Dom Development Group 2021 Results Presentation
0 likes205 views
Dom Development Group reported record financial results in 2021. It sold over 4,000 units, up 8% year-over-year, with the average sale price increasing 12% to PLN 667k. The company achieved a record net profit of PLN 325m and ended the year with PLN 648m in cash and net cash of PLN 255m. Dom Development expanded into the Cracow market in 2021 and increased its land bank to almost 17,000 plots.
Dom Development Group 2021 Results Presentation
- 1. PRESENTATION OF 2021 RESULTS 18 MARCH 2022 DOM DEVELOPMENT S.A. CONSOLIDATED GROUP
- 2. 2 2021 AT DOM DEVELOPMENT GROUP 4 066 UNITS SOLD record sales +8% YoY PLN 667k AVERAGE VALUE per sold unit +12% YoY PLN 325m 2021 CONSOLIDATED NET PROFIT record profit PLN 648m CASH AS AT 31.12.2021 PLN 255m above interest-bearing debt PLN 10 per share DIVIDEND PAID PLN 254m in total Cracow NEW MARKET continued expansion through acquisition
- 3. 3 2021 Sales Units under construction Units in land bank DOM DEVELOPMENT GROUP IN CRACOW * Transaction value amounts to PLN 209.5m, consisting of PLN 151.4m for equity and PLN 58.1m for loan repayments; moreover, the BUMA companies owned PLN 51.5m in cash, while bank loans amounted to PLN 1.9m. 1 July 2021 purchase of a 77% stake in Sento S.A. for PLN 35m 28 February 2022 acquisition of companies from BUMA Group for PLN160m* TOTAL 506 414 2 097 261 224 1 370 245 190 727 AS PLANNED, IN 2021 WE ENTERED CRACOW MARKET All information presented in the following slides does not include companies from BUMA Group, unless stated otherwise.
- 4. 4 2021 FINANCIAL SUMMARY REVENUE 2021 2020 Change PLN 1 897m PLN 1 815m PLN +82m +5% 33% GROSS MARGIN 2020: 32% 28% ROE 2020: 28% -20% GEARING 31.12.2020: - 23% NET PROFIT 2021 2020 Change PLN 325m PLN 302m PLN +23m +8% NET CASH 31.12.2021 31.12.2020 Change PLN 255m PLN 266m PLN -11m -4%
- 5. 5 MARKET IN 2021 • Strong demand across all market segments • Insufficient market supply due to administrative delays and permit problems, particularly in Warsaw • Further price growth resulting from surging inflation and supply restrictions • Interest rate increases in Q4 slightly limited mortgage affordability • Surging inflation and negative real interest on deposits persuaded investors to put savings into real estate • Cash purchases increased to approx. 54% of Group sales in Q4 • Increasing construction-cost pressures successfully mitigated by the Group’s in-house general contractors
- 6. 6 RUSSIAN INVASION OF UKRAINE AND ITS IMPACT ON THE MARKET ENVIRONMENT • Inflow to Poland of almost 2 milion refugees within three weeks • Strong social mobilisation to help Ukrainians and the shock caused by destabilisation have resulted in people postponing decisions on flat purchases • Concentration of refugees in major cities causing jump in demand for flat rentals; rocketing rents will support demand for flat purchases • Increased inflationary expectations may drive more savings into bricks and mortar • Tightening of monetary policy, including interest rate increases, limits mortgage affordability • Limited availability and price increases of construction materials, especially for steel • Some workers from Ukraine have left Poland due to military mobilisation
