Dom Development Group Q1 2021 Results Presentation
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In Q1 2021, Dom Development S.A. reported a record delivery of 1,366 units, achieving a significant increase in net sales and profits with revenues of PLN 807.9 million, reflecting a 157% year-over-year growth. The company maintained strong customer satisfaction, high margins, and effectively managed its construction costs despite ongoing challenges from the COVID-19 pandemic. As of March 31, 2021, the group had a cash reserve of PLN 647 million and a strong land bank supporting future developments.
Dom Development Group Q1 2021 Results Presentation
- 1. PRESENTATION OF Q1 2021 RESULTS 13 MAY 2021 DOM DEVELOPMENT S.A. CONSOLIDATED GROUP
- 2. CONTENTS 1. Q1 2021 SUMMARY 1. HIGHLIGHTS 3 2. FINANCIAL RESULTS SUMMARY 4 3. MARKET 5 2. OPERATIONAL PERFORMANCE 1. Q1 2021 NET SALES 6 2. SALES SEGMENTATION 7 3. OFFER 8 4. PROJECTS LAUNCHED FOR CONSTRUCTION 9 5. UNITS UNDER CONSTRUCTION 10 6. LAND BANK – OWNED AND CONTROLLED 11 7. DELIVERIES 12 3. FINANCIAL RESULTS 1. PROFIT AND LOSS ACCOUNT 13 2. CUMULATIVE NET SALES TO BE RECOGNIZED IN P&L 14 3. BALANCE SHEET 15 4. DEBT MATURITY STRUCTURE 16 4. SUMMARY 17 5. APPENDICES 1. COMMENCEMENT OF HANDOVERS IN Q2-Q4 2021 19 2. PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: a) WARSAW 20 b) TRI-CITY 21 c) WROCLAW 22
- 3. 3 1.1. Q1 2021 HIGHLIGHTS • Strongest-ever beginning to a year: 1 366 units delivered, with an average value of PLN 591k • 1 084 units sold (+33% YoY) with high margin • Very high levels of customer satisfaction (Group’s NPS* exceeded 70 points) • Minimal disruption to projects despite a worsening COVID-19 epidemic • PLN 647m cash as of 31 March 2021 (PLN 277m over and above the Group’s interest-bearing debt) • Record-high dividend recommendation from the 2020 net profit: PLN 10.00 per share, PLN 254m in total • Decision to enter the Cracow market through the acquisition of Sento S.A. (planned for Q2 2021) *NPS – Net Promoter Score is an indicator calculated on the basis of customer satisfaction surveys, with a value ranging from -100 to 100 points; data on Polish housing developers is not available, though the average value for UK developers is 42 points (National new home customer satisfaction survey, March 2021).
- 4. 4 1.2. Q1 2021 FINANCIAL SUMMARY (v. Q1 2020) DELIVERIES 1 366 UNITS +149% REVENUES PLN 807.9m +157% GROSS MARGIN 32.5% +3.0 pp NET PROFIT PLN 174.5m +353% GEARING at 31.03.2021 (21)% -26 pp Q1 features heavily in planned finished- flat deliveries for the whole of 2021. This is represented in strong financial results for the period. The average value (PLN 591k) and profitability (33%) of sold units recognized in the P&L statement reflect the quality of our projects as well as effective construction cost controls. Negative gearing, i.e. the excess of cash over loans and bond liabilities, confirms the extraordinary strength of the Group balance sheet.
