en Brie 41,382 sq.m 528 housing units, of which 110 rent-to-buy multiple housing units 160 multiple social housing units 50 multiple intermediate rent units 208 single-family homes Cap d Agde/Iconic 25,000 sq.m 217 apartments 3,000 sq.m of retail outlets and services 1 tourism residence 1 residence for seniors 12

15 MANAGED RESIDENCES

16 MANAGED RESIDENCES: ORDERS IN % 1, orders Kaufman & Broad Number of units 868 Student residences Residences for seniors Tourism & business residences

17 MANAGED ACCOMMODATION: PLANNED DEVELOPMENTS 2018: 27 projects at the marketing stage Lille & Villeneuve d Ascq Erquy Caen Rouen Amiens Number of projects marketed in 2018 Student residences Rennes Région parisienne Residences for seniors Nantes Tourism & business residences La Rochelle Villeurbanne 3,100 units under development, of which 16 residences for seniors including about 1,600 units Hendaye Bordeaux Toulouse Montpellier Carpentras Cap d Agde St Mandrier 15

18 MANAGED ACCOMMODATION: THREE STRATEGIC PRIORITIES 1. Student residences Maintain the level of development for conventional student residences Develop a new generation of student residences 2. Tourism & business residences Extend our land search to managed social accomodation Take ownership of new products (Coliving, youth hostels, etc.) 3. Residences for Seniors Turn the joint-venture with Serenis, and the Cosy Diem concept, into a high development priority 16

19 SERENIS: A STRATEGIC PARTNER A major operator, recognized in its field: Serving seniors since 1956 An experienced and well-known local operator 6 facilities, and 800 beds A specialist in caring for the elderly: Serenis has recognized experience and expertise (proceedings, guardianships, and elected officials, etc.) Serenis specifically partners with the Toulouse Gerontology Hub Strong values: Independence: family-oriented and independent atmosphere of the facilities in the Serenis network, providing a local offering around Toulouse. Quality: The quality and reliability of care are at the heart of Serenis facilities aims. Respect: A care ethic guides the overall approach to the elderly patient 17

20 COSY DIEM: AN INNOVATIVE CONCEPT Meeting the new requirements and expectations of an increasingly elderly population. Seniors want to grow old at home, where they have always lived, for as long as possible. Between now and 2060: 1/3rd of French people will be over 60 There will be more than 5 million people aged over 85 An innovative concept designed to meet the expectations of the new generation of independent seniors, who like their independence, and hope to prolong their independence while benefiting from on-hand assistance and a friendly atmosphere. A customized coaching program developed with the assistance of the Gerontology Hub, which aims to maintain residents capabilities in accordance with their wishes Food prepared on-site using healthy, organic, and fresh produce, with the health of local residents in mind, and from short distribution chains Maintaining social bonds and developing inter-generational bonds thanks to locations in city centers and residences that are open to their immediate surroundings, both from a geographic and societal standpoint (e.g. access to the local market, retail outlets, and partnership with crèches, etc.) 18

21 TOULOUSE: THE LARGEST PRIVATE UNIVERSITY RESIDENCE IN FRANCE Toulouse: Delivery of the largest private university residence in France for the Kley Group 17 months of works 140 m long 565 rooms a car park on 2 basement levels 1,000 sq.m of community areas, services, and retail outlets on the ground floor, overlooking a huge planted terrace 19

22 BORDEAUX: TOURISM RESIDENCE Bordeaux Residence: - Upgrade and extension of the Bordeaux District Social Action Community Center units, including 103 in a youth hostel, 97 in a hotel, and 14 housing units 20

23 COMMERCIAL PROPERTY

24 THE COMMERCIAL PROPERTY MARKET IN 2017 Market Continued high level of investment volumes: Volume of sales before completion, Ile-de-France: 2.3 billion, excl. VAT Volume of sales before completion, Regions: 0.7 billion, excl. VAT Orders of million, incl. VAT in 2017 Orders booked over the next 12 months, estimated at 200 to 300 million, incl. VAT 21

25 CONTINUED EXPANSION THROUGHOUT FRANCE > 19 projects in France being constructed, marketed or developped Honfleur Chapelle d Armentières Paris & area Châtres Strasbourg 15 Office projects 4 Logistics projects Nantes Mer Nancy Bordeaux Montbartier Toulouse 22

