Rea Group Ltd · ASX:REA
Rea — FY2024 Earnings Presentation
45 slides from Rea's earnings presentation, Aug 9, 2024
Slide 1: REA Group Investor & Analyst Presentation FY24
ASX Announcement 9 August 2024 REA Group Investor & Analyst Presentation FY24 On behalf of REA Group Ltd (ASX:REA) please find attached a results presentation for the year ended 30 June 2024. -ends- For further information, please contact: REA Group Ltd Investors: REA Group Ltd Media: Alice Bennett
Slide 2: Full year results 30 June 2024
Full year results 30 June 2024 Changing the way the world experiences property
Slide 3: Agenda
Agenda 1. Financial highlights 2. Property market update 3. Business highlights 4. Financial results update 2
Slide 4: Financial highlights
Financial highlights Owen Wilson Chief Executive Officer 3
Slide 5: REA Group delivers exceptional FY24 financial result
REA Group delivers exceptional FY24 financial result $1,453m $825m $461m $303m Revenue 1, 2 +23% EBITDA 1, 2, 3 +27% Net profit +24% Reported net -15% after tax 1, 2 profit after tax 2, 4 57% $1.89 +20% $3.49 +24% $204m Operating Dividend per share, Earnings 30 June 2024 closing EBITDA1, 2, 3 margin
Slide 6: Property market update
Property market update Owen Wilson Chief Executive Officer 5
Slide 7: Increase in national listing volumes led by growth in Melbourne and Sydney
Increase in national listing volumes led by growth in Melbourne and Sydney Continued vendor confidence saw FY24 new national Continued strong uplift in volume of new listings in Sydney listings growth of 7% YoY, 5% above the 6-year average and Melbourne with smaller capital cities starting to follow
Slide 8: Healthy buyer demand absorbed the increase in listings and supported strong market conditions
Healthy buyer demand absorbed the increase in listings and supported strong market conditions Demand remained healthy with national buyer enquiries Strong level of demand resulted in YoY reduction in days on returning to growth, increasing 14% YoY1. Enquiry levels site with properties turning over m
Slide 9: Business highlights
Business highlights • Overview and strategy • Property.com.au • Audience leadership • Next generation marketplaces • Consumer • Global • Customer • ESG Owen Wilson Chief Executive Officer 8
Slide 10: FY24 highlights
FY24 highlights Consumer highlights Customer highlights Strategic investments 10.8m unique audience 1(A) Australia’s #1 address in property1(B) Premiere+ delivering superior value Acquisition of remaining interest in Realtair Highly engaged and loyal audience with 4.1x more Record Premiere+ depth pe
Slide 11: Clear and consistent focus on strategic priorities
Clear and consistent focus on strategic priorities Audience & Consumer Largest audiences, Engage Australia’s largest audience of property seekers, most engaged consumers driving more leads to our customers. Customer Value Deliver superior value across property advertising, agent marketplace and agen
Slide 12: Australia's #1 address in property extends leadership
Audience leadership Australia’s #1 address in property extends leadership1(F) realestate.com.au extends unique audience lead1(F) Gap Gap 10.8m 127.2m 60m 4.6m 4.4m Average monthly Total average Total average realestate.com.au monthly visits to monthly visits to unique audience realestate.com.au real
Slide 13: Personalised experiences driving deeper consumer engagement and quality seller leads to customers
Consumer Personalised experiences driving deeper consumer engagement and quality seller leads to customers +18% YoY +46% YoY The AI-generated homepage experience delivers 7.5 million personalised recommendations via hundreds of different layout Growth in active Increase in inspections combinations t
Slide 14: Leading technology and platforms powering consumer experiences
Consumer Leading technology and platforms powering consumer experiences Realtair’s ‘Make an Offer’ capability integrated into select Roomvo visualisation feature added to the Property listings – providing deep insights for customers and Owner Dashboard – supporting owners to take the next efficienci
Slide 15: Integrated end-to-end agency solution delivering superior customer value
Customer Integrated end-to-end agency solution delivering superior customer value Attract Nurture Convert Market Transact Insights Supporting agencies to Delivering rich market Seamless agent Increasing campaign Tools to manage Supporting smart agent stand out and generate insights and supporting au
Slide 16: Premium suite of digital products delivering quality leads
Customer Premium suite of digital products delivering quality leads Premiere+ Add Ons Marketplace and Services Record Premiere+ penetration with exceptional yield growth +32% YoY +37% YoY Growth in Residential Audience Maximiser Growth in seller leads2 revenue with record Seller leads in Ignite Camp
Slide 17: realcommercial.com.au is Australia's #1 place for commercial property in every state
Customer realcommercial.com.au is Australia’s #1 place for commercial property in every state1(K) +23% YoY growth in unique audience in Q4 1(L) 1.5m Focus on differentiating and personalising the consumer experience driving audience growth and continued leadership Average monthly realcommercial.com.
