Rea Group Ltd · ASX:REA
Rea — Investor Day (June 2022)
78 slides from Rea's investor day presentation, Jun 2, 2022
Slide 1: ASX Announcement: Investor Day Presentation
ASX Announcement 2 June 2022 Investor Day Presentation For personal use only REA Group Ltd (ASX:REA) will be holding an Investor Day in Sydney today, commencing at 9.00am (AEST). Attached are the Investor Day presentation materials. -ends- For further information, please contact: REA Group Ltd Inves
Slide 2: Investor Day 2022
Investor Day For personal use only 2022 2 June 2022
Slide 3: Disclaimer
Disclaimer This presentation has been prepared by REA Group Ltd ABN 54 068 349 066 (“REA”) and contains general information about REA and its subsidiaries (“REA Group”) For personal use only and its activities as at the date of this presentation. This information is in summary form only and does not
Slide 4: Today's agenda
Today’s agenda For personal use only 9:00am Welcome to REA Investor Day Owen Wilson 9:05am Our strategy overview Owen Wilson 9:15am Consumer Experiences Val Brown 9:25am Customer Value Henry Ruiz, Kul Singh 9:40am Property.com.au Henry Ruiz 9:50am First Q&A session 10:20am Break 10:40am Property Dat
Slide 5: Our leadership team
Our leadership team For personal use only Owen Wilson Janelle Hopkins Henry Ruiz Val Brown Melina Cruickshank Chief Executive Officer Chief Financial Officer and Chief Strategy and Chief Consumer Chief Audience and (CEO) CEO Financial Services Customer Product Officer, Product Officer Marketing Offi
Slide 6: Our Strategy
01 For personal use only Our Strategy Owen Wilson Chief Executive Officer 2 June 2022
Slide 7: Our purpose and strategy is more relevant than ever
Our purpose and strategy is more relevant than ever For personal use only Our purpose and strategy Overlaying the lens of horizons to our strategy Largest audiences, most engaged consumers Core Extend Transform Defend and grow Build emerging models Drive future growth – core business where product m
Slide 8: We have evolved from a residential listing portal to a property, finance and data business
We have evolved from a residential listing portal to a property, finance and data business For personal use only Growing online Driving subscriptions to depth Building the next generation marketplaces classifieds to mobile to personalisation Residential Commercial Consumer Experiences Share accommod
Slide 9: Our strategic priorities are clear
Our strategic priorities are clear For personal use only Consumer Experience Customer Value Property Data Financial Services Global Engage Australia’s largest Deliver superior customer Build Australia’s leading Be Australia’s #1 retail Be India’s undisputed audience of property value “under one roof
Slide 10: Our growth will be underpinned by significant opportunities
Our growth will be underpinned by significant opportunities For personal use only Consumer Experience Customer Value Property Data Financial Services Global Continue audience Continue advertising Grow broker volumes Power REA experiences Audience leadership leadership leadership and loan books Digit
Slide 11: We have accelerated REA's strategy through pivotal investments
We have accelerated REA’s strategy through pivotal investments For personal use only Acquired 27.8% Acquired Mortgage stake in Managed1 Choice (100%) Acquired remaining Acquired 34.4% stake in Smartline (100%) stake in Simpology4 Acquired HomeTrack (100%) Acquired 27% stake (now PropTrack) in Campai
Slide 12: We have significant opportunities across large addressable markets
We have significant opportunities across large addressable markets For personal use only Total addressable markets1 Financial Customer Value Property Data Global Services Commercial, Residential Developer Agent Insights Lender Southeast North Valuations4 India6 Advertising2 and Media Services3 and D
Slide 13: Growth Opportunities
02 For personal use only Growth Opportunities Owen Wilson Chief Executive Officer 2 June 2022
Slide 14: Consumer Experiences
For personal use only Consumer Experiences Val Brown Chief Consumer Product Officer
Slide 15: We are Australia's #1 address in property
We are Australia’s #1 address in property For personal use only 15% CAGR Monthly visits1 127m 3.3x more visits than 122m 127m our nearest competitor3 77m 90m 72m Average monthly traffic to realestate.com.au on all platforms FY18 FY19 FY20 FY21 9M FY22 #6 largest online brand 26% CAGR in Australia4 A
Slide 16: Membership provides a compelling opportunity for lead generation
Membership provides a compelling opportunity for lead generation For personal use only Unique audience monthly average1 12.6m Active members monthly average2 2.4m Members are highly engaged3 3x more likely to act 1m+ Renter Profiles 1.7m+ Financial Profiles 1.5m+ Owners tracking Driving more high va
Slide 17: realestate.com.au is the lifelong property companion
realestate.com.au is the lifelong property companion For personal use only Our consumer proposition is underpinned by trust, choice and service 16
