Rightmove Plc · LSE:RMV
Rightmove — FY2023 Earnings Presentation
35 slides from Rightmove's earnings presentation, February 2024
Slide 1: Full Year Results
Full Year Results for the year ended 31st December 2023
Slide 2: Content
Content 1. FY 2023 Highlights 2. Financials Alison Dolan, CFO 3. Property Market update Johan Svanstrom, CEO 4. Strategic & Business update Johan Svanstrom, CEO 5. Appendix 2
Slide 3: FY 2023 Highlights
FY 2023 Highlights
Slide 4: Key Performance Indicators – FY 2023
Key Performance Indicators – FY 2023 (2022: £100.3m) Revenue ARPA1 Membership1 Underlying Profit2 +10% £1,431 18,785 +8% Revenue up to £364.3m Up £117 (+9%) (31 December 2022: 19,014) Underlying Operating profit (2022: £332.6m) (2022: £1,314) £264.6m (2022: £245.4m) Underlying EPS3 Dividend Cash ret
Slide 5: Strong 2023 operational progress
Strong 2023 operational progress 5 Pillars Example deliverables Doubled the number of Consumer Launch of Track-a-Property serious home hunters >2m Enhanced profiles Be the place to find your home online (instant, online valuation) signing in Core Customer Optimiser Edge >600 Advanced package at 53%
Slide 6: Launch of two Big Beliefs: AI and GoGreener
Launch of two Big Beliefs: AI and GoGreener AI GoGreener +100 use cases outlined Leveraging the largest data-set of UK property market across 4 pillars, Ongoing implementation & integrating with company targets: experimentation across 3 pillars: Greener Homes Consumers Greener Buildings Customers Gr
Slide 7: Financials
Financials Alison Dolan, CFO
Slide 8: Strong revenue growth, fuelled by record New Homes growth
Strong revenue growth, fuelled by record New Homes growth % of total Strong and broad-based revenue growth Revenue £m 2023 2022 YoY growth 2023 revenue c.60% of ARPA growth driven by customers using more products Estate Agency 220.4 208.1 6% 61% and upgrading packages Lettings (including RS) 1 41.6
Slide 9: Product driven ARPA growth; Record increase in New Homes
Product driven ARPA growth; Record increase in New Homes Blended ARPA growth of £117/9% Total ARPA Pricing Product Upgrades New Homes +£117 +£312 Product remains the primary growth driver (58%) £202 Record New Homes growth of £312/ 21% to £1,825 £68 58% £110 New Homes continues to see Agency high pa
Slide 10: Customer Numbers stable
Customer Numbers stable Agency and New Homes • Continued strong Agency retention, 89%, as agents continue to see Rightmove as crucial to their marketing needs 2,859 3,082 2,946 16,110 15,932 15,839 • Developments down 136 / 4% YoY, driven by new developments coming to market slower FY 2021 FY 2022 F
Slide 11: Underlying Operating Costs
Underlying Operating Costs1 Operating costs increased £12.5m (14%) Underlying cost increase of £12.5m Successful recruitment of 87 (12%) new heads, of which 52 are technology roles Technology costs increased due to Cloud migration, AI & data consultancy fees and increased licence costs due to headco
Slide 12: Cash bridge
Cash bridge1 Cash generated from operating activities of £268m (2022: £244m) Operating cash conversion2 of 104% (2022:101%) Effective tax rate of 23.3% (2022 18.9%) vs 23.5% enacted rate 12 Source: Rightmove. 1. Cash in bridge includes cash equivalents of 95-day money market deposits of £5.2m (2022:
Slide 13: Capital allocation and financial guidance for 2024
Capital allocation and financial guidance for 2024 Capital allocation • Organic investment prioritised • Includes bolt-on M&A e.g. Homeviews acquisition an example of buy vs build • Progressive dividend policy to continue • All surplus cash to be returned Financial Guidance • Revenue growth of 7% to
Slide 14: Property Market Update
Property Market Update Johan Svanstrom, CEO
Slide 15: 2023 Sales market saw headwinds vs previous years
2023 Sales market saw headwinds vs previous 2 years Housing Transactions1 and HPI2 2007-2023 (UK) 1,800k £400k 1,600k £350k 1,614 1,400k Average Asking Price 1,478 £300k 1,200k Transactions 1,219 1,230 1,235 1,220 1,258 £250k 1,192 1,177 1,000k 1,074 1,045 1,019 £200k 800k 900 886 885 932 858 £150k
Slide 16: Rental market remains challenging for tenants and landlords
Rental market remains challenging for tenants and landlords Rental Supply and Demand, indexed to January 2019 Available Listings Demand Advertised rents 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Jul-23 Jan-24 • Lack of supply continues
Slide 17: Business & Strategic update
Business & Strategic update Johan Svanstrom, CEO
Slide 18: Accelerating the pace of innovation and delivering exceptional value
Accelerating the pace of innovation and delivering exceptional value Total Customer Chargeable products Rightmove lead conversion1: 90% 87% 85% 83% 80% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Applicants Landlord Vendor Sales Lettings Instructions Instructions Outcomes outcomes Consume
Slide 19: Core platform deliveries reinforce strong network effects
Core platform deliveries reinforce strong network effects Marketing products Knowing more that deliver about our outstanding, consumers Consumer measurable results Customer Product Data Increasingly Increasing tailored products relevance and for specific personalisation customer segments Demand Tech
