Good morning, everyone. Welcome to the presentation of the Q1 2026, so first quarter results. Before we dive into today's presentation, we'd like to let you know that we'll first answer questions asked orally and then questions asked online. You may ask your questions in the question box in the webcast if you want to ask questions online. I will now hand over the floor to the CEO, Nordine Hachemi, and to Bruno Coche, who is the CFO. You have the floor, gentlemen.
Good morning, everyone. Good morning. Thank you for being here today for our Q1 results presentation at Kaufman & Broad. As you know, the fiscal quarter begins on the 1st of December and ends on the 28th of February. You all have received the press release and also the PowerPoint presentation that I will use to make my presentation.
Bruno Coche and David Laurent will also speak based on this presentation. Let's move to the first slide. You're very familiar with this dashboard. We present it at each quarter. It gives you the main parameters to describe our business in mid and long term. The first parameter is the land portfolio, which gives us an overview of our planned activity. As you can see, we are beginning to build our land portfolio again, and we have a 4% growth forecast. It's not shown on the slide here, but this is our forecast for the quarter compared with 2025. Housing orders also increasing. They're increasing slightly in volume. They're going down in value. We'll talk about this decrease in value in a few moments, but this is nothing to be concerned about.
It's just a quarter, and those orders can be impacted by several projects that are put up for sale, that are being marketed, and depending on what is being sold, this is going to impact the value and the type of orders. Now, take-up rate, this is a very important indicator. This take-up rate is the time that we need or that we would need it to sell our entire offer if we were now to have new projects. So this gives you an idea of the fact that we're able to renew our offer very regularly. You have the backlog that is down, and this is due to the progress made with the Austerlitz project for commercial properties, and it's rather stable for the housing sector. In total, we have EUR 2.336 billion.
Now, if we have a look at the next slide, what can we say with regards to the housing market? That's for the first quarter once more. It doesn't necessarily take into account all the variations and the volatility that we might see in the upcoming months due to current geopolitical events. What we've seen, and we already mentioned this in January, for the first time, this is probably the most encouraging sign. Elected officials, the local mayors, started to increase the number of permits or building permits issued before the municipal elections. If you have a look at the graph, you will see that in the past, mayors used to issue fewer building permits before the municipal elections because they thought this would be negatively perceived by the people, and this would negatively impact the votes, and that they wouldn't be reelected.
This time things were different. What we see is that we have more permits that were issued. On slide five, you will see that more than 2/3 of mayors and local officials said during the campaign that it was important to build housing units. This is new. It's important because we had reached such a low point that people were being negatively impacted. They were concerned. It was difficult to find a place to live for them or for their children. In the past, people would say, "I will stop issuing building permits. I will stop building new buildings." This was one of the things that was said, especially during the previous elections, just after COVID. People said, "For mental reasons, we shouldn't build new housing units." Things have changed now.
Mayors are now really being more positive now towards building new housing units, and they tend to reason differently now. As for social housing, expectations are still quite high. That's for housing and the positive aspects. Now, as a reminder, now if you have a look at the next slide, in order to build housing, you need building permits, so it does need to be issued by mayors. Then you need to have affordable costs so that people can buy those units. To do this, there are two main criteria. The cost of money, because people take on a loan, a mortgage to buy those units, and interest rates are obviously a very important factor. 1% interest rate is -5% to 10% in purchasing power for our clients because those salaries are not increasing as much as they are in other countries.
In some countries, when you have more inflation, salaries go up also, but this is not necessarily the case in France. You had, in December 2023, a high level on a peak. They went down, the interest rates went down. They seem to be rather stable, but we don't know whether this will remain that way. Because of the current crisis, because of the current situation, we cannot say whether interest rates are going to go up again or not. This is what we said in the communique. We haven't seen any direct impact on interest rates for now. Banks continue to provide rather stable interest rates. If you have a look at the next slide, you will see that as of today, this is slide seven.
On inflation, we haven't seen any impact on the construction costs yet, but usually it begins with the main construction works and then you have a trickle-down effect on all the trades. We haven't seen any negative impact of the current additional crisis yet on our business, but things could change. I want to hand over the floor to David Laurent, who is going to talk about our activity.
Thank you, Nordine. Good morning, everyone. I will say a few words about what Nordine has already presented. I will talk about housing first. We were looking at the orders comparing Q1 2026 with Q1 2025. You now have here the numbers for a 12-month rolling period. +2%, whereas according to some market estimates, they are faced with a -15% decrease. Take-up period is still quite good, at 4.9 months.
