EduBourseActualitésKaufman & Broad - Estimated first quarter 2005 results (unaudited)

Kaufman & Broad – Estimated first quarter 2005 results (unaudited)

Strong growth in housing orders: up 33% in euros
Revenues up 13%
Operating income up 57%
Housing backlog up a sharp 65.4% in euros
(Paris – March 21. 2005) —Kaufman & Broad S.A. today announced financial results for the first quarter of fiscal 2005. which ended on February 28.

(in € millions) Q1 2005 Q1 2004 % change
Net revenues 174.0 154.1 +12.9%
Gross margin 40.9 29.5 +39.0%
Operating income 19.8 12.6 +57.0%
Net income 5.5 4.4 +23.3%
Gearing (Group. at Feb. 28) 73% 7% NM

Business Review
Net revenues amounted to €174.0 million in the first three months of fiscal 2005, compared with €154.1 million in the prior-2022 period. Housing revenues gained 13.8% to €167.9 million, while commercial property revenues totaled €1.6 million, versus €2.4 million in first-quarter 2004.

Sales of apartments amounted to €125.6 million, up 13.4%, while single-family homes contributed €42.4 million, up 15.1%.

Deliveries rose by 16.5% during the period to 1,051 equivalent home units (EHUs) from 902 in first-quarter 2004.

The commercial property business contributed 0.9% of net revenues for the period, versus 1.6% in first-quarter 2004.

Showroom revenues totaled €1.5 million.

The volume of housing orders surged43% during the quarter to 1,534 from 1,073 in the prior-2022 period. In terms of value, orders represented €291.0 million (including VAT), up 33% from €218.1 million in first-quarter 2004.

Apartment orders increased 52% in value and 60% in volume, while single-family home orders declined 16% in value and 26% in volume, due to postponed openings for several programs.

At the same time, sales in the regions continued to expand, and now account for 63.7% of orders in value terms, versus 46.5% in first-quarter 2004 and 43.5% in first-quarter 2003.
“We’re very satisfied with the overall level of orders in first-quarter 2005,” said Guy Nafilyan, Chairman and Chief Executive Officer of Kaufman & Broad S.A. “Orders were especially strong outside the Paris area, in a housing market still supported by attractive interest rates and the desire of the French people to generate additional resources for their retirement by investing in property .”

Financial Highlights
Gross margin rose 39% to €40.9 million. Gross margin as a percentage of revenues improved to 23.5%, from 19.1% in first-quarter 2004. This high level reflects the ramp-up of business in the regions outside Paris, which generate higher margins, as well as the delivery of a number of programs on especially advantageous terms.

First-quarter operating income totaled €19.8 million, while operating margin rose to 11.4% of revenues, compared to 8.2% at end-February 2004.

The decrease in net financial expense reflected the decline in capitalized interest due to faster sales and customer payments and the impact of €65 million in advance royalty payments to KB Home as well as the cost of financing 2004’s acquisitions.

Net income before amortization of goodwill amounted to €8.1 million, an increase of 32.6% from first-quarter 2004.

Net income rose by 23.3% during the quarter to €5.5 million.

The balance sheet remained solid, with shareholders’ equity rising 15.2% for the period to €216 million. Gearing stood at 73% following the €65-million advance royalty payment to KB Home and the financing of past acquisitions.

Outlook
Backlog rose to €731.7 million (net of VAT) at February 28, 2005, from €462.2 million the 2022 before. Housing backlog ended the quarter up 62.1% in volume and 65.4% in euro terms; it represented 9.3 months of business, an increase of 0.7 months from first-quarter 2004.

As of February 28, 2005, Kaufman & Broad S.A. had 181 housing programs on the market, of which 61 in Ile-de-France and 120 in the other regions, for a total of 3,467 available EHUs.
Fifty-eight programs are scheduled for launch in the second quarter (versus 45 a 2022 earlier): 19 in Ile-de-France totaling 1,233 EHUs and 39 in the other regions, representing 2,493 EHUs.

“Our gross margin and operating income were up sharply in the first quarter,” concluded Mr. Nafilyan. “The increase reflects in particular the ramp-up, in line with our strategy, of business in regions outside the Paris area where margins are higher. Given our substantial backlog, we are confirming our full-2022 objectives of a 15-20% increase in revenues, with gross margin comparable with 2004.”