- 7. 7 DOM DEVELOPMENT GROUP AT THE BEGINNING OF 2022 • We are actively supporting refugees, in cooperation with local authorities • High cash balance and available credit lines provide us with stability during the current turmoil • We started the year with 5 000 flats sold with a total valueof PLN 3bn, which will be recognized in our revenues for upcoming periods (see slide 19 - Presales) • All construction sites are progressing on time and our subcontractors’ availability is secured • We have limited increases in construction costs with in-house general contractors, economies of scale and forward buying policy • We are the leader in upper segment flats, where buyers are least affected by the cost of mortgages • Due to current uncertainty, the Management Board has decided to issue its recommendation on dividend payment at a later date
- 8. 8 3 975 3 602 3 661 3 756 4 066 2017 2018 2019 2020 2021 ANNUAL NET SALES No. of units RECORD VOLUMES AND INCREASING MARKET DIVERSIFICATION Net sales (units) 2021 2020 Change YoY Warsaw 2 165 2 340 -7% Tri-City 1 263 1 015 +24% Wroclaw 519 401 +29% Cracow* 119 - - Dom Development Group 4 066 3 756 +8% * Dom Development Group entered Cracow in July 2021
- 9. 9 1 695 1 740 1 941 2 131 2 575 2017 2018 2019 2020 2021 NET SALES VALUE SALES VALUE UP 21% YOY WHILE VOLUME INCREASED BY 8% Net sales value (PLN m) 2021 2020 Change YoY Warsaw 1 577 1 521 +4% Tri-City 696 438 +59% Wroclaw 230 172 +34% Cracow* 72 - - Dom Development Group 2 575 2 131 21% * Dom Development Group entered Cracow in July 2021 PLN m
- 10. 10 Average transaction value (PLN k) 2021 2020 Change YoY Warsaw 774 685 +13% Tri-City 568 453 +25% Wroclaw 459 460 - Cracow* 576 - - Dom Development Group 667 598 +12% 2021 SALES SEGMENTATION 12% INCREASE IN AVERAGE TRANSACTION VALUE COMBINED WITH RECORD SALES VOLUME Unit sale value includes price of flat with fit-out (if purchased), storage room (if purchased) and parking space (if purchased). 17% 20% 16% 14% 33% up to PLN 400k PLN 400-500k PLN 500-600k PLN 600-700k over PLN 700k Dom Development Group 2021 sales value segmentation * Dom Development Group entered Cracow in July 2021
- 11. 11 OFFER 2 979 2 896 2 255 2 482 2 480 31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021 No. of units available for sale OFFER LEVEL MAINTAINED DESPITE RECORD SALES VOLUME AND CHALLENGING MARKET, OVER 1,750 UNITS LAUNCHED IN Q4 Group offer by location 31.12. 2021 31.12. 2020 Change YoY Warsaw 1 161 1 051 +10% Tri-City 753 1 017 -26% Wroclaw 457 414 +10% Cracow 109 - - Dom Development Group 2 480 2 482 -
- 12. 12 LAUNCHES IN Q4 2021 APARTAMENTY LUDWIKI – NEW, PRESTIGOUS WARSAW PROJECT 432 units Wola district of Warsaw, near Płocka metro station 110 units Bemowo district of Warsaw 186 flats Pogórze, near Gdynia 93 flats south of Gdańsk 131 units, Krzyki-Jagodno district of Wroclaw
- 13. 13 UNITS UNDER CONSTRUCTION 5 221 4 413 4 718 5 298 5 930 31/12/2017 31/12/2018 31/12/2019 31/12/2020 31/12/2021 No. of units RECORD NUMBER OF UNITS UNDER CONSTRUCTION - ALL SITES PROGRESSING ON TIME AND WITH HIGH MARGINS Units under construction 31.12. 2021 31.12. 2020 Change YoY Warsaw 2 584 2 433 +6% Tri-City 2 283 2 044 +12% Wroclaw 873 821 +6% Cracow 190 - - Dom Development Group 5 930 5 298 +12%
