Rea Group Ltd · ASX:REA
Rea — FY2021 Earnings Presentation
41 slides from Rea's earnings presentation, Aug 6, 2021
Slide 1: ASX Announcement: REA Group Investor & Analyst Presentation FY21
ASX Announcement 6 August 2021 REA Group Investor & Analyst Presentation FY21 On behalf of REA Group Ltd (ASX:REA) please find attached a full-year results presentation for the year ended 30 June 2021. -ends- For further information, please contact: REA Group Ltd Investors: REA Group Ltd Media: Grah
Slide 2: Full year results 30 June 2021
REA Group Ltd Full year results 30 June 2021 Changing the way the world experiences property REA Group
Slide 3: Agenda
Agenda 01. 02. 03. Business Financial Q&A highlights results session update
Slide 4: Business Highlights
Business Highlights Owen Wilson Chief Executive Officer REA Group Ltd • Full year results 30 June 2021
Slide 5: Exceptional FY21 financial results delivered
Exceptional FY21 financial results delivered Core revenue1 Core EBITDA2, 3 Core net profit after tax3 $928m $565m $318m +13% +19% +18% 60% 131¢ +19% 247¢ +21% $169m $245m Core EBITDA3, 4 FY21 full year Core earnings per Cash closing Net debt5, 6 margin dividend per share share3 position5 (1) Revenue
Slide 6: Significant milestones delivered in FY21
Significant milestones delivered in FY21 Consumer highlights Customer highlights Pivotal investments Record audience Record Premiere penetration Expanding India exposure realestate.com.au now reaching Premiere continues to Controlling position acquired in Elara, over 12.6m Australians on outperform,
Slide 7: Strategy supporting ongoing growth
Strategy supporting ongoing growth Largest audiences, Our global network: most engaged consumers Australia India / Asia Building the next generation marketplaces Superior Unparalleled North America customer value data insights
Slide 8: realestate.com.au extends audience leadership position
realestate.com.au extends audience leadership position +35%4 Monthly visits 3.3x more visits than the nearest competitor1 121m FY21 average monthly 4 72m 76m 90m 121m Reaching over 12.6m traffic to realestate.com.au on all platforms FY18 FY19 FY20 FY21 people on average each month2 +49%5 App launche
Slide 9: Australia's 8th largest online brand
Unique Rank Brand Audience Top 10 1 Google 20.3m Online Brands Australia’s 8th largest 2 Facebook 17.7m June 20212 3 MSN/Outlook/Bing/Skype 15.0m 4 13.6m online brand Instagram 5 ABC Online Network 13.4m 6 Microsoft 13.4m 7 12.3m Reaching over 60% of Australia’s eBay 8 Realestate.com.au 12.3m 18+ po
Slide 10: Highly personalised consumer experiences driving engaged members
Highly personalised consumer experiences driving engaged members Consumer profiles enable the delivery of experiences based on individual needs Growing Strong Increasing membership engagement property tracks 31% YoY1 increase 20% YoY1 increase 52% YoY increase in in new members with in membership ow
Slide 11: Property owner dashboard empowering consumers
Property owner dashboard empowering consumers Helping owners monitor their market and make confident property choices while driving highly qualified customer leads Sell, Rent, Refinance or Renovate? Increasing Prospect Leads engagement conversion growth 765k owners 24% of owners 71% growth in engagi
Slide 12: Connecting customers with more buyers, sellers and renters
Connecting customers with more buyers, sellers and renters A comprehensive suite of products and services helping agencies and agents throughout the property lifecycle Agency Marketplace Agency Services Property Advertising Leading destination to help agencies and Digital services to help streamline
Slide 13: Accelerating REA's strategy through pivotal investments
Accelerating REA’s strategy through pivotal investments Moved to controlling 59.7% stake in Elara1 Announced transfer of Malaysia and Thailand assets3 in exchange for 18% stake4 Acquired 100%5 Jul 20 Aug 20 Sep 20 Oct 20 Nov 20 Dec 20 Jan 21 Feb 21 Mar 21 Apr 21 May 21 Jun 21 Jul 21 Acquired 17.9% s
Slide 14: Elara delivers audience and market share growth despite COVID
Site visits ('m) Elara delivers audience and market share growth despite 10.6 10.9 10.6 9.0 ongoing COVID impacts 10.4 5.1 6.6 3.5 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Strong audience & Exceptional app Housing 99Acres MagicBricks NoBroker market share growth usage uptake 92