Slide 20: We are where consumers turn to first and engage with most
Consumer We are where consumers turn to first and engage with most Market Share of top 4 property portals1 100% • Strong market share at 86%, up from 85% in Dec-20221 80% • Over 85% of traffic comes directly from consumers who are actively seeking the Rightmove brand 60% 40% • +40% of leads now sent
Slide 21: Getting closer to consumers across more of their home moving journey
Consumer Getting closer to consumers across more of their home moving journey Knowing more about our consumers Increasing relevance and Going beyond find personalisation +2M enhanced profiles 82% of signed-in lead senders Consumer visiting Manage My Move Knowing more about our consumers Increasing r
Slide 22: Optimiser Edge starts strongly, helping customers deliver measurable results
Customer Optimiser Edge starts strongly, helping our customers deliver outstanding, measurable results Price Guide Engagement Customer Branch Usage Digitally Shared with Consumer Over 600 chargeable Optimiser Edge customers at an average 100% uplift of just over £300 90% Marketing products 80% that
Slide 23: Tailored product enhancements to continue driving ARPA growth in New Homes
Customer Tailored product enhancements to continue driving ARPA growth in New Homes Strong adoption of New Homes Top package, Advanced. Customer Developments on Advanced at 53% in December 2023 (42% in Video feature on Advanced listing & December 2022) Spotlight Marketing products that deliver • Upg
Slide 24: Extending beyond marketing products for all customers
Customer Extending beyond marketing products for all customers Future RM+ Customer Providing value outside of marketing Marketing products RM+ is an embedded efficiency tool for that deliver agents in their day-to-day operations Increasingly tailored for users outstanding, measurable results >90% of
Slide 25: Investment in strategic growth areas underway, with key developments planned across 2024
Strategic Growth Areas Investment in strategic growth areas underway, with key developments planned across 2024 Broker proposition Enquiry Manager Mortgages: • Enhancements to MiP journey e.g. save & return functionality and lead nurturing • Scale broker proposition in H2 • Remortgage proposition bu
Slide 26: Strategic Outlook – in brief
Strategic Outlook – in brief • With expected reduction of interest rates in ‘24 and into ‘25, and property-price stability due to undersupply, the outlook for transaction levels is positive • Our market data and platform network effects are unrivalled. We will continue to lead product innovation and
Slide 27: Appendix
Appendix rightmove “
Slide 28: Income Statement
Income Statement 31 December 2023 31 December 2022 (£’m) (£’m) Revenue 364.3 332.6 Operating costs (exc. share-based incentives charges) (99.7) (87.2) Underlying Operating Profit 264.6 245.4 Underlying margin 73% 74% Share-based payments charge (6.5) (4.1) Operating profit 258.0 241.3 Margin 71% 73%
Slide 29: Balance Sheet
Balance Sheet As at 31 Dec 2023 As at 31 Dec 2022 £m £m Property, plant and equipment 9.4 10.4 Intangible assets 21.8 22.1 Deferred tax assets 2.4 1.5 Total non-current assets 33.6 34.0 Trade and other receivables 31.5 26.6 Contract assets 0.8 0.5 Income tax receivable 0.2 0.6 Cash and money market
Slide 30: Capital Structure
Capital Structure Share Capital FY 2023 m FY 2022 m In issue at 1 January 837.4 859.7 Purchase and cancellation of own shares (24.0) (22.3) Total issued share capital 813.4 837.4 Shares held in Treasury (11.7) (12.2) Voting rights share capital 801.7 825.2 Own shares held by the EBT/SIP (2.2) (2.3)
Slide 31: Key performance indicators
Key performance indicators Period end membership FY 2023 FY 2022 FY 2021 Agency branches 15,839 15,932 16,110 New Home developments 2.946 3,082 2,859 Total 18,785 19,014 18,969 Growth (1%) 0% (1%) Commercial customers 933 830 884 ARPA (£) FY 2023 FY 2022 FY 2021 Agency 1,356 1,278 1,155 New Homes 1,
Slide 32: Revenue by business segment
Revenue by business segment FY 2023 Percentage of revenue FY 2022 Percentage of revenue Agency New Homes Other Agency New Homes Other 10% 10% 16% 18% 72% 74% Source: Rightmove 32
Slide 33: Package breakdown – FY 2023
Package breakdown – FY 2023 Agency Packages New Homes Packages Optimiser Edge Essential Essential Extra Enhanced Optimiser 20 Standard Gold Advanced Optimiser 15 12,000 3,500 10,000 3,000 2,500 8,000 2,000 6,000 1,500 4,000 1,000 2,000 500 - - Dec-21 Dec-22 Dec-23 Dec-21 Dec-22 Dec-23 Source: Rightm
Slide 34: Agency product types
Agency product types Closing Products Branding products Vendor Lead Generation Leads to Keys Featured Property Local Homepage Sold By Me Native Search Ad Local Valuation Alert Enquiry Manager Featured Agent Agent Microsite Tenancy Manager Premium Listing Rightmove Discover Digital Media Campaigns E-
Slide 35: New Homes product types
New Homes product types Closing products Branding products Premium New Property Carousel Local Homepage Audience Extension Home Spotlight Featured Developer Microsite Premium Listing Developer Carousel Featured New Home Featured Developer Advanced Development listing Digital Media Campaigns Targeted