Pexa Group Limited · ASX:PXA
Pexa — Investor Presentation (November 2023)
48 slides from Pexa's investor presentation, Nov 21, 2023
Slide 1: Strategy update
Strategy update PEXA Group November 2023
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation and the information accompanying it (Presentation) Forward Statements PEXA cannot assure you as to the accuracy or the reliability of the has been prepared and provided solely by PEXA Group Limited (PEXA No representation or warranty, expressed or im
Slide 3: Acknowledgement of Traditional Custodians
In the spirit of reconciliation, PEXA acknowledges the Traditional Custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to their Elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today. We a
Slide 4: Today’s discussion
Today’s discussion Enhance: Extend: Expand: Evolve: Finance Overview Australian Close and Q&A Digital Growth International Technology Update Exchange Glenn King Les Vance Ivan Motley Joe Pepper Eglantine Etiemble Scott Butterworth Glenn King Group Managing Chief Customer & Founder, .ID Chief Executi
Slide 5: Overview
Overview 4
Slide 6: Our investment proposition
Our investment proposition Secular trend Current TAM estimate1 Our position Favourable long term property dynamics Australia’s #1 digital property exchange • Supported by underlying $300m pa • Processing ~88% of all transactions demographic and economic outlook Heightened property market volatility
Slide 7: Clear purpose and strategy
PURPOSE Clear purpose and strategy PRIORITIES ENHANCE EXTEND EXPAND EVOLVE We will enhance the core Exchange in We will provide innovative insights and We will bring digital property solutions We will invest in our people, platform, Australia to build deeper customer digital services for customers,
Slide 8: Growing customer depth and breadth
Growing customer depth and breadth Segment Government Developers FIs Major law firms Practitioners Share of FY23 ~3% <1% ~25% ~15% ~55% revenues1 Business reach 1 Reflects Australian revenue for the year ended 30 June 2023. 7
Slide 9: Mixed economic outlook
Mixed economic outlook Real GDP growth (%, yoy)1 Central bank rate growth (%)2 Dwelling investment growth (%, yoy)3 4.3 4.3 9.5 3.7 3.7 4.1 2.9 2.1 2.2 2.1 2.2 1.8 1.8 -0.3 -1.1 -2.3 0.5 0.5 0.3 0.3 0.0 0.0 -5.8 -6.8 2022a 2023a 2024f 2025f 2022a 2023a 2024f 2025f 2022a 2023a 2024f 2025f Australia U
Slide 10: Focused on strategic execution and delivery in 2024
Focused on strategic execution and delivery in 2024 2020 - 21 2022 - 23 2024 IPO Strategic Expansion Execution and Delivery • Public listing in July 2021 • Initiate Exchange connectivity • Integrate Exchange with platforms • Deliver IPO commitments • Digital Growth launch • Drive Digital Growth towa
Slide 11: Enhance: Australian Exchange
Enhance: Australian Exchange 10
Slide 12: Exchange – Australia’s leading ELNO
Exchange – Australia’s leading ELNO Critical infrastructure Extensive integration & connection 12,000+ 2 ATO Reserve Bank of Australia Families safely settling their homes +81 (weekly) 6 Land Titles Offices 3.7m+ Billing events (annually) +81 Customer Effort Score 5 State Revenue Offices Customer Ef
Slide 13: Volumes and mix improved from lows in 3Q23
Volumes and mix improved from lows in 3Q23 Exchange volumes: Monthly average per fiscal quarter (#’000) Exchange refi mix: Monthly average per fiscal quarter (% of total) 27% 28% 358 27% 344 338 329 25% 25% 321 319 323 319 47 310 23% 41 46 23% 44 22% 45 44 280 44 43 42 20% 20% 72 78 74 40 62 80 80 8
Slide 14: Continued, judicious spend to enhance and protect Exchange
Continued, judicious spend to enhance and protect Exchange Exchange capital expenditure by category: FY23 ($m) E.g., FY23 Exchange Capex = $37.5m • Resilience & security • Maintenance • Features (e.g., autobalance) • Interoperability E.g., • Coverage • Group Salesforce CRM • Policy changes APIs and
Slide 15: Constructively engaged in complex regulatory activity
Constructively engaged in complex regulatory activity Expected ARNECC timeline Current activity Interoperability Pilot Transaction (1 simple QLD Refi Sept 2023 • Complete per ELNO) • Design work continues Refinance amongst big four banks July 2025 • Build commenced NSW • Continuing engagement on sco
Slide 16: Functionally rich platform supporting our customers
