Rea Group Ltd · ASX:REA
Rea — FY2020 Earnings Presentation
33 slides from Rea's earnings presentation, Aug 7, 2020
Slide 1: REA Group Investor & Analyst Presentation FY20
ASX Announcement 7 August 2020 REA Group Investor & Analyst Presentation FY20 For personal use only On behalf of REA Group Ltd (ASX:REA) please find attached a full-year results presentation for the full-year ended 30 June 2020. -ends- For further information, please contact: REA Group Ltd Investors
Slide 2: Investor & Analyst presentation, Full-year results 30 June 2020
For personal use only REA Group Ltd Investor & Analyst presentation Full-year results, 30 June 2020 Changing the way the world experiences property
Slide 3: Changing the way the world experiences property
Changing the way the world experiences property Results & market update Progress on strategy FY 2020 highlights For personal use only Resilient performance against Largest and most engaged audience Successfully tackling COVID-19 unprecedented backdrop1: • Realestate.com.au No. 1 property site4 • Pri
Slide 4: Full year financial results
Full year financial results Resilient performance delivered; strong EBITDA margin2 increased to 60% For personal use only -5% -7% +-6% 6% $492.1m 110.0¢ EBITDA2 Total Dividend $ 820.3m Revenue1 -9% -9% $268.9m 204.1¢ NPAT3 EPS3 1. Revenue is defined as revenue from property and online advertising an
Slide 5: Market update
Market update Early 2020 signs of property market recovery overshadowed by COVID-19 impacts and economic uncertainty For personal use only Residential buy listings YoY* Developer project launches YoY 10% 10% - - Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-20 Q4-20 Q1-19 Q2-19 Q3-19 Q4-19 Q1-20 Q2-20 Q3-2
Slide 6: Delivering on our growth strategy
Delivering on our growth strategy Balancing operational discipline with long term growth opportunities For personal use only Largest audiences, most engaged consumers Our global network: AUSTRALIA ASIA Building the next generation marketplaces NORTH AMERICA Superior Unparalleled data customer insigh
Slide 7: Successfully tackling COVID-19
Successfully tackling COVID-19 Prioritising health and safety while responding rapidly to address customer and consumer needs For personal use only REA responded Customer support Delivering new Strong industry decisively measures launched product innovations engagement Prioritised health Pricing def
Slide 8: realestate.com.au is Australia's no. 1 property site
realestate.com.au is Australia’s no. 1 property site1 Record audience performance extending leadership position For personal use only Monthly unique Total visits audience +18%2 +16% 4 90m FY20 average monthly traffic to 2 9.8m 4 FY20 average monthly unique audience to realestate.com.au on all platfo
Slide 9: Australia's market leading property app
Australia’s market leading property app1 realestate.com.au app fueling over 50% of buyer enquiries2 For personal use only App launches App downloads +25% 3 +11%5 36.8m Average monthly launches of 3 10m 5 Total downloads of the realestate.com.au app realestate.com.au app 10.1m 46.2m 9.2m Jul-19 Aug-1
Slide 10: Loyal and exclusive audience
Loyal and exclusive audience A powerful source of high intent property seekers driving more leads For personal use only Now reaching 60%1 of Australian +18 60% population each month Over 61%2 of people use realestate.com.au 61% exclusively and do not visit nearest competitor FY20 Q4 Property views F
Slide 11: Delivering highly personalised consumer experiences
Delivering highly personalised consumer experiences Connecting property seekers with the best experiences, at the right time throughout their property journey For personal use only Strong digital inspections uptake Cultivating lifelong property relationships New personalisation features launched • 1
Slide 12: Driving strong customer value and engagement
Driving strong customer value and engagement Creating opportunities to connect more buyers and sellers with REA customers For personal use only Driving quality seller leads to our customers Ignite empowering customers Prop20 supporting Industry development • 1.6m avg. monthly visits from people look
Slide 13: Building next generation marketplaces
Building next generation marketplaces Investing in more ways to connect more Australians For personal use only Australia’s #1 place for Rent Helping Australians finance property Leveraging unparalleled data and insights • 18.9m avg. monthly visits to Rent section of • Loan submissions and settlement
Slide 14: Our global footprint spans three continents
Our global footprint spans three continents Providing exposure to some of the world’s largest and fastest growing property markets For personal use only v 13
Slide 15: Leveraging REA's unique capabilities across Asia
Leveraging REA’s unique capabilities across Asia Asia segment included strong Malaysia performance; offset by Hong Kong disruption and COVID-19 impacts For personal use only iProperty.com.my Malaysia's clear market leader Hong Kong impacted by market forces • Maintained strong site leadership positi
Slide 16: Strong foothold in key markets
Strong foothold in key markets Long term growth opportunities across North America and Asia For personal use only • Move, Inc. revenue decreased 2% to USD 473 million1 • COVID-19 impacted Q4 performance • realtor.com avg monthly unique users in Q4 grew 11% YoY to 80 million2 REVENUE • Elara Technolo
