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Kaufman & Broad SA : Press Release 2014 Annual Results (January 22, 2015)

KOF | January 22, 2015

PARIS, Jan. 22, 2015 (GLOBE NEWSWIRE) --

Key sales activity items
Housing orders:
5,871 housing units:
+9.1% vs 2013
€1,128.5M (incl. VAT): +14.0% vs 2013

Office orders: €295.1M (incl. VAT)
vs €87.5M in 2013

Key financial items
Revenues:
€1,083M vs €1,026M in 2013 Gross margin:
€194.3M vs €196.8M in 2013 Attributable net income:
€38.4M vs €40.8M in 2013 Net cash flow of €2.1M
at end 2014 vs €50M
in net financial debt at end 2013

Key growth indicators
Total backlog at Nov. 30: +14% €1,161.5M vs €1,018.6M
at end 2013

Housing backlog:
€1,015.7M vs €965.1M
at end 2013 Housing property portfolio
at Nov. 30: +16%
17,695 lots vs 15,205 lots
at end 2013

2014 results in line with the objectives announced Property portfolio up to 16% Housing: orders in value + 14% Offices: orders up sharply to €295M (including VAT)

The Kaufman & Broad SA Board of Directors reviewed the unaudited results for fiscal year 2014 (December 1, 2013 to November 30, 2014). Nordine Hachemi, Chairman and Chief Executive Officer of Kaufman & Broad SA, made the following statement:

Kaufman & Broad's 2014 results are in line with the objectives announced at the beginning of the fiscal year. Throughout the year, the Group continued to actively prepare for the future while at the same time pursuing the improvement of its financial structure.

In the Housing segment, as announced at the beginning of the year, the number of new program launches increased 15% with a steady pace in the 4^th quarter after a less robust first half.

The increase in orders throughout the fiscal year, both in volume and in value, shows the relevance of the product/price positioning of Kaufman & Broad's offer.

The ability to find the response to our customers' well-identified needs is an essential factor in our growth outlook, not without the help of our continuously growing property portfolio.

The Commercial property segment - an important lever of growth for the group - ended the fiscal year with a 23,000 sq.m Paris Rive Gauche Mixed Development Zone (ZAC) sale before completion. The late December 2014 acquisition of Concerto ED, a specialist in logistics development, allows Kaufman & Broad to broaden its general developer expertise.

At the same time, its financial structure has continued to improve with a gross financial debt reduced by more than €90 million and a zero net debt at fiscal year-end.

Regarding the 2015 outlook, stabilizing macro-economic and tax environments should result in a revenues and a gross margin comparable to 2014.

At last, the Board of Directors is considering to pay in March an interim dividend of €0.68 per share on the €1.36 dividend per share which will be proposed to the Shareholders' Meeting on April 16, based on the audited 2014 financial statements.

Sales activity

Housing segment

Over the entire fiscal year 2014, housing orders rose 9.1% in volume to 5,871 orders. In the 4^th quarter 2014, 1,921 housing units were ordered versus 1,436 in the 4^th quarter 2013. In value, housing orders totaled €1,128.5 million (including VAT), i.e. a 14.0% increase compared to 2013.

Apartments

In fiscal year 2014, 5,687 apartments were ordered, for revenues of €1,079.5 million (including VAT). Apartment orders were up 13.0% in volume and 22.0% in value compared to 2013.

Single-family homes in communities

Orders of Single-family homes in communities totaled €49.0 million (including VAT), compared to €105.6 million (including VAT) in 2013.

Customer-base structure

In 2014, orders by investors remained unchanged at 34%. Orders from homebuyers accounted for 37% (26% from first-time homebuyers and 11% from second-time homebuyers). Block orders totaled 28%.

Commercial property segment

In early November, Kaufman & Broad delivered to OPCIMMO (AMUNDI) the 8,000 sq.m CAP 14 building located in Paris' 14th arrondissement.

Construction works are in progress on the "YOU" building (9,300 sq.m), located in the EcoQuartier - Île Seguin - Rives de Seine in Boulogne-Billancourt and sold before completion in 2013 to Boursorama for its future headquarters.

In addition, the entire Paris Rive Gauche development (23,000 sq.m) was sold before completion to an institutional investor represented by DTZ Investors France and leased for a fixed 12-year period to the SNI Group, a real estate subsidiary of the Caisse des Dépôts group.

Kaufman & Broad also obtained the building permits for projects of significant size in Paris and Hauts de Seine representing nearly 32,000 sq.m of office space.

