Pultegroup, Inc. · NYSE:PHM
Pultegroup — Q1 2024 Earnings Presentation
26 slides from Pultegroup's earnings presentation, Apr 23, 2024
Slide 1: Q1 2024 Operating & Financial Results
Q1 2024 Operating & Financial Results April 23, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This release includes “forward-looking statements.” These statements are subject to a number of risks, uncertainties and other factors that could cause our actual results, performance, prospects or opportunities, as well as those of the markets we serve or intend to serve,
Slide 3: PulteGroup Participants
PulteGroup Participants Ryan Marshall Bob O’Shaughnessy President & CEO EVP & CFO Jim Ossowski Jim Zeumer SVP, Finance VP, Investor Relations
Slide 4: Q1 2024 Operating & Financial Highlights
Q1 2024 Operating & Financial Highlights
Slide 5: Q1 2024 Financial Highlights
Q1 2024 Financial Highlights • Earnings increased 32% over prior year Earnings Per Share to Q1 record $3.10 per share $3.10 $2.35 Q1 EPS includes $0.14 per share gain related to $1.83 JV sale and $0.09 per share insurance benefit $1.13 • “Our strong financial performance Q1 2021 Q1 2022 Q1 2023 Q1
Slide 6: Q1 2024 Financial Highlights
Q1 2024 Financial Highlights Closings • Home sale revenues increased 7,095 10% to a Q1 record $3.8B 6,044 6,039 6,394 Q1 closings of 7,095 homes increased 11% over prior year period Q1 2021 Q1 2022 Q1 2023 Q1 2024 Mix of closings in the quarter resulted Home Sale Revenues ($M) in 1% decrease in a
Slide 7: Q1 2024 Financial Highlights
Q1 2024 Financial Highlights Gross Margin * • Gross margin increased 50 basis points over prior year to 29.6% 29.6% 29.3% 29.1% Q1 gross margin reflects favorable geographic 25.9% mix and pricing dynamics Q1 2021 Q1 2022 Q1 2023 Q1 2024 • SG&A expense of $358M, or 9.4% of home sale revenues SG&A *
Slide 8: Q1 2024 Financial Highlights
Q1 2024 Financial Highlights Net New Orders • Net new orders increased 14% to 8,379 homes 9,852 7,971 8,379 7,354 YOY increase reflects higher gross orders and decrease in cancelation rate Q1 2021 Q1 2022 Q1 2023 Q1 2024 ⁃ Q1 cancelation rate as a percent of beginning period backlog was 10%, down f
Slide 9: Efficiently Investing in Future Growth
Efficiently Investing in Future Growth • Q1 land investment of $1.1B, of which 60% Lots Under Control Owned Optioned was for development of existing land assets 122,326 102,827 112,541 99,739 Company remains on track to invest 93,954 112,216 107,528 107,001 approximately $5B in land acquisition &
Slide 10: Delivering High Returns While Maintaining Conservative Capital Structure
Delivering High Returns While Maintaining Conservative Capital Structure Return on Equity * • Returned $246M to shareholders through share repurchases in Q1 33% 28% 27% 27% 24% Repurchased 2.3 million shares at an average price of $106.73 Since 2013, Company has repurchased 2020 2021 2022 2023 TTM
Slide 11: Q1 2024 Selected Financial Data
Q1 2024 Selected Financial Data Three Months Ended March 31, 2024 2023 Change Home Sale Revenues ($M) $3,820 $3,488 10% Gross Margin Percentage 29.6% 29.1% 50 bps SG&A as Percent of Home Sale Revenues 9.4% 9.6% -20 bps Financial Services Pre-tax Income ($M) $41 $14 195% Net Income ($M) $663 $532 25%
Slide 12: Q1 2024 Selected Balance Sheet Data
Q1 2024 Selected Balance Sheet Data March 31, 2024 December 31, 2023 Cash and Equivalents, including Restricted Cash ($M) $1,766 $1,849 House and Land Inventory ($M) $12,107 $11,795 Notes Payable ($M) $1,957 $1,962 Shareholders’ Equity ($M) $10,762 $10,383 Debt – to – Capital Ratio 15.4% 15.9% Net D
Slide 13: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures This report contains information about our debt-to-capital ratios. These measures could be considered non-GAAP financial measures under the SEC's rules and should be considered in addition to, rather than as a substitute for, comparable GAAP financial me
Slide 14: Today's Operating Model Driving Superior Financial Results
Today’s Operating Model Driving Superior Financial Results
Slide 15: Nation's 3rd Largest Builder 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 16: Unmatched Ability to Serve All Buyer Groups
Unmatched Ability to Serve All Buyer Groups Closings by Buyer Group First Time Move Up Active Adult 100% 90% 24% 25% 25% 25% 26% 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 higher-mar
Slide 17: 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% $750K and Above 23% ©2024 PulteGroup 17
Slide 18: Disciplined Land Investment is Key Driver of Sustained Business Success
Disciplined Land Investment is Key Driver of Sustained Business Success Land Underwriting Tied to Return on Invested Capital IRR 18% 18% 18% 18% 18% 19% 19% 20% 20% 21% 21% 22% 22% 23% 24% 25% 26% 27% 28% 29% 30% Threshold Score 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Land inv
Slide 19: Operating Model Launched a Decade Ago
Operating Model Launched a Decade Ago Strategic Capital Allocation Consistent Invest in the business Land Underwriting Dividends Share Repurchase Pay down debt Efficient Land Pipeline Improve Homebuilder Generating Consistent Profitability Cash Flow Goal: increase lot Industry leading gross
Slide 20: Driving Outsized EPS Growth
Driving Outsized EPS Growth Closings Closings (2001 - 2005) (2019 - 2023) 50,000 50,000 40,000 45,630 40,000 38,612 30,000 30,000 32,693 28,903 28,894 29,111 28,603 20,000 20,000 24,624 22,915 23,232 10,000 10,000 0 0 2001 2002 2003 2004 2005 2019 2020 2021 2022 2023 EPS EPS (2001 - 2005) (2019 - 20
Slide 21: With Significantly Higher Returns on Equity
With Significantly Higher Returns on Equity Return on Equity Return on Equity (2001 – 2005) (2019 – 2023) 35.0% 35.0% 30.0% 30.0% 5 Yr Avg – 26.3% 32.9% 25.0% 28.9% 25.0% 27.9% 5 Yr Avg – 22.2% 27.0% 25.3% 20.0% 20.0% 23.7% 20.6% 20.0% 15.0% 18.0% 18.2% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 2001 200
Slide 22: Generating Positive Cash Flows to Fund Operations
Generating Positive Cash Flows to Fund Operations Cash Flows from Operations ($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 $0 2001 2002 2003 2004 2005 2019
Slide 23: Allocating Capital to Grow the Business and Reward Shareholders
Allocating Capital to Grow the Business and Reward Shareholders Land Investment ($M) Share Repurchase & Dividends ($M) $5,000 $1,400 $4,539 $1,200 $4,000 $4,283 $1,219 $4,236 $1,142 $1,000 $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 24: 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 24
Slide 25: 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 26: PulteGroup
* _—- Saas PULTEGROUP