Forestar : Q4 FY 2024 Investor Presentation
FOR
Investor Presentation
Q4 2024
FORESTAR OVERVIEW
Forestar Group Inc. ("Forestar" or "FOR") is
a highly differentiated, pure-play,
residential lot developer for the affordably-
priced single-family home market
Operations in 59 markets across 24 states(1)
/ FOR markets / states
(1) As of September 30, 2024
RETURNS FOCUSED
PRUDENT
DISCIPLINED
STRATEGIC
EFFICIENT
STRONG LIQUIDITY
LEADERSHIP
Track record of solid operational results
Fully-entitled projects with short durations
Investing capital across a diverse, national footprint which mitigates risk
Strong relationship with D.R. Horton, the nation's largest homebuilder
Capturing market share while maintaining a low overhead model
Balance sheet provides financial and operational flexibility
Proven management team with significant land development experience
3
Q4 FY 2024 HIGHLIGHTS
Solid execution with strong profitability
Lots Sold
Lots Contracted for Sale
Book Value Per Share
5,374
21,000
4,986
15,000
$27.43
8%
40%
Q4 FY 2023
Q4 FY 2024
Q4 FY 2023
Q4 FY 2024
Q4 FY 2023
$ in millions
Note: All comparisons are to the prior year quarter
$31.47
15%
Q4 FY 2024
4
RETURNS FOCUSED EXECUTION
Forestar is driving shareholder value creation through the execution of its clear, strategic plan and a disciplined, returns- focused approach to capital allocation
Talented Team + Solid Profitability + Strong Customer Relationship = Industry Leading Residential Lot Developer
Return on Average Inventory (1)
Return on Equity(2)
Book Value Per Share
13.0%
13.8%
$31.47
11.7%
$20.47
8.8%
FY 2021
FY 2024
FY 2021
FY 2024
FY 2021
FY 2024
Maximize return on investments through consistent execution and financial discipline
Strong capital discipline builds
shareholder value
Consistent growth in book value per share → 3-year CAGR of 15%
(1) Return on average inventory is calculated as pre-tax income for the year divided by average real estate balance, where average real estate balance is the sum of ending real estate balances of the trailing five quarters divided by five
(2) Return on equity is calculated as net income for the year divided by average stockholders' equity, where average stockholders' equity is the sum of ending stockholders' equity balances of the trailing five quarters divided by five
5
FY 2024: STRONG EXECUTION DRIVING FINANCIAL PERFORMANCE
Solid
Operational
Execution
Increased Profitability
Low-Cost Structure
Maintaining
Financial
Flexibility
Planning for the Future
As of or for the fiscal year ended 9/30/24. All comparisons are to the prior year.
6
SOLID PERFORMANCE WHILE POSITIONING FOR FUTURE GROWTH
Forestar expects to grow its lot deliveries ~6% to 10% in fiscal 2025, generating between $1.6 billion and $1.65 billion of revenue
Lot Deliveries
Revenue
16,000 - 16,500
$1.6 - $1.65
16,250
$1.7
15,068
14,040
$1.5
$1.4
FY 2023
FY 2024
FY 2025E
FY 2023
FY 2024
FY 2025E
$ in billions
Note: Expectations are based on current market conditions as noted on the Company's Q4 FY 2024 conference call on 10/29/24.
7
DELIVERING PROFITABLE GROWTH
Forestar is creating long-term value for shareholders by generating strong profitability and returns
Pre-Tax Income and Margin
Net Income and ROE
Pre-Tax Income
Pre-Tax Profit Margin
Net Income
ROE
15.5%
17.9%
16.2%
15.4%
13.2%
13.8%
$270.1
11.7%
11.1%
$235.8
$203.4
8.4%
$221.6
$178.8
7.3%
$166.9
$146.6
$110.2
$78.1
$60.8
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
FY 2020
FY 2021
FY 2022
FY 2023
FY 2024
$ in millions
Note: Return on equity is calculated as net income for the year divided by average stockholders' equity, where average stockholders' equity is the sum of ending stockholders' equity balances of the trailing
8
five quarters divided by five
FORESTAR SUPPLIES THE FIRST INPUT TO BUILDING A HOME
Key Components to Building a Home:
Note: ASP refers to the average sales price of a home
9
UNIQUELY POSITIONED TO PROVIDE FINISHED LOTS
Builders' preference for 'land lighter' models enhances opportunity, and in times of economic uncertainty, many homebuilders shift their land strategies to slow raw land purchases and focus on purchasing finished lots
Optioned Land/Lot Position as a
Number of Years of Owned Land
% of Total Owned & Controlled
Based on TTM Closings
76% 78%
75% 76%
3.5
66%
3.2
3.3
3.2
3.2
51% 51%
54%
47%
43%
1.9
1.6
1.7
1.7
1.5
DHI - HB segment
Average Public HB
DHI - HB segment
Average Public HB
6/30/20
6/30/21
6/30/22
6/30/23
6/30/24
6/30/20
6/30/21
6/30/22
6/30/23
6/30/24
Source: FactSet and respective Company SEC filings
Notes: Average Public Homebuilder (HB) data represents the land and lot positions of LEN, PHM, TOL, NVR, MTH, MHO, TMHC, TPH, LGIH and KBH
For LEN and KBH, data is as of the periods ended 5/3110 For TOL, data is as of the periods ended 7/31
Disclaimer
Forestar Group Inc. published this content on October 29, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 29, 2024 at 10:46:21.493.