D.r. Horton, Inc. · NYSE:DHI
D.r. Horton — Q1 2021 Earnings Presentation
29 slides from D.r. Horton's earnings presentation, 2021
Slide 1: Investor Presentation Q1 2021
Investor Presentation Q1 2021
Slide 2: Broad Geographic Footprint
Broad Geographic Footprint 2
Slide 3: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation may include “forward‐looking statements” as defined by the the impact of an inflationary, deflationary or higher interest rate environment; Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes home warranty and construction defe
Slide 4: D.R. Horton, Inc.
D.R. HORTON, INC. Traded on NYSE as DHI $22.2 billion $3.5 billion 28.0% & 24.4% Consolidated revenues Consolidated pre‐tax income ROI (HB) & ROE, respectively* $12.5 billion $34.33 17.3% Stockholders’ equity Book value per common share Homebuilding leverage* As of or for the twelve‐month period end
Slide 5: DHI Growth, Consolidation and Market Share
DHI GROWTH, CONSOLIDATION AND MARKET SHARE 1,400 71,168 Homes Closed during TTM ended 12/31/2020 10% 2020 Closings: 71,168 9% 1,200 8% 1,000 7% 2006 Closings: 6% 800 53,410 2011 Closings: 5% 17,176 600 4% 400 3% 2% 1992 Closings: 200 1,231 1% 0 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 20
Slide 6: Market Share Dominance
MARKET SHARE DOMINANCE D.R. Horton Share and Rankings in Largest U.S. Housing Markets Top 5 Markets Top 50 Markets 18% 50 16% 40 44 14% 40 12% 36 30 10% 8% 20 6% 4% 10 11 2% 0% 0 DFW Houston Atlanta Phoenix Austin #1 Top 5 Top 10 Operate In DHI Market Share Next Ranking Competitor Market Share Sourc
Slide 7: Management Tenure and Experience
MANAGEMENT TENURE AND EXPERIENCE Executive Team & Region Presidents ~27 years Division Presidents ~15 years City Managers >10 years Average employee tenure 7
Slide 8: Homebuilding Operational Focus
HOMEBUILDING OPERATIONAL FOCUS • Maximize returns by managing inventories, sales pace and pricing in each community, while maintaining affordability for homebuyers • Consolidate market share while generating strong profits and operating cash flow • Maintain sufficient inventories of land, lots and h
Slide 9: Capital and Cash Flow Priorities
CAPITAL AND CASH FLOW PRIORITIES • Balanced, disciplined, flexible and opportunistic; focused on enhancing long‐term value • Strong balance sheet, ample liquidity and low leverage provide significant financial flexibility to effectively operate through changing economic conditions • Invest in homebu
Slide 10: Geographic Diversification
GEOGRAPHIC DIVERSIFICATION 7% 9% 90 Markets 29 States 27% 12% East Inventory Delaware, Maryland, New Jersey, North and South Carolina, Pennsylvania, Virginia 18% 27% Midwest Colorado, Illinois, Indiana, Iowa, Minnesota, Ohio South Central Louisiana, Oklahoma, Texas Southeast South Central West East
Slide 11: Diverse Product Offerings and Price Points
DIVERSE PRODUCT OFFERINGS AND PRICE POINTS Homes for entry‐level, move‐up, active adult and luxury buyers 65% of homes closed <$300k 6% 30% 29% 30% 5% $0 - $200k $200k - $250k $250k - $300k $300k - $500k >$500k Represents price points of homes closed for the twelve months ended 12/31/20 11
Slide 12: Family of Brands
FAMILY OF BRANDS Homes Sales Average Selling Number of Number of Homes Sold Homes Closed Revenue Markets Price States 65% 64% 67% $317k 90 29 31% 32% 27% $256k 62 19 3% 3% 3% $300k 25 12 1% 1% 3% $534k 20 9 As of or for the twelve months ended December 31, 2020 12
Slide 13: Forestar ("FOR")
FORESTAR (“FOR”) • DHI owns 65% of FOR, a publicly traded residential lot manufacturer with operations in 51 markets and 21 states • Supports DHI’s strategy of increasing land and lots controlled through purchase contracts • FOR delivered 3,567 lots and generated $307.1 million of revenue in Q1 2021
Slide 14: Emphasis on Return on Inventory (ROI)
EMPHASIS ON RETURN ON INVENTORY (ROI) Homebuilding ROI target of >20% 30% 28.0% 25% 24.6% 20% 20.2% 18.1% 18.7% 15% 10% 5% 0% FY 2018 FY 2019 TTM 12/31/19 FY 2020 TTM 12/31/20 Homebuilding ROI is calculated as homebuilding pre‐tax income for the year divided by average homebuilding inventory. Averag
Slide 15: Return on Equity (ROE)
RETURN ON EQUITY (ROE) ROE has improved to greater than 20%, while leverage has decreased to below 20% HB leverage ROE 25% 25% 24.4% 22.1% 20% 20% 17.6% 18.2% 15% 17.2% 15% 10% 10% 5% 5% 0% 0% FY 2018 FY 2019 TTM 12/31/19 FY 2020 TTM 12/31/20 ROE Leverage ROE is calculated as net income divided by a
