Kb Home · NYSE:KBH
Kb Home — Q2 2024 Earnings Presentation
34 slides from Kb Home's earnings presentation, Jun 18, 2024
Slide 1: Investor Presentation Second Quarter 2024
Investor Presentation Second Quarter 2024 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Items in this presentation, and statements by KB Home management in relation to this presentation or otherwise, may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on current
Slide 3: Built to Order Model Provides Competitive Advantages
Built to Order Model Provides Competitive Advantages Buyers Want Choice Buyers Value Choice; Buyers select their floor plan, lot, square footage and As a Result, Our BTO Model Drives personalized finishes in our Design Studios based on what they High Monthly Absorption per Community value and can af
Slide 4: Built to Order Also Attracts Largest Demand Segments of Market
Built to Order Also Attracts Largest Demand Segments of Market A Leader in the 1st Time Buyer Segment While Drawing a Mix of Buyers to Our Communities Q2 2024 Buyer Profile BTO enhances (Based on Homes Delivered) value and affordability Position through choice of 15% our product lot, square footage,
Slide 5: Dedicated to Providing World Class Customer Service
Dedicated to Providing World Class Customer Service • KB Home’s personalized, customer- centric Built-to-Order business model enables us to develop long-term relationships with our customers • Our community teams partner with customers through each major step of their purchase of a KB home: sale – m
Slide 6: Second Quarter 2024
Second Quarter 2024 6
Slide 7: Growth-Oriented Geographic Footprint
Growth-Oriented Geographic Footprint Principal Markets West Coast Southwest Central Southeast California, Idaho, Arizona, Colorado, Florida, Washington Nevada Texas North Carolina Q2 2024 Mix West Coast Southwest Central Southeast Homebuilding Revenues 41% 19% 22% 18% Deliveries 30% 20% 29% 21% Aver
Slide 8: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights (all comparisons on a year-over-year basis) Q2 2024 Q2 2023 % Change • Revenues totaled $1.71 billion, compared to $1.77 billion • Homebuilding operating income was $188.2 million, compared to Housing Revenues $1.70 billion $1.76 billion -3% $202.1 million – Homebuildi
Slide 9: Housing Revenues
Housing Revenues ($ in millions) $1,933 $1,839 $1,758 $1,715 $1,702 $1,660 $1,574 $1,458 $1,394 $1,379 '22 '23 24 '22 '23 24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 9
Slide 10: Average Selling Price
Average Selling Price ($ in thousands) $509 $510 $495 $494 $486 $483 $487 $480 $480 $466 '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 10
Slide 11: Homebuilding Operating Income Margin
Homebuilding Operating Income Margin* 18.1% 15.5% 15.8% 12.2% 11.7% 11.7% 11.4% 10.9% 11.1% 10.9% '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 11 *Excludes inventory-related charges. See Appendix: Reconciliation of Non-GAAP Financial Measures.
Slide 12: Housing Gross Profit Margin – Reported
Housing Gross Profit Margin – Reported 26.7% 25.3% 22.4% 22.4% 21.5% 21.5% 21.1% 21.1% 21.5% 20.7% '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 12
Slide 13: Housing Gross Profit Margin – As Adjusted
Housing Gross Profit Margin – As Adjusted* 27.0% 25.3% 23.9% 22.4% 21.8% 21.6% 21.4% 21.5% 21.2% 20.8% '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 13 *Excludes inventory-related charges. See Appendix: Reconciliation of Non-GAAP Financial Measures
Slide 14: SG&A Expense Ratio
SG&A Expense Ratio 10.8% 10.2% 10.1% 10.1% 10.2% 9.8% 9.9% 9.6% 8.9% 8.0% '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 14
Slide 15: Balanced Land Portfolio
Balanced Land Portfolio Q2 2024 Highlights Lots by Region (in 000’s) • Total inventory was $5.34 billion • Total lots owned or controlled were 65,533 21.9 22.4 22.5 16.7 19.4 19.7 • Owned lots represented a supply of 14.1 14.0 16.7 approximately 3.0 years based on 12.3 11.7 11.9 14.7 16.5 29.0 29.4
Slide 16: Average Community Count
Average Community Count 251 253 240 240 243 237 236 221 213 211 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2022 2023 2024 16
Slide 17: Net Orders per Community per Month
Net Orders per Community per Month 6.6 6.2 5.5 5.2 4.6 4.3 3.1 2.8 2.7 1.0 '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 17