That's for our commercial offer or compared with 21 months on the market. The take-up period is calculated based on the commercial offer at the end of the period, and this is compared with the number of orders for the same period. As you can see, there is slight increase, up from 3.8 months, reaching 4.9 months. It's still very low, and this is due to the fact that our commercial offer is progressing, which is quite good. You will also see that our commercial offer is in line with our clients' expectations, also in line with market expectations. With this take-up rate of 4.9 months, we are able to tell or to say that we've been able to renew our commercial offer. We are in attractive locations, and we're able to offer products that are in line with the purchasing power of our clients.
Now for the breakdown, the customer breakdown, compared with 2026, so Q1 2026 compared with Q1 2025, in value, it's almost identical, and volumes +4.4% investors and -3.4% first time buyers. Now regarding our land portfolio, that's the plots that we have, the plot for which we have an agreement with the landowners or specific purchasing agreements. We are now being more selective when we add new land to this portfolio. At first, this led to a decrease in this land portfolio, but we are now seeing this number go up again, +4%, and we have approximately six years of business before us, and 87% of those lots are in high- demand areas. Now if you have a look at the backlog. That's the backlog is quite stable compared with 2025.
It's identical to 2019, more than two years of business here, and this provides us with a good outlook. We tended to present you with our planned recognition of revenue for the Austerlitz project . No changes here. The project is progressing as planned, and nothing has changed since the end of January 2026 presentation. A recognition of 19% of the revenue in 2026, and the remaining recognition in 2027 when the product will be delivered. I will now hand over the floor to Bruno Coche.
You've just had the main financial information in the communiqué that was released yesterday evening. First, let's begin with our revenue. That's page 16. EUR 235.8 million for our revenue, down compared with last year, -EUR 15 million, approximately. This was expected. It was in our forecast for the first quarter.
Bearing in mind that this decrease is due to decrease in the housing sector. EUR 176.7 million, down from EUR 205.6 million. With regards to commercial property, +EUR 15 million, reaching EUR 55.3 million. Once more, we had planned those changes. Regarding the gross margin, approximately EUR 50 million, slightly up in absolute terms compared with last year, and + 1.7%, more than 21%, reaching more than 21%. This is mainly due to the housing sector. Housing sector is down in terms of revenue, but that contributes to the gross margin more. This is due to the fact that we focused on profitability and cash rather than on volumes. It is also due to the fact that we're being more selective right from the outset when we launch a new project. Our land portfolio is a high-quality portfolio.
We have transformed it, and we are fully in line with the economic situation. We have projects that sell well, that sell quickly, and they do not require any major commercial efforts, and you see this in our revenues.
Let us continue with the income, and let's have a look at the current operating income. The operating expenses, they're up except for provisions that were set aside for different reasons. In any case, by and large, if you look at the current operating income, the COI, it's more or less stable at EUR 18 million. In terms of rates, it's a bit more than 8% of our revenues, in line with the guidance, which means an improvement from last year. Here again, there's no surprise given what we anticipated several months ago. On page 18, we're going to have a look at the EBIT rate and the evolution over the past three years. It's improved. Maybe if you listened carefully to Nordine, maybe you saw the EBIT rate starting from 2019.
As you can see, it's constant regardless of exogenous events such as COVID, Ukraine, et cetera, and what have you. Current operating margin is quite satisfactory. If we continue with the numbers, expenses of net debt is almost zero. In fact, it's financial expenses due to IFRS standards, that is on the rent for the Kaufman & Broad headquarters, and also because we know that there are postponements for the payment of the land of Austerlitz. This payment will be in 2027, totaling EUR 200 million, which will be spent for Austerlitz. Net attributable income is EUR 11.8 million, therefore almost stable. We're satisfied and not surprised. Let's have a look at the balance sheet, WCR to start with. As you can see, it's strongly negative at EUR 191.5 million. At the end of November, we were at more or less EUR 215 million, therefore a slight deterioration.
