Douglas Elliman Inc. · NYSE:DOUG
Douglas Elliman — Investor Presentation (November 2021)
31 slides from Douglas Elliman's investor presentation, Nov 30, 2021
Slide 1: Investor Presentation
Investor Presentation June 2021 / Confidential November 2021
Slide 2: Disclaimer
Disclaimer Safe Harbor Statement & Use of Non-GAAP Information This document and any related oral presentation does not constitute an offer or invitation to subscribe for, purchase or otherwise acquire any equity or debt securities or other instruments of Vector Group Ltd. (“Vector”, “VGR” or “the C
Slide 3: Agenda
Agenda Introduction 2 The Douglas Elliman Story 8 Douglas Elliman Financial Overview 21 1
Slide 4: Introduction
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Slide 5: Introduction to the Douglas Elliman Management Team
Introduction to the Douglas Elliman Management Team Richard Lampen Scott Durkin Howard Lorber Director, Executive Vice President and Chief Chairman, President and President and Chief Executive Officer, Chief Executive Officer Operating Officer Douglas Elliman Bryant Kirkland Marc Bell David Ballard
Slide 6: Transaction Summary
Transaction Summary Pro Forma Transaction Structure ⚫ Planned as tax-free spin-off of Douglas Elliman to Vector Group Ltd. (“Vector” or “VGR”) stockholders VGR Stockholders Vector Group Ltd. SpinCo Inc. Tobacco Segment Real Estate Douglas Elliman New Valley NV Title LLC NV Mortgage LLC Subsidiaries
Slide 7: Distribution & Governance
Distribution & Governance Ticker NYSE: DOUG Approximately 77.6 million, based on Vector outstanding Post Spin-off Shares Outstanding common stock on September 30, 2021 Distribution Ratio 1 share of SpinCo for every 2 shares of Vector $0.20 per share of SpinCo common stock Expected Annual Dividend ($
Slide 8: Douglas Elliman at a Glance
Douglas Elliman at a Glance Business Overview ⚫ Founded in 1911 as a pioneer in the real estate industry that has continued to challenge the status quo through innovation and high- quality service provided by best-in-class real estate agents ⚫ Leading brand associated with service, luxury and forwar
Slide 9: Douglas Elliman's Geographical Footprint
Douglas Elliman’s Geographical Footprint One ~6,600 affiliated agents across ~100 offices in the U.S. #6 Nationally of the Largest in New York Alliance with Knight Frank provides an international network of ~384 offices across ~51 countries and ~16,000 agents Massachusetts(1) GTV: $377m Market Share
Slide 10: The Douglas Elliman Story
THE DOUGLAS ELLIMAN STORY 8
Slide 11: Investment Highlights
Investment Highlights 1 Highly attractive dynamics in the U.S. residential real estate market Comprehensive solution provides for multiple revenue streams and 2 monetization of valuable agent relationships Industry-leading brand name with a strong presence in most major U.S. 3 luxury markets Cutting
Slide 12: Highly Attractive Dynamics in the U.S. Residential Real Estate Market
Highly Attractive Dynamics in the U.S. Residential Real Estate Market Consistent Growth in New and Existing Home Sales and Increasing Home Ownership Rates(1) (thousands) Existing Home Sales New Home Sales 6,871 7,392 6,022 6,506 5,956 969 828 797 615 688 5,341 5,334 5,678 6,074 6,423 2018 2019 2020
Slide 13: Highly Attractive Dynamics in the U.S. Residential Real Estate Market (Cont.)