- 5. 5 1.3. MARKET • Strong demand across all market segments • Gradual decrease in market supply due to administrative delays, permit problems and land shortages particularly in Warsaw • Strong demand alongside restricted supply results in accelerated price growth • Negative real interest rates on bank deposits alongside low debt servicing costs provide a boost to the housing market • High mortgage availability and positive impact of low interest rates • Cash purchases continue to account for approx. 40% of Group sales • Rise in construction material prices and high availability of subcontractors
- 6. 6 2.1. QUARTERLY SALES No. of units RECORD-HIGH START TO THE YEAR, YoY VOLUME INCREASES ACROSS MARKETS Net sales (units) Q1 2021 Q1 2020 Change YoY Warsaw 600 497 +21% Tri-City 342 220 +55% Wroclaw 142 98 +45% Dom Development Group 1 084 815 +33% 61% 74% 58% 58% 55% 27% 18% 30% 31% 32% 12% 8% 11% 11% 13% 815 816 995 1 130 1 084 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Warsaw Tri-City Wroclaw
- 7. 7 2.2. Q1 2021 SALES SEGMENTATION HIGH SHARE OF PREMIUM FLATS UNDERSCORES GROUP MARKET POSITION Unit sale value includes the price of a flat with fit-out (if purchased), storage room (if purchased) and parking space (if purchased). 33% 14% 18% 22% 13% Dom Development S.A. Consolidated Group over PLN 650k PLN 550-650k PLN 450-550k PLN 350-450k up to PLN 350k Average transaction value (PLN k) Q1 2021 Q1 2020 Change YoY Warsaw 722 660 +9% Tri-City 497 454 +9% Wroclaw 447 456 (2)% Dom Development Group 612 578 +6%
- 8. 8 2.3. OFFER SIGNIFICANT INCREASE OF TRI-CITY AND WROCLAW SHARE IN GROUP OFFER No. of units Group’s offer by location 31.03. 2021 31.03. 2020 Change YoY Warsaw 959 1 163 (18)% Tri-City 859 468 +84% Wroclaw 557 259 +115% Dom Development Group 2 375 1 890 +26% 61% 70% 50% 42% 40% 14% 20% 36% 41% 36% 25% 10% 14% 17% 24% 1 890 2 019 2 377 2 482 2 375 31/03/2020 30/06/2020 30/09/2020 31/12/2020 31/03/2021 Warsaw Tri-City Wroclaw
- 9. 9 2.4. PROJECTS LAUNCHED FOR CONSTRUCTION STICKING BY OUR SCHEDULE FOR NEW PROJECT LAUNCHES Project/phases launches in Q1 2021: Warsaw: Apartamenty Służewiec (37 units) Metro Zachód phase3/1 (145 units) Osiedle Wilno IV phase 3 (154 units) Osiedle Wilno IV phase 5 (158 units) Tri-City: Osiedle Przy Błoniach building B2 (45 units) Zielony Południk building 15 (48 units) Zielony Południk buildings 16-17;22-23 (90 units) Wroclaw: Apartamenty Ołtaszyn (158 units) No. of units 326 402 1 184 159 494 180 174 495 677 183 101 356 158 506 576 1 780 1 192 835 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Warsaw Tri-City Wroclaw
- 10. 10 2.5. UNITS UNDER CONSTRUCTION No. of units RECORD-HIGH NUMBER OF UNITS UNDER CONSTRUCTION - ALL SITES PROGRESSING ON TIME AND ON BUDGET Units under construction 31.03. 2021 31.03. 2020 Change YoY Warsaw 2 699 2 552 +6% Tri-City 2 163 1 569 +38% Wroclaw 717 763 (6)% Dom Development Group 5 579 4 884 +14% 52% 58% 53% 46% 48% 32% 29% 34% 39% 39% 16% 13% 13% 15% 13% 4 884 4 507 5 115 5 298 5 579 31/03/2020 30/06/2020 30/09/2020 31/12/2020 31/03/2021 Warsaw Tri-City Wroclaw
- 11. 11 2.6. LAND BANK – OWNED AND CONTROLLED Land Bank Owned Controlled Total Change YoY Warsaw 2 845 5 629 8 474 +22% Tri-City 3 801 1 561 5 362 (9)% Wroclaw 498 1 258 1 756 +23% Dom Development Group 7 144 8 448 15 592 +9% SIGNIFICANT LAND PURCHASES IN WARSAW (+1 275 UNITS IN 4 LOCATIONS) 7 936 7 633 7 507 6 691 7 144 6 305 7 582 5 745 7 975 8 448 14 241 15 215 13 252 14 666 15 592 31/03/2020 30/06/2020 30/09/2020 31/12/2020 31/03/2021 Plots owned Plots controlled No. of units to be developed