Slide 18: Key Consumer takeaways
Key Consumer takeaways For personal use only 1 2 3 4 Realestate.com.au Realestate.com.au Our 12.6m unique Having the largest is Australia’s is the 6th largest audience drives our and most engaged #1 address for online brand in membership base audience in our property, Australia. which has marketplac
Slide 19: Customer Value
For personal use only Customer Value Henry Ruiz Kul Singh Chief Strategy Chief Customer and Customer Officer Product Officer
Slide 20: Key Customer Value highlights
Key Customer Value highlights For personal use only #1 position Record depth penetration and buyer enquiries Rent listings and applications Premiere penetration driving growth, with strong Market leading position in rental listings and share engagement across all states; buyer enquiries up 23% YoY1
Slide 21: Our residential customer strategy provides superior value
Our residential customer strategy provides superior value For personal use only Property Advertising: Offering customers a comprehensive and flexible set of high- performing solutions which target Australia's largest property seeking audience Property Advertising Depth • Premiere+ Agency Marketplace
Slide 22: We are well positioned to leverage our clear value proposition
We are well positioned to leverage our clear value proposition For personal use only We capture Our share of We deliver less than half the property 3.3x more visits the marketing transaction is than the next schedule today1 very small2 competitor3 (1) REA Internal; (2) ABS and REA internal data, whe
Slide 23: Premiere+ is a new bundle and the most complete marketing package
Premiere+ is a new bundle and the most complete marketing package in market For personal use only All the benefits of our Premiere product, plus Pre-market: Build demand early with the most engaged buyers ‘Coming soon’ buyer notification ‘Coming soon’ Premiere listing on realestate.com.au ‘Coming so
Slide 24: Our agency marketplace helps agents grow their business
Our agency marketplace helps agents grow their business We believe a subscription model is the most attractive way to bring our seller leads to market For personal use only Marketplace visits1 +18% Ratings and reviews1 +56% Seller leads1 +77% We plan to introduce new, enhanced seller leads through a
Slide 25: Digital solutions to help customers win listings and sell property
We are creating digital solutions to help our customers win listings and sell property more efficiently For personal use only Attract Nurture Convert Market Sell / Lease Agent Profile Market Insights Pitch Depth Products Sign+ Ratings and Reviews CMA (Sell) Sign+ Extension Products Agent Elevate CMA
Slide 26: Our unique proposition will generate significant Customer value
Our unique proposition will generate significant Customer value to support continued revenue growth For personal use only Agency Agent Marketplace Advertising Services Identify Build Deliver Convert Advertise Prospective Recommend prospective confidence high-value prospective property seller agents
Slide 27: Key Customer takeaways
Key Customer takeaways For personal use only 1 2 3 4 We are targeting Advertising: Agency Marketplace: Agency Services: double-digit yield Premiere+ is well We plan to introduce Strong headroom growth through placed to drive our seller leads for Connect growth the cycle1. multi-year yield subscripti
Slide 28: CEO REAx
For personal use only CEO REAx Henry Ruiz 27
Slide 29: Motivating property owners creates a large opportunity to drive listings
Motivating property owners creates a large opportunity to drive growth in listings For personal use only Average property ownership duration1 2 out of 3 prospective sellers do not go on to sell1; Stimulating finding confidence to sell is one of the key barriers just 1% of all +27% prospective vendor
Slide 30: Introducing the full picture on every property: Property.com.au
Introducing the full picture on every property: Property.com.au For personal use only We have started by turning property.com.au into the full picture on every property Property.com.au • Driven by property information (property-centric experience) • Stimulates transactions • Serves consumers first a
Slide 31: Our first step is building the leading property research destination
Our first step is building the leading property research destination For personal use only #5 Property site in Australia 15m Searchable addresses 8m Address searches Property-centric experience More information available Links back to REA and agency monthly focused on address searches on every prope
Slide 32: We believe more owners will act if they have the confidence to sell
We believe more owners will act if they have the confidence to sell For personal use only Property Advertising Listing Upgrades • Social • Property Email Extensions Depth • Premiere+ Owners Agencies • Listings Add-ons Stage 1 Stage 2 (underway) (exploration) Build the #1 property Trial transformativ
Slide 33: Key takeaways
