PulteGroup, Inc. · NYSE:PHM
PulteGroup — Investor Presentation (March 2024)
24 slides from PulteGroup's investor presentation, March 2024
Slide 1: Investor Presentation: Constructing a High Returning Homebuilder
Investor Presentation Constructing a High Returning Homebuilder March 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements As a cautionary note, except for the historical information contained herein, this presentation contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to a number of risk
Slide 3: Agenda
AGENDA Constructing a High Returning Homebuilder Driving Superior Financial Results Favorable Long-Term Market Dynamics Summary
Slide 4: Constructing a High Returning Homebuilder
Constructing a High Returning Homebuilder
Slide 5: Continuing to Expand Our Market Platform
Nation’s 3rd Largest Builder Continuing to Expand Our Market Platform Recent Market Entry SEATTLE BOSTON PORTLAND MINNEAPOLIS NEW HAVEN DETROIT PHILADELPHIA CLEVELAND CHICAGO SACRAMENTO COLUMBUS SALT LAKE SAN FRANCISCO WASHINGTON D.C. CITY INDIANAPOLIS SAN JOSE DENVER LOUISVILLE TRIAD RALEIGH LAS VE
Slide 6: Unmatched Ability to Serve All Buyer Groups
Unmatched Ability to Serve All Buyer Groups 2023 Closings by Buyer Group First Time Move Up Active Adult 100% 90% 24% 26% 25% 25% 25% 80% 70% 60% 45% 43% 39% 36% 50% 46% 40% 30% 20% 36% 39% 28% 31% 32% 10% 0% 2019 2020 2021 2022 2023 Offering both spec and build-to-order ~60% of closings among highe
Slide 7: Diversified Across Price Points
Diversified Across Price Points 2023 Closings by Price Point 13% 6% Under $300K 22% $300K - $399K $400K - $499K $500K - $749K 36% $750K and Above 23% ©2024 PulteGroup 7
Slide 8: Control of Critical Land Resources
Control of Critical Land Resources Lots Under Control 300,000 Owned Optioned 250,000 Actively managing land pipeline 200,000 119,218 118,115 • Multi-year program underway to 102,264 150,000 88,989 increase optioned lots to 70% of pipeline 100,000 50,000 91,363 109,078 108,848 104,515 Expect to inves
Slide 9: Disciplined Land Investment is Key Driver of Sustained Business Success
Disciplined Land Investment is Key Driver of Sustained Business Success Land Underwriting Tied to Return on Invested Capital IRR 18% 18% 18% 18% 18% 19% 19% 20% 20% 21% 21% 22% 22% 23% 24% 25% 26% 27% 28% 29% 30% Threshold Score 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Land inv
Slide 10: Operating Model Launched a Decade Ago
Operating Model Launched a Decade Ago Strategic Capital Allocation Consistent Invest in the business Land Underwriting Dividends Share Repurchase Pay down debt Improve Homebuilder Generating Consistent Efficient Land Pipeline Profitability Cash Flow Goal: increase lot Industry leading gross
Slide 11: Operating Model Aligned with Driving High Returns Over the Housing Cycle
Operating Model Aligned with Driving High Returns Over the Housing Cycle Drive superior • Strategic expansion into • Consistently realize homebuilding profitability new markets to support positive cash flows to • Disciplined underwriting process growth fund allocation priorities • Efficient Build to
Slide 12: Today's Operating Model Driving Superior Financial Results
Today’s Operating Model Driving Superior Financial Results
Slide 13: Capitalizing on Volumes to Drive Outsized EPS Growth
Capitalizing on Volumes to Drive Outsized EPS Growth Closings Closings (2001 - 2005) (2019 - 2023) 50,000 50,000 40,000 45,630 40,000 38,612 30,000 30,000 32,693 28,903 28,894 29,111 28,603 20,000 20,000 24,624 22,915 23,232 10,000 10,000 0 0 2001 2002 2003 2004 2005 2019 2020 2021 2022 2023 EPS EPS