Slide 15: Financial services – strong broker performance and new digital experiences
Financial services – strong broker performance and new digital experiences launched Growth in leads Record recruitment realestate.com.au is a Industry leading value powerful source of home proposition driving strong finance leads, increasing +26% YoY increase in +46% YoY1 recruitment1 Loan tracker R
Slide 16: M&A activity accelerates financial services strategy
M&A activity builds on strong foundations and accelerates financial services strategy Enhancing REA’s exposure to Will enable seamless the $400+ billion annual home transmission of digital loan market1 mortgage applications • Combined Mortgage Choice and • Partnership will provide a step-change Smar
Slide 17: Creating a next generation financial services marketplace
Creating a next generation financial services marketplace Digital Experience Broker Experience Engage audience and nurture leads through Scaled market-leading broker model with the best-in-class digital model: audience reach best local brokers: trusted brand, service and experience driving lead gene
Slide 18: PropertyGuru transaction creates leading proptech group in Southeast Asia
PropertyGuru transaction creates Singapore most compelling proptech group in #1 Southeast Asia Vietnam #1 PropertyGuru #1 Provides REA with 18% player in four of five shareholding4 in larger, more key SEA markets1 diversified company Malaysia #1 SEA one of the fastest Creates new opportunities growi
Slide 19: REA well positioned to drive future growth
REA well positioned to drive future growth Consumer & Customer Value Data and Insights Next Generation Elara Audience Assist customers to Drive ongoing adoption Marketplaces Become the undisputed #1 Australia’s largest win more business by of scalable data and Ambition to originate 1 in 10 real esta
Slide 20: Supporting a sustainable future
Supporting a sustainable future Creating positive change through responsible business practices Environment & Workplace culture Gender diversity community Named Australia’s 4th Best 5 out of 9 on Executive team Strong progress made on Workplace by Great Place to are female ESG initiatives Work Gende
Slide 21: Financial Results Update
Financial Results Update Janelle Hopkins Chief Financial Officer REA Group Ltd • Full year results 30 June 2021
Slide 22: Financial operating results
Financial operating results Revenue ($m)1 FY 2021 Growth ex FY21 927.8 Performance ($m) ex FY 2021 FY 2021 FY 2020 Growth acquisitions acquisitions acquisitions Total Core Total Core % % FY20 820.3 Revenue1 FY19 874.9 Australia 846.3 - 846.3 746.7 13% 13% FY18 807.7 Financial Services 24.0 - 24.0 25
Slide 23: Australian market update
Australian market update Residential buy listings YoY Residential Buy listings 70% • Q1 FY21 Australian residential listings 50% negatively impacted by Melbourne COVID 30% lockdowns, however recovered strongly 10% over the remainder of the year. -10% • National listings in FY21 increased 15% YoY, wi
Slide 24: Strong 19% EBITDA growth driven by Residential performance
Strong 19% EBITDA growth driven Residential revenue +18% by Residential performance • Higher national listings. • Improved depth and Premiere penetration. • Continued growth in add-on products. Commercial and Developer revenue +5% • 17% increase in new project Group EBITDA ($m)1, 2 commencements • I
Slide 25: Strong Premiere penetration
Strong Premiere penetration Record Residential Buy listing depth Residential Buy Listing Penetration (depth) penetration • Record number of customers are committed to our depth products, with customers upgrading to higher tier products. • The highest yielding listing product Premiere continues to ou
Slide 26: International: strong Move performance, Asia COVID impact
International: strong Move performance, Asia COVID impact Move – an excellent year • Strong turnaround from $7.2m associate loss in FY20 to $15.9m profit in FY21. • Revenue increased 36% driven by continued strength in the referral model and traditional lead gen product4. Asia Elara Elara – consolid
Slide 27: Positive operating jaws
Positive operating jaws Operational Expenses1 Group Operating Results Growth1 372.2 (ex acquisitions) 35.4 FY21 operating jaws (ex acquisitions) remain 328.2 20% open +3% 31.3 36.7 • Revenue increased 11% and operating costs 40.0 up 3%, excluding the impact of Elara. 18% 11% 36.7 8% 52.0 • Cost grow
