Green Brick Partners, Inc. · NYSE:GRBK
Green Brick Partners — Q3 2021 Earnings Presentation
27 slides from Green Brick Partners's earnings presentation, 2021
Slide 1: Third Quarter 2021 Investor Call Presentation
THIRD QUARTER INVESTOR CALL PRESENTATION|2021 GREEN BRICK PARTNERS THIRD QUARTER 2021 INVESTOR CALL PRESENTATION
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This presentation and our earnings call contain “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements concern expectations, beliefs, projections, plans and strategies, anticipated INTRODUCTION events or trends an
Slide 3: Management Presenters
MANAGEMENT PRESENTERS INTRODUCTION JIM BRICKMAN CHIEF EXECUTIVE OFFICER • Over 40 years in real estate development and homebuilding. • Co-founded JBGL with Greenlight Capital in 2008. JBGL was merged into Green Brick in 2014. • Previously served as Chairman and CEO of Princeton Homes and Princeton R
Slide 4: Green Brick Is a Diversified Builder with 8 Brands in 4 Major Markets
GREEN BRICK IS A DIVERSIFIED BUILDER WITH 8 BRANDS IN 4 MAJOR MARKETS BRANDS & SUBSIDIARY MARKET PRODUCTS PRICE RANGE OWNERSHIP HOMEBUILDER OFFERED SERVICES Dallas, TX Trophy Signature Homes Ft. Worth, TX Single Family $290k - $870k 100% Dallas, TX CB JENI Homes Ft. Worth, TX Townhomes $290k - $530k
Slide 5: Company at a Glance
COMPANY AT A GLANCE Green Brick Demonstrates Consistent Growth With Some of the Highest Risk-Adjusted Returns in the Industry RANKED #1 AMONGST PUBLIC HOMEBUILDERS AND #19 OVERALL IN FORTUNE’S 2021 FASTEST GROWING COMPANIES LIST GROWTH TOTAL REVENUES (IN MILLIONS) PRE-TAX INCOME ATTRIBUTABLE TO GREE
Slide 6: Population Growth Is Expected to Drive Future Housing Demand
POPULATION GROWTH IS EXPECTED TO DRIVE FUTURE HOUSING DEMAND Last 10-Year Resident Population Growth for 25 Largest States DEMOGRAPHIC TRENDS 10-Year Population State Growth % Growth Texas 4,000 15.9% Colorado 745 14.8% Washington 981 14.6% GREEN BRICK STATES ARE HIGHLIGHTED Florida 2,737 14.6% Ariz
Slide 7: Our Markets Are Well-Positioned to Generate Future Growth
OUR MARKETS ARE WELL-POSITIONED TO GENERATE FUTURE GROWTH DFW and Atlanta saw the second and third largest declines in active listings of the largest MSAs in September 2021, spurred MARKET by strong employment and affordability UPDATE • Due to a 33.9% decline in active listings, DFW saw a 20.6% incr
Slide 8: Sustained Growth Through Prudent Land Development
SUSTAINED GROWTH THROUGH PRUDENT LAND DEVELOPMENT Our results demonstrate the strong balance sheet, lot position, and operational excellence required for continued growth. We added 12,288 lots since Q3 2020 to fuel growth in 2022 and beyond while maintaining debt to capital under 32%. EXPANDING TOTA
Slide 9: Land Position
LAND POSITION Land is well positioned in attractive submarkets SUBMARKET LOCATIONS ATLANTA METRO AREA DALLAS-FT. WORTH METRO AREA √ SUBMARKET GRADES GRBK LOCATIONS MOST DESIRABLE DESIRABLE AREA MEDIAN DESIRABILITY MORE AFFORDABLE MOST AFFORDABLE GREEN BRICK PARTNERS THIRD QUARTER 2021 INVESTOR CALL
Slide 10: Availability of Finished Lot Supply
AVAILABILITY OF FINISHED LOT SUPPLY Delivery of finished lots expected over the next 15 months should provide ample runway for sustained delivery growth FINISHED LOTS 55* 900 COMMUNITIES LOTS ANTICIPATED TO BE UNDER DEVELOPMENT FINISHED IN THE NEXT 3 MONTHS 90 3,700 AVERAGE ACTIVE SELLING COMMUNITIE
Slide 11: Shift to Larger and Higher Absorption Trophy Communities
SHIFT TO LARGER AND HIGHER ABSORPTION TROPHY COMMUNITIES ACCLERATES GROWTH IN Q4 2021 AND BEYOND Green Brick has grown units under construction by 44% in nine months UNITS UNDER CONSTRUCTION CONSOLIDATED UNITS UNDER TROPHY UNITS UNDER CONSTRUCTION CONSTRUCTION 1,000 Trophy started 930 1,537 homes ov
Slide 12: Trophy Signature Homes Growth Trajectory
FUTURE DELIVERIES WILL CONTINUE TO MOVE TOWARDS TROPHY THE ENTRY-LEVEL AND FIRST-TIME MOVE-UP BUYER SIGNATURE With DFW starts and closings running at 57k and 48k units, respectively, on an annualized basis, Trophy has the capacity HOMES for higher growth Growth Trajectory COMPARISON OF TROPHY VOLUME
Slide 13: Trophy Signature Homes Demonstrates Excellent Financial Results
TROPHY SIGNATURE HOMES DEMONSTRATES EXCELLENT FINANCIAL RESULTS TROPHY Growth of Trophy brand is expected to provide a significant opportunity to drive our industry-leading results even higher SIGNATURE HOMES METRICS AVERAGE EXPECTED TROPHY STATISTICS VS OTHER SUBSIDIARIES 160+ Lots 12% SIZE OF FY 2
Slide 14: Green Brick Continues to Demonstrate Strong Top-Line Growth
GREEN BRICK CONTINUES TO DEMONSTRATE STRONG TOP-LINE GROWTH HOME Consolidated average sales price increased 8.6% over one year ago, 4.4% sequentially from Q2 21, and 3.4% on a last CLOSINGS twelve months basis while achieving a successful expansion of entry-level segment with Trophy Signature Homes
Slide 15: Substantial Backlog Will Continue to Provide Visibility in Future Closings
SUBSTANTIAL BACKLOG WILL CONTINUE TO PROVIDE VISIBILITY IN FUTURE CLOSINGS FINANCIAL Backlog is up 84% YOY and is the highest in our history, despite closing a record number of units YTD. HIGHLIGHTS Net New Orders By metering sales during Q2 and Q3, the Company successfully increased the number of s
Slide 16: Financial Results Continue to Demonstrate Strong Risk-Adjusted Returns
GREEN BRICK’S FINANCIAL RESULTS CONTINUE TO DEMONSTRATE STRONG RISK-ADJUSTED RETURNS Robust year-over-year growth in Q3 2021 continues an uptrend with gross margins now up 580 basis points over the last two years YTD YTD Q3 2021 Q3 2020 Increase Q3 2021 Q3 2020 Increase Homebuilding Gross Margin 26.