26 COMMERCIAL PROPERTY: ACTIVITY IN ,000 sq.m TOTAL REVENUES Offices 156,000 sq.m 170,300 sq.m million (excl. VAT) million (incl. VAT) Offices 60,300 sq.m Logistics Logistics 210,000 sq.m 12% 110,000 sq.m Revenues Orders Surface areas under construction Surface areas at the marketing and/or development stage 23

27 OFFICE DEVELOPMENT IN ILE DE FRANCE AND THE REGIONS ORA Building Porte Pouchet 26,000 sq.m Bordeaux Euratlantique 26,000 sq.m Strasbourg Starlette Building 20,000 sq.m of Offices, 15,000 sq.m of Housing EDF Commerce South- West s Head Office in Bordeaux 4,500 sq.m Arcueil 10,000 sq.m A9B Building, 23,000 sq.m Paris Left Bank Development Zone (ZAC) SNI s future Head Office Lille Eurasanté 7,000 sq.m Courbevoie Highlight Building 23,000 sq.m of Offices, 6,000 sq.m Hotel Residence Austerlitz Paris Left Bank 70,000 sq.m Planning permit submitted: Dec

28 LOGISTICS: SIGNATURE FOR TWO PLATFORMS Signature in 2017 of an agreement for two logistics platforms with total surface area of over 100,000 sq.m and an order volume of nearly 110 million Châtres Mer Montbartier Sales before completion with Groupama at Châtres (Seine-et-Marne) 36,000 sq.m For use by the French Army Sales before completion with Invesco at Montbartier (Tarn-et-Garonne) 72,000 sq.m Easydis (group Casino) as user Marketing & development Mer Logistics Park (Loir-et-Cher) 73,000 sq.m 25

29 INNOVATION AT THE SERVICE OF THE CUSTOMER, VALUE CREATOR

30 OUR CUSTOMERS ARE VALUE CREATORS Our ambition: Our customers are a source of value-creation Our capacity to innovate for their benefit determines our long-term future An approach based on several priorities: Innovating in terms of listening Innovating in terms of services Innovating in terms of quality Innovating in terms of techniques Using a customized panel of customers, enabling us to create a direct and ongoing link in terms of our ideas and their expectations Offering services throughout the entire value chain Strengthening the ties between the fundamental qualities of housing and the Kaufman & Broad brand Construction materials: example of tower blocks made of wood 27

31 I - INNOVATING IN TERMS OF LISTENING: KAUFMAN & BROAD IS INTRODUCING A TOOL FOR CONSULTING ITS CUSTOMERS A Panel of Likely Property Buyers, which can be activated throughout the year The panel was formed, and is facilitated by the Independent Data2décisions Institute Consumers who have a three-year property plan and live in the Kaufman & Broad catchment area (32 Departments) Representative sample (quota method) 28

32 I - INNOVATING IN TERMS OF LISTENING KAUFMAN & BROAD IS INTRODUCING A TOOL FOR CONSULTING ITS CUSTOMERS The Panel of Likely Property Buyers enables us to consult our customers at any time, in order to test the following at an early stage: Product design Services and fixtures Architectural design and internal lay-out Design of new services Various innovations New uses Communication tools Sales offerings This Panel enables us to be responsive and flexible, by adjusting to our customers expectations and requirements at an early stage 29

33 II - INNOVATING IN TERMS OF SERVICES OFFERING SERVICES THROUGHOUT THE ENTIRE VALUE CHAIN Aim: strengthening ties with our customers on an ongoing basis Broadening our service proposal by meeting our customers requirements throughout their experience: from before the purchase to use of the property Genuine value-added in terms of customer usage and experience Neutral impact in terms of revenues and equity capital Our approach: introduction to expert start-ups Selecting start-ups in response to highly targeted issues Experimenting (Proof of Concept) Partnerships and inclusion in our service offering 30

34 OFFERING SERVICES THROUGHOUT THE ENTIRE VALUE CHAIN Prior to purchase When using the property > Digitization of the marketing process (Used for all of our projects) Illustrations (viewpoints, etc.) 3-D plan Virtual viewings Orbital mock-ups > > Simplifying the managemen of condominiums (Currently being rolled out) Simplifying dayto-day travel (Test phase) > Customization of, and changes to, plans (Currently being trialled) > Car-sharing > Modeling of sunlight in the apartments > Use of free parking spaces 31