Key takeaways For personal use only 1 2 3 4 We have re-launched There is a large We will continue Unlocking just 1% property.com.au, opportunity to to develop of these prospective stimulate new transformative vendors would drive with the aspiration listings products an additional 8,000 to become the
Slide 34: Investor Day 2022
Investor Day For personal use only 2022 2 June 2022
Slide 35: Property Data
For personal use only Property Data Melina Cruickshank Chief Audience and Marketing Officer, CEO PropTrack
Slide 36: We aspire to be the leading provider of property data and analytics
We aspire to be the leading provider of property data and analytics For personal use only We aim to create Australia’s #1 property data business Supercharge REA Grow PropTrack and build new revenue streams Power our consumer Accelerate the value of Make mortgage Scaled data solutions experiences our
Slide 37: We are digitising the mortgage valuation process
We are digitising the mortgage valuation process Objective: drive the shift towards digital valuations and grow our share1, and capture fair value exchange through pricing For personal use only Consumer Bank / broker Bank / valuer Current Time to Consumer Bank mixture2 deliver3 Digital Automated ~30
Slide 38: PropTrack's suite of products looks to assess risk faster and more accurately
PropTrack’s suite of products looks to assess risk faster and more accurately – reducing banks’ time to ‘yes’ For personal use only Our unique value proposition PropTrack Valuation Platform PropTrack AVM PropTrack Desktop Highly digital, frictionless user experience Powered by PropTrack’s unique dat
Slide 39: We are commercialising our insights and data
We are commercialising our insights and data For personal use only The real estate industry is moving to embed scalable data solutions into their offerings through open ecosystem solutions Our unique data sets can be distributed and monetised through PropTrack APIs, as well as Premiere Plus, Connect
Slide 40: We have all the right ingredients to drive long-term growth
We have all the right ingredients to drive long-term growth For personal use only Our capability Our products Channels to market Talented team of property, Mortgage valuation solutions data, and technology experts Access to all the major real estate agencies through REA with proven industry leading
Slide 41: Key Property Data takeaways
Key Property Data takeaways For personal use only 1 2 3 4 PropTrack is PropTrack is We are playing Further opportunity supercharging playing in a large an active role in to commercialise our REA’s consumer addressable market – digitising the insights and data experiences to drive $500m for mortgage
Slide 42: Financial Services
For personal use only Financial Services Janelle Hopkins CEO Financial Services
Slide 43: We're evolving our destination to easily find and finance property
We’re evolving our destination to easily find and finance property For personal use only Trust 12.6m • Personalised property search and finance journey REA monthly • Powering opportunities by developing a rich financial profile average unique • Confidence to act through relevant personalised insight
Slide 44: Finance is integral to property and brokers are preferred
Finance is integral to property and brokers are preferred For personal use only Finance is a natural Broker share increasing 2, Broker key metrics 3 compare favourably Market sees record loan sizes adjacency to property digital-assisted in the future against Branded Franchise peers (FY21) and intere
Slide 45: Economics driven by consumer choice of channel and product
Economics driven by consumer choice of channel and product For personal use only Engage consumers searching for property and finance ~$3b broker lender commission TAM4 Choice of channel Digital direct across digital and broker Mortgage Choice Brokers application ~$800m franchisor TAM4 Choice of prod
Slide 46: Engaging consumers
Engaging consumers For personal use only Connecting finance & property Personal financial profiles allow consumers to power their property search from home loan calculators through to applications. Digital lending Consumers can choose digital lending or be connected via concierge to our Mortgage Cho
Slide 47: Driving broker scale and effectiveness
Driving broker scale and For personal use only effectiveness Increasing broker scale Expanded network unlocks economies of scale. Continued recruitment focus is underpinned by our unique broker value proposition and branding support. Hi Deslie, Congratulations! Your franchise has been allocated a ne
Slide 48: Key Financial Services takeaways
Key Financial Services takeaways For personal use only 1 2 3 4 Our unique proposition : Drive online Brokers command Digital assisted engagement through increasing share lending is expected • largest audience of financial experiences (67% of mortgages) to increase over property seekers, and digital
Slide 49: India
For personal use only India Dhruv Agarwala CEO REA India
Slide 50: We are seeking to become India's undisputed #1 property brand