Here again, the WCR is very strongly negatively marked, and the decrease is due to the cash of Austerlitz. Yet, if you look at WCR for housing, it's stable. At a 12-month interval, it really shows that we're doing well on the commercial front. If you look at the stocks of units for the projects being built, there's a decrease of EUR 30 million over a year, which explains 100% of the decrease of the amounts of stocks on the balance sheet. Now let's have a look at the full balance sheet. You have equity to EUR 151.2 million, almost stable from one year to the next. Here again, the financial structure of the group is such that we don't need to say much. We don't have any gross debt, and then shareholder's equity to EUR 151.2 million and net cash at EUR 314 million.
To which we could add the LCF line, page 22, which means total financial capacity of EUR 514 million, which means that Kaufman has no debts, no covenants to meet in the quarters to come, and therefore we have enough cash on the balance sheet, or we can draw from these RCF lines, and we can mobilize more than EUR 500 million immediately, which means we have very good visibility for the future. Changes in equity and net financial debt, stability of equity, and the net cash position has been positive for a number of quarters now. Finally, as far as the outlook is concerned, at the end of the first quarter, we'll confirm the guidance for the year. That is, group's revenue is expected to be more or less stable versus fiscal year 2025.
EBIT rate will be nearing 8%, and net cash will remain positive at the end of the year and after paying out a dividend totaling EUR 2.2, which will have to be approved on the 5th of May during the general meeting. These were the main numbers. I'll hand over to Nordine again.
Thank you, Bruno. Now we'll hand over to the moderator so that we can organize the Q&A.
Thank you very much. Ladies and gentlemen, if you'd like to ask a question, please dial star one on your telephones. First question is from Ebrahim Homani from CIC. The floor is yours.
Thank you. Good morning. Thank you for this presentation. I have two questions, if I may. The first one, your guidance that you're maintaining.
Profit is good during Q1, but if you look at the growth for the top line, well, there's a bit of a mismatch compared to what you were saying in the guidance. What about the rest of the year? Will the revenue grow on the basis of non-managed residential market or portfolio, and therefore an erosion of your margin? The second question is housing orders. Can you tell us more about these orders apart from managed residences and what the end of the year is going to look like? And finally, what about working capital requirement? How is it going to evolve over the year?
Thank you for these questions. Again, this is only one quarter. This is where we have the lowest level of business during the year.
As we keep on saying, you can't arrive at any conclusions after one quarter, and you can't say anything about revenues. It all depends, for instance, on the weather conditions. This could slow down the construction work. As was the case this year, we had 1.5 months of rain. Don't try and come to any conclusions from this quarter. The only thing we're saying is that we're going to confirm the guidance. So far, we've always walked the talk and. Well, except for two cases, the health crisis in 2022 when we changed the guidance because there was a lockdown for six months. Yet, we had a profit that year, and that's on page seven, I think. Look at our past economic performance. We can weather all the storms, and we've always been profitable and will continue to be profitable this year.
Now then, if we look at the world global events, who knows what's going to happen? Who knows about the impacts on the price of energy, impacts on inflation, and what about the ECB? What about their policy? I don't know. If you have the answer, please tell me. Today, frankly, I don't know what's going to happen in the months to come. We'd need to know more about these developments, these events. These are the reasons why we might have to amend or correct a number of things. If you look at the economic performance of our group in general, and if you look at our earnings, we have a good level of confidence. You've asked a question about orders and the order mix. During Q1, we started opening managed residences, and therefore they were weighted quite a lot.
We had quite a lot of projects such as this one that is for investors, and the amounts were quite low, EUR 70,000 before VAT for a student room. Usually, for the first-time buyers, it's more than EUR 200,000. The impact of these residences is such that even though the volumes were up, the impact was lower on the orders. If you look at revenue, it was not as much as last year during the same period. What about the buyers' behaviors? What we saw is that until September or October 2025, they were back, and then they thought, "We'll wait and see." That was due to the budget crisis. Now we can, as I said, weather the storms, the different crises, but then nobody knew about the budget in France, and therefore people thought, and the clients thought, we'll wait and see.
The government and the parliament were talking about taxes here and there, everywhere. People were afraid of being taxed heavily, for the unit owners. Then since January, we've had quite an interesting number of contacts, and therefore now we want to have more commercial openings, and we'll have to see what we're going to do in the future, because if the international events such as the crisis in the Middle East, we'll have to see if these have impacts on the behaviors of buyers, psychologically speaking. As you know, you have to trust that things are going to be okay in the future if you want to buy a unit, and you shouldn't be afraid of being unemployed. Psychologically, it's very important for people. I've answered all of your questions. Oh, no. Working capital requirements, Bruno.