Highly Attractive Dynamics in the U.S. Residential Real Estate Market (Cont.) Positive Demographics as Millennials are Entering the Housing Market in Larger Numbers(1) (% of home buyers) 42% 37% 14% 5% 2% Gen Z Millennials Gen X Baby Boomers Silent Generation Significant Home Price Appreciation(2) 1
Slide 14: Comprehensive Solution Provides for Multiple Revenue Streams
Comprehensive Solution Provides for Multiple Revenue Streams and Monetization of Valuable Agent Relationships • Agents are able to generate significant repeat business from clients and referrals – 67% of home sellers and 60% of home buyers in 2020 chose to work with an agent they had used in the pas
Slide 15: Industry-leading Brand and Thought Leadership
Industry-leading Brand and Thought Leadership Marquee Douglas Elliman Brand Synonymous with Luxury H1 2021 Media Reports(1) • Douglas Elliman’s reach New York and ad-value Florida Leading Voice in Real significantly exceed peers Estate Across All Markets • We are #1 in in Which We Operate 10 regions
Slide 16: Large and Growing Presence in Most Major U.S. Luxury Markets
Large and Growing Presence in Most Major U.S. Luxury Markets Leading Presence in Large Luxury Markets ✓ Markets are primarily international finance and technology hubs that are densely populated and offer inventory at premium prices ✓ Large national presence augmented by alliance with Knight Frank,
Slide 17: Cutting-edge Technology Supportive of Agent Recruitment, Retention and Productivity
Cutting-edge Technology Supportive of Agent Recruitment, Retention and Productivity • Premier, customizable, mobile-friendly and cloud-based agent portal that integrates all agent resources in one user-friendly suite • Fully mobile-friendly, allowing agents to manage their business anytime, anywhere
Slide 18: MyDouglas | Complete Set of Capabilities
MyDouglas | Complete Set of Capabilities Capabilities Solutions Team Management Agent Social Media • Learning Management System • MyDouglas Team Views • Team Deal Management Agent Brand Management VideoBolt – One-Click Video Creation/Virtual Tours • Elliman.com • Custom Property Websites Listing Man
Slide 19: Open Architecture Technology Infrastructure Benefits Agents and Minimizes Costs
Open Architecture Technology Infrastructure Benefits Agents and Minimizes Costs Open Architecture Technology Infrastructure, Kept State-of-the-art Through Strategic Investments in Early Stage PropTech Companies with Technology Purpose-built for the Real Estate Industry Key Benefits of Our Technology
Slide 20: Strong Platform for Continued Growth
Strong Platform for Continued Growth Market Expansion Opportunity • Further grow leadership position in NY while entering and expanding into adjoining markets where the Douglas Elliman brand has strong awareness and Salt Lake City brand equity, including Florida, California, Colorado Sacramento Coun
Slide 21: Strong Platform for Continued Growth (Cont.)
Strong Platform for Continued Growth (Cont.) Retention(1) Recruitment of Star Agents 89% 91% 90% Continue to 2018 2019 2020 Recruit Best-in- class Agents In 2019 and 2020, average 87% retained agent was of LTM Revenue comes from agents with >3 years of ~2.5x to ~3.0x more productive than tenure attr
Slide 22: Strong Platform for Continued Growth (Cont.)
Strong Platform for Continued Growth (Cont.) • Grow New Valley Ventures and create a portfolio of start-ups that, through our investment relationship, have access to our operating businesses/distribution, as well as our know-how and experience, to grow their own Invest in businesses, while also prop
Slide 23: Douglas Elliman Financial Overview
DOUGLAS ELLIMAN FINANCIAL OVERVIEW 21
Slide 24: Attractive Financial Profile
Attractive Financial Profile Disciplined expense Strong performance management drive across KPIs with impressive significant operating revenue growth leverage Healthy margins and limited CapEx requirements drive high Strong balance sheet with cash flow conversion, $200 million of net cash(1) support
Slide 25: Summary of KPIs
Summary of KPIs Principal Agents(1) Transactions Transactions Transactions per Avg. Principal Agent (3) 5,498 5,370 6.0 5,246 4,996 147 (2) 4.4 4.3 4.4 30,850 22,990 23,479 22,686 5,099 2018 2019 2020 9/30/21 2018 2019 2020 LTM 9/30/21 Gross Transaction Value Average Transaction Value ($ thousands)
Slide 26: Financial Summary
Financial Summary ($ millions) Revenue Gross Profit(1) $352.9 $1,286.4 $253.7 $258.8 $227.0 $754.1 $784.1 $774.0 2018 2019 2020 LTM 9/30/21 2018 2019 2020 LTM 9/30/21 Adjusted EBITDA Capital Expenditures Adj. EBITDA Adj. EBITDA Margin 1.6% 0.7% 2.8% 8.2% $13.0 $106.1 $8.1 $6.1 $3.7 $22.1 $12.3 $5.2
Slide 27: Income Statement
Income Statement ($ thousands) Twelve Months Year Ended December 31, Nine Months Ended September 30, Ended September 30, 2018 2019 2020 2020 2021 2021 Revenues: Commissions and other brokerage income $715,458 $742,414 $733,751 $477,720 $974,048 $1,230,079 Property management 33,350 35,461 35,115 26,
Slide 28: Balance Sheet
Balance Sheet ($ thousands) December 31, December 31, September 30, 2019 2020 2021 ASSETS: Current assets: Cash and cash equivalents $71,485 $94,421 $158,804 Receivables 21,308 24,377 26,531 Income taxes receivable, net 162 - - Agent receivables, net 5,115 7,346 11,127 Restricted cash and cash equiv
Slide 29: Investment Highlights
Investment Highlights Unique Investment Opportunity in Tech-Enabled Residential Real Estate Brokerage with Comprehensive Suite of Real Estate Solutions, Industry-leading Brand Name and Talented Team of Employees and Agents Highly attractive dynamics in the U.S. residential real estate market Experie
Slide 30: Appendix
APPENDIX 28
Slide 31: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ thousands) Twelve Months Year Ended December 31, Nine Months Ended September 30, Ended September 30, 2018 2019 2020 2020 2021 2021 Net income (loss) $5,197 $8,459 ($46,372) ($60,405) $78,650 $92,683 Interest income, net (387) (600) (190) (148) (65) (107) Income tax
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