35 USAGE SERVICES KAROS > In test phase Ongoing trials with 3 projects in Ile-de-France: Vigneux-sur-Seine, Jouy Le Moutier and Mennecy 2018 Forthcoming trials at: Villejuif, Osny, Aubervilliers, Plaisir and Argenteuil The aim is to improve access to property projects and simplify day-to-day travel Car-pooling turns a personal car into public transport, and makes it an additional transport network Advantages: Transport solution in areas that are poorly served by public transport Encouraging multi-modality with existing transport Reducing the carbon footprint No organizational constraints Application and online platform: profile checked by Karos, notes and opinions from people using the car-pool, comfort criteria Declared vehicle, and Crit air sticker 32

36 USAGE SERVICES CHOUETTECOPRO > A successful trial, which is currently being rolled out Challenge: increase comfort and usage value by simplifying the management of condominiums Internet platform and mobile application bringing together the occupants, the condominium board, the condominium manager and the companies involved, in order to report and monitor the handling of incidents in the common parts Model: Complimentary 1-year subscription at the time of delivery Trial of 6 projects in the Ile-de-France Roll-out decision for all residential programs in the Ilede-France (to date, 23 condominiums have been equipped with the system) Trials in the regions Average registration rate for the housing units: 73% Among the registered occupants: 3 out of 4 have published at least 1 comment Renewal rate: 5 condos out of 6 in

37 III - INNOVATING IN TERMS OF QUALITY THE NF HABITAT ARRANGEMENTS NF Habitat certification is the cornerstone of Kaufman & Broad s Quality, Environment, and Innovation approach A certificate that showcases the key attributes of the housing unit, including a single set of multi-criteria guidelines for all types of housing units Four commitments: Responsible management where the Project Manager is concerned Quality of life Protecting the environment Economic efficiency Kaufman & Broad is one of the rare developers to be certified for all of its operations 34

38 IV - INNOVATING IN TERMS OF TECHNIQUES WOODEN BUILDINGS - SILVA TOWERBLOCK IN BORDEAUX > June 2015: Call for projects launched by EPA Bordeaux Euratlantique Aim: to exceed the current construction, technical and regulatory limits for wooden buildings Planning permit submitted in 3 rd quarter of 2018 Delivery in the 4 th quarter of 2020 Total floor area: 17,640 sq.m Housing floor area: 14,130 sq.m Office floor area: 3,005 sq.m Number of apartments: 184 Percentage of wood: for the entire project 55.7% for the tower block: 80.6% Frame made out of wooden posts and beams 35

39 EMPLOYEES WHO ARE COMMITTED TO SERVING OUR CUSTOMERS An attractive employer brand Increase of around 20% in the headcount over the past 24 months (around 150 new employees) A high level of commitment Commitment rate ( Human Footprint survey) of roughly 90% (March 2017) (versus the national average of 66%) Employeeshareholders Kaufman & Broad SA s largest shareholder with about 14% of the share capital 36

40 FINANCIAL RESULTS

41 REVENUE +12.3% 1,390.8 million 1,238.0 million 1% Housing 87% Other: 11.8 million vs. 6.9 million Apartments: 1,169.1 million vs. 1,017.7 million Single-family homes in communities: 44.6 million vs million Commercial property 12% Commercial property*: million vs million *Offices, retail premises, hotels, and logistics 38

42 FROM REVENUE TO OPERATING INCOME 1,390.8 (+12.3%) In million (1,121.7) (+14.2%) 19.4% of revenue (151.2) (+16.5%) 8.5% of rev (+16.1%) 9.1% of rev Revenue Cost of sales Gross margin Current operating expenses Operating income Adjusted EBIT* Corresponds to income from current operations restated for capitalized borrowing costs 39

43 OPERATING MARGINS Gross Margin (As a % of revenues) Current Operating Margin (As a % of revenues) Adjusted EBIT* (As a % of revenues) 19.1% 19.0% 19.4% 8.1% 8.2% 8.5% 8.7% 8.8% 9.1% * Income from current operations restated for capitalized borrowing costs 40

44 FROM OPERATING INCOME TO NET INCOME (+16.5%) (5.8) In million (28.4) (+25.8%) (25.8) 59.1 (+28.4%) Operating income Cost of net financial debt Tax Attributable income Consolidated net income Noncontrolling equity affiliates equity interests and joint ventures Attributable net income 41

45 SUMMARY BALANCE SHEET AT END 2017 In million ASSETS LIABILITIES Noncurrent assets Shareholders equity (vs M end of 2016) Working Capital Non-current liabilities 33.1 Net financial debt

