Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $0.87 for Q3 2025, a more than 10% increase from $0.79 in the prior year period [4] - Total comparable funeral revenue declined by almost $2 million, or less than 1%, compared to the prior year quarter [5] - Comparable core funeral revenue decreased by $3 million, or just under 1%, primarily due to a 3.5% decrease in core funeral services performed [6] - Cemetery revenue increased by $31 million or almost 7%, driven by a $27 million increase in total recognized preneed revenue [11] Business Line Data and Key Metrics Changes - Funeral gross profit decreased by $9.5 million, with the gross profit percentage declining by 170 basis points to about 18% [9] - Non-funeral home revenue increased by $3 million, primarily due to a 13.4% increase in the average revenue per service [7] - Comparable cemetery revenue increased by $31 million or almost 7%, with core revenue up by $27.5 million or 7% [11][12] - Preneed funeral sales production increased by $6 million or about 2% over the third quarter of 2024 [10] Market Data and Key Metrics Changes - The core cremation rate increased modestly by 50 basis points to 57.3% [6] - Total recognized preneed revenue benefited from growth in comparable cemetery preneed sales production of $30 million or almost 10% [12] - Large sales grew by $8 million or 19% over the prior year quarter [12] Company Strategy and Development Direction - The company confirmed the midpoint of its normalized EPS guidance for 2025 at $3.80-$3.90, slightly raising its cash flow outlook due to stronger working capital trends [13] - The company expects modest funeral revenue and gross profit growth compared to the fourth quarter of 2024 [14] - The company anticipates low to mid single-digit cemetery preneed sales production growth, with a focus on educating consumers about cremation options [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving EPS growth within the long-term growth framework of 8%-12% [15] - The company expects favorable trends in funeral volume, average sales, and cemetery sales, alongside lower interest rates [15] - Management noted that the impact from the share repurchase program would favorably affect EPS compared to the prior year [15] Other Important Information - The company generated adjusted operating cash flow of $268 million in the quarter, an increase of $10 million from the prior year [17] - Capital investments totaled $140 million in the quarter, with $123 million returned to shareholders through dividends and share repurchases [19][20] - The company ended the quarter with liquidity of just under $1.5 billion and a leverage ratio of 3.6x net debt to EBITDA [23] Q&A Session Summary Question: Discussion on cemetery preneed sales production and trends - Management noted strong velocity in cemetery preneed sales and expressed confidence in sustaining this trend into next year [26][30] Question: Confidence in achieving 8%-12% EPS growth - Management indicated a historical assurance level of 85%-90% for achieving the EPS growth target, emphasizing revenue growth as a key driver [31][32] Question: Sales trends at the largest location, Rose Hills - Management reported strong performance at Rose Hills, with double-digit growth expected to continue [51] Question: Expense control and pressure areas - Management acknowledged some pressure on cemetery maintenance costs but expressed confidence in managing overall expenses [55] Question: Education on cremation options - Management highlighted efforts to increase consumer awareness of cremation options and the potential for growth in this area [59][60] Question: Transition effects on SCI Direct production - Management expects growth in SCI Direct sales production in 2026 but does not anticipate returning to pre-transition levels immediately [76]

Core Viewpoint - Kaldalón hf. reported substantial revenue growth in the first half of 2025, driven by prior-year investments, with a notable increase in rental income and a strong operating profit margin [2][7]. Financial Performance - Operating revenues for H1 2025 reached ISK 2,638 million, up from ISK 2,132 million in H1 2024, reflecting a year-on-year growth of approximately 23.7% [4]. - Operating profit before fair value adjustments was ISK 2,056 million, compared to ISK 1,672 million in the previous year, indicating a growth of 22.9% [4]. - The profit before tax decreased to ISK 1,753 million from ISK 2,454 million, a decline of 28.5% [4]. - The return on equity was 11.3%, down from 17.3% in the previous year [4]. Investment and Growth - The company invested ISK 3.5 billion during the period, with most investments made late in the half-year, expected to contribute to revenues in the second half [6][8]. - Kaldalón signed purchase agreements for properties in Reykjavík, expected to increase annual revenues by ISK 203 million upon completion [9][12]. Outlook - The company updated its financial outlook for 2025, projecting operating revenues between ISK 5,500 million and ISK 5,670 million, and operating profit in the range of ISK 4,270 million to ISK 4,430 million [5]. - The forecast assumes completion of announced transactions related to income-generating properties in Q3 2025 [5]. Market Position and Strategy - The company reported a stable demand for rental space and resilience in the economy despite high interest rates, with a weighted average lease maturity of nearly 10 years [11]. - Market-based funding increased to 35% of total debt from 21%, aligning with the long-term strategy of increasing indexed debt and market-based financing [6][10].