Service Corporation International · NYSE:SCI
Service Corporation International — Q3 2023 Earnings Presentation
25 slides from Service Corporation International's earnings presentation, 2023
Slide 1: Service Corporation International Investor Presentation Q3 2023
SERVICE CORPORATION INTERNATIONAL | INVESTOR PRESENTATION | Q3 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements in this presentation that are not historical facts are forward-looking statements. You can generally identify our forward-lookin
Slide 3: Our strategy has been effective and remains intact
Our strategy has been effective and remains intact GROW LEVERAGE DEPLOY REVENUE SCALE CAPITAL 3
Slide 4: Our financial position affords us financial flexibility, which allows us to be opportunistic
Our financial position affords us financial flexibility, which allows us to be opportunistic DEBT MATURITY PROFILE September 30, 2023 Provides financial flexibility to invest in our associates TERM LOAN AMORTIZATION PAYMENT and our businesses, and REVOLVER MATURITIES $660 NON-CALLABLE SENIOR BONDS p
Slide 5: We have enhanced shareholder returns through dividends and share repurchases
We have enhanced shareholder returns through dividends and share repurchases VALUE RETURNED TO SHAREHOLDERS ~$6.5B Value returned to shareholders through dividends and share repurchases since 2004 SHARES OUTSTANDING 350,000 56% 16% CAGR DIVIDENDS PER SHARE $1.20 Reduction in outstanding Dividends pe
Slide 6: Our execution has translated into superior total shareholder returns over the long term
Our execution has translated into superior total shareholder returns over the long term TOTAL SHAREHOLDER RETURN September 30, 2023 60% 263% 208% 40% 34% 135% 42% 41% SCI 34% 90% S&P 500 23% 12% RUSSELL 2000 S&P MIDCAP 400 3 YEAR 5 YEAR 10 YEAR Annualized Return 12% 10% 12% 7% 7% 10% 6% 2% 14% 12% 9
Slide 7: Sustainable value creation foundational in everything we do
Sustainable value creation foundational in everything we do Our 2022 Sustainability Report is available at sci-corp.com SUPPORTING OUR INVESTING IN OUR OPERATING 25,000 ASSOCIATES COMMUNITIES WITH PRINCIPLE Supporting the personal Delivering service excellence Operating with integrity, and professio
Slide 8: SCI at a glance
SCI at a glance 2022 SNAPSHOT Revenues OTHER $4.1B CONSOLIDATORS SCI $4.1B ~10% REVENUES Employees 25K We are the largest company in ~15%–16% the highly fragmented deathcare Customers Served ~706K space with an approximate 15%–16% revenue market share Preneed Sales in the U.S. & Canada ~75% $2.5B IN
Slide 9: Our scale and footprint provides competitive advantages
Our scale and footprint provides competitive advantages CANADA 161 12 National brand FUNERAL CEMETERY Leading technologies Supply chain cost advantages UNITED 1,325 477 Premier preneed sales program STATES FUNERAL CEMETERY Network optimization/ back office efficiencies Leading cemeteries in markets
Slide 10: Long-Term Power of SCI's Growth Model
Long-Term Power of SCI’s Growth Model 10
Slide 11: Our base case earnings framework remains sound
ORGANIC Our base 5%–7% case earnings FUNERAL Modest revenue growth driven by increases in volume and framework sales average supporting stable margins CEMETERY remains sound Mid-single digit % preneed sales growth supporting increasing margins 8%–12% CAPITAL DEPLOYMENT 3%–5% Reinvesting in business,
Slide 12: Long-Term Consistent EPS Growth
Long-Term Consistent EPS Growth Modest incremental revenue growth drives EPS above the range Our business model has proven that ADJUSTED EARNINGS PER SHARE incremental revenue $4.57 yields significant $3.80 profitability; similar to 14% CAGR $2.91 post-Stewart, post- 2013–2017 COVID, we expect to $1
Slide 13: New higher earnings base reflects post-COVID learnings and efficiencies
