Rea Group Ltd · ASX:REA
Rea — H1 FY21 Earnings Presentation
31 slides from Rea's earnings presentation, Feb 5, 2021
Slide 1: REA Group Investor & Analyst Presentation Half-Year Results 31 December 2020
ASX Announcement 5 February 2021 REA Group Investor & Analyst Presentation Half-Year Results 31 December 2020 On behalf of REA Group Ltd (ASX:REA) please find attached a half-year results presentation for the half-year ended 31 December 2020. -ends- For further information, please contact: REA Group
Slide 2: REA Group Ltd Investor & Analyst presentation
REA Group Ltd Investor & Analyst presentation Half-year results, 31 December 2020 Changing the way the world experiences property
Slide 3: Strong result and progress on strategy
Strong result and progress on strategy Results & market update Progress on strategy H1 FY21 highlights Strong result despite market volatility1 Superior customer value & consumer Expanding global exposure • Revenue2 down 2% experiences • REA increased shareholding to 59.65% • Operating expenses down
Slide 4: Half-year financial results
Half-year financial results Strong profit result with EBITDA margin2 increasing to 67% 9% 7% +-2% 6% $290.2m 59.0¢ EBITDA2 Interim Dividend $430.4m Revenue1 13% 13% $172.1m 130.7¢ NPAT3 EPS3 (1) Revenue is defined as revenue from property and online advertising and revenue from Financial Services le
Slide 5: Australian market update
Australian market update COVID-19 restrictions caused significant volatility during the half Residential buy listings YoY* Developer project launches YoY 30% 20% 20% 10% 10% - Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 - (10%) Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY20 Q1 FY21 Q2 FY21 (20%) (10%) (30%) (4
Slide 6: Consistent growth strategy
Consistent growth strategy Pursuing long-term growth opportunities balanced with operational discipline Largest audiences, most engaged consumers Our global network: AUSTRALIA ASIA Building the next generation marketplaces NORTH AMERICA Superior Unparalleled customer value data insights 5
Slide 7: realestate.com.au: Australia's #1 property site & app
realestate.com.au: Australia’s #1 property site & app1 Reaching 6 million more Australians2 and 3.2x more visits3 than the nearest competitor Monthly Visits Unique audience App launches +36%4 +39%4 +46%4 115m 4 12.3m 4 50.9m 4 H1 FY21 average monthly traffic to H1 FY21 average monthly unique audienc
Slide 8: Delivering rich consumer experiences backed by unrivalled data
Delivering rich consumer experiences backed by unrivalled data Personalised Property Owner dashboard empowering owners to monitor their market and make confident property decisions Sell Rent Finance +100k people engaged with dashboard in first 6 weeks1 2.45m total properties now tracked – up 68% YoY
Slide 9: Helping our customers grow their businesses
Helping our customers grow their businesses Providing Agents with the tools they need to free themselves up and focus on what they do best 8
Slide 10: Providing access to unique data & market intelligence
Providing access to unique data & market intelligence Delivering REA Group’s unrivalled data & insights to customers and consumers Trusted leader in property data and automated valuations • Hometrack rebranded as PropTrack • Successfully signed several multi-year customer contracts • Delivering prop
Slide 11: Building REA's next generation rental marketplace
Building REA’s next generation rental marketplace Strengthening Australia’s #1 place for Rent by reimaging REA’s rental marketplace Our goal Property Managers evaluate applications in 5 mins versus 90 mins. How • Introduce a consistent and reusable Property Management workflow • Remove repetitive pr
Slide 12: Global footprint spanning three continents
Global footprint spanning three continents Exposure to some of the world’s largest and fastest growing property markets v 11
Slide 13: Strong progress across Asia despite difficult conditions
Strong progress across Asia despite difficult conditions Product innovations launched to support customers and consumers during COVID-19 • iProperty.com.my Malaysia’s #1 property site1, growing site visits 35% YoY2 • 80% of customers successfully migrated to new iProperty PRO platform • iProperty PR
Slide 14: International investments across large and growing markets
International investments across large and growing markets Controlling interest secured in Elara Technologies while Move, Inc. delivered strong result • REA Group moved to a controlling position in Elara Technologies, increasing its original shareholding from 13.5% to 59.65% • Elara operates India’s
Slide 15: REA Group is committed to sustainable practices