Slide 28: Continued investment in Capital Expenditure
Continued investment in Capital Expenditure Investment strategy • The Group continues to invest to support growth over medium to long-term. Group Capital Expenditure ($’m) • Investment focus is on consumer experience, new product delivery and 100.0 25% supporting technology. 80.0 20% • Initiatives d
Slide 29: Strong cash position
Strong cash position Strong operating cash flows • Operating cash flows of $321m, with free cash flow (ex acquisitions) of $286m. Group cash flow ($m)1 • Higher YoY income tax payments following temporary deferral of FY20 instalments as a result of COVID. Investment in innovation and acquisitions 99
Slide 30: Current trading
Current trading • COVID continues to cause market volatility globally and has the potential to impact the Group’s FY22 performance. • Despite COVID related volatility, market dynamics remain strong, with strong levels of buyer enquiry underpinned by low interest rates and healthy bank liquidity. • T
Slide 31: Q&A
Q&A Owen Wilson Janelle Hopkins Chief Executive Officer Chief Financial Officer REA Group Ltd • Full year results 30 June 2021
Slide 32: Supplementary Information
Supplementary Information Where 12 million Australians buy, rent & sell
Slide 33: Core vs. reported net profit reconciliation
Core vs. reported net profit reconciliation Transaction costs • Transaction costs incurred in the current period relate to the Group’s acquisition of Elara and Mortgage Choice and divestment Reconciliation to Financial Statements ($m) FY 2021 FY 2020 Growth % of Malaysia and Thailand businesses. Net
Slide 34: Strong performance in volatile market conditions
Strong performance in volatile market conditions Group Revenue1 ($m) 627.5 Revenue category1 FY FY Growth 18% ($m) 2021 2020 Australia 533.5 Depth revenue 702.8 606.7 16% Subscription revenue 54.4 50.8 7% Media, Data & Other 89.1 89.2 (0%) Financial Services 24.0 25.7 (7%) Australian revenue 870.3 7
Slide 35: Financial Services: FY21 pro forma
Financial Services: FY21 pro forma Proforma earnings including Mortgage Choice • While Mortgage Choice earnings will be Existing Combined3 FY 2021 Mortgage Choice2 consolidated from 1 July 2021, we have REA Financial Services REA Financial Services provided pro forma earnings assuming the Revenue1 $
Slide 36: Balance sheet
Balance sheet 30 Jun 2021 30 Jun 2021 30 Jun 2021 30 Jun 2020 Balance Sheet ($m) Mortgage Choice acquisition ex Mortgage Mortgage Growth Total Group Total Group Choice Choice1 % ASSETS • Net identifiable assets acquired of $140m, Current assets with remaining goodwill of $104m Cash and cash equivale
Slide 37: Historical Revenue and Operating EBITDA
Historical Revenue and Operating EBITDA Revenue, EBITDA and Margin Revenue and cost growth (core operations)1 • FY21 revenue growth was 13% and core operating cost growth was 13%. 60% • Excluding the impact of Elara 927.8 874.9 50% consolidation, FY21 revenue growth was 807.7 820.3 11% and operating
Slide 38: Financial comparatives
Financial comparatives Financial Core Operations1 Statements FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2021 Group results $m Growth $m Growth $m Growth $m Growth $m Growth $m Total revenue2 671.2 16% 807.7 20% 874.9 8% 820.3 (6%) 927.8 13% 927.8 Total operating income 671.2 16% 807.7 20% 874.9 8% 8
Slide 39: Cash flow reconciliation
Free cash flow Cash flow reconciliation • Working capital movement due to higher gross revenue partially offset by increased operating costs, as well as consolidation of Mortgage Choice and Elara working capital balances. Cash flow reconciliation ($'m) FY 2021 FY 2020 Growth • Increased tax payments
Slide 40: Glossary
Glossary EBITDA Earnings before Interest, Tax, Depreciation and Amortisation including share of associates and joint ventures. Financial results Reported results adjusted for significant non-recurring items such as from core restructure costs, gain/loss on acquisitions and disposals, related operati
Slide 41: Visit our investor site at rea-group.com
Visit our investor site at rea- group.com Investors: Graham Curtin General Manager Group Finance P: +61 3 8456 4288 Disclaimer: This presentation contains non-specific background information E: ir@rea-group.com about REA Group’s current activities. This information is a summary only. Investors and p