Now, what we've been saying for quarters is that the Austerlitz project at the end of 2027 will have to pay for the land, and we have EUR 200 million cash that will be used up until it's delivered. If you look at WCR, it's negative, -EUR 200 million, more or less. The guidance for the end of the year has been given to you. Net cash will remain positive. With this, you know what's going to happen. What's important is that if you look at the housing business, WCR is within the usual bracket. It's been the case for more than 10 years. That is between 10% and 15%. It really shows that we have good control over the different parameters for the group. As far as this is concerned and WCR is concerned, you can do the math.
You will see what the trend is going to look like. As we speak, if you look at our financial capacity, it's more or less EUR 500 million, which means that we're quite confident.
Good. Thank you.
Next question. Marie-Line Fort , Bernstein.
Hello. The gross margin rate has improved over Q1. Do you think that will be repeated, or is it due to your housing mix? Could you tell us more about this, please? Could you give us more color as well as to the deployment of the Denormandie scheme? I know it's only the beginning, but what do you think about this scheme? Third question, social housing, which represents a high percentage of orders in 2025. What about 2026? Do you think that will still have a high level of demand?
Finally, the increase in construction permits that you saw at the end of 2025 and beginning of 2026. Is there a windfall effect? Will this tend to normalize, or do you think this will last during the financial year?
Bruno will start.
Okay. The gross margin rate during Q1, it's more than 20%, and that's due mainly to the housing projects and their gross margin rate. That's because we've launched many projects over the past 18 months after the crisis in Ukraine, and therefore a positive contribution with a rate at 19%, gross margin rate 19%. If things remain as they are, this will have a mechanical impact on the bottom line. We think this is going to continue in the quarters to come.
On a like-for-like basis, if the economic parameters stay the same, but you know that we're very careful about recognizing the margins and the revenue over time. Anyway, we think we have enough leeway, and we have enough reasons to remain optimistic and stick to our guidance with an EBIT rate, which is the result of the gross margin rate and operating expenses. Therefore, we think we're going to be close to 8%. As far as operating expenses are concerned, we don't think they're going to increase in the quarters to come if the economic environment remains the same.
Thank you very much, Bruno. Now, I'll answer the other questions, Marie-Line. Denormandie. Regarding the Denormandie scheme, as I said in the beginning, this scheme, it's not going to deeply change the way buyers behave.
It's not going to harm the business, but it really addresses more experienced buyers, investors, because they will be able to amortize their investment. It's a bit complicated. The scheme is a bit complex, and it requires many explanations.
As I said, w e've had very few orders using this scheme this quarter, maybe 30 or so. It will be part of the landscape gradually, but the most important aspect is that it doesn't trigger any inflation with regards to the price of land. Although we still see some of our competitors that are totally disconnected from the reality, and they make decisions that are not so good in the long term. In our case, I believe that we've seen a decrease in the number of building permits, and people are now realizing that it is necessary to build housing, to build more units. This is the answer to the social housing question. I don't think there will be any peak when it comes to the number of building permits issued.
We 're going to reach a figure that will be much higher than the one that we had in the past, but it should remain stable, and this is much better than when we have huge variations. I believe that this will be one of the main topics during the campaign prior to the presidential election. It will also, I'm sure, be a time to realize once more that it's important to house our citizens. It's also good for the environment because we build units that have a low environmental impact, and it also creates jobs. What I anticipate is that many promises are going to be made, and maybe buyers will have a bit of a wait-and-see approach now until they know exactly what kind of support measures will be implemented.
Now, with regards to social housing, that approximately 70% of the population in France is eligible and could access social housing. Many acquisitions that were made during the COVID crisis because this is what the government asked them to do. So they supported developers that were faced with financial difficulties. They acquired some of their projects in order to support them. I believe that the need for social housing will remain. The demand remains high, and even though some stakeholders seem to have more of an erratic behavior, I still feel that owners, be they private or public owners, are now seeing that you cannot simply make empty promises. We remain very selective, but we are seeing the competitive landscape becoming more healthy in a sense, and this is good for everyone. I don't know if I answered all your questions.
No, thank you. I'm good.
Let me remind you that if you want to ask a question, all you have to do is dial star one on your phone. Next question Emmanuel Parot, Gilbert Dupont.
