Rightmove Plc · LSE:RMV
Rightmove — FY2022 Earnings Presentation
39 slides from Rightmove's earnings presentation, 2023
Slide 1: Full Year Results for the year ended 31 December 2022
Full Year Results for the year ended 31 December 2022
Slide 2: Agenda
1. FY 2022 Highlights 2. Financials Alison Dolan, CFO 3. Housing Market update Peter Brooks-Johnson, CEO 4. Strategic update Peter Brooks-Johnson, CEO 5. Outlook 6. Appendix
Slide 3: FY 2022 Highlights
FY 2022 Highlights rightmove ~
Slide 4: Key Performance Indicators: Continued Momentum on 2021
Key Performance Indicators: Continued Momentum on 2021 Adjusted Revenue Underlying EPS2 Dividend Underlying Profit1 +9% +7% +9% 8.5p Revenue up to £332.6m Underlying Operating Underlying EPS 23.8p Dividend per ordinary share (2021: £304.9m ) profit £245.4m (2021: 7.8p) (2021: 21.8p) (2021: £228.6m)
Slide 5: Making home moving in the UK easier
Making home moving in the UK easier Making home moving in the UK easier Helping our customers to… More of the home moving Grow their market share journey made possible with Optimiser 2015 package retired Rightmove… with customers migrated to Optimiser 2020, allowing them Making Mortgages more digita
Slide 6: Financials
Financials Alison Dolan, CFO
Slide 7: Strong revenue growth in all business units
Strong revenue growth in all business units 350 332.6 325 304.9 289.3 300 275 250 225 205.7 £ millions £ millions 200 175 150 125 100 75 50 25 0 2021 Agency New Agency New Homes Mortgages Other 2022 2019 2020 2021 2022 revenue ARPA Homes customer development revenue revenue growth ARPA impact impact
Slide 8: The slowing market led to a notable rise in New Homes ARPA in H2
The slowing market led to a notable rise in New Homes ARPA in H2 ARPA growth over the two halves1 • Strong H2 ARPA Agency New Homes performance of £24 120 exceeded guidance 100 80 60 • Agency ARPA growth H1 40 weighted; H2 slightly higher than a “normal” year 20 0 2017 2018 2019 2021 2022 2017 2018
Slide 9: New Record for ARPA growth: +£125 to £1,314
New Record for ARPA growth: +£125 to £1,314 Agency New Homes +£123 +£146 • Highest ever absolute growth £150 • Over 40% of Optimiser 2020 £120 upgrades came from Essential & Enhanced £78 £90 • Customers continue to spend on £77 63% 53% product after upgrading £60 • Successful core pricing actions in
Slide 10: Slowing market in H2 led to growth in development numbers
Slowing market in H2 led to growth in development numbers Agency and New Homes • Overall flat customer numbers; +45 customer numbers vs December-21 20,000 2,801 3,126 3,462 3,275 2,859 3,082 • Relative H1 performances of Agency and New 16,000 Homes reversed in H2 12,000 17,626 17,328 16,347 15,922 1
Slide 11: Underlying Operating Costs
Underlying Operating Costs1 Underlying cost increase of £10.9m • Operating costs have increased by £10.9m (14%) • 60% due to increased people- related costs; of which £3.7m is from new heads, mainly Product Development • G&A increase from increased travel Two one- and accommodation off costs • Under
Slide 12: Cash bridge
Cash bridge1 • Cash generated from operating activities of £244m (2021:£237m) • Operating cash conversion(2) of 101% (2021:105%) • Effective tax rate of 18.9% vs 19.0% enacted rate • Enacted 25% rate expected from April 2023 • No change to long term capital returns policy in 2023 12
Slide 13: ESG targets – progress across the board
ESG targets – progress across the board • Environmental targets tested & verified by the SBTi Environmental • Verified as consistent with the 1.5 degrees warming limitations • Delivery to date on all Environmental targets is ahead of plan • TCFD risks & opportunities modelling enhanced • 87% of empl
Slide 14: Housing market update
Housing market update Peter Brooks-Johnson, CEO
Slide 15: A strong year for transactions, house prices and commissions
A strong year for transactions, house prices and commissions Housing transactions1 and HPI2 2007-2022 (UK) 1,800 £400k 1,600 £360k 1,614 1,400 £320k Transactions, ‘000 1,476 Average Asking Price 1,200 £280k 1,256 £240k 1,235 1,230 1,220 1,219 1,192 1,177 1,000 1,074 £200k 1,045 800 932 900 886 885
Slide 16: Despite base rate rises, fixed mortgage rates are falling
Despite base rate rises, fixed mortgage rates are falling Top 6 lenders – 60% & 85% Loan to Value Base Rate (with a fee) 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 1-7 Sept 22-28 Sept 13-19 Oct 3-9 Nov 24-30 Nov 15-21 Dec 5-11 Jan 26-1 Feb 5 year 60% LTV 2 year 85% LTV Bank of England Base Rate
Slide 17: Strategic update
Strategic update Peter Brooks-Johnson, CEO
Slide 18: Rightmove remains the best place for agents to get the most exposure and quality leads
Rightmove remains the best place for agents to get the most exposure and quality leads Market Share of top 4 property portals1 100% 80% 60% Comscore methodology change 40% 20% 0% Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Ri
Slide 19: Getting Closer to Home Owners in 2023 with Track My Property
Getting Closer to Home Owners in 2023 with Track My Property Consumer advantages Agent advantages • Market leading automated estimate of • Reinforces the benefits of consumers how much a property is worth using this tool alongside the accuracy integrated with local area information of an agent's val
Slide 20: Agents' priorities will change depending on the market dynamics
Agents’ priorities will change depending on the market dynamics Faster Market Slower Market Top of Funnel • Being the one chosen on • Increasing share of voice so the first round of market front of queue for potential Branding appraisals is vital sellers • Building reputation in a more challenging m
Slide 21: The impact of the Mortgage Market Review: a rapid change from under to over-supply
