Pultegroup, Inc. · NYSE:PHM
Pultegroup — Raymond James 44th Annual Institutional Investors Conference 2023
23 slides from Pultegroup's conference presentation, Mar 6, 2023
Slide 1: Investor Presentation: Raymond James 44th Annual Institutional Investors Conference
Investor Presentation Raymond James 44th Annual Institutional Investors Conference 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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 s
Slide 3: Agenda
Agenda Company Profile The Successes and Challenges of 2022 Responding to Market Changes Summary ©2023 PulteGroup
Slide 4: Company Profile
Company Profile
Slide 5: Nation's 3rd Largest Builder With a Broad and Balanced Geographic Footprint
Nation’s 3rd Largest Builder With a Broad and Balanced Geographic Footprint SEATTLE BOSTON PORTLAND MINNEAPOLIS NEW HAVEN DETROIT PHILADELPHIA CLEVELAND CHICAGO SACRAMENTO COLUMBUS SAN FRANCISCO WASHINGTON D.C. INDIANAPOLIS SAN JOSE DENVER LOUISVILLE TRIAD RALEIGH LAS VEGAS CHARLOTTE NASHVILLE WILMI
Slide 6: Industry Leading Brand Names
Industry Leading Brand Names ©2023 PulteGroup 6
Slide 7: Serving a Variety of Price Points
Serving a Variety of Price Points 2022 Closings by Price Point 12% 5% 20% Under $300K $300K - $399K $400K - $499K $500K - $749K 37% $750K and Above 26% ©2023 PulteGroup 7
Slide 8: Focused on Delivering High Returns Over the Housing Cycle
Focused on Delivering High Returns Over the Housing Cycle • Drive superior homebuilding profitability – Disciplined underwriting process – Build to Order operating model – More efficient construction processes – Strategic pricing methodology – Importance of gross margin as a critical driver of retur
Slide 9: The Successes & Challenges of 2022
The Successes & Challenges of 2022
Slide 10: The Successes of 2022
Homes Sale Revenues ($B) The Successes of 2022 $15.8 $13.4 $9.8 $9.9 $10.6 • Strong gains in homebuilding operations 2018 2019 2020 2021 2022 – 29,111 homes delivered Gross Margin % of Home Sale Revenues – $15.8 billion in home sale revenues 29.7% 26.4% – 29.7% home sale gross margin 23.2% 23.1% 24.
Slide 11: The Successes of 2022
Cash Flow from Operating Activities ($M) The Successes of 2022 $1,784 $1,448 $1,076 $1,004 • Higher returns and increased capital $668 deployment 2018 2019 2020 2021 2022 – $4.5 billion invested in land acq./dev. Share Repurchases & Dividends ($M) – $1.2 billion returned to shareholders $1,219 $1,04
Slide 12: The Successes of 2022: Increasing Off-site Manufacturing Capabilities
Increasing Off-site Manufacturing Capabilities The Successes of 2022 • Expanded homebuilding presence in new markets Denver Sacramento Portland, OR Greenville, SC Columbia, SC • Opened new off-site manufacturing facility (ICG) in Florence, SC • Named a Fortune 100 Best Company to Work For ©2023 Pult
Slide 13: The Challenges of 2022
The Challenges of 2022 Rate on 30-Year Mortgage 8.0% • Fed raised rates 7 times 7.0% – Rate on 30-year mortgage doubles in 9 months; rate peaked above 7.0% 6.0% – National new and existing home sales dropped by 16% and 18%, respectively, from 5.0% prior year 4.0% – Single-family starts dropped 11% t
Slide 14: Responding to Market Changes
Responding to Market Changes
Slide 15: Adapting to Market Changes: Production
Adapting to Market Changes: Production • Focus on turning assets while intelligently managing starts – Near-term need to consistently start homes • Meet buyer preference for “quick move-in” homes • Helpful in working with trades and suppliers • Balancing starts with sales pace • Start cadence should
Slide 16: Adapting to Market Changes: Land
Adapting to Market Changes: Land Lots Under Control Owned Optioned • Actively managing land pipeline – Lots under control down 8% from prior year 119,218 • Walked from 52,000 optioned lots in 2022 102,264 • Wrote off $64M rather than invest an incremental $2.1B • Expect to invest $3.3B in land acqui
Slide 17: Adapting to Market Changes: Capital Allocation
Adapting to Market Changes: Capital Allocation Land Acq. & Dev. Spend ($B) • Intelligently invest in the business – Look for opportunities in an evolving land $2.1 $2.6 Dev. market $1.6 $1.5 $2.1 Acq. – Evaluate M&A transactions that meet strategic criteria $1.2 $1.4 $2.2 $1.9 $1.2 • Fund and approp
Slide 18: Favorable Long-term Demand Dynamics
Favorable Long-term Demand Dynamics
Slide 19: Structural Housing Deficit of Millions of Houses
Structural Housing Deficit of Millions of Houses Housing Starts (M) 2.5 • Population growth drives sustained 2.0 need for new housing stock 1.5 • Supportive demographic trends with 1.0 aging of Millennial and Gen Z 0.5 0.0 – Peak of Millennial generation entering prime homebuying age Relative to Est
Slide 20: The Kids are Moving Out
The Kids are Moving Out Ages 25-34 Are Leaving Home 20% 8,500 • Improved finances and jobs Number of 25-34 Year Olds Living at Home (000) enabling those aged 25-34 to live 18% on their own 7,500 % of 25-34 Year Olds Living at Home – Rate for those age 25-34 living at home 16% remains well above hist
Slide 21: Conclusion
Conclusion
Slide 22: Summary
Summary • Delivered outstanding 2022 financial results • Well positioned to navigate dynamic market conditions • Intelligently managing pricing, production and investment • Working to lower costs and shorten build cycle • Continue to appropriately fund capital allocation priorities – Invest in the b
Slide 23: Thank You
Thank You
PulteGroup — Raymond James 44th Annual Institutional Investors Conference 2023 on 6ix