Service Corporation International (SCI) UBS Global Healthcare Conference 2025 summary

Key business trends and performance

• Funeral and cemetery volumes have normalized, with volatility reduced and foundational strength expected to continue.

• Cremation mix shift has moderated to a 50-100 basis point annual increase, down from previous higher rates.

• SCI Direct experienced more volatility than anticipated due to operational shifts and transition to insurance products.

• Cemetery segment posted 10% growth in the third quarter, exceeding earlier cautious expectations.

• Pre-need cemetery sales remain strong, with Baby Boomer demographic expected to drive future growth.

Financial outlook and growth drivers

• EPS growth target of 8%-12% for 2026, driven by stable funeral volumes, low single-digit revenue growth, and capital deployment.

• Capital deployment includes $75-$125 million in acquisitions, growth capital, and share buybacks.

• Interest rates expected to be flat or decline by 2026; tax rate headwinds from expiring deductions are factored in.

• Transition to insurance products in SCI Direct is complete, expected to support funeral production growth.

• Acquisitions contribute 1%-2% to growth, with synergies typically realized within 12-18 months.

Market dynamics and demographic trends

• Funeral volumes are stabilizing, with COVID impacts moderating and Baby Boomer effects expected later in the decade.

• Average client age is 80-81, with Baby Boomer impact on volumes likely to be more pronounced in the late 2020s.

• Pre-need cemetery penetration is around 20%-25% for the target age group, indicating further growth potential.

• Cremation rates are at 57% and expected to plateau around 75%, with the pace of increase moderating.

• Revenue per case for burial and cremation is growing at inflationary rates, with limited pricing power due to market fragmentation.