Rea Group Ltd · ASX:REA
Rea — FY2022 Earnings Presentation
41 slides from Rea's earnings presentation, Aug 9, 2022
Slide 1: REA Group Investor & Analyst Presentation FY22
ASX Announcement 9 August 2022 REA Group Investor & Analyst Presentation FY22 On behalf of REA Group Ltd (ASX:REA) please find attached a full-year results presentation for the year ended 30 June 2022. -ends- For further information, please contact: REA Group Ltd Investors: REA Group Ltd Media: Alic
Slide 2: Full year results
REA Group Ltd Full year results 30 June 2022 Changing the way the world experiences property
Slide 3: Agenda
Agenda 1 2 3 Business Financial Q&A highlights results update session
Slide 4: Business Highlights
Business Highlights Owen Wilson Chief Executive Officer
Slide 5: Exceptional FY22 core financial results
Exceptional FY22 core financial results Revenue1, 2 EBITDA1, 3 Net profit after tax1, 4 Reported net profit after tax4, 5 $1,170m $674m $408m $385m +26% +19% +25% +19% +18% excl. acquisitions6 +20% excl. acquisitions6 +28% excl. acquisitions6 +27% excl. acquisitions6 57% 164.0¢ +25% $3.08 +25% $248m
Slide 6: Strong momentum behind delivery of key milestones
Strong momentum behind delivery of key milestones Consumer highlights Customer highlights Strategic investments 12.7m unique audience 1 Australia’s #1 property portal2 Record Premiere and depth penetration Mortgage Choice integration on track realestate.com.au achieved 124.1m visits on Significant g
Slide 7: Clear strategy driving significant growth
Clear strategy driving significant growth Largest audiences, Consumer Experiences most engaged consumers Customer Value Property Data Building the next generation Financial Services marketplaces Global Superior Unparalleled customer value data insights 6
Slide 8: Consistent focus on strategic priorities
Consistent focus on strategic priorities Audience & Customer Value Data & Insights Financial Services Global Consumer Deliver superior value Build Australia’s Be Australia’s #1 retail Be India’s undisputed #1 Engage Australia’s “under one roof” leading property data, broker business and property por
Slide 9: Australia’s #1 address in property
Australia’s #1 address in property Total visits1 Unique audience3 App launches5 124.1m 12.7m 59m Australia’s Average monthly traffic to realestate.com.au on all platforms Average monthly unique audience to realestate.com.au on all platforms Average monthly launches of realestate.com.au app 7th 3.36x
Slide 10: Rapid growth in loyal & active consumers
Rapid growth in loyal & active consumers delivering increased value to customers Record member growth Leveraging our audience leadership position as we accelerate active membership growth. Personalised experiences drive membership. Members are Monthly active members up 25% YoY1 3x more likely to sen
Slide 11: Australia’s leading rental marketplace providing seamless connections & efficiencies
Australia’s leading rental marketplace providing seamless connections & efficiencies Enhanced rental application experience 1form retired in June with enhanced realestate.com.au Rental Application platform simplifying the process and providing more privacy. Australia’s Australia’s #1 rental applicat
Slide 12: The first choice for digital property advertising solutions
The first choice for digital property advertising solutions - driving quality customer leads Property Advertising offering the most comprehensive marketing package Premiere+ launched in March with pre-market, on-market and post-market benefits. Outstanding Premiere+ take-up and record depth penetrat
Slide 13: Unique data driving product enhancements & powering digitisation
Unique data driving product enhancements & powering digitisation Supercharging value in core products and experiences Unique PropTrack data driving and engaging our audiences through content and experiences. Visits to PropTrack insights content up 210% in Q4 YoY1 Property Data Innovative mortgage va
Slide 14: Financial Services network growth, refreshed brand & new digital initiatives
Financial Services network growth, refreshed brand & new digital initiatives Strong presence Record settlements driving growth in market Submissions and settlements growth driven by broker Launched refreshed recruitment, productivity improvements and strong market. Mortgage Choice brand to market, s
