Service Corporation International (SCI) 25th Annual Consumer Growth and E-Commerce Conference summary

Business model and strategy

• Operates as the largest owner of funeral homes and cemeteries in North America, with a focus on the U.S. and Canada, holding about 1,500 funeral homes and 500 cemeteries.

• Shifted from an EPS-accretive roll-up model to a focus on return on invested capital and market relevance since 2002.

• Maintains 8%-12% annual EPS growth, driven by 5%-6% organic growth (mainly cemetery pre-need sales), 2%-3% inorganic growth (M&A and new builds), and 1%-3% share repurchases.

• Has reduced shares outstanding from 345 million to just over 140 million since the mid-2000s.

• Strategy centers on staying relevant to consumer preferences and preparing for Baby Boomer demographic shifts.

Funeral and cemetery segment trends

• Interacts with about 700,000 families annually, with 350,000 funeral services and 150,000 cemetery interments.

• Pandemic led to a spike of 130,000 additional funerals, followed by a pull-forward effect and subsequent volume declines, now stabilizing.

• Funeral volumes were down 2%-2.5% in 2024 but are expected to be flat in 2025, with Q1 2025 showing 1.8% growth.

• Funeral revenue per service has grown steadily in the low single digits, with pricing increases of 4%-6% during high inflation, now returning to 2%-3%.

• Pre-need contracts are a major driver, with $2.6 billion in annual sales split between funeral and cemetery segments.

Pre-need and cemetery sales dynamics

• Pre-need cemetery sales average $1.4 billion annually, with 10%-15% from large sales (over $80,000), and the rest from core sales.

• Growth is driven by Baby Boomers entering the 60-65 age range and a real estate tiering strategy that offers a range of property types and prices.

• High-end cemetery properties can reach $2.5-$3 million in major markets, contributing to margin expansion.

• Cemetery segment margins have grown from 12%-13% to 30%-35% over 20 years, with stable margins expected in 2025.

• Pre-need cemetery growth was low to mid-single digits pre-COVID, spiked during the pandemic, and is expected to return to mid-single digits as Baby Boomer effects increase.