New higher earnings base reflects post- COVID learnings and efficiencies ADJUSTED EARNINGS PER SHARE 2022 to 2023 Bridge $4.57 Less Estimated COVID Impact $2.27 Unique +10% Guidance 2022 Interest $3.80 Growth Midpoint Adj Base Headwind $3.35 +$0.35 $3.50 Incremental learnings & efficiencies $0.45 [$
Slide 14: There are key pillars to reach even greater potential growth
There are 4 key pillars to reach even greater potential growth Marketing, Sales & Enhanced Preneed Demographic Cemetery Growth Capital Backlog Tailwinds Inventory Opportunities Impact Impact 14
Slide 15: Favorable conditions exist for future volume growth
Favorable conditions exist for future volume growth MAIN DRIVERS AGING EXCESS DEATHS PRENEED DRIVING DEMOGRAPHICS INCLUDING COVID MARKET SHARE These drivers could easily increase our current assumptions for funeral volume and cemetery atneed production 15
Slide 16: Initiatives underway supporting even further production growth
Initiatives underway supporting even further production growth MAIN DRIVERS QUALITY & QUANTITY IMPROVED SALES CEMETERY OF MARKETING - EFFECTIVENESS & INVENTORY DRIVEN LEADS EFFICIENCIES OPPORTUNITIES These drivers could easily increase our current assumptions for cemetery preneed production 16
Slide 17: Our growth capital continues to add strength to our earnings growth framework
Our growth capital continues to add strength to our earnings growth framework MAIN DRIVERS ACQUISITIONS NEW BUILDS OTHER GROWTH CAPITAL With continued deployment like recent years, we are able to support higher earnings growth potential 17
Slide 18: Our preneed strategy and backlog are structured to drive earnings and cash flow growth
Our preneed strategy and backlog are structured to drive earnings and cash flow growth MAIN DRIVERS HIGHER - QUALITY TRUST INVESTMENT INCREASING CONTRACT SALES RETURNS SUPPORTING CEMETERY BACKLOG PRODUCTION FUTURE GROWTH RECOGNITION Strength in our backlog could easily drive increases in our sales a
Slide 19: Key Takeaways
Key Takeaways 1 2 3 4 5 Strong business Significant and Industry leaders Preneed model Potential for model with a consistent cash in innovation and and backlog incremental growth is sustainable growth flow continues technology strength much greater in the platform to grow differentiates us coming ye
Slide 20: Appendix
APPENDIX 20
Slide 21: Definitions: Non-GAAP Financial Measures
Definitions: Non-GAAP Financial Measures This information should not be considered in isolation or as a substitute for related GAAP measures. Additionally, these measures as calculated by the Company may not be comparable to similarly titled measures used by other companies. ADJUSTED EPS OR DILUTED
Slide 22: Adjusted EPS – 2014 to 2022
Adjusted EPS – 2014 to 2022 (In millions, except Diluted EPS) 12 Months Ended December 31, 2022 2021 2020 2019 2018 2017 2016 2015 2014 Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Income EPS Income EPS Income EPS Income EPS Income EPS I
Slide 23: Adjusted EPS – 2005 to 2013
Adjusted EPS – 2005 to 2013 (In millions, except Diluted EPS) 12 Months Ended December 31, 2013 2012 2011 2010 2009 2008 2007 2006 2005 Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Net Diluted Income EPS Income EPS Income EPS Income EPS Income EPS I
Slide 24: Adjusted cash flow from operations and free cash flow
Adjusted cash flow from operations and free cash flow (In millions) 12 Months Ended December 31, 2022 2021 2020 2019 2018 2017 Net cash provided by operating activities $ 825.7 $ 920.6 $ 804.4 $ 628.8 $ 615.8 $ 503.4 Contractual/Legal settlements, net of insurance recoveries - (8.3) - 6.4 - 17.8 IRS
Slide 25: Financial outlook
Financial outlook GUIDANCE In Millions, except Adjusted EPS 2023 Low Midpoint High Diluted earnings per share excluding special items $3.40 $3.50 $3.60 Adjusted EPS Net cash provided by operating activities excluding special items and cash taxes $920 $940 $960 Cash taxes expected in 2023 (at the mid
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