Functionally rich platform supporting our customers Maintain social licence Enhance business Extend business Maintain security Regulatory Expand Integration Improve Grow & resilience compliance coverage & useability efficiency relationships External partners/ Address coverage Discretionary spend Int
Slide 17: Enhance: Australian Exchange
Enhance: Australian Exchange 16
Slide 18: Extend: Digital Growth
Extend: Digital Growth 17
Slide 19: Digital Growth strengthens PEXA
Digital Growth strengthens PEXA Growth Relationship depth Relationship breadth Current situation Exchange TAM of Existing Exchange Exchange relationships ~$300m, nearing peak relationships generally strongest with penetration centred on 1 service Practitioners and FIs Benefits of Extends PEXA into S
Slide 20: Business provides leading solutions to key market issues
Business provides leading solutions to key market issues Use case Demand for land Use and value of land Environmental and climate Transaction effectiveness 250 140 85 TAM 65 ($m, 2027) Customer Where to Optimising Reduce threats Improve cost, problem invest investment value to value churn, speed, se
Slide 21: Digital Growth business gaining momentum
Digital Growth business gaining momentum Revenue uplift: 1Q24 vs 1Q23 (x) 1 Overview of business milestones 1.5 Dec 2022 Current2 1.2 1.1 9 21 Products in market and in pipeline 72m 910m Property Bureau records $10m $22m Advertising equivalent value of research3 Acquired: ID Sep 22 Land Insight Jul
Slide 22: Extend: Make informed decisions
Extend: Make informed decisions We convert data into knowledge to help you make informed decisions. .id stands for informed decisions. We are a company of demographers, spatial analysts, urban planners, economists, forecasters, social researchers, census data and IT experts. We We understand how cit
Slide 23: National forecast insights forecast.id
National forecast insights forecast.id ✔ Population ✔ Housing and development ✔ Custom age groups 2028 2029 2030 2031 2032 ✔ Every year to 2046 ✔ Analyse a known location ✔ Make a location decision 22
Slide 24: National liveability insights views.id
National liveability insights views.id X = > Understand Measure Calculate Community Values Experiences Liveability Needs What the local What's going well (and not One number between 0 & Attributes related to community believes so well) in and across 100 to monitor collective advancing quality of lif
Slide 25: Market View
Market View 2.0 Links data from ID and across the PEXA Group Support the planning, development and funding of new properties in the growth corridors of Australia Assist in the planning of marketing activities and services placement, such as branches or the direction and support of brokers Highlight
Slide 26: Digital Growth priorities
Digital Growth priorities Grow individual businesses Exploit portfolio Improve efficiency Value Land PEXA Cross- Achieve ID Australia Insight solutions business break-even ‘Nationalise’ Continue product Extend climate risk Workflow tools (e.g., Partner1 propositions Consolidate sales and major data
Slide 27: Expand: International
Expand: International 26
Slide 28: UK property processes perform poorly
UK property processes perform poorly Jurisdiction Transaction fall through rate Transaction completion time 1 UK 31% 12-24 weeks Canada Very rare ~12 weeks US 4% ~9 weeks Australia Rare 8-12 weeks Source: PwC; PEXA 27 1 UK is a measure of England and Wales
Slide 29: UK property transaction market is sizeable
UK property transaction market is sizeable Re-mortgage transactions (#’000 pa) 1 UK sale and purchase transactions (#’000 pa) 1 1,400 UK 2,000 UK Australia Pre-GFC Australia 1,800 1,200 Pre-GFC 1,600 Covid 1,000 1,400 1,200 Post-Brexit 800 1,000 600 800 GFC period 400 600 GFC period Post-Brexit 400
Slide 30: PEXA creates benefits for all UK stakeholders
PEXA creates benefits for all UK stakeholders Today Benefits with PEXA 81% of purchasers and 43% of remortgages Consumers suffer detriment Faster, cheaper, more transparent remo and S&P experiences Unexpected costs > £1k for 63% of purchasers Poor customer experiences, excess capital, Mortgage portf
Slide 31: UK proposition underway and developing
UK proposition underway and developing Lenders • HRBS and Shawbrook on-boarded (over £13m of Remo's PEXA Pay transacted) • Seventh BOE net settlement payment scheme • Good progress being made with Virgin Money, Metro Bank and • The only payment scheme dedicated to property Nottingham BS to explore i
