Pultegroup, Inc. · NYSE:PHM
Pultegroup — Q3 2024 Earnings Presentation
26 slides from Pultegroup's earnings presentation, Oct 22, 2024
Slide 1: Q3 2024 Operating & Financial Results
Q3 2024 Operating & Financial Results October 22, 2024
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: PulteGroup Participants
PulteGroup Participants Ryan Marshall Bob O’Shaughnessy President & CEO EVP & CFO Jim Ossowski Jim Zeumer SVP, Finance VP, Investor Relations
Slide 4: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights • Earnings for Q3 increased 16% over Quarterly Earnings Per Share prior year to $3.35 per share $4.50 $4.00 • “Supported by the successful execution $3.50 Q1 $3.00 of our balanced spec and build-to-order $2.50 Q2 Q3 operating model, PulteGroup realized $2.00 Q4 record th
Slide 5: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights Closings • Home sale revenues 7,924 increased 12% to $4.3B 7,007 7,047 7,076 Q3 closings of 7,924 homes, an increase of 12% over the prior Q3 2021 Q3 2022 Q3 2023 Q3 2024 year Home Sale Revenues ($M) Average sales price of homes $3,792 $3,887 $4,343 $3,281 closed in th
Slide 6: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights Gross Margin * • Gross margin of 28.8%, compared with 29.5% in the prior year period 30.5% 29.5% 28.8% Geographic mix impacted Q3 gross margin as 26.9% Company closed more homes in its West area which carries slightly lower gross margins Gross margins also reflect hi
Slide 7: Q3 2024 Financial Highlights
Q3 2024 Financial Highlights Net New Orders • Net new orders of 7,031 were consistent with prior year 6,796 7,065 7,031 • Cancellations as a percent of 4,924 beginning backlog were 9.6%, up slightly from the prior year Q3 2021 Q3 2022 Q3 2023 Q3 2024 Unit Backlog • Backlog lower by 11% to 12,089 hom
Slide 8: Increasing Supply of Controlled Lots
Increasing Supply of Controlled Lots Lots Under Control • Increased land pipeline to ~235,000 Owned Optioned lots with 56% held under option 119,339 118,115 112,541 120,066 131,069 • $1.4B of land spend in Q3, as we invest 103,754 104,515 107,001 105,238 103,473 to support ongoing growth of operatio
Slide 9: Systematic Return of Funds to Shareholders
Systematic Return of Funds to Shareholders Return on Equity * • Repurchased $320M of common shares in Q3 and $880M YTD 33% 28% 27% 27% 24% Repurchased 2.5 million shares in Q3 at an average price of $126.05 7.6 million shares, or 4% of shares 2020 2021 2022 2023 TTM Q3 2024 outstanding repurchased
Slide 10: Q3 2024 Selected Financial Data
Q3 2024 Selected Financial Data Three Months Ended September 30, 2024 2023 Change Home Sale Revenues ($M) $4,343 $3,887 12% Gross Margin Percentage 28.8% 29.5% -70 bps SG&A as Percent of Home Sale Revenues 9.4% 9.1% 30 bps Financial Services Pre-tax Income ($M) $55 $29 90% Net Income ($M) $698 $639
Slide 11: Q3 2024 Selected Balance Sheet Data
Q3 2024 Selected Balance Sheet Data September 30, 2024 December 31, 2023 Cash and Equivalents, including Restricted Cash ($M) $1,455 $1,849 House and Land Inventory ($M) $12,642 $11,795 Notes Payable ($M) $1,624 $1,962 Shareholders’ Equity ($M) $11,564 $10,383 Debt – to – Capital Ratio 12.3% 15.9% N
Slide 12: 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 13: Today's Operating Model Driving Superior Financial Results
Today’s Operating Model Driving Superior Financial Results
Slide 14: Continuing to Expand Our Market Platform
Nation’s 3rd Largest Builder Continuing to Expand Our Market Platform Recent Market Entry SEATTLE BOSTON PORTLAND MINNEAPOLIS DETROIT PHILADELPHIA CLEVELAND CHICAGO SACRAMENTO COLUMBUS SALT LAKE SAN FRANCISCO WASHINGTON D.C. CITY INDIANAPOLIS SAN JOSE DENVER LOUISVILLE TRIAD RALEIGH LAS VEGAS CHARLO
Slide 15: Operating in an Undersupplied Market
Operating in an Undersupplied Market 2023 Housing Stock by Year Built and Building Type vs. U.S. Population 25,000 1 unit, detached 1 unit, attached 400,000,000 2 to 4 units 5 to 19 units 20+ units MH, mobile home, trailer or other 350,000,000 Population 20,000 300,000,000 Units (Thousands) 250,000,
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% 22% 25% 25% 25% 80% 70% 60% 37% 45% 43% 39% 36% 50% 40% 30% 20% 36% 39% 41% 31% 32% 10% 0% 2020 2021 2022 2023 YTD 2024 Offering both spec and build-to-order ~60% of closings among higher
Slide 17: Diversified Across Price Points
Diversified Across Price Points YTD 2024 Closings by Price Point 6% 14% Under $300K 21% $300K - $399K $400K - $499K $500K - $749K 36% $750K and Above 23% ©2024 PulteGroup 17
Slide 18: Disciplined Land Investment is Key Driver of Sustained Business Success
Disciplined Land Investment is Key Driver of Sustained Business Success Land Underwriting Tied to Return on Invested Capital IRR 18% 18% 18% 18% 18% 19% 19% 20% 20% 21% 21% 22% 22% 23% 24% 25% 26% 27% 28% 29% 30% Threshold Score 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Land inv
Slide 19: Operating Model Launched a Decade Ago
Operating Model Launched a Decade Ago Strategic Capital Allocation Consistent Invest in the business Land Underwriting Dividends Share Repurchase Pay down debt Improve Homebuilder Generating Consistent Efficient Land Pipeline Profitability Cash Flow Goal: increase lot Industry leading gross
Slide 20: Driving Outsized EPS Growth
Driving Outsized EPS Growth Closings Closings (2001 - 2005) (2019 - 2023) 50,000 50,000 40,000 45,630 40,000 38,612 30,000 30,000 32,693 28,903 28,894 29,111 28,603 20,000 20,000 24,624 22,915 23,232 10,000 10,000 0 0 2001 2002 2003 2004 2005 2019 2020 2021 2022 2023 EPS EPS (2001 - 2005) (2019 - 20
Slide 21: With Significantly Higher Returns on Equity
With Significantly Higher Returns on Equity Return on Equity Return on Equity (2001 – 2005) (2019 – 2023) 35.0% 35.0% 30.0% 30.0% 32.9% 5 Yr Avg – 26.3% 25.0% 28.9% 25.0% 27.9% 5 Yr Avg – 22.2% 27.0% 25.3% 20.0% 20.0% 23.7% 20.6% 20.0% 15.0% 18.0% 18.2% 15.0% 10.0% 10.0% 5.0% 5.0% 0.0% 0.0% 2001 200
Slide 22: Generating Positive Cash Flows to Fund Operations
Generating Positive Cash Flows to Fund Operations Cash Flows from Operations ($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 $4,236 $4,283 $1,219 $1,000 $1,142 $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
Ls * soucnar PULTEGROUP