- 14. 14 7 609 7 876 6 691 9 946 4 702 6 339 7 975 7 039 12 311 14 215 14 666 16 985 31/12/2018 31/12/2019 31/12/2020 31/12/2021 Plots owned Plots controlled Land Bank Owned Controlled Total Change YoY Warsaw 4 574 4 755 9 329 +24% Tri-City 3 931 1 269 5 200 -6% Wroclaw 880 849 1 729 +10% Cracow* 561 166 727 - Dom Development Group 9 946 7 039 16 985 +16% LAND BANK – OWNED AND CONTROLLED RECORD LAND BANK – ALMOST 17K PLOTS TO BE DEVELOPED No. of units to be developed *Does not include BUMA Group with 1 370 units in land bank, acquired in February 2022
- 15. 15 2 929 3 632 3 482 3 006 3 332 2017 2018 2019 2020 2021 DELIVERIES WE ARE DELIVERING THE HIGHEST QUALITY FLATS ON SCHEDULE No. of units Deliveries in units 2021 2020 Change YoY Warsaw 1 798 1 807 - Tri-City 972 824 +18% Wroclaw 470 375 +25% Cracow* 92 - - Dom Development Group 3 332 3 006 +11% * Dom Development Group entered Cracow in July 2021
- 16. 16 PROFIT AND LOSS ACCOUNT ANOTHER RECORD YEAR FOR DOM DEVELOPMENT GROUP Profit and Loss Account 2021 2020 Change YoY Sales Revenues 1 897.5 1 815.0 +5% Handovers (units) 3 332 3 006 +11% Revenue per unit (PLN’000) 569.5 603.8 -6% Gross Profit on Sales 625.2 578.8 +8% Gross Profit Margin 32.9% 31.9% +1.0 pp Operating Profit 413.1 386.3 +7% Operating Profit Margin 21.8% 21.3% +0.5 pp Profit Before Tax 405.5 378.6 +7% Profit Before Tax Margin 21.4% 20.9% +0.5 pp Net Profit 325.3 302.2 +8% Net Profit Margin 17.1% 16.7% +0.4 pp EPS (PLN) 12.89 12.00 +7% IAS 15, PLN m
- 17. 17 GROSS MARGIN ON SALES 27,5% 27,5% 30,1% 31,9% 32,9% 2017 2018 2019 2020 2021 CONSISTENT AND EFFECTIVE USE OF MARKET OPPORTUNITIES
- 18. 18 ROE AND GEARING HIGH RETURN ON EQUITY AND LOW DEBT 20,5% 22,6% 24,5% 27,9% 28,1% 6% 7% 14% -23% -20% 2017 2018 2019 2020 2021 ROE annual net income / equity beginning balance Gearing net interest-bearing debt* / equity closing balance *bonds and bank loans less cash (including escrow accounts)
- 19. 19 0 500 1 000 1 500 2 000 2 500 3 000 I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII I II III IV V VIVIIVIIIIX X XI XII 2013 2014 2015 2016 2017 2018 2019 2020 2021 CUMULATIVE NET SALES TO BE RECOGNIZED IN P&L (UNITS SOLD BUT NOT DELIVERED - PRESALES) OVER PLN 3 BILLION REVENUE PIPELINE PLN m Units sold but not delivered (presales): Value 31.12.2020 4 111 units PLN 2 222m 31.12.2021 5 030 units, including: PLN 3 003m • 1 192 finished units; • 3 838 units under construction, with 2 745 completing in 2022
- 20. 20 BALANCE SHEET STRONG BALANCE SHEET AND LOW DEBT PLN m ASSETS 31.12.2021 31.12.2020 Change Current Assets 3 767 3 182 +18% Cash 648 636 +2% Incl. escrow accounts 41 50 -19% Inventory, including: 3 025 2 424 +25% Land and phases under construction 2 550 1 822 +40% Finished units, parking places and storage cells 259 378 -31% Fixed Assets 110 71 +56% TOTAL ASSETS 3 878 3 253 +19% EQUITY AND LIABILITIES 31.12.2021 31.12.2020 Change Equity 1 249 1 157 +8% Total Liabilities 2 628 2 096 +25% Long-term liabilities 511 431 +19% Incl. Interest-bearing debt (bonds and loans) 342 260 +31% Short-term liabilities, including: 2 106 1 665 +26% Deferred income 1556 1 111 +40% Interest-bearing debt (bonds and loans) 51 110 -53% TOTAL EQUITY AND LIABILITIES 3 876 3 253 +19% FIXED OTHER INVENTORY CASH EQUITY EQUITY LONG-TERM LIABILITIES. LOANS BONDS OTHER SHORT-TERM LIABILITIES TRADE PAYABLES AND OTHER BONDS LEASING DEFFERED INCOME 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 2 200 2 400 2 600 2 800 3 000 3 200 3 400 3 600 3 800 ASSETS LIABILITIES PLN m