- 12. 12 2.7. DELIVERIES STRONGEST-EVER START TO THE YEAR: 1 366 DELIVERED UNITS, WITH AN AVERAGE VALUE OF PLN 591K No. of units Deliveries in units Q1 2021 Q1 2020 Change YoY Warsaw 906 430 +111% Tri-City 150 38 +295% Wroclaw 310 81 +283% Dom Development Group 1 366 549 +149% 78% 72% 28% 64% 66% 7% 27% 46% 26% 11% 15% 26% 10% 23% 549 692 692 1 073 1 366 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Warsaw Tri-City Wroclaw
- 13. 13 3.1. PROFIT AND LOSS ACCOUNT EARLY DELIVERIES RESULT IN DISPROPORTIONATE PERCENTAGE OF 2021 ANNUAL PROFIT BOOKED IN Q1 Profit and Loss Account Q1 2021 Q1 2020 Change YoY Q1 2021 Q4 2020 Change QoQ Sales Revenues 807.9 314.1 +157% 807.9 679.7 +19% Handovers (units) 1 366 549 +149% 1 366 1 073 +27% Revenue per unit (PLN’000) 591 572 +3% 591 633 (7)% Gross Profit on Sales 262.9 92.7 +184% 262.9 223.1 +18% Gross Profit Margin 32.5% 29.5% +3.0 pp 32.5% 32.8% (0.3) pp Operating Profit 215.9 49.7 +334% 215.9 158.5 +36% Operating Profit Margin 26.7% 15.8% +10.9 pp 26.7% 23.3% +3.4 pp Profit Before Tax 216.1 48.1 +349% 216.1 160.1 +35% Profit Before Tax Margin 26.7% 15.3% +11,4 p.p. 26.7% 23.6% +3.1 pp Net Profit 174.5 38.5 +353% 174.5 127.0 +37% Net Profit Margin 21.6% 12.3% +9,3 p.p. 21.6% 18.7% +2.9 pp EPS (PLN) 6.87 1.54 +346% 6.87 5.04 +36% IAS 15, PLN m
- 14. 14 0 500 1 000 1 500 2 000 2 500 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M 2013 2014 2015 2016 2017 2018 2019 2020 2021 3.2. CUMULATIVE NET SALES TO BE RECOGNIZED IN P&L (UNITS SOLD BUT NOT DELIVERED - PRESALES) CONTINUING UPWARD TREND OF REVENUE POTENTIAL PLN m Units sold but not delivered (presales): Value 31.03.2020 3 627 units PLN 1 948m 31.03.2021 3 829 units, including: PLN 2 024m • 260 finished units; • 3 569 units under construction, wiith 1 749 finishing in 2021
- 15. 15 3.3. BALANCE SHEET STRONG BALANCE SHEET SUPPORTS GROUP DEVELOPMENT AND GROWTH IN SCALE OF OPERATIONS PLN m ASSETS 31.03.2021 31.03.2020 Change YoY Current Assets 3 073.1 3 363.2 (8.6)% Cash 646.9 639.8 +1.1% Incl. escrow accounts 45.3 57.6 (21.2)% Inventory, including: 2 277.3 2 620.6 (13.1)% Land and proojects under construction 1 660.5 2 194.1 (24.3)% Finished units, parking places and storage cells 234.9 194.4 +20.8% Fixed Assets 74.5 72.9 +2.1% TOTAL ASSETS 3 147.6 3 436.1 (8.4)% EQUITY AND LIABILITIES 31.03.2021 31.03.2020 Change YoY Equity 1 341.5 1 128.0 +18.9% Total Liabilities 1 806.0 2 308.1 (21.8)% Long-term liabilities 457.8 714.3 (35.9)% Incl. Interest-bearing debt (bonds and loans) 260.0 593.4 (56.2)% Short-term liabilities, including: 1 348.2 1 593.8 (15.4)% Deferred income 828.5 978.8 (15.3)% Interest-bearing debt (bonds and loans) 110.0 100.0 +10.0% TOTAL EQUITY AND LIABILITIES 3 147.6 3 436.1 (8.4)% FIXED OTHER INVENTORY CASH EQUITY EQUITY LONG-TERM LIABILITIES BONDS OTHER SHORT-TERM LIABILITIES TRADE PAYABLES AND OTHER BONDS LEASING DEFFERRED 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 ASSETS LIABILITIES PLN m
- 16. 16 3.4. DEBT MATURITY STRUCTURE WELL-SPREAD DEBT MATURITY GIVES US FLEXIBILITY Cash (including escrow accounts) as of 31/03/2021 PLN 647m Bond debt as of 31/03/2021 PLN 360m Available credit lines as of 31/03/2021 PLN 375m 110 50 50 50 100 10 0 20 40 60 80 100 120 by 11.2021 by 12.2022 by 10.2023 by 12.2024 by 09.2025 Bonds Bank Loans PLN m
