Slide 1: Lennar Overview: Second Quarter 2020
Lennar Overview Second Quarter 2020 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes “forward-looking statements,” as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our business, financial condition, results of operations, cash flows, str
Slide 3: Macro Overview
Macro Overview On balance, as strong as pre-crisis and any peer
Slide 4: Macro Overview: Production deficit of homes, both for-sale and for-rent
Macro Overview: Production deficit of homes, both for-sale and for-rent 2,500 Proj. Annual Housing Demand (000's) Household Formations 1,200 - 1,300 Obsolescence 200 - 400 Second Homes 100 - 200 2,250 1,500 - 1,900 2,000 352 1,047 345 1,750 587 Annual 536 349 Housing Demand 336 Normal 901 913 Total
Slide 5: Macro Overview: Demographic trends and inventory levels
Macro Overview: Demographic trends and inventory levels Millennial generation driving significant increase in peak household formation years (Ages 35-44) 50,000 U.S. Population Age 35-44 (thousands) 48,000 46,000 44,000 42,000 40,000 38,000 36,000 '90 '92 '94 96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '
Slide 6: Macro Overview: COVID placing a spotlight on the home
Macro Overview: COVID placing a spotlight on the home Fears from COVID a driver for new home purchases in the suburbs near-term Home = safety, office, children’s school, gym Urban density vs suburban living Predicting moving trends due to COVID: o Buyers will emerge from isolation looking for
Slide 7: Strategic Overview
Strategic Overview LENNAR
Slide 8: Strategic Overview: Investible through the cycle
Strategic Overview: Investible through the cycle Grow topline mid-single digit percent Moderate growth rate reduces stress on the platform and allows for higher hurdles when it comes to: o New land purchases – underwriting can be more stringent o Hiring new associates – focus on keeping A-players
Slide 9: Strategic Overview: Product and geographic diversification
Strategic Overview: Product and geographic diversification Product diversification – FY 2019 For Sale: Southwest Carolinas 10% o Entry level: ~40% 13% East o Move-up: ~50% CA 8% o 2nd move-up & active adult 14% Midwest (11 markets) Deliveries of 7% For Rent: ~50,000 WA/OR 3% o >7,000 apartments
Slide 10: Strategic Overview: Technology enabling a more efficient platform
Strategic Overview: Technology enabling a more efficient platform Starts, Land Construction Even Flow Dynamic Digital Focus Customer Sales, Process Costs Production Pricing Marketing Reports Care Closings Owned/controlled Monitoring direct Recently Focus on FIFO Tracking, Real‐time data Data with dr
Slide 11: Strategic Overview: Technology taking the homebuyer journey digital
Strategic Overview: Technology taking the homebuyer journey digital Digital Private mortgage Virtual Lennar.com Internet Online self tours Virtual / close customer Sales scheduling or virtual orientation process care Consultant tool tours service 11
Slide 12: Homebuilding, Financial Services tech-enabled process
Strategic Overview: Financial Services tech-enabled process CUSTOMER EXPERIENCE SEAMLESS DIGITAL Start of One Tap Frictionless App Immediate Pre-Qualification • Salesforce invite to Blend digital app • Paperless asset, income, employment verification • BOT’s automate the pre-qualification process •
Slide 13: Strategic Overview: Sustainable business practices
Strategic Overview: Sustainable business practices ENVIRONMENT Inclusion of healthy, green features in the homes we build o Solar power SOCIAL ‒ 8,508 solar power home Community: deliveries in fiscal 2019, 91% o The Lennar Foundation, of which were on Lennar created 30 years ago, receives homes
Slide 14: Financial Update
Financial Update
Slide 15: Financial Update: Operating and credit metrics
Financial Update: Operating and credit metrics Continued focus on strong profitability, cash flow generation and leverage reduction Sales of Homes Revenue HB Operating Margin ($ millions) $20,560 $19,616 $18,811 14.1% 13.6% 12.9% 13.3% 13.0% $11,035 12.3% $9,559 $8,336 2015 2016 2017 2018 2019 2020G
Slide 16: Conclusion
Conclusion On balance, as strong as pre-crisis and any peer
Slide 17: Conclusion: Strategies driving performance throughout the cycle
Conclusion: Strategies driving performance throughout the cycle Supportive short‐term and long‐term macro economic backdrop supported by production deficit, demographic trends and safety of homeownership Core homebuilding platform with intense technology and efficiency focus throughout the business