Slide 15: REA India - the #1 property portal in India
REA India - the #1 property portal in India A record Maintained audience leadership Housing.com maintains its position as #1 property site1 driven by strong SEO focus, improved mobile experience 16.7m 5 (mobile ~89% of total audience)2 and targeted marketing visits to Housing.com in May 14.2m averag
Slide 16: Global investments delivering solid revenue growth
Global investments delivering solid revenue growth PropertyGuru delivers 42% revenue growth in March Move delivers 11% FY22 revenue growth in challenging quarter and reaffirms 44% CY22 revenue guidance1 market3 Singapore 77% Revenue (US$m)4 #1 engagement market share2 +11% 3.9x +14% CAGR YoY closest
Slide 17: Committed to a sustainable future
Committed to Environment Social Governance a sustainable Strengthened commitment to environmental initiatives An inclusive and great place to work Identifying opportunities to improve ESG initiatives future 100% Green Energy across the majority of REA’s Australian REA named an Inclusive Employer for
Slide 18: Property Market Conditions
Property Market Conditions
Slide 19: Financial Results Update
Financial Results Update Janelle Hopkins Chief Financial Officer
Slide 20: Core financial operating results
Core financial operating results FY22 FY22 Growth excl. impact of FY22 FY21 excl. Revenue1, 3 Core 1,2 performance ($m) acquisitions acquisitions6 Total Total Growth % acquisitions %6 FY22 1,169.5 Revenue3 FY21 927.8 Australia4 1,074.1 41.5 1,115.6 910.5 23% 18% FY20 820.3 India - 53.9 53.9 17.3 >10
Slide 21: Statutory (reported 4E) vs core results
Statutory (reported 4E) vs core results Statutory Significant Core Significant items3 FY22 ($m) (reported 4E) items3 results • Revenue Group revenue1 1,160.2 9.3 1,169.5 o Trail commission integration adjustment Group operating expenses (490.4) (8.6) (499.0) • Operating expenses o Net gain on acquis
Slide 22: Strong growth in Residential revenue
Strong growth in Residential revenue Driven by listings, depth, price rise and add-ons Residential revenue ($m) Residential buy listings YoY change1 80% 60% 24% 22% 40% 776 54% 11% 20% 2% 628 - 6% 8% 11% (20%) 0% (40%) (60%) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY21 FY22 FY21 FY21 FY21 FY21 FY22 FY22 FY22 FY22 N
Slide 23: Yield growth driven by record depth penetration
Yield growth driven by record depth penetration Record Premiere and overall depth penetration Residential buy listings penetration (depth)1 Record Residential Buy listing depth penetration • FY22 has seen record penetration across all states • Growth driven by the success of recontracting in Q4 FY21
Slide 24: Commercial & Developer Media, Data & Other
Commercial & Developer Media, Data & Other Revenue up 3% with growth in Commercial offsetting Strong 28% growth in Data revenues lower project launches in Developer Commercial & Developer revenue Developer project launches Media, Data & Other revenue ($m) ($m) YoY change 3% 134 9% 97 44% 130 12% 14%
Slide 25: Strong Financial Services operational revenue growth
Strong Financial Services operational revenue growth Driven by strength in settlements and recruitment, with net revenue impacted by trail commission revaluation Settlements4 ($bn) Operating revenue1, 2, 3 ($m) Net revenue1, 2 ($m) +28% YoY 70 12% 68 -2% 79 45 44 15.8 20.0 25.5 66 FY20 FY21 FY22 25
Slide 26: Exceptional India revenue growth
Exceptional India revenue growth Driven by Housing.com’s core business and adjacency products including Housing Edge India revenue1 ($m) India EBITDA1, 2 ($m) 54 FY21 FY22 Housing.com audience5 (m) 12 92% +50% YoY 42 Adjacency 28 14 4 Property & 24 Advertising (29) 9 (35) 5 FY20 FY21 FY22 FY21 FY22
Slide 27: Continued investment in equity accounted associates
Continued investment in equity accounted associates Total share of associate profits reduce from $9m in FY21 to $3m in FY22 Move, Inc.1, 2 ($m) PropertyGuru1, 3 ($m) Other4 ($m) FY21 - FY22 FY21 FY22 16 14 n/a (5) (6) (7) FY21 FY22 • Revenue up 11% to US$712m driven by growth • PropertyGuru listed o
Slide 28: Positive operating jaws with strategic reinvestment