Slide 17: Our people & culture provides a competitive edge
Our people & culture provides a competitive edge Strong focus on supporting REA teams in a virtual working environment For personal use only Internal promotions demonstrates 50:50 Exec leadership demonstrates gender diversity 34% workplace talent Employees visiting REAUni underpins 31% Tech roles he
Slide 18: Financial Highlights
For personal use only Financial Highlights Full year results, 30 June 2020 17
Slide 19: Financial operating results
Financial operating results Performance ($m) FY 2020 FY 2019 Growth Growth Revenue ($m)1 For personal use only $m % FY20 820.3 Revenue1 Australia 746.7 799.3 (52.6) (7%) FY19 874.9 Financial Services 25.7 27.0 (1.3) (5%) Asia 47.9 48.6 (0.8) (2%) FY18 807.7 Group Revenue 820.3 874.9 (54.7) (6%) FY17
Slide 20: Unfavourable market conditions
Unfavourable market conditions Residential listings Residential Listing Changes1 For personal use only 50% • Australian residential listings decreased 12% for the year, including declines of 6% in Sydney and 40% 8% in Melbourne. 30% 20% • H1 decline in listings primarily as a result of the 10% restr
Slide 21: Resilient performance in challenging market conditions
Resilient performance in challenging market conditions • Residential revenue declined 4%, with lower national listing volumes partially offset by price For personal use only changes that took effect from 1 July 2019 and improved product mix across both buy and Group EBITDA ($m)1 rent. • Commercial a
Slide 22: Delivering customer value
Delivering customer value For personal use only Residential Listing Penetration (depth) Residential listing depth penetration • Improved product mix and further depth penetration notwithstanding challenging market conditions. • Record number of customers committed to depth products. • Continued incr
Slide 23: International performance impacted by COVID-19
International performance impacted by COVID-19 Asia • Malaysia had a strong first half with digital For personal use only revenue performance increasing 20%, offset by the ongoing disruption in Hong Kong and significant impacts of COVID-19 on the region. Asia Asia • EBITDA1 growth driven by a combin
Slide 24: Operating results
Operating results For personal use only Group Operating Results Growth1 FY20 revenue 30.0% • The first half was impacted by a significant decline in Residential listings and Developer new project commencements. • This was followed by strong signs of recovery at 20.0% the start of the second half, in
Slide 25: Continued investment in Capital Expenditure
Continued investment in Capital Expenditure For personal use only Investment strategy Group Capital Expenditure • The Group continues to invest to support growth over the medium to long-term. 90.0 25% Investment focus is on consumer experience 80.0 plus new product delivery and supporting 70.0 20% t
Slide 26: Strong operating cash flows
Strong operating cash flows For personal use only Cash flow highlights Group cash flow ($m) • Strong operating cash flows of $419m. • Repayment of $70m of debt. 924.7 (401.7) • Final dividend payment of 55.0c per share, maintaining full year payout ratio. • Continued investment in innovation and Inc
Slide 27: Current trading
Current trading Ongoing COVID-19 health crisis creates uncertain market conditions For personal use only • July 2020 national residential listings up 16%; Sydney up 47% and Melbourne up 13%, reflecting weak comparatives in July 2019. • Despite COVID-19 impacts, buyer demand remains strong. • FY21 pr
Slide 28: Supplementary Information
For personal use only 1 Supplementary Information 27
Slide 29: Resilient performance in challenging market conditions
Resilient performance in challenging market conditions For personal use only Group Revenue1 ($m) 533.5 (4%) 555.0 124.0 (7%) 134.1 89.2 (19%) 110.2 47.9 25.7 (5%) 27.0 (2%) 48.6 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Aus: Residential Depth & Subs Aus: Commerc
Slide 30: Historical Revenue & EBITDA
Historical Revenue & EBITDA For personal use only Revenue, EBITDA and Margin (core operations)1 60% 874.9 50% 807.7 820.3 40% 671.2 579.1 30% 515.3 492.1 471.5 385.3 20% 341.7 10% 0% FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 EBITDA before associates Revenue EBITDA margin 1. Financial results from core
Slide 31: Financial comparatives
Financial comparatives For personal use only Financial Core Operations1 Statements FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2020 Group results $m Growth $m Growth $m Growth $m Growth $m Growth $m Total revenue 579.1 21% 671.2 16% 807.7 20% 874.9 8% 820.3 (6%) 820.3 Total operating income 579.1 21%
Slide 32: Cash flow reconciliation
Cash flow reconciliation For personal use only Cash flow reconciliation ($'m) FY 2020 FY 2019 Growth EBITDA1 475.6 501.2 (5%) Working capital movement 33.6 (0.5) >100% Net interest paid (4.3) (9.1) 53% Income taxes paid (98.2) (136.9) 28% Capital expenditure (73.4) (68.0) (8%) Other 13.0 9.8 33% Fre
Slide 33: Visit our investor site at rea-group.com
For personal use only Visit our investor site at rea-group.com Investors: Graham Curtin General Manager Group Finance P: +61 3 8456 4288 Disclaimer: This presentation contains non-specific background information E: ir@rea-group.com about REA Group’s current activities. This information is a summary