Slide 16: Book Value per Share
BOOK VALUE PER SHARE Consistent annual double‐digit percentage growth in book value per share $35.00 $34.33 $30.00 $32.53 $27.20 $27.92 $25.00 $23.88 $20.00 $15.00 $10.00 $5.00 $0.00 9/30/2018 9/30/2019 12/31/2019 9/30/2020 12/31/2020 16
Slide 17: Cash Flow at Work
CASH FLOW AT WORK Utilization of greater than $5 billion of cash generated by homebuilding operations Investments CF from HB Operations $2,000 $2,000 $1,904 $1,800 $1,800 5 Year Cumulative Capital* $1,600 $1,438 $1,600 Cash Flow from $5.2B $1,400 $1,400 Homebuilding Operations $1,200 $1,200 $1,002 H
Slide 18: Expectations
EXPECTATIONS* • Q2 FY 2021 • Consolidated revenues in a range of $6.0 billion to $6.2 billion • Homes closed between 19,000 homes and 19,500 homes • Home sales gross margin around 24.1% • Homebuilding SG&A of approximately 7.9% of homebuilding revenues • Financial services pre‐tax profit margin of 4
Slide 19: First Quarter Data
First Quarter Data
Slide 20: Q1 FY 2021 Highlights
Q1 FY 2021 HIGHLIGHTS • Net income per diluted share increased 84% to $2.14 • Net income attributable to D.R. Horton increased 84% to $792 million • Consolidated revenues increased 48% to $5.9 billion • Consolidated pre‐tax income increased 98% to $1.0 billion • Consolidated pre‐tax profit margin im
Slide 21: Sales and Closings
SALES AND CLOSINGS Net Sales Orders and Homes Closed increased 56% and 45%, respectively, in Q1 FY 2021 compared to Q1 FY 2020 # of Homes 25,000 20,000 15,000 10,000 5,000 0 Sales Closings 1QFY19 1Q FY20 1Q FY21 21
Slide 22: Income Statement
INCOME STATEMENT 3 MONTHS ENDED FISCAL YEAR ENDED 12/31/2020 12/31/2019 9/30/2020 9/30/2019 Homes closed 18,739 12,959 65,388 56,975 Homebuilding Revenues: Home sales $ 5,698.7 $ 3,863.3 $ 19,560.8 $ 16,925.0 Land/lot sales 19.9 19.7 83.1 91.9 5,718.6 3,883.0 19,643.9 17,016.9 Gross profit: Home sal
Slide 23: Home Sales Gross Margin
HOME SALES GROSS MARGIN 24% 22% 24.1% 22.7% 20% 21.3% 21.3% 21.6% 21.8% 21.0% 20.2% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% FY 2018 FY 2019 1Q20 2Q20 3Q20 4Q20 FY 2020 1Q21 Shown as a % of the Company’s homebuilding segment’s home sales revenues Includes interest amortized to cost of sales Refer to slide
Slide 24: Homebuilding SG&A
HOMEBUILDING SG&A SG&A as a percentage of homebuilding revenues improved 130 basis points to 7.9% in Q1 FY 2021 HB Rev $ Fiscal Year SG&A % HB Rev $ First Fiscal Quarter SG&A % $20,000 12% $14,000 12% $17,500 $12,000 11% 11% $15,000 $10,000 $12,500 10% 10% $8,000 $10,000 9% $6,000 9% $7,500 $4,000 9
Slide 25: Consolidated Pre-Tax Income
CONSOLIDATED PRE-TAX INCOME Consolidated pre‐tax profit margin improved 440 basis points to 17.4% in Q1 FY 2021 Fiscal Year First Fiscal Quarter PTI $ PTI $ 14.7% $3,000 $1,600 $2,983.0 $1,400 $2,500 12.1% $1,200 $2,000 17.4% $2,125.3 $1,000 $1,034.3 $1,500 $800 $600 13.0% $1,000 $400 $523.3 $500 $2
Slide 26: Balance Sheet
BALANCE SHEET 12/31/2020 9/30/2020 12/31/2019 Homebuilding Cash and cash equivalents $ 2,140.1 $ 2,560.6 $ 1,159.5 Inventories: Construction in progress and finished homes 6,665.1 6,037.5 5,603.3 Land inventories 5,473.4 4,977.5 5,282.3 12,138.5 11,015.0 10,885.6 Other assets 1,644.3 1,503.5 1,291.5
Slide 27: Homes in Inventory
HOMES IN INVENTORY Well‐positioned to respond to increased new home demand 45,000 42,100 40,000 38,000 35,000 30,200 30,000 27,900 27,700 25,000 20,000 15,000 10,000 5,000 0 9/30/18 9/30/19 12/31/19 9/30/20 12/31/20 Sold Specs Homes in inventory excluding model homes 27
Slide 28: Homebuilding Land and Lot Position
HOMEBUILDING LAND AND LOT POSITION Total lot position increased 38% from a year ago 28% owned / 72% controlled at 12/31/20 500,000 440,700 450,000 400,000 376,900 350,000 319,000 307,300 288,500 300,000 318,700* 250,000 264,300* 185,900* 195,600* 164,200* 200,000 150,000 100,000 50,000 124,300 121,4
Slide 29: Homebuilding Public Debt Maturities by Year
HOMEBUILDING PUBLIC DEBT MATURITIES BY YEAR No senior note maturities in next 12 months $800 $700 $700 $600 $500 $500 $500 $500 5.750% $400* $400 $350 $300 $200 2.550% 4.375% 4.750% 2.500% 2.600% 1.400% $100 $0 FY 21 FY 22 FY 23 FY 24 FY 25 FY 26 FY 27 FY 28 $ in millions *Repaid at maturity in Dece