Slide 14: With Significantly Higher Returns on Equity
With Significantly Higher Returns on Equity Return on Equity Return on Equity (2001 – 2005) (2019 – 2023) 35.0% 35.0% 30.0% 30.0% 5 Yr Avg – 26.3% 32.9% 25.0% 28.9% 25.0% 27.9% 5 Yr Avg – 22.2% 27.0% 25.3% 20.0% 20.0% 23.7% 20.6% 20.0% 15.0% 18.0% 18.2% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 2001 200
Slide 15: While Building a Strong Balance Sheet
While Building a Strong Balance Sheet Debt-to-Capital Debt-to-Capital (2001 – 2005) (2019 – 2023) 50.0% 50.0% 5 Yr Avg – 39.8% 40.0% 44.8% 40.0% 40.9% 38.4% 38.8% 36.2% 30.0% 30.0% 33.6% 29.5% 5 Yr Avg – 23.8% 20.0% 20.0% 21.3% 18.7% 10.0% 10.0% 15.9% 0.0% 0.0% 2001 2002 2003 2004 2005 2019 2020 202
Slide 16: And Generating Positive Cash Flows to Fund Operations
And Generating Positive Cash Flows to Fund Operations Cash Flows from Operations ($M) Cash Flows from Operations ($M) (2001 – 2005) (2019 – 2023) $200 $2,500 $149 $19 $0 $2,000 $2,197 -$200 $1,500 $1,784 -$336 -$407 -$400 $1,000 $1,076 $1,004 -$600 -$692 $500 $669 -$800 $0 2001 2002 2003 2004 2005 2
Slide 17: Allocating Capital to Grow the Business and Reward Shareholders
Allocating Capital to Grow the Business and Reward Shareholders Land Investment ($M) Share Repurchase & Dividends ($M) $5,000 $1,400 $4,539 $1,200 $4,000 $4,236 $4,283 $1,219 $1,000 $1,142 $1,045 $3,000 $800 $2,978 $2,856 $2,000 $600 $400 $1,000 $397 $200 $301 $0 $0 2019 2020 2021 2022 2023 2019 202
Slide 18: And Achieving Our Goal of Superior Total Shareholder Returns
And Achieving Our Goal of Superior Total Shareholder Returns 1 Year 3 Year 5 Year 140% 150% 400% 120% 350% 125% 100% 300% 100% 250% 80% 75% 200% 60% 150% 50% 40% 100% 20% 25% 50% 0% 0% 0% Rankings based on results through the periods ending December 31, 2023 ©2024 PulteGroup 18
Slide 19: The Long-term Investment Thesis for PHM
The Long-term Investment Thesis for PHM Investing in the business to support the goal of growing volumes 5% to 10% annually ⁃ Opportunity to expand share of U.S. home sales Seek to maintain high returns on equity as we work to build long-term shareholder value, while maintaining a strong balance she
Slide 20: Favorable Long-term Market Dynamics
Favorable Long-term Market Dynamics
Slide 21: Years of Under Building Has Created a Significant Housing Deficit
Years of Under Building Has Created a Significant Housing Deficit Housing Starts (M) Relative to Estimated Need of 1.5M 2.5 800 600 2.0 400 Est of annual need 1.5M 200 1.5 0 (200) 1.0 (400) 0.5 (600) (800) 0.0 (1,000) 2001 2021 2009 2003 2005 2007 2011 2023 2019 2013 2015 2017 1999 1993 1995 1997 20
Slide 22: Existing Homeowners Slow to Part With Low-Rate Mortgages
Existing Homeowners Slow to Part With Low-Rate Mortgages Existing Home Sales Year Millions 2020 5.6 2021 6.1 2022 5.0 2023 4.1 Source: Urban Institute December 2023 Chartbook On an annual basis, 2023 existing Anticipated declines in rates for 2024 not expected home sales of 4.1 million was the to br
Slide 23: Summary
Summary Nation’s 3rd largest homebuilder operating across 46 markets ⁃ Unmatched ability to serve all buyer groups ⁃ Balanced spec and build-to-order production Share gains and expansion into new markets supporting ongoing growth of the business ⁃ Positioning the business to grow 5% to 10% annually
Slide 24: PulteGroup
a PULTEGROUP