Service Corporation International (SCI) Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025 summary

Industry and company outlook

• Earnings per share have grown 8%-12% annually over the past decade, driven by organic growth, new builds, and M&A activity.

• COVID led to a temporary surge in funeral volumes, pulling forward demand; normalization is expected by 2025.

• Demographic shifts, especially the aging Baby Boomer generation and increased Asian and Hispanic consumer presence, are expected to drive future growth.

• The company benefits from a 60%-70% fixed cost structure, supporting incremental margin and profit growth as volumes rise.

M&A environment and strategy

• Private equity is entering the industry but faces barriers due to the need for scale and existing synergies.

• Strategic buyers have an advantage over financial buyers due to national scale and immediate synergies.

• M&A spending reached $180 million last year, exceeding guidance due to increased opportunities post-COVID.

• Larger, multi-location independents in major markets are now more likely to sell, often due to generational fatigue.

• The company maintains discipline in acquisition pricing and focuses on long-term relationships with sellers.

Technology and sales force productivity

• Pre-need sales rose from $1.8 billion pre-COVID to $2.8 billion post-COVID, with a smaller sales force enabled by technology.

• Investments in CRM, point-of-sale, and virtual meeting technology have driven efficiency and sales growth.

• Ongoing digital investments of $20-$25 million are planned to further enhance sales and operational efficiency.

• Sales force turnover has been reduced by half over the past decade through technology and personnel investment.