Persimmon Plc · LSE:PSN
Persimmon — H1 2023 Earnings Presentation
45 slides from Persimmon's earnings presentation, 2023
Slide 1: Managing uncertainty; building for future growth
MANAGING UNCERTAINTY; BUILDING FOR FUTURE GROWTH
Slide 2: On target to deliver expectations for the current year
On target to deliver expectations for the current year ▪ ▪ - ▪ - ▪ ▪ - - -
Slide 3: Operational excellence supports future growth
Operational excellence supports future growth ▪ ▪ - ▪ - - ▪
Slide 4: Jason Windsor
Jason Windsor (@ Persimmon Together, we make your home
Slide 5: Key highlights
Key highlights Navigating a challenging market backdrop (@ Persimmon ‘Together, we make your home H1 2023 H1 2022 Change New home legal completions 4,249 6,652 (36%) Average selling price £256,445 £245,597 +4.4% New housing revenue £1,090m £1,634m (33%) Gross profit £234.0m £506.2m (54%) Gross margi
Slide 6: Operating profit bridge
Operating profit bridge ▪ - - - ▪ - - ▪
Slide 7: New housing revenue
New housing revenue ▪ - - - ▪ ▪ ▪ ▪
Slide 8: High quality land investment
High quality land investment ▪ ▪ ▪ ▪ ▪
Slide 9: Disciplined and diversified investment
Disciplined and diversified investment ▪ ▪ ▪
Slide 10: Good quality land portfolio, with high embedded margins
Good quality land portfolio, with high embedded margins ▪ ▪
Slide 11: H1 completions by date of land acquisition
H1 completions by date of land acquisition ▪ ▪
Slide 12: Focus on cash deployment
(@ Persimmon ‘Together, we make your home Focus on cash deployment Ensuring a strong platform for the future £m etm A = £240m of cash land spend in H1 2023 nA “a (including £182m settlement of land creditors), 42% lower YoY Land Net decrease = Land spend of £400m-£500m investment inland expected for
Slide 13: Financial strength
Financial strength {@ Persimmon A strong platform for the future Jun Dec Jun 2023 2022 Change 2022 Change Land £2,090m £2,092m (£2m) £2,103m (£13m) = Net asset value per share 1,051p Work in progress £1,477m £1,264m +£213m £1,226m +£251m Land creditors £356m £473m (£117m) £494m (£138m) . cane Ci GSC
Slide 14: New £700m sustainability linked RCF
New £700m sustainability linked RCF ▪ ▪ ▪ - - - ▪
Slide 15: Priorities for capital allocation
Priorities for capital allocation
Slide 16: Dean Finch
Dean Finch (@ Persimmon Together, we make your home
Slide 17: Current trading
Current trading Resilient and disciplined performance in a challenging market Affordability remains key issue Strong product proposition - Persimmon private ASP 25% below market average - Strengthening brand reputation Sales rate over last 5 weeks of 0.41 (2022: 0.69) Pricing remains resilient - Cur
Slide 18: Gross margin bridge
(@ Persimmon ‘Together, we make your home Gross margin bridge Net impact of HPI and Impact of sales rate p Sales incentives & H1 2022 build cost inflation reduction Mix effect PD/HA marketing costs H1 2023 ASP c.£250k.- | Gross margin IR 31.0% 26.8% © Gross profit © Build and direct cost @ Land cost
Slide 19: Operating from lean base with continued focus on cost discipline
Operating from lean base with continued focus on cost discipline ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 20: Further investment in vertical integration and innovation
Further investment in vertical integration and innovation ▪ - - - ▪ - ▪ - - - -
Slide 21: Building safety update
Building safety update ▪ - - - ▪ -
Slide 22: Strong focus on sales and marketing in a disciplined and effective way
Strong focus on sales and marketing in a disciplined and effective way ▪ - - ▪ ▪ ▪ ▪
Slide 23: Broad geographic reach coupled with strong brand recognition
Broad geographic reach coupled with strong brand recognition ▪ ▪ ▪ ▪ ▪
Slide 24: Planning challenges require nimble, proactive approach
Planning challenges require nimble, proactive approach ▪ - - - ▪ - - ▪ ▪ - - -
Slide 25: 5,102 plots achieved detailed planning in H1
5,102 plots achieved detailed planning in H1 ▪ - - ▪ ▪
Slide 26: Outlet growth
Outlet growth &@ Persimmon Commitment to get back to pre-Covid outlet levels = Commitment to get back to pre-Covid levels as soon as it is sensible and where planning allows = Pipeline of around 250 new outlets opening over the Average sales outlets next 2.5 years subject to planning and market cond
Slide 27: Fundamental long term strengths
Fundamental long term strengths ▪ ▪ ▪ - - - - ▪ - - ▪ ▪ -
Slide 28: (@ Persimmon
(@ Persimmon Together, we make your home
Slide 29: Appendices
Appendices (@ Persimmon Together, we make your home
Slide 30: Appendices
APPENDICIES (@ Persimmon ‘Together, we make your home 1. Quarterly trading performance 2. Underlying trading performance 3. Underlying trading per plot 4. Underlying P&L split by half 5. Trading performance by brand (Persimmon, Charles Church and Partnerships) 6. Trading performance by division 7. A
Slide 31: Quarterly trading performance
Quarterly trading performance
Slide 32: Underlying trading performance
Underlying trading performance
Slide 33: Underlying trading per plot
APPENDIX 3 Underlying trading per plot Syecenaees (@ Persimmon New housing per plot H1 2023 H1 2022 Change H1 2023 H1 2022 Change Revenue £256,445 £245,597 +4.4% 100.0% 100.0% Land costs (£28,837) (£29,230) (1.3%) (11.2%) (11.9%) + 0.7% Build and other direct costs (£172,542) (£140,262) + 23.0% (67.