The impact of the Mortgage Market Review: a rapid change from under to over-supply • Sharp increase in transactions in 2014, not repeated in 2015 due to the impact of the Mortgage Market review. 2014 saw strong growth in Agency from increased agent formation and the expansion of agents expanding • A
Slide 22: The Brexit years: increased New Homes activity
The Brexit years: increased New Homes activity • Political and economic uncertainty negatively impacted the property market as it fell for four consecutive years. • New Homes developments increased as sales rates slowed and spend - particularly on transactional digital marketing - rose to record lev
Slide 23: The counter-cyclicality protects the predictability of the core business
The counter-cyclicality protects the predictability of the core business Agency and New Homes revenue £350 £300 £250 Covid support provided to £200 customers £m £150 £100 £50 £0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Agency New Homes • Consistent revenue growth regardless of the mark
Slide 24: Our products work regardless of the market dynamics
Our products work regardless of the market dynamics… Rightmove share of voice correlates with number of • Top of Funnel Branding instructions products, such as Featured 160 Agent and Sold by Me, increase Share of Voice. 71% New Instructions (Indexed to 120 of branches ranked in Top 5 for Market Shar
Slide 25: A package structure that is flexible for customers and offers considerable value
…with a package structure that is flexible for customers and offers considerable value Rightmove package performance1 • The flexibility of our packages Essential Enhanced Optimiser enables customers to choose Return on package 7x 11x 15x what suits them, while offering an exceptional ROI Average num
Slide 26: Room to grow from enhancing our most valued products and launching new products
Room to grow from enhancing our most valued products and launching new products LVA revenue and timing of enhancements Enhancement LVA mobile enhancement Mobile optimisation to increase lead flow Enhancement 20% inventory increase Enhancement Enhancement Menu and Local Valuation homepage (Mobile) Al
Slide 27: Products well placed to meet the needs of the New Homes market
Products well placed to meet the needs of the New Homes market Average monthly leads Package Penetration1 generated per development1 • 37% of developments on Advanced package, which was 30 40% launched in 2021 30% 20 20% • 19% of developments purchase 10 Native Search Adverts, launched in 10% 2021.
Slide 28: Strategic progress on digital renting journey
Strategic progress on digital renting journey Consumer advantages Agent advantages Rightmove advantages • Increased visibility of progress • Efficiency & cost savings throughout • Become more embedded into of transaction entire workflow customers' operational processes • Reduced duplication of data
Slide 29: Creating a more digital rental process drives referencing and other opportunities
Creating a more digital rental process drives referencing and other opportunities Number of references ordered indexed vs 2021 140% 130% • Around 20% more references in 2022 vs last year 120% 110% • Continue to grow market share 100% • Open banking tested in Q4 and will 90% help deliver higher refer
Slide 30: Outlook
Outlook (abt :' a MMM at TB rightmove ~
Slide 31: Outlook
Outlook • Rightmove’s network effects continue to position us at the heart of the UK property market • Our visibility of property market data remains unrivalled • Customer numbers likely to follow similar pattern to H2 2022 • ARPA growth driven by new product launch, ongoing product uptake and prici
Slide 32: Appendix
Appendix rightmove ~
Slide 33: Profit & Loss
Profit & Loss Year ended Year ended 31 December 2022 31 December 2021 £m £m Revenue 332.6 304.9 Other income (one-off provision release) - 2.4 Operating costs (exc. share-based incentives and related NI) (87.2) (76.3) Underlying Operating Profit 245.4 231.0 Underlying operating margin 74% 76% Exclud
Slide 34: Capital Structure
Capital Structure FY 2022 FY 2021 Share capital m m In issue at 1 January 859.7 886.4 Purchase and cancellation of own shares (22.3) (26.7) Total issued share capital 837.4 859.7 Shares held in Treasury (12.2) (12.5) Voting rights share capital 825.2 847.2 Own shares held by the EBT/SIP (2.3) (1.9)
Slide 35: Balance Sheet
As at As at Balance Sheet 31 December 2022 31 December 2021 £m £m Property, plant and equipment 10.4 12.0 Intangible assets 22.1 21.1 Deferred tax assets 1.5 2.2 Total non-current assets 34.0 35.3 Trade and other receivables 26.6 23.1 Contract assets 0.5 0.1 Income tax receivable 0.6 1.1 Money marke
Slide 36: Key performance indicators
Key performance indicators FY FY FY FY FY 2018 2019 2020 2021 2022 Period end membership - Agency branches 17,328 16,347 15,922 16,110 15,932 - New Home developments 3,126 3,462 3,275 2,859 3,082 Total 20,454 19,809 19,197 18,969 19,014 Growth - -3% -3% -1% 0% Average monthly revenue per advertiser
Slide 37: Revenue by business segment
Revenue by business segment 10% 10% 16% 16% FY 2022 FY 2021 Percentage Percentage of revenue of revenue 74% 74% Agency New Homes Other 37
Slide 38: Agency product types
Agency product types Closing Products Top of Funnel Vendor Lead Generation Featured Property Local Homepage Sold By Me Native Search Ad Local Valuation Alert Featured Agent Agent Microsite Premium Listing Rightmove Discover Digital Media Campaigns E-Leaflets Property Alert Sponsor Opportunity Manage
Slide 39: New Homes product types
New Homes product types Closing products Top of Funnel 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 Cam