Slide 18: property.com.au the #3 property site - supporting buyer and seller confidence
property.com.au the #3 property site1(N) - supporting buyer and seller confidence property.com.au member experience Member Map view launched in January supporting consumers on personalisation with AVMs their research journey with relevant market insights +167% YoY The launch of all properties search
Slide 19: Next generation marketplaces
Next generation marketplaces PropTrack delivered double digit Product innovation and brand revenue growth while powering investment delivering revenue growth unique products and solutions and value to broker network • Propensity models supported Agents • Submission volumes increased 4% YoY and Broke
Slide 20: REA India delivering the best app experience to drive audience and customer value
REA India delivering the best app experience to drive audience and customer value 31% YoY revenue growth App YoY traffic growth1(R) 46% App downloads share1(S) MagicBricks Multiple drivers of Housing.com core revenue growth including strong 44% 8% 39% performance of customer events, increased depth
Slide 21: Global
Global PropertyGuru Group delivered 12% YoY revenue growth Move’s revenue declined by 10%, impacted by continued in the March quarter with growth in Singapore offsetting challenging macroeconomic conditions2 a phased recovery in Vietnam and Malaysia1 Market update: Market update: • Singapore continu
Slide 22: Committed to a sustainable future
Committed to a sustainable future ESG FY24 ratings and Progress towards recognitions ESG goals in H2 • Certified carbon neutral through Climate Maintained AA MSCI Active for the fourth consecutive year rating for the third • 19% YoY increase in carbon emissions consecutive year primarily driven by a
Slide 23: Strong growth drivers in place for FY25
Strong growth drivers in place for FY25 • Pricing: Re-contracting completed, with double-digit price rises across Residential Buy (Premiere+ up 10%) and Commercial (up 11%). • Strong product pipeline: Product pipeline will continue to drive significant value for customers, supporting further yield g
Slide 24: Market Outlook
Market Outlook 23
Slide 25: Financial results update
Financial results update Janelle Hopkins Chief Financial Officer 24
Slide 26: Core financial operating results
Core financial operating results Group Revenue1, 2 Core results ($m)1, 3 FY24 FY23 Growth $ Growth % FY24 1,452.8 Revenue2 Australia 1,349.7 1,104.4 245.3 22% FY23 1,183.2 India 103.1 78.8 24.3 31% Group revenue 1,452.8 1,183.2 269.6 23% FY22 1,169.5 FY21 927.8 Operating expenses Australia (460.1) (
Slide 27: Statutory (reported 4E) vs core results
Statutory (reported 4E) vs core results Significant items1 Group operating expenses Statutory Significant Core FY24 ($m) (reported 4E) items1 results1 • Fair value gain on previously held investment in Group revenue 2 1,452.8 - 1,452.8 CampaignAgent • Integration costs for CampaignAgent Group operat
Slide 28: Strong growth in Residential revenue
Strong growth in Residential revenue Driven by double-digit Buy yield growth, higher listings and improved geo-mix, partially offset by deferral Residential revenue ($m) Residential national Buy listings YoY change 40% 30% +24% 20% 996 10% 16% - 805 5% 8% 6% (10%) 1% (20%) -12% (30%) -21% -18% (40%)
Slide 29: Record Premiere+ penetration
Record Premiere+ penetration With YoY growth across all states Residential buy listings penetration (depth)1 Record Premiere Residential Buy listing depth penetration • Total depth penetration has increased sequentially and YoY • FY24 has seen record Premiere penetration (including Premiere+) • Prem
Slide 30: Commercial & Developer Media, Data & Other
Commercial & Developer Media, Data & Other Revenue up 12% with strong growth in Commercial, and Revenue up 25%, and up 2% excluding CampaignAgent modest growth in Developer acquisition Commercial & Developer Developer project launches Media, Data & Other revenue ($m) revenue ($m) YoY change +12% 14%
Slide 31: Financial Services delivers solid revenue growth
Financial Services delivers solid revenue growth Increased trail commission and white label growth offsetting small decline in settlements Operating revenue ($m)1 Net revenue ($m) Settlements ($bn) -1% YoY +8% 25.5 22.0 21.7 74 +21% 74 69 FY22 FY23 FY24 61 Brokers2 +1% YoY FY23 FY24 FY23 FY24 1,066
