Business

Revenues rose to EUR 205.93 million from EUR 121.38 million in the first half of 1999, reflecting the French property market's sustained growth since the beginning of last year.

Sales of apartments amounted to EUR 150.29 million, representing 73% of the total, while single-family homes contributed EUR 54.80 million, or 26.6%.

Deliveries rose by 48% to 1,185 equivalent home units (EHUs) from 801 in first-half 1999. As in the first quarter, the faster growth in revenues was driven by a shift in the product mix following the sale of a number of programs in well-known Parisian neighborhoods and communities in the greater Paris area.

Orders represented revenues of EUR 307.93 million, up 10.8% from EUR 277.92 million in first-half 1999. In volume terms, a total of 1,465 orders were booked during the period, compared with 1,446 in the previous first half.

First-half sales comprised single-family homes and large apartments purchased mainly by consumers for their primary residence. Sales related to the Besson tax incentive system accounted for just 8.6% of the total.

"For Kaufman & Broad, as for the entire profession, first-half 1999 was the best half-year since 1989," said Guy Nafilyan, Chairman and Chief Executive Officer of Kaufman & Broad S.A. "The further increase in business in the first half of 2000 is therefore very encouraging."

Backlog at May 31 was up 30.7% in euro terms to EUR 315.34 million from EUR 241.31 million, representing 6.4 months of business against 6.1 months in the prior-year period.

Financial highlights

First-half operating income totaled EUR 17.22 million, up 81.1% from EUR 9.51 million in first-half 1999. Operating margin widened to 8.4% from 7.8% at May 31,1999, reflecting the negotiated reduction, as from 2000, in the royalties paid to the parent company.

First-half net income amounted to EUR 8.40 million compared with EUR 4.35 million the year before, an increase of 92.9%. The faster growth compared with operating income was due to a reduction in the effective tax rate.

The acquisitions of Park Promotion in September 1999 and of Franck Arthur in January 2000 contributed EUR 39 million to first-half revenues.

Operating highlights

Showroom. First-half showroom revenues tripled to EUR 4.57 million from EUR 1.37 million in the prior-year period.

Commercial property. Kaufman & Broad operates in the commercial property market on behalf of third parties. In the first half, options were signed for land enabling the development of an aggregate 120,000 square meters of new office space (in Saint-Denis, Courbevoie and Strasbourg) and warehouse premises (in Vaulx le Pénil).

Partnerships. Financing agreements with Crédit Agricole-Ile de France and Crédit Agricole-Brie took effect on April 27, 2000. Between then and June 8, 115 applications for mortgage financing on Kaufman & Broad homes in the Paris area were passed on to the banks. In addition, an agreement was signed with AGF concerning the sale of multi-risk homeowner insurance.

The Internet. Kaufman & Broad has partnered with Bouygues Immobilier and Groupe Georges V to launch France's first new property sales portal, with the aim of quickly bringing together property developer-builders accounting for more than 50% of French new property sales. The portal will generate revenue from property listings, partnerships, and fees from developers for passing on information to prospects. It is scheduled to go live in the final quarter of 2000.

Acquisitions. In line with the Company's growth strategy, a number of acquisitions are being considered in the greater Paris area and the rest of France. A protocol agreement was recently signed to acquire First Promotion in Lille, which will provide local market coverage in northern France.

Outlook

At the end of the first half, Kaufman & Broad S.A. had 120 programs on the market, of which 27 were in single-family homes and 93 in apartments. Twelve programs (eight in apartments and four in homes) are scheduled for launch in the third quarter.

The French housing market remains buoyant. The main economic indicators - GDP growth, consumer confidence and unemployment - are positively trended, while the recent rise in short-term interest rates has not affected mortgage rates.

In light of the above, full-year net income is expected to increase by more than 50%. For more than 30 years, Kaufman & Broad S.A. has been designing, building and selling single-family homes and apartments throughout France. Its size, profitability, strong brand name and reputation for quality have made Kaufman & Broad S.A. one of France's leading developers and builders of homes.

For further information:

Investor Relations
Nancy Levain Teitelbaum
+33 (0) 145 382 119 - nlevain@ketb.com

Media Relations
Solange Stricker / Fabienne Rom
+33 (0) 140 710 697

www.ketb.com