Forward indicators of sales activity

At November 30, 2014, total backlog amounted to €1,161.5 million (excluding VAT), up 14.0% compared to November 30, 2013.

Housing backlog totaled €1,015.7 million (excluding VAT), or more than 13 months of business.

The Commercial property backlog totaled 145.7 million (excluding VAT) versus €52.7 million (excluding VAT) at November 30, 2013.

At November 30, 2014, Kaufman & Broad had 158 housing programs on the market representing a total of 3,484 housing units, of which 1,236 were in Île-de-France and 2,248 were in the Regions.

The Housing property portfolio included 17,695 lots, for potential revenues corresponding to three years of business and an increase of 16.4% compared with the total of 15,205 lots at end-November 2013.

In the 1^st quarter of 2015, the group plans to launch 20 new programs including 6 launches in Île-de-France representing 576 lots and 14 launches in the Regions representing 1,049 lots.

Financial results

Operating activities

Total revenues for fiscal year 2014 rose 5.6% to €1,083.3 million (excluding VAT), compared to €1,026.0 million (excluding VAT) in 2013. In the 4^th quarter 2014 alone, revenues recorded a rise of 23.7% compared to the 4^th quarter 2013 to reach €428.8 million.

For the entire fiscal year 2014, Housing revenues, which account for 85.5% of total revenues, totaled €925.8 million (excluding VAT) compared to €967.5 million (excluding VAT) in 2013.

Revenues for the Apartments segment were down 8.2% to €844.3 million (excluding VAT) versus €919.3 million (excluding VAT) in 2013. They accounted for 91.2% of the Housing segment revenues. Revenues generated by the Single-family homes in communities segment totaled €81.5 million (excluding VAT), compared to €48.2 million (excluding VAT) in 2013.

Commercial property revenues totaled €150.4 million (excluding VAT) compared to €51.2 million in fiscal year 2013. The other business activities generated revenues of €7.2 million (excluding VAT).

Profitability indicators

Gross margin was €194.3 million, compared to €196.8 million in 2013. The gross margin rate was 17.9%, versus 19.2% for fiscal year 2013, reflecting the change in the Housing/Commercial property product mix. In the 4^th quarter, the gross margin rose 7.8% to €71.7 million versus €66.5 million in the 4^th quarter 2013.

Current operating expenses amounted to €119.8 million (11.1% of revenues) versus €120.7 million in 2013 (11.8% of revenues).

Current operating income totaled €74.4 million, compared to €76.0 million in 2013. The current operating margin was 6.9% versus 7.4% in 2013.

The cost of net financial debt was €0.3 million versus €2.8 million in 2013.

Attributable net income totaled €38.4 million versus €40.8 million euros in 2013. In the 4^th quarter alone, it was up 11.4 % to €19.0 million.

Financial structure and liquidity

As of November 30, 2014, net financial debt was reduced by €52.1 million compared to November 30, 2013 and, accordingly, net cash flow was €2.1 million.

Cash assets (available cash and investment securities) totaled €150.0 million compared to €188.3 million at November 30, 2013 bringing Kaufman & Broad's financial capacity to €200 million.

Working capital requirements totaled €111.2 million (10.3% of revenues), compared to €126.8 million at November 30, 2013 (12.4%).

This press release is available from the website www.ketb.com

Next regular publication date:

April 15, 2015: 1^st quarter 2015 results (after market close)

April 16, 2015: Annual Shareholders' Meeting

Contacts

Chief Financial Officer	Press Relations
Bruno Coche +33 (1) 41 43 44 73 Infos-invest@ketb.com	Camille Petit Burson-Marsteller +33 (1) 56 03 12 80 contact.presse@ketb.com

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 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.14-0121 on March 6, 2014.

Glossary

Orders: measured in volume (Units) and in value, orders reflect the group's sales 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: 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 notarized sales 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.

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 such 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, the related property costs and construction costs.

Backlog: a summary at any given moment used for forecasting future revenues for the coming months.