Positive operating jaws with strategic reinvestment Group operating results growth1 Operational expenses1 ($m) 499 (ex acquisitions)2 Mortgage Choice 37 20% REA India 18% 372 89 11% 35 +11% 3732 Operations & administration 18% 8% 328 +3% 3372 29 21 37 31 COGS 12 29 11% 9 28 27 55 7% 52 Technology an
Slide 29: Accelerated investment in strategic initiatives
Accelerated investment in strategic initiatives Group capital expenditure ($m) Depreciation and amortisation1 ($m) 100 25% FY21 FY22 FY23 90 REA Group ($m) Actual Actual Forecast 80 20% Office fit out costs Excluding acquisitions 70 Core depreciation & amortisation2 69 62 63 – 65 REA India & Mortgag
Slide 30: Strong cash position
Strong cash position Strong operating cash flows Group cash flow ($m)1 • Operating cash flow of $488m, with free cash flow of $394m up $140m Strong liquidity position enabling 1,288.4 (592.7) borrowings and investment • Investment of additional $71m in PropertyGuru as part of the IPO transaction and
Slide 31: Current trading
Current trading • The Australian residential property market is likely to continue to moderate as interest rates rise. While this adjustment has already impacted property prices, the current market reflects strong fundamentals including record low unemployment, high household savings and increasing
Slide 32: Q&A
Q&A Owen Wilson Chief Executive Officer Janelle Hopkins Chief Financial Officer
Slide 33: Where 12 million Australians buy, rent & sell
Supplementary Information Where 12 million Australians buy, rent & sell
Slide 34: Core vs. reported reconciliation
Core vs. reported reconciliation Trail commission integration adjustment • Trail commission adjustment for broker remuneration alignment Growth Core vs. reported reconciliation FY22 FY21 % Associate IPO and restructuring costs Core operating income 1,169.5 927.8 26% • PropertyGuru IPO transaction co
Slide 35: Revenue breakdown
Revenue breakdown Revenue category1, 2 ($m) FY22 FY21 Growth Revenue category1, 2 ($m) FY22 FY21 Growth Australia Australia Depth revenue 852.0 702.8 21% Residential 776.5 627.5 24% Subscription revenue 58.6 54.4 8% Commercial & Developer 134.1 129.7 3% Media, Data & Other 96.9 89.1 9% Media, Data &
Slide 36: Australia segment reconciliation
Australia segment reconciliation Australia Property & Change in operating segment presentation Online Advertising Australia Australia • Following the divestment of the Malaysia FY221 (excl. Asia) Financial Services Asia2 total and Thailand businesses on 3 August and Segment operating income Total se
Slide 37: Financial Services: pro forma
Financial Services: pro forma Pro forma earnings including Mortgage Choice • While Mortgage Choice earnings are REA Financial Services Combined pro forma4 consolidated from 1 July 2021, we FY21 (excl. Mortgage Choice) Mortgage Choice3 REA Financial Services have provided pro forma earnings Revenue1
Slide 38: Financial comparatives
Financial comparatives Core Operations1 Reported FY18 FY19 FY20 FY21 FY22 FY22 Group results $m Growth $m Growth $m Growth $m Growth $m Growth $m Total revenue2 807.7 20% 874.9 8% 820.3 (6%) 927.8 13% 1,169.5 26% 1,160.2 Total operating income 807.7 20% 874.9 8% 820.3 (6%) 927.8 13% 1,169.5 26% 1,16
Slide 39: Cash flow reconciliation
Cash flow reconciliation Cash flow reconciliation ($m) FY22 FY213 Growth Free cash flow EBITDA1 673.5 564.8 19% • Working capital favourability mainly due to strong Working capital movement 57.1 (97.8) >100% collections and lower prepayments, as well as consolidation of Mortgage Choice and India in
Slide 40: Glossary
Glossary EBITDA Earnings before Interest, Tax, Depreciation and Amortisation including share of associates Financial results from Reported results adjusted for significant non-recurring items such as restructure costs, gain/loss on core operations acquisitions, disposals and closure of subsidiaries,
Slide 41: Disclaimer
Disclaimer Visit our The information in this presentation is in summary form only and does not purport to be comprehensive or complete. It contains information that has been derived from publicly available sources that has not been independently verified. This presentation should be read in conjunct