Slide 17: Focus on Gross Margins Has Driven Earnings Growth
FOCUS ON GROSS MARGINS HAS DRIVEN EARNINGS GROWTH Green Brick Demonstrates Consistent Growth With Some of the Highest Risk-Adjusted Returns in the Industry GROSS GROSS MARGIN PERCENTAGE QUARTERLY – LAST TWO YEARS AS OF 9.30.2021 LAST 12 MONTHS NET INCOME TO GRBK QUARTERLY – LAST TWO YEARS AS OF 9.30
Slide 18: The Company Continues to Raise Prices Faster Than Costs
THE COMPANY CONTINUES TO RAISE PRICES FASTER THAN COSTS Green Brick maintains some of the best margins in the industry, well above most small and mid-cap peers GROSS GRBK Gross Margin Percentage was 26.5% for the nine months ended September 30, 2021 versus an average 23.1% for MARGIN covered public
Slide 19: Green Brick Has Reduced Risk by Diversifying Customer Mix
GREEN BRICK HAS REDUCED RISK BY DIVERSIFYING CUSTOMER MIX Entry-level plus first-time move-up segments have increased from 19% to 35% over two years. HOMEBUYER Homebuyer Customer Mix DIVERSIFICATION Last Nine Months GRBK Home Closings Revenue by Product Type YTD Q3 2019 HOME CLOSINGS REVENUE YTD Q3
Slide 20: Strong Risk-Adjusted Growth Relative to Peers
GREEN BRICK PROVIDES STRONG RISK-ADJUSTED GROWTH RELATIVE TO PEERS Based on our key performance indicators, we believe Green Brick has one of the best growth opportunity profiles among PEER peers small and mid-cap peers COMPARISON LAST TWELVE MONTHS ENDING 9.30.2021 OR NEAREST DATE Growth in Pre-Tax
Slide 21: Balance Sheet Strength
BALANCE SHEET STRENGTH Green Brick continues to maintain financial leverage below the industry average for mid-cap and small-cap peers. FINANCIAL LEVERAGE GRBK Debt to Capital was 31.9% as of September 30, 2021 versus an average 41.1% for covered mid-cap and small-cap public builders. Also, GRBK’s i
Slide 22: Appendix
APPENDIX GREEN BRICK PARTNERS THIRD QUARTER 2021 INVESTOR CALL PRESENTATION 22 22
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Adjusted Homebuilding Gross Margin Reconciliation APPENDIX Nine Months Nine Months Three Months Ended Three Months Ended (Unaudited, in Thousands) Ended Ended September 30, 2021 September 30, 2020 September 30, 2021 September 30, 2020 Residential Units Revenue $338,900 $263,8
Slide 24: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION GRBK Pre-tax Income, EBITDA, and Interest Coverage Ratio APPENDIX Three Months Three Months Nine Months Nine Months Ended Ended Ended Ended (Unaudited, in Thousands) September 30, September 30, September 30, September 30, 2021 2020 2021 2020 Net Income Attributable to Green B
Slide 25: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION GRBK Pre-tax Income Return on Average Invested Capital APPENDIX Three Months Three Months Nine Months Nine Months (Unaudited, in Thousands) Ended Ended Ended Ended September 30, September 30, September 30, September 30, 2021 2020 2021 2020 Net Income Attributable to Green Bri
Slide 26: Financial Highlights
FINANCIAL HIGHLIGHTS (Unaudited) Q3 Q3 Qtr over Qtr YTD Q3 YTD Q3 YTD over YTD APPENDIX (Dollars in Millions, Except EPS) 2021 2020 Change 2021 2020 Change New Homes Delivered 738 622 18.6% 2,011 1,623 23.9% Net New Home Orders 689 823 -16.3% 2,375 2,037 16.6% Average Active Selling Communities 84 9
Slide 27: Third Quarter Investor Call Presentation
THIRD QUARTER INVESTOR CALL PRESENTATION |2021 GREEN BRICK PARTNERS 2805 Dallas Parkway, Suite 400 Plano, Texas 75093 | www.greenbrickpartners.com THIRD QUARTER 2021 INVESTOR CALL PRESENTATION