We are seeking to become India’s undisputed #1 property brand For personal use only Housing DIY Premium online property Do-it-yourself offerings One-stop solution for sale/rent On-ground property fulfilment classifieds portal for Developer for Owners and Tenants adjacent property services and transa
Slide 51: India is an attractive market experiencing rapid digitisation
India is an attractive market experiencing rapid digitisation For personal use only Fastest growing trillion-dollar Declining data costs driving strong Digital economy accelerated post economy globally usage growth COVID-19 pandemic GDP Growth1 Cost / GB (Rs) Data / Subscriber (GB)2 GTV – Consumer I
Slide 52: Strong macro drivers will accelerate the property sector
Strong macro drivers will accelerate the property sector For personal use only Positive regulatory reform Improved affordability Supportive government policy • Real Estate Act (RERA) • Historically low interest rates • Infrastructure investment of ~A$1T • Model Tenancy Code • Wage inflation over las
Slide 53: Our addressable markets are large and growing
Our addressable markets are large and growing For personal use only REA India operates in large and Indian real estate market is expected In turn driving growth in online listings growing markets to grow to A$1.4tn by 2030 and revenue Market size (A$m)1, 2, 3 Indian real estate market size (A$bn)2 D
Slide 54: Our strategic priorities are clear, and we are well positioned to win
Our strategic priorities are clear, and we are well positioned to win in the Indian market For personal use only Market leadership Integrated adjacent Attract, engage, retain Stronger monetisation in audience services strategy and develop best talent Extend audience leadership; Drive growth through
Slide 55: We have a clear strategy to extend our audience leadership
We have a clear strategy to extend our audience leadership For personal use only Housing.com has sustained #1 position in market for last 6 months Our audience strategy Housing.com relative audience size vs competitors since Increase in average Provide superior consumer experiences REA moved to cont
Slide 56: Stronger monetisation is expected through product and market expansion
Stronger monetisation is expected through product and market expansion For personal use only Core Segments New Growth Segments Brokerage Services Commercial and Broker / Agent Developer New homes Co-living / Paying Guest • Drive deeper advertising • Scale existing and new content • Scale Commercial
Slide 57: We are expanding into adjacent markets to drive further growth
We are expanding into adjacent markets to drive further growth For personal use only Adjacencies Housing DIY (Owner, Tenant) Mortgages • Direct listings / monetisation of consumers • Integrated marketplace offering digital • India has the second largest number (owners and tenants) owner and tenant s
Slide 58: Delivering a superior experience to consumers and customers
We are focused on delivering a superior experience to both our consumers and customers For personal use only Consumer Experience Customer Value Housing DIY Pay Rent 57
Slide 59: We have a clear strategy to continue the strong momentum
We have a clear strategy to continue the strong momentum we have achieved over the last 12 months For personal use only Our recent success: #1 32m +95% +108% 76% +43% Portal by Visits in SEO 2-year App traffic Housing revenue Customer audience1 Mar-222 CAGR3 2-year CAGR3 contribution4 growth YoY5 (1
Slide 60: Key REA India takeaways
Key REA India takeaways For personal use only 1 2 3 Market advantage: Audience leadership: Adjacencies: India is an attractive We plan to extend our Offer further upside and market with strong macro audience leadership by bring us closer to the tailwinds supporting investing in our consumer transact
Slide 61: ESG (Environmental, Social and Governance)
03 For personal use only ESG (Environmental, Social and Governance) Mary Lemonis Chris Venter Tamara Kayser Chief People Officer Chief Technology General Counsel and Officer Company Secretary 2 June 2022
Slide 62: Building a sustainable next generation organisation
Building a sustainable next generation organisation For personal use only ESG strategy & ratings Environment Social Governance MSCI ESG Rating history AAA AA AA A A BBB BBB BB BB B B CCC Jan-18 Mar-19 Feb-20 Mar-21 Mar-22 MSCI1 Task Force on Climate Diversity & Inclusion Cyber security Related Finan
Slide 63: Market Outlook
04 For personal use only Market Outlook Cameron Kusher Director Economic Research 2 June 2022
Slide 64: Property price rises have slowed but sales volumes remain strong
Property price rises have slowed but sales volumes remain strong albeit a little lower than last year For personal use only House prices have risen sharply since The cost of housing varies greatly House sale volumes remain strong in the beginning of the pandemic throughout the country 2022 but are n
Slide 65: So where are we in the listings cycle?