Slide 18: Net Order Value
Net Order Value ($ in millions) $2,154 $2,125 $2,032 $1,900 $1,582 $1,512 $1,002 $979 $933 $363 '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 18
Slide 19: Backlog Value
Backlog Value ($ in millions) $6,121 $5,711 $5,261 $3,692 $3,457 $3,395 $3,315 $3,122 $2,792 $2,668 '22 '23 '24 '22 '23 '24 '22 '23 '22 '23 First Quarter Second Quarter Third Quarter Fourth Quarter 19
Slide 20: Generating Significant Gross Operating Cash Flow
Generating Significant Gross Operating Cash Flow ($ in millions) Highlights $2,884 $2,857 $2,496 $2,586 $2,005 From 2020 through 2023: • We generated nearly $10 billion in gross $1,083 operating cash flow $564 $311 $183 • Approximately 85% of this cash flow was $(37) reinvested in our future growth
Slide 21: Healthy Capital Structure
Healthy Capital Structure Debt-to-Capital Ratio Highlights 39.6% Leverage 35.8% 33.4% • Since fiscal year-end 2020, we have reduced our debt- 30.7% 29.8% to-capital ratio by nearly 10 percentage points 2020 2021 2022 2023 Q2 2024 Liquidity • Total liquidity, including cash and revolver availability,
Slide 22: The ESG Difference
The ESG Difference 22
Slide 23: Leadership in Sustainable Homebuilding
Leadership in Sustainable Homebuilding Received a record 29 190,000+ ENERGY STAR® Market Leader Awards in 2023 Total U.S. EPA ENERGY STAR Certified New Homes 20,900+ Total Solar Homes 21,800+ Total U.S. EPA WaterSense & Water Smart Homes Approx. $1.2 Billion* Cumulative Utility Bill Savings Approx.
Slide 24: Giving Back to Our Communities
Giving Back to Our Communities 24
Slide 25: Strong Corporate Governance
Strong Corporate Governance Governance Practices: A Snapshot Independent • Eight of our nine directors are independent • Independent directors lead all Board committees Accountable • Directors are elected annually under a majority voting standard • In 2024, our directors received an average of 95% s
Slide 26: Summary
Summary 26
Slide 27: KB Home – A Compelling Story
KB Home – A Compelling Story Key Takeaways Well positioned Existing geographic footprint offers potential for substantially larger scale in markets selected for their long-term economic and demographic growth potential Compelling Focused on 1st time and affordable 1st move-up buyers, while also appe
Slide 28: KB Home is a Stronger, More Profitable Company Today
KB Home is a Stronger, More Profitable Company Today The growth in our scale and profitability, together with the health of our balance sheet, have transformed KB Home into a larger and stronger company. Housing Revenues (billions) Housing Gross Margin(1) $6.37 21.4% 18.7% $4.51 $3.58 16.6% 15.8% $1
Slide 29: KB Home is a Stronger, More Profitable Company Today
KB Home is a Stronger, More Profitable Company Today Debt-to-Capital Ratio Capital Returned to Stockholders (millions) 82.1% $468 60.5% 42.3% $97 30.7% $20 $12 2012 2016 2019 2023 2012 2016 2019 2023 Return on Equity Book Value per Share 15.7% $50.22 12.2% 6.3% $26.60 $20.25 $4.88 (15.1%) 2012 2016
Slide 30: Increasing Share Repurchases
Increasing Share Repurchases We are reinvesting in our growth and returning cash to stockholders through a significant share repurchase Share Repurchases (millions) program, utilizing the $1 billion authorization that our $411 Board approved in April. While we had previously set a range for 2024 sha
Slide 31: Appendix
Appendix 31
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 2022 2023 2024 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Housing Gross Profit Margin ` Housing Gross Profit Margin - As Reported 22.4% 25.3% 26.7% 22.4% 21.5% 21.1% 21.5% 20.7% 21.5% 21.1% Housing inventory-related charges - - 0.3 1.5 0.3 0.3 - 0.1 0.1 0.1 Housing G
Slide 33: Deferred Tax Asset Value and Protection
Deferred Tax Asset Value and Protection • At May 31, 2024, KB Home had net deferred tax assets (DTA) of approximately $114 million • To support the realization of the DTA, KB Home has undertaken a number of steps to avoid experiencing an “ownership change” under federal tax laws • At May 31, 2024, t
Slide 34: Thank you for your interest in KB Home.
Thank you for your interest in KB Home. For further information, please contact us: Investor Relations (310) 231-4000 investorrelations@kbhome.com 34