- 21. 21 DEBT MATURITY STRUCTURE OVER PLN 1 BILLION OF AVAILABLE FINANCING AND WELL-SPREAD DEBT MATURITY SUPPORT OUR AGILITY PLN 648m CASH PLN414m UNDRAWN CREDIT LINES 51 50 50 100 110 31 2022 2023 2024 2025 2026 Bonds Bank Loans PLN m As of 31.12.2021
- 22. 22 CASH FLOW HIGH OPERATING CASH FLOW PROVIDES SECURITY PLN m Cash flow 31.12.2021 31.12.2020 Profit/(loss) before tax 405.5 378.6 Changes in inventory (367.8) 125.7 Changes in prepayments and deferred income 431.0 262.9 Other adjustments 6.2 29.1 Cash flow generated from operating activities 474.9 796.4 Interest paid and received (12.3) (14.1) Income tax paid (68.9) (102.8) Cash flow from operating activities after interest and tax 393.7 679.3 Cash flow from investing activities (66.5) (38.1) Net cash flow from financing activities (305.9) (308.8) Increase / (decrease) in net cash and cash equivalents 21.4 332.3 Cash and cash equivalents – opening balance 585.7 253.3 Cash and cash equivalents – closing balance 607.0 585.7
- 23. 23 DIVIDEND RECORD PAYMENT IN 2021 – PLN 10.00 PER SHARE, PLN 254M IN TOTAL FROM 2020 PROFITS Dividend yield (right scale) calculated on closing price on last day of trading cum dividend 0,15 2,04 0,80 0,80 0,90 1,50 3,68 2,20 2,25 3,25 5,05 7,60 9,05 9,50 10,00 0,1% 3,3% 2,5% 1,5% 1,9% 4,9% 8,5% 4,4% 4,5% 6,3% 6,4% 8,9% 10,5% 8,3% 6,6% 0% 2% 4% 6% 8% 10% 0,00 1,00 2,00 3,00 4,00 5,00 6,00 7,00 8,00 9,00 10,00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Dividend yield Dividend per share (PLN) RECOMMENDATION ON DIVIDEND PAYMENT FROM 2021 PROFITS TO BE ISSUED UPON ANALYSIS OF THE IMPACT OF THE WAR IN UKRAINE ON COMPANY BUSINESS
- 24. 24 SUMMARY: 2021 • Record 4 066 units sold with high margin • 5 930 units under construction as at the end of December • Timely deliveries of 3 332 units at an average value of PLN 569k • Record PLN 325m net profit • PLN 648m cash at bank with negative gearing of (20)% • Successful entry into strong new market: Cracow
- 26. 26 COMMENCEMENT OF HANDOVERS IN 2022 PROJECT / PHASE LOCATION NO. OF UNITS COMMENCEMENT OF HANDOVERS PROJECT / PHASE LOCATION NO. OF UNITS COMMENCEMENT OF HANDOVERS Q1 ŻOLIBORZ ARTYSTYCZNY PHASE14 WARSAW 280 JAN'22 Q3 OSIEDLE ZIELNA PHASE 1 WROCLAW 160 JUL'22 STACJA GROCHÓW PHASE 3 WARSAW 125 FEB'22 ZIELONY POŁUDNIK BUILD. 16, 17, 22, 23 TRI-CITY 90 AUG'22 NASZE MIEJSCE BUILDING C TRI-CITY 34 FEB'22 WILNO IV PHASE 3 WARSAW 154 SEP'22 ZIELONY POŁUDNIK BUILDINGS 18, 19 TRI-CITY 44 FEB'22 APARTAMENTY SŁUŻEWIEC WARSAW 37 SEP'22 ZIELONY POŁUDNIK BUILDINGS 20, 21 TRI-CITY 44 FEB'22 ZIELONY POŁUDNIK BUILDING 15 TRI-CITY 48 SEP'22 METRO ZACHÓD PHASE 2/2 WARSAW 124 MAR'22 Q4 METRO ZACHÓD PHASE 3/1 WARSAW 145 OCT'22 OSIEDLE GŁĘBOCKA PHASE 2 WARSAW 211 MAR'22 REZYDENCJA STANISŁAWA AUGUSTA WARSAW 125 OCT'22 Q2 STACJA GROCHÓW PHASE 2 WARSAW 125 APR'22 OSIEDLE PRZY BŁONIACH BUILDING B2 TRI-CITY 45 OCT'22 OSIEDLE BEAUFORTA BUILDING 10 TRI-CITY 32 APR'22 APARTAMENTY OŁTASZYN WROCLAW 158 OCT'22 OSIEDLE PRZY BŁONIACH BUILDING 1 TRI-CITY 65 APR'22 DYNAMIKA BUILDINGS A AND B TRI-CITY 90 NOV'22 OSIEDLE KOMEDY PHASE 2 WROCLAW 101 APR'22 METRO ZACHÓD PHASE 3/2 WARSAW 153 DEC'22 WILNO V PHASE 2 WARSAW 213 MAY'22 WILNO IV PHASE 5 WARSAW 158 DEC'22 OSIEDLE BEAUFORTA BUILDINGS 21, 22 TRI-CITY 70 MAY'22 DOKI BUILDING A TRI-CITY 93 DEC'22 NASZE MIEJSCE BUILDINGK A TRI-CITY 46 MAY'22 MONTOWNIA TRI-CITY 116 DEC'22 OSIEDLE PERSPEKTYWA PHASE 1/3 TRI-CITY 70 MAY'22 PERSPEKTYWA PHASE 2 TRI-CITY 252 DEC'22 STACJA GROCHÓW PHASE 4 WARSAW 159 JUN'22 OSIEDLE KOMEDY PHASE 3 WROCLAW 127 DEC'22 OSIEDLE BEAUFORTA BUILDINGS 23, 24 TRI-CITY 51 JUN'22 SENTOTU PHASE 1/2 CRACOW 106 DEC'22 ZIELONY POŁUDNIK BUILDING 14 TRI-CITY 50 JUN'22 SENTOTU PHASE 1/3 CRACOW 84 DEC'22 PRZESTRZENIE BANACHA PHASE 2 (BUMA) CRACOW 134 DEC'22