Slide 34: Underlying P&L split by half
APPENDIX 4 Underlying P&L split by half © Persimmon Underlying performance: H1 2023 H1 2022 Change FY 2022 New housing Unit completions 4,249 6,652 (2,403) 14,868 Revenue £1,089.6m £1,633.7m (£544.1m) £3,696.4m Operating profit’ £152.2m £440.7m (£288.5m) £1,006.5m Operating margin’ 14.0% 27.0% (13.0
Slide 35: Trading performance - Brand
APPENDIX 5 Trading performance - Brand stellata (@ Persimmon New housing H1 2023 H1 2022 Change New housing H1 2023 H1 2022 Change No. No. £m £m Units Persimmon 2,993 5,133 (42%) Gross Profit Persimmon 176.3 430.6 (59%) Charles Church 288 420 (31%) Charles Church 31.9 49.1 (35%) Partnerships 968 1,0
Slide 36: Trading performance - Divisional
Trading performance - Divisional
Slide 37: Analysis of new home sales
APPENDIX 7 Analysis of new home sales ee (@ Persimmon By Price Band (Private) By House Type (All) | | 33% 29% Over £300,000 ver 39% Perse | 3885 9f £250,000 to £299,999 ays Semi-detached Sui 24% po TH oi £200,000 to £249,999 23% Townhouse iced 20% fo 2% £150,000 to £199,999 Apartment 25% @ Persimmon
Slide 38: Land holdings at 30 June 2023
APPENDIX 8 Land holdings at 30 June 2023 © Persimmon Number Number Number Anticipated Cost to ant. Cost to ant. of plots of plots of plots average Average Revenue Revenue Dec 2022 Jun 2023 change revenue plot cost Jun 2023 Dec 2022 Plots owned with detailed planning 35,860 35,086 (774) £258,449 £32,
Slide 39: Balance sheet - key items
APPENDIX 9 Balance sheet - key items Jun 2023 Jun 2022 Change Dec 2022 Work in progress £1,476.9m £1,226.1m + £250.8m £1,263.9m Land £2,090.5m £2,102.8m (£12.3m) £2,091.7m Land creditors £355.9m £493.8m (£137.9m) £472.8m Part exchange stock £85.8m £27.2m + £58.6m £61.0m Shared equity loans £34.1m £4
Slide 40: Cash flow
APPENDIX 10 Cash flow £m H12023 _H12022 Operating cash generated (before working capital movements) 155.3 451.1 Movement in working capital: Decrease/(increase) in gross land 27 (299.8) (Decrease)/increase in land creditors (119.9) 85.3 Net land movement (117.2) (214.5) Increase in WIP, part exchang
Slide 41: Cash flow generated from operations
Cash flow generated from operations
Slide 42: Margin sensitivity scenarios FY2022
Margin sensitivity scenarios FY2022 ▪ ▪ ▪
Slide 43: Monthly Mortgage Approvals
APPENDIX 13 Monthly Mortgage Approvals baal ral Remain at low levels (@ Persimmon ‘000s 120 Dec 2020: 101,200 100 ' Dec 2015: 80 Dec 2018: ara 60 Dec 2017: Average monthly 62,000 65,900 approvals since beginning of 2013: 65,800 40 20 May 2020: 9,300 to) 1 7 - 7 - 7 7 - 7 - 2013 2014 2015 2016 2017 2
Slide 44: Net zero pathway
APPENDIX 14 Net zero pathway {@ Persimmon 31% reduction on new eco homes range THE PATH TO NET ZERO CARBON HOMES IN USE ©) Insulation ©), EER escy sorpy Sas” | Sam ESI Thermally Efficient Walls Waste Water 31% REDUCTION Heat Recovery PART L| 2021 GiEnergy Efficient Boiler | Controls ln © More Therma
Slide 45: Disclaimer
Disclaimer @ Persimmon Important Notice Some of the information in this document may contain projections or other forward-looking statements regarding future events or the future financial performance of Persimmon Plc and its subsidiaries (the Group). You can identify forward-looking statements by t