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

APPENDICES

Financial data

Key consolidated data

in € millions	Q4 2014	Fiscal 2014	Q4 2013	Fiscal 2013
Revenues	428.8	1,083.3	346.6	1,026.0
of which Housing	297.5	925.8	307.3	967.5
of which Commercial property	129.1	150.4	37.7	51.2
of which Other	2.2	7.2	1.7	7.2

Gross margin	71.7	194.3	66.5	196.8
Gross margin rate (%)	16.7%	17.9%	19.2%	19.2%
Current operating income	35.8	74.4	30.7	76.0
Current operating margin (%)	8.4%	6.9%	8.9%	7.4%
Attributable net income	19.0	38.4	17.1	40.8
Attributable net income per share (€/share) *	0.88	1.78	0.79	1.89

* 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 2014	Fiscal 2014	Q4 2013	Fiscal 2013
Revenues	428,830	1,083,342	346,641	1,025,954
Cost of sales	(357,104)	(889,070)	(280,131)	(829,185)
Gross margin	71,726	194,272	66,510	196,769
Selling expenses	(9,702)	(29,243)	(9,092)	(30,619)
Administrative expenses	(15,713)	(53,770)	(17,774)	(54,936)
Technical and customer service expenses	(5,013)	(18,375)	(4,598)	(19,258)
Development and program expenses	(5,467)	(18,437)	(4,306)	(15,926)
Current operating income	35,831	74,446	30,740	76,030
Other non-recurring income and expenses	(805)	(673)	6	(1)
Operating income	35,026	73,773	30,746	76,029
Cost of net financial debt	(656)	(250)	(2,027)	(2,807)
Other financial income and expenses	-	-	-	-
Income tax	(13,371)	(25,295)	(8,868)	(21,961)
Share of income (loss) of equity affiliates and joint ventures	1,710	2,586	288	642
Income (loss) attributable to shareholders	22,709	50,815	20,140	51,903
Minority interests	3,705	12,373	3,079	11,055
Attributable net income	19,004	38,442	17,061	40,848

* Unaudited and not approved by the Board of Directors

Consolidated balance sheet*

in € thousands	Nov. 30, 2014	Nov. 30, 2013
ASSETS
Goodwill	68,511	68,511
Intangible Assets	85,075	85,376
Property, plant and equipment	4,323	4,713
Equity affiliates and joint ventures	11,314	8,181
Other non-current financial assets	1,843	20,139
Non-current assets	171,065	186,920
Inventories	323,119	324,962
Accounts receivable	336,561	291,778
Other receivables	176,606	153,404
Cash and cash equivalents	149,993	188,258
Prepaid expenses	1,437	867
Current assets	987,715	959,270
TOTAL ASSETS	1,158,780	1,146,190

EQUITY AND LIABILITIES
Capital stock	5,612	5,612
Additional paid-in capital	164,661	130,931
Attributable net income	38,442	40,847
Attributable shareholders' equity	208,715	177,390
Minority interests	8,748	10,811
Shareholders' equity	217,463	188,201
Non-current provisions	21,485	33,422
Borrowings and other non-current financial liabilities (> 1 year)	135,815	218,959
Deferred tax liabilities	43,227	40,365
Non-current liabilities	200,527	292,746
Current provisions	2,168	1,724
Other current financial liabilities (< 1 year)	12,101	19,340
Accounts payable	617,953	550,233
Other payables	106,858	92,729
Deferred income	1,709	1,217
Current liabilities	740,790	665,242
TOTAL EQUITY AND LIABILITIES	1,158,780	1,146,190

* Unaudited and not approved by the Board of Directors

Operational data

Housing	Q4 2014	Fiscal 2014	Q4 2013	Fiscal 2013

Revenues (€m, excluding VAT)	297.5	925.8	307.3	967.5
of which Apartments	274.9	844.3	288.4	919.3
of which Single-family homes in communities	22.7	81.5	18.9	48.2

Deliveries (EHUs)	1,810	5,623	1,937	5,839
of which Apartments	1,714	5,303	1,844	5,606
of which Single-family homes in communities	96	320	93	233

Net orders (number)	1,921	5,871	1,436	5,379
of which Apartments	1,874	5,687	1,367	5,031
of which Single-family homes in communities	47	184	69	348


Net orders (€m, including VAT)	358.5	1,128.5	246.1	990.3
of which Apartments	351.6	1,079.5	218.6	884.7
of which Single-family homes in communities	6.9	49.0	27.5	105.6


Commercial offer at period end (number)	3,484		3,550

Backlog at period end
In value (€m, excluding VAT)	1,015.7		965.1
of which Apartments	961.6		870.4
of which Single-family homes in communities	54.1		94.7
In months of business	13.2		12.0

Property portfolio at period end (number)	17,695		15,205

Commercial property	Q4 2014	Fiscal 2014	Q4 2013	Fiscal 2013

Revenues (€M, excluding VAT)	129.1	150.4	37.7	51.2
Net orders (€M, including VAT)	283.6	295.1	76.0	87.5
Backlog at period end (€M, excluding VAT)	145.7		52.7