So where are we in the listings cycle? For personal use only H2 2021 listings back at 2017 levels, Listings growth in FY23 and Q1 2022 was highest March quarter since 2014 New Buy listings Positive drivers: • Strong economy • Increased home owner equity Macroprudential tightening Royal Covid • Prefe
Slide 66: Total supply for sale remains low and properties are selling quickly
Total supply for sale remains low and properties are selling quickly, and demand remains elevated but has fallen from recent highs For personal use only Total For Sale listings remain Potential buyers per listing is Days on site has reduced at historically low levels at historically high levels sign
Slide 67: Rents have risen substantially since the pandemic
Rents have risen substantially since the pandemic as many investors have exited the market For personal use only Rents have risen sharply, A high volume of selling of properties Rental yields have declined since the particularly during the pandemic by investors is still happening pandemic, particula
Slide 68: New rent listings are at historically low levels
New rent listings are at historically low levels For personal use only Rent listings growth in FY23 will Rent listings have come under pressure since the pandemic remain challenged Positive drivers: Monthly new Rent listings • Opening of borders and return of migration • Increasing shift from first
Slide 69: Demand for rental stock far outweighs supply
Demand for rental stock far outweighs supply For personal use only Total Rent listings are at historically While potential renters per listing is Days on site has hit a historical low low levels at historically high levels Monthly total national Potential renters per listing Monthly median days on s
Slide 70: While enquiry for new homes has eased, it remains elevated
While enquiry for new homes has eased, it remains elevated at a time in which there are fewer projects on site For personal use only There has been a large reduction in land estates Enquiry has eased from record highs advertised on site but is still higher than pre-pandemic Developer project profile
Slide 71: Commercial sales were historically strong last year but slower this year
Commercial sales were historically strong last year but have started this year much slower For personal use only Commercial sales were strong in 2021, Buy searches have been strongest The pandemic has seen a surge in driven by Industrial and Retail for offices searches for medical properties to leas
Slide 72: Financial Update
05 For personal use only Financial Update Janelle Hopkins Chief Financial Officer and CEO Financial Services 2 June 2022
Slide 73: Targeting double-digit revenue growth through the cycle
Targeting double-digit revenue growth through the cycle1… For personal use only Building next generation marketplaces FY22 Forecast FY25 Forecast2 Expecting double-digit revenue growth to be driven by: • Continued growth in traditional advertising • Building next generation marketplaces • Scaling ad
Slide 74: Targeting double-digit EBITDA growth through the cycle
…and targeting double-digit EBITDA growth through the cycle For personal use only Australia India • Yield up by adding value to our core products • Invest in branding, SEO and apps to win and services audience and revenue market share and improve consumer experience • Optimise through productivity a
Slide 75: Strong cash generation and balance sheet provide flexibility for growth
Strong cash generation and balance sheet provide flexibility for growth For personal use only Strong free cashflows to fund capex Continue to invest in the core and next With balance sheet flexibility and dividends generation marketplaces Free cashflow, $m Capex1/Revenue2 Net Debt4, $m 9% 9% Net Deb
Slide 76: Conclusion
05 For personal use only Conclusion Owen Wilson Chief Executive Officer 2 June 2022
Slide 77: A strategy designed to continue delivering double-digit growth
We have a strategy designed to continue delivering double-digit growth through the cycle For personal use only Clear Relentless Strong pipeline to leadership in focus drive continued the Australian on people & growth market innovation High margin, Unique High growth strong cash monetisable internati
Slide 78: Investor Day 2022
Investor Day For personal use only 2022 2 June 2022