Slide 32: Smoove builds Remo and S&P business
Smoove builds Remo and S&P business Smoove product overview Product Customer on- Agent customer Conveyancing boarding and ‘White label’ panel ‘Practice in a box’ Practitioner Description Conveyancer portal panel communications management for conveyancers compliance tools portal Transaction Business
Slide 33: UK priorities
UK priorities Create infrastructure Generate demand Monetise PEXA Connect PEXA Build UK Create Grow REMO Grow S&P platform to the digital business advocacy flows flows development landscape capability for PEXA PEXA Go Bank of England Migrate Optima from Government and Build out Optima PEXA Build S&P
Slide 34: Evolve: Technology
Evolve: Technology 33
Slide 35: Focus on three key priority areas
Focus on three key priority areas Cyber and platform Modernising and Continuously evolving resilience remains our connecting our our operations enabling key priority platforms efficient growth 34
Slide 36: Cyber and platform resilience remains our key priority
Cyber and platform resilience remains our key priority Cyber & Platform resilience principles Initiatives & outcomes Cyber: • Security Operations Uplift ▪ Lowest risk appetite level on Cyber Security and • Advisory Committee Uplift Platform resilience • Tools and training to practitioners Platform:
Slide 37: Modernising and connecting our platforms
Modernising and connecting our platforms Platform & Enterprise data principles Initiatives & outcomes • International Platform Build Remo, S&P ▪ Adopting Group view of assets – building a • PEXA <> Optima Integration • API platform & roadmap execution portfolio of interconnected systems across opera
Slide 38: Continuously evolving our operations enabling efficient growth
Continuously evolving our operations enabling efficient growth Operations principles Initiatives & outcomes Vic Uni /Holberton Partnership Program PEXA Academy for Tech/Engineering ▪ Plan our workforce strategically Career pathway development ▪ Building key competencies in-house and managing IP Stra
Slide 39: In conclusion
In conclusion Cyber and platform Modernising and Continuously evolving resilience remains our connecting our our operations enabling key priority platforms efficient growth 100% Uptime from Spend reduction in Estimated efficiency in 30% 100% Platform and Cyber 60% to 80% delivering Technology reusin
Slide 40: Finance update
Finance update 39
Slide 41: Update on Productivity Enhancement Program
Update on Productivity Enhancement Program About 25 Australian based FTE will • Harness Group-wide scale and scope have exited the business by the end of Operating model and • Capacity management and workforce planning December 2023 labour costs • Optimisation of overheads • Intelligent automation W
Slide 42: FY24 guidance (ex-Smoove) maintained
FY24 guidance (ex-Smoove) maintained FY23 outcome FY24 guidance PEXA Exchange Exchange margin1 54% 50-55% Operating cashflow2 -$73m -$70-$80m Growth businesses Digital Growth break-even3 n/a June 2024 Group Group margin1 35% Above 35% Guidance excludes impact of Smoove acquisition – update to be pro
Slide 43: Specified and other items update
Specified and other items update 2H23 actual 1H24 outlook Comment Specified items Smoove acquisition na c$5m As previously flagged Optima integration $5.1m c$2.5-3m Migration from Capita TSAs Redundancy and restructuring costs $1.1m c$4m Cost of PEP in 1H24 Other items1 $4.9m c$4m Reduced spend on M
Slide 44: Conclusion
Conclusion 43
Slide 45: Deep leadership expertise
Deep leadership expertise Selected senior leaders Lailani Burra Rod Currie CEO, .ID GM, Group Architecture IBM, Not-for-profit Technology – FS, telecoms, ELT colleagues manufacturing Alice Morrison Chief Risk & Krystle Kocik Rukshana Sashankan Governance Officer Chief Product Officer, UK GM, Practit
Slide 46: Key messages
Key messages Well-positioned business model benefiting from secular trends in property markets - #1 ELNO in Australia - Portfolio of leading property information assets in Australia - Unique solution to major causes of detriment in UK property sector Clear, consistent, and purpose-driven strategy to
Slide 47: Q&A
Q&A 46
Slide 48: Investor relations
Investor relations Media Hany Messieh Danielle Tricarico e: hany.messieh@pexa.com.au e: danielle.tricarico@pexa.com.au t: + 61 414 446 876 t: + 61 403 688 980 47