- 17. 17 4. SUMMARY: Q1 2021 • Strong demand across market segments • 1 084 units sold with high margin • 2 375 units available for sale as at the end of March • Record-high 5 579 units under construction at quarter end • 1 366 units delivered with average value of PLN 591k • Gross margin at 33% and net profit of PLN 174m • PLN 647m cash at bank with negative gearing of 21%
- 19. 19 APPENDIX 1: COMMENCEMENT OF HANDOVERS IN Q2-Q4 2021 PROJECT/PHASE LOCATION NO. OF UNITS COMMENCEMENT OF HANDOVERS PROJECT/PHASE LOCATION NO. OF UNITS COMMENCEMENT OF HANDOVERS Q2 OSIEDLE KOMEDY PHASE 1 WROCLAW 120 MAY'21 Q4 WILNO V PHASE 1 WARSAW 326 OCT'21 BEAUFORTA BUILDING 17 TRI-CITY 24 MAY'21 LOCUS BUILDING 4 TRI-CITY 91 NOV'21 METRO ZACHÓD PHASE 1 WARSAW 134 JUN'21 NASZE MIEJSCE BUILDING B TRI-CITY 44 NOV'21 ZIELONY POŁUDNIK BUILDING 5 TRI-CITY 22 JUN'21 PERSPEKTYWA PHASE 1/1 TRI-CITY 33 NOV'21 ZIELONY POŁUDNIK BUILDING 6 TRI-CITY 22 JUN'21 BEAUFORTA BUILDING 8 TRI-CITY 35 NOV'21 ZIELONY POŁUDNIK BUILDING 7 TRI-CITY 22 JUN'21 BEAUFORTA BUILDING 9 TRI-CITY 27 NOV'21 ZIELONY POŁUDNIK BUILDING 8 TRI-CITY 23 JUN'21 BEAUFORTA BUILDING 11 TRI-CITY 35 NOV'21 LOCUS BUILDING 3 TRI-CITY 71 JUN'21 ŻOLIBORZ ARTYSTYCZNY PHASE 13/1 WARSAW 158 DEC'21 Q3 DAWNA POCZTA TRI-CITY 106 JUL'21 ŻOLIBORZ ARTYSTYCZNY PHASE 13/2 WARSAW 55 DEC'21 BEAUFORTA BUILDING 18 TRI-CITY 35 AUG'21 METRO ZACHÓD PHASE 2/1 WARSAW 129 DEC'21 BEAUFORTA BUILDING 19 TRI-CITY 32 AUG'21 OSIEDLE GŁĘBOCKA PHASE 1 WARSAW 60 DEC'21 BEAUFORTA BUILDING 20 TRI-CITY 38 AUG'21 PERSPEKTYWA PHASE 1/2 TRI-CITY 21 DEC'21 ZIELONY POŁUDNIK BUILDING 13 TRI-CITY 50 SEP'21 ZIELONY POŁUDNIK BUILDINGS 18-19 TRI-CITY 44 DEC'21 OSIEDLE CIS TRI-CITY 148 SEP'21
- 20. 20 APPENDIX 2A: PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: WARSAW NO. OF UNITS, AS OF 31/03/2021 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION 8 10 12 3 7 11 9 6 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 8 PALLADIUM (AKACJE) --- 566 9 GŁĘBOCKA 271 --- 10 WILNO 851 222 11 REZYDENCJA STANISŁAWA AUGUSTA 125 --- 12 STACJA GROCHÓW (SIENNICKA) 390 --- 13 WAWER (NEW) --- 219 TOTAL RIGHT BANK 1 637 1 007 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 METRO ZACHÓD (+393) 532 546 2 LITERACKA (NEW) --- 530 3 ŻOLIBORZ ARTYSTYCZNY 493 --- 4 CIOŁKA (NEW) --- 133 5 LUDWIKI --- 429 6 APARTAMENTY SŁUŻEWIEC (BOKSERSKA) 37 --- 7 PORY --- 200 TOTAL LEFT BANK 1 062 1 838 2 1 4 5 13
- 21. 21 APPENDIX 2B: PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: TRI-CITY NO. OF UNITS, AS OF 31/03/2021 1 5 3 6 7 8 2 9 10 11 4 12 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION 13 14 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 OSIEDLE BEAUFORTA 379 --- 2 PERSPEKTYWA 376 283 3 ZIELONY POŁUDNIK 415 138 4 DOLNE MIASTO --- 371 5 LOCUS 162 --- 6 OSIEDLE CIS 148 --- 7 OSIEDLE PRZY BŁONIACH 110 110 8 DAWNA POCZTA 106 --- 9 DOKI + MONTOWNIA 343 857 10 NASZE MIEJSCE 124 --- 11 DYNAMIKA --- 334 12 JASTARNIA --- 116 13 PIEKARNICZA --- 536 14 BEAUFORTA II --- 1 056 TOTAL 2 163 3 801 TRI-CITY
- 22. 22 PROJECT IN PREPARATION PROJECT UNDER CONSTRUCTION 3 2 1 4 APPENDIX 2C: PROJECTS UNDER CONSTRUCTION AND IN PREPARATION: WROCLAW NO. OF UNITS, AS OF 31/03/2021 NO. PROJECT UNDER CONSTRUCTION IN PREPARATION 1 OSIEDLE CHOCIEBUSKA 11 (NOWY DWÓR) 196 --- 2 APARTAMENTY OŁTASZYN (KUSTRONIA) 158 --- 3 KOMEDY (BUFOROWA) 203 353 4 ZIELNA 160 145 TOTAL WROCLAW 717 498
- 23. 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 tel. +48 22 351 68 49 e-mail: magdalena.cumanis@domd.pl www.inwestor.domd.pl