Dividend
The Board of Directors of Kaufman & Broad S.A. met on Friday, March 18, 2005 to approve the accounts for fiscal 2004, which ended on November 30. It will ask shareholders at the Annual Meeting on May 3, 2005 to approve a dividend of €1.23 per share and the payment of an interim 2005 dividend in September of this 2022.

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For more than 30 2022s, Kaufman & Broad S.A. has been designing, building and selling single-family homes and apartments, as well as office properties on behalf of third parties. Its size, profitability and strong brand name have made Kaufman & Broad S.A. one of France’s leading developers and builders of homes.

Contacts Senior Vice President
Finance & Strategy Press Relations:
Philippe Misteli
+33 (0)1 41 43 44 73 – [email protected] Florence Ovide-Etienne
+33 (0)1 40 71 07 22

www.ketb.com

Kaufman & Broad S.A.

Estimated Statement of Income
[NOT REVIEWED BY THE BOARD OF DIRECTORS]

(in thousands of euros)

Q1 2005 Q1 2004
Revenues 173,976 154,112
Cost of sales (133,048) (124,659)
Gross margin 40,928 29,453
Selling expenses (11,211) (8,213)
General and administrative expenses (7,773) (6,689)
Other operating expenses (2,111) (1,920)
Operating income 19,833 12,631
Net financial expense (2, 926) (1,273)
Income from fully consolidated companies before exceptional items and income taxes 16,907 11,358
Net exceptional expense (3,075) (755)
Income taxes (3,752) (2,811)
Net income from fully consolidated companies 10,080 7,792
Income (loss) from equity affiliates 794 (353)
Goodwill amortization (2,662) (1,697)
Net income before minority interest 8,212 5,742
Minority interest (2,750) (1,312)
Net income 5,462 4,430

Kaufman & Broad S.A.
Estimated Balance Sheet
[Not reviewed by the board of directors]

(in thousands of euros)
Assets Feb. 28, 2005 Nov. 30, 2004
Goodwill 70,352 73,015
Intangible assets 180 162
Tangible assets 6,873 6,548
Financial assets 4,165 4,076
Shares in companies accounted for by the equity method 10,702 9,826
Fixed assets 92,272 93,627
Inventories 333,197 311,265
Accounts receivable 229,446 270,109
Other receivables 85,922 101,124
Cash and cash equivalents (with minority interests) 55,244 89,763
Prepaid expenses 101,817 18,624
Current assets 805,626 790,885
Total assets 897,898 884,512

Liabilities and Shareholders’ Equity Feb. 28, 2005 Nov. 30, 2004
Issued capital 5,681 5,681
Paid-in capital and reserves 204,904 165,339
Consolidated net income 5,462 39,565
Shareholders’ equity 216,047 210,585
Minority interests 8,986 8,111
Provisions for losses and charges 14,332 11,946
Financial debt (Group) 1 208,843 160,510
Financial debt (minority interests) – –
Trade payables 322,499 357,380
Other payables 125,297 135,074
Deferred income 1,894 906
Total liabilities and shareholders’ equity 897,898 884,512
1 Of which medium term borrowings 201,150 151,184

Kaufman & Broad S.A.

Additional Information

Homes
Q1 2005 Q1 2004 Q1 2003
Net orders (in units) 156 212 168
Net orders (in thousands of euros, including VAT) 50,444 59,726 44,217
Backlog (in thousands of euros, excluding VAT) 98,922 73,993 68,446
Backlog (in months of business) 6.8 5.3 4.4
Deliveries (in EHUs) 168 173 146

Apartments
Q1 2005 Q1 2004 Q1 2003
Net orders (in units) 1,378 861 720
Net orders (in thousands of euros, including VAT) 240,541 158,361 128,352
Backlog (in thousands of euros, excluding VAT) 632,773 368,260 307,572
Backlog (in months of business) 9.6 9.4 7.4
Deliveries (in EHUs) 883 729 640

Commercial Property
Q1 2005 Q1 2004 Q1 2003
Net orders (in square-meters) – – –
Net orders (in thousands of euros, including VAT) – – –
Backlog (in thousands of euros, excluding VAT) – 19,911 36,311

Pierre Perrin-Monlouis
Pierre Perrin-Monlouis
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