Good morning. I hope you hear me well. I have three questions. The first, with regards to the change in the number of orders. Any change since the start of the war in Ukraine, March, April, or is the situation the same as it was before the beginning of the war? Now, second question has to do with another aspect. We think that there might be an increase in the cost of construction materials in the future. How do you anticipate this? How are you going to handle this? Third question, commercial real estate. Is the market still flat, or do you see any new projects in your pipeline? Thank you.
The way our buyers behave, for now, we are not seeing any impact on their behavior, especially that of first-time buyers. We look at the contacts now when we start our teasing phase, when we have new projects in mind, and we are seeing that people are interested in our projects. This is not having an impact on the behavior of buyers. Now, with regards to construction materials, we are not seeing any impact right now, but there's going to be one, definitely. Especially for the major construction works, because you need a lot of energy to do concrete, cement, and the iron part and all this consumes a lot of energy. The heavy equipment also uses a lot of energy. We are mostly going to see an impact.
Those companies are not overwhelmed with contracts, so this could balance this, could offset this in a bit. We'll have to make sure that things are good for everyone. The fact that there is no impact right now doesn't mean that there's not going to be an impact in the future. What we do is that in-house, obviously, we have a very precise and in-depth consultation processes. Before we buy a piece of land, we have an acquisition committee, and we make sure that we have firm offers before we purchase the land. We make sure that we are aware of the construction cost before the land is being purchased, and this means that we avoid losing any money. We have a very good control over our costs. We set up provisions. It's in a sense a bit of a in-house insurance scheme.
Everyone has a 3% provision on building costs in order to make sure that any excess costs could be covered. This means that 80% of our projects didn't use those 3%, this provision. We have 20% of our projects that will be faced with additional costs, but those costs will be covered by this in-house internal insurance scheme. We have now increased this percentage to 5%. We behave like an insurance company, and we make sure that we can cover any unexpected additional costs. This is the way we deal with this in-house. We cannot be taken by surprise. If the construction costs are to go up, well, if they're too high, we'll simply won't go for the project, and we'll decide not to buy the piece of land. Maybe the current owner will decide not to lower the price.
We will make sure on our side that we do not validate all the construction costs before we sign the agreement and buy the piece of land. What about the question on the commercial? Do you want to answer this question, David?
Well, yes, I will. During the first quarter, the global investment market that includes the option of a new unit and also the refurbishment of old units, was a market that wasn't very active. People were waiting now to see what would happen. The outlook was a decreased ECB rate back in 2025, but because of the current geopolitical situation, things are not that certain. Investors are waiting to see how things are going to turn out before they make any decisions. They want the situation to stabilize first.
Now, when it comes to potential outlook, I will talk about what we presented back in January. Outside of Paris, new building, well, new offers are not so numerous, and we are seeing users who want to discuss turnkey operations. It doesn't mean they're going to get those contracts, but this is something that we are seeing. We still have the Office List project that we discuss regularly and provide you with update on a regular basis. You have the Marseille project, and this provides us with a good visibility. It's more than EUR 50 million in backlog. We also have, and we talked about this in the press release, we have a certain number of logistics projects that are currently being marketed.
Thank you. Thank you for those very precise answers. One last question, if I may. I'm always very surprised in a positive way about the difference between your orders and the number of orders on the market. How can you explain this? Obviously, it has to do with your offers, but do you think that some players are still experiencing financial difficulties and they are postponing some of their projects? Or are the reasons not that visible? Any changes in what you see now compared with what you said in the past?
Well, indeed, if you add up the losses of the main players, well, we could obviously think that some shareholders or managers are realized that the price of land was just too high. This is what we kept saying. Prices for land plots were just too unreasonably high, and that those prices were being offset by decreased interest rate.
During those meetings, I kept telling you that we would rather not play that game, because we would depend too much on the decisions made by others. Those competitors made a lot of orders, but they paid too much. Because of increased rates, this led to huge losses, millions of EUR, and now they are paying the price for this. We are good customers and current land owners, be they private owners, public owners. One other thing is that we are a solid company. We have a very good image. We are a developer that really is seen as a serious player now because we make sure that our projects are completed.
Thank you.
If you want to ask a question please dial star one. We no longer have any questions.
Well, all good. Well, thank you very much for being with us this morning. We'll meet again at the beginning of July, on the 9th of July for the half- year results. Have a lovely day.