- 27. 27 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 METRO ZACHÓD (+1 255) 496 2 398 2 LITERACKA --- 530 3 CIOŁKA --- 133 4 APARTAMENTY LUDWIKI 432 --- 5 URBINO 124 --- 6 APARTAMENTY SOLIPSKA (NEW) --- 188 7 DOM NA SŁUŻEWCU (NEW) --- 108 8 APARTAMENTY SŁUŻEWIEC 37 --- 9 OSIEDLE BOKSERSKA 71 234 --- 10 PORY --- 200 11 PALLADIUM (AKACJE) --- 566 12 OSIEDLE CERAMICZNA 346 --- 13 WILNO 525 233 14 REZYDENCJA STANISŁAWA AUGUSTA 125 --- 15 STACJA GROCHÓW 265 --- 16 WAWER --- 218 TOTAL WARSAW 2 584 4 574 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION 1 2 3 13 14 15 16 PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: WARSAW NO. OF UNITS, AS OF 31/12/2021 8 12 6 9 5 4 7 10 11
- 28. 28 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION 16 1 2 3 5 6 7 13 14 15 4 8 9 10 PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: TRI-CITY NO. OF UNITS, AS OF 31/12/2021 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 PERSPEKTYWA 322 283 2 DOKI + MONTOWNIA 654 546 3 DOLNE MIASTO --- 371 4 PIEKARNICZA --- 536 5 DYNAMIKA 196 138 6 NASZE MIEJSCE 80 --- 7 ZIELONY POŁUDNIK 413 --- 8 OSIEDLE BEAUFORTA 153 --- 9 OSIEDLE BEAUFORTA 2 186 228 10 KONSTELACJA --- 642 11 GÓRA MARKOWCA (NEW) --- 178 12 LOCUS 2 --- 135 13 OSIEDLE PRZY BŁONIACH 220 --- 14 RUMIA ZA BŁONIAMI (+303) --- 523 15 RUMIA WYŻYNNA --- 175 16 WYDMA 59 --- 17 LEMA (NEW) --- 176 TOTAL TRI-CITY 2 283 3 931 12 17 11
- 29. 29 PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: WROCLAW NO. OF UNITS, AS OF 31/12/2021 1 2 3 4 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 OSIEDLE CHOCIEBUSKA 11 (NOWY DWÓR) 196 --- 2 APARTAMENTY OŁTASZYN (KUSTRONIA) 158 --- 3 KOMEDY (BUFOROWA) 359 96 4 ZIELNA 160 146 5 CENTRUM --- 171 6 OSOBOWICE --- 87 7 NOWY DWÓR --- 36 8 MIĘDZYLESKA (NEW) --- 344 TOTAL WROCLAW 873 880 5 6 6 6 7 8 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION
- 30. 30 PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: CRACOW NO. OF UNITS, AS OF 31/12/2021 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 SENTOTU 190 --- 2 GÓRKA NARODOWA --- 561 TOTAL – SENTO S.A. 190 561 1 2 3 PRANDOTY --- 502 4 MALBORSKA 90 33 5 GÓRKA NARODOWA (PRZESTRZENIE BANACHA) 134 835 TOTAL – BUMA GROUP 224 1 370 TOTAL CRACOW 414 1 931 4 5 3
- 31. Dom Development S.A. endeavours to ensure that the information in the presentation is complete. up-to-date and accurate. However, we do not make any guarantees in this respect. Dom Development S.A. connot accept responsibilty for the consequences of using such information. and in particular any loss caused by reliance thereon for the purpose of investment decisions. The material contained in the presentation originates from reliable public sources and to the best knowledge of Dom Development S.A. may be considered reliable. For further information please contact: Magdalena Cumanis Investor Relations Director tel. +48 22 351 68 49 e-mail: magdalena.cumanis@domd.pl www.inwestor.domd.pl