46 CHANGE IN WORKING CAPITAL In million % of revenue 10.3% of revenue 8.7% of rev. 10.4% of revenue 10.6% of revenue Working Capital at end 2013 Working Capital at end 2014 Working Capital at end 2015 Working Capital at end 2016 Working Capital at end

47 STRENGTHENING OF THE FINANCING STRUCTURE 150 million Euro PP bond placement with institutional investors in Europe One 50 million tranche with a 7 year maturity, and one 100 million tranche with an 8 year maturity 100 million refinancing of the existing bank debt Extension of the average life on the debt (from 4.3 years at end 2016 to 5,6 years at end November 2017) Increased financial resources, to support growth 74% up-take of the share-based dividend option Cancellation of 947,136 treasury shares in order to keep the total number of shares identical on a fully-diluted basis 28 million improvement in cash and shareholders equity 65.4% up-take of the Offer reserved for employees 7.4 million improvement in cash and shareholders equity Increased borrowing capacity ( million compared with million at the end of 2016) 44

48 FINANCIAL STRUCTURE In million Nov Nov Shareholders equity Financial debt* Of which financial debt maturing in < 1 year Of which financial debt maturing in > 1 year Maturity 5.6 years 4.3 years *of which: Loan issuance costs (0.5) (3.1) Bilateral facilities, hedging instruments, and other Bond loan Senior B + C debt Cash and cash equivalents Borrowing capacity

49 : Strong capacity to generate cash In M (19.5) Var. WCR (5.7) CAPEX. (50.0) Cumulated Cash Flows * Net financial debt end of 2014 (115.2) Cumulated paid dividends (57.4) Share buyback (14.0) Debt repayement Capital Increase 7.4 (33.1) Net financial debt end of 2017 Operational Cash Flow after joint-venture, Taxes and financial interest 46

50 OUTLOOK

51 RECOMPOSITION OF SHARE CAPITAL Completion of recomposition of the share capital and Offer reserved for employees > The employees are now Kaufman & Broad s largest shareholder with nearly 14% of the share capital At January 19, 2017 At November 30, % 8.0% 8.0% Free float Predica KBSA Management and employees* 1.4% 13.6% 7.9% 77.1% 36.5% 39.1% Kaufman & Broad S.A. PAI Partners 8.4% KBSA Senior Executives and employees via Artimus Participations, KBSA s Company Savings Plan and other employees 47

52 LONG RUN OUTLOOK FOR THE FRENCH HOUSING MARKET From now to 2040 : Demographic growth: At least 7 more million inhabitants At least 6 more million households Household typology: Increase of single-parent families in the total number of households Source : INSEE 48

53 OUTLOOK FOR 2018 Market estimated at between 125,000 and 130,000 housing units Consolidated revenues: growth of between 8 and 10% Gross margin ratio: around 19% Adjusted EBIT ratio 1 : 8.5% to 9% Payment of a dividend of 2.10 per share in 2018 in respect of the 2017 fiscal year (ended on November 30, 2017), subject to the approval of the General Meeting of the Company s Shareholders on May 3, 2018 Option for payment of the dividend in shares, cash, or in cash and shares 1 Corresponds to income from current operations restated for capitalized borrowing costs 49

54 NOTES

55 REMINDER OF THE PINEL ARRANGEMENTS Undertaking to rent for a period of 6, 9, or 12 years at a rent that is lower than the market average, and to tenants whose income is capped Tax reduction of 12%, 18%, or 21% in exchange The value of the investment is capped at 300,000 Construction of highly energy-efficient (RT 2012) housing units 50

56 REMINDER OF THE PTZ ARRANGEMENTS FOR NEW BUILD The PTZ finances the purchase of a new-build home, as a primary residence, with a view to its initial occupancy. It is granted exclusively to first-time buyers. Its award is subject to income conditions. The amount of the PTZ depends on the number of people expected to occupy the home, the geographic region, and the characteristic features of the housing unit. It cannot exceed the total amount of other loans with a term of over two years. A property financed by the PTZ may be rented out during the sixyear period following the date when the loan was disbursed. 51

57 IMPORTANT NOTICE The Kaufman & Broad Registration Document was filed with the French Financial Markets Authority ( AMF ) under No. D on March 31, It is available on the AMF ( and Kaufman & Broad ( 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 document 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. 52