Slide 32: India momentum continues
India momentum continues Driven by event growth and increased depth for Housing.com, and Housing Edge adjacency products India revenue ($m) India EBITDA ($m)1 Housing.com audience (m)2(U) 103 FY23 FY24 +31% 79 35 19.7 19.5 Adjacency 24 15.4 68 Prop er ty & 55 +25% Advertising +9% (36) (39) FY22 FY23
Slide 33: Equity accounted associates
Equity accounted associates Total share of associate losses increased from $16m loss in FY23 to a $26m loss in FY24 Move, Inc. ($m)1, 2 PropertyGuru ($m)1, 3 Other ($m)4 FY23 FY24 FY23 FY24 FY23 FY24 (6) (1) (4) (3) (7) (21) • Revenue down 10% to US$544m in FY24 • PropertyGuru delivered 9% revenue g
Slide 34: Positive Australian and Group operating jaws
Positive Australian and Group operating jaws Australia operating results growth1 Operational expenses ($m)1 23% 22% +18% 628 India 532 139 REA India 18% excl. Mortgage Choice 118 489 22% +18% 11% 18% 20 COGS 414 56 20 41 41 Ot her 36 66 Australia 11% excl. Mortgage Choice 1% 57 Technology and ot her
Slide 35: Increased investment in strategic initiatives
Increased investment in strategic initiatives Group capital expenditure ($m) Depreciation and amortisation ($m)1 140 25% 125 FY23 FY24 FY25 120 118 20% REA Group ($m) Actual Actual Forecast 100 95 Offi ce fit out costs Australia Core depreciation & amortisation1 73 91 108-111 Amount ($'m) 15% % of r
Slide 36: Strong cash position funding further investment
Strong cash1 position funding further investment Group cash flow ($m) Strong operating cash flows • Operating cash flow of $589m, with free cash flow of $464m Continued strategic investment (732.2) • Capex for PPE and intangible assets of $125m • Investments in subsidiaries relates to acqusitions 1,
Slide 37: Current trading
Current trading • July National residential new Buy listings were up 12% YoY, with Sydney increasing 12% and Melbourne listings up 15%. July benefited from an additional 2 working days relative to the prior year. Excluding this, like-for- like growth was 2%. YoY growth rates for the remainder of the
Slide 38: Q&A
Q&A Changing the way the world experiences property
Slide 39: Supplementary information
Supplementary information 38
Slide 40: Core vs. reported reconciliation
Core vs. reported reconciliation Core vs. reported reconciliation FY24 FY23 Growth % Share of associate non-core costs Core operating income 1,452.8 1,183.2 23% • REA’s share of restructuring and impairment costs of PropertyGuru and Reported operating income 1,452.8 1,183.2 23% Move, offset by a rev
Slide 41: Cash flow reconciliation
Cash flow reconciliation Cash flow reconciliation ($m) FY24 FY23 Growth % Free cash flow EBITDA 1 798.6 635.0 26% • Working capital unfavourability mainly due to consolidation of Working capital movement (43.6) 13.9 <(100%) CampaignAgent and stronger revenue in current year Net interest paid (12.6)
Slide 42: Revenue breakdown
Revenue breakdown Revenue category ($m)1, 2 FY24 FY23 Growth % Revenue category ($m)1, 2 FY24 FY23 Growth % Australia Australia Depth revenue3 1,094.0 885.1 24% Residential 995.7 804.9 24% Subscription revenue3 61.4 Commercial & Developer 158.7 141.6 12% 60.4 (2%) Media, Data & Other 121.7 97.0 25%
Slide 43: Financial comparatives
Financial comparatives Core Financial Results1 Reported FY20 FY21 FY22 FY23 FY24 FY24 Group results $m Growth % $m Growth % $m Growth % $m Growth % $m Growth % $m Total revenue2 820.3 (6%) 927.8 13% 1,169.5 26% 1,183.2 1% 1,452.8 23% 1,452.8 Total operating income 820.3 (6%) 927.8 13% 1,169.5 26% 1,
Slide 44: Glossary
Glossary Buyer enquiries Buyer enquiries include email enquiry, phone number reveals, applied for inspection, SMS agent, and Developer brochure downloads. Cash Cash includes cash and cash equivalents. EBITDA Earnings before Interest, Tax, Depreciation and Amortisation excluding contribution from ass
Slide 45: Audience metric sources
Audience metric sources Ipsos iris Online Audience Measurement Service, Jul 2023 - Jun 2024 (average), P14+, PC/laptop/smartphone/tablets, text only, Homes and Property Category, Brand Group, Realestate.com.au vs A Domain, Audience (000’s) and Exclusive Audience (000’s). B Ipsos iris Online Audience