REA Group is committed to sustainable practices Creating positive change through our ESG focus Environment – Increased Climate Change commitment • Introduced REA’s inaugural Climate Change policy with established carbon footprint and science based aligned targets to reduce carbon footprint • Commitm
Slide 16: Financial Highlights
Financial Highlights H1 FY21 results 15
Slide 17: Financial operating results
Financial operating results Growth Growth Revenue ($m)1 Performance ($m) H1 FY21 H1 FY20 $m % Revenue1 H1 FY21 430.4 Australia 401.7 400.5 1.2 0% Financial Services 11.7 12.6 (1.0) (8%) H1 FY20 440.3 Asia 17.0 27.2 (10.2) (38%) H1 FY19 469.2 Group Revenue 430.4 440.3 (10.0) (2%) H1 FY18 406.8 EBITDA
Slide 18: Volatile market conditions
Volatile market conditions 1 Residential Listing Changes Residential listings 70% • In Australia, the residential property market showed continued signs of recovery with National 20% residential listings increasing 4% and Sydney listings increasing 19% for the half. -30% • In contrast, the COVID-19
Slide 19: Strong EBITDA performance
Strong EBITDA performance • Residential revenue increased 4%, due to increase in buy listings, stronger Premiere penetration, continued Group EBITDA ($m)1 growth in add-on products and a one-off COVID-19 related impact resulting in a reduction in listings 22.5 290.2 syndicated to MyFun. • Commercial
Slide 20: Strong Premiere penetration
Strong Premiere penetration Residential Listing Penetration (depth) Residential listing depth penetration • Overall penetration and Premiere penetration maintained despite the significant Q1 FY21 listing declines in Melbourne. • Continued penetration and Premiere growth in NSW and QLD offsetting the
Slide 21: International performance impacted by COVID-19
International performance impacted by COVID-19 Asia • Revenue negatively impacted by renewed COVID- 19 related lockdowns, cancellation of events across all markets, adverse FX movements and the one-off COVID-19 related reduction in syndicated MyFun listings. Asia Asia • Prior period comparatives als
Slide 22: Operating results
Operating results H1 FY21 revenue • The Group’s result reflects the diverse effects of the COVID-19 pandemic across Australia and the Group’s International businesses. Group Operating Results Growth1,2 H1 FY21 costs 30.0% • Continued focus on strong cost management resulted in a 13% reduction in tot
Slide 23: Continued investment in Capital Expenditure
Continued investment in Capital Expenditure Group Capital Expenditure Investment strategy • The Group continues to invest to support 90.0 25% growth over the medium to long-term. 80.0 70.0 20% • Investment focus is on consumer experience, 60.0 new product delivery and supporting 15% technology. 50.0
Slide 24: Strong cash position
Strong cash position Cash flow highlights Group cash flow ($m) • Operating cash flows of $125m impacted by higher income tax payments following the temporary deferral of FY20 instalments as a 464.7 (219.0) result of COVID-19. • Lower receipts from customers driven by revenue decline and working capi
Slide 25: Current trading
Current trading COVID-19 continues to create market uncertainty • In January, national residential listings were flat, with an increase in Melbourne of 12% and Sydney down 1%. • Strong levels of buyer enquiry, underpinned by low interest rates and healthy bank liquidity. • Developer revenues are exp
Slide 26: Supplementary Information
1 Supplementary Information 25
Slide 27: Strong performance in volatile market conditions
Strong performance in volatile market conditions 295.6 Group Revenue ($m) 4% 283.2 63.3 (7%) 68.4 42.8 (12%) 48.8 11.7 17.0 (38%) 27.2 (8%) 12.6 H1 FY21 H1 FY20 H1 FY21 H1 FY20 H1 FY21 H1 FY20 H1 FY21 H1 FY20 H1 FY21 H1 FY20 Aus: Residential Depth & Subs Aus: Commercial & Developer Depth & subs Aus:
Slide 28: Historical Revenue & EBITDA
Historical Revenue & EBITDA Revenue, EBITDA and Margin (core operations)1 1,000 70% 900 60% 874.9 800 807.7 820.3 700 50% 671.2 600 40% 500 501.2 463.7 475.6 30% 400 430.4 380.9 300 20% 290.2 200 10% 100 - 0% FY17 FY18 FY19 FY20 H1 FY21 EBITDA after associates Revenue EBITDA margin (1) Financial res
Slide 29: Financial comparatives
Financial comparatives Financial Core Operations1 Statements H1 FY17 H1 FY18 H1 FY19 H1 FY20 H1 FY21 H1 FY21 Group results $m Growth $m Growth $m Growth $m Growth $m Growth $m Total revenue 337.3 16% 406.8 21% 469.2 15% 440.3 (6%) 430.4 (2%) 430.4 Total operating income 337.3 16% 406.8 21% 469.2 15%
Slide 30: Cash flow reconciliation
Cash flow reconciliation Cash flow reconciliation ($'m) H1 FY21 H1 FY20 Growth EBITDA1 290.2 267.2 9% Working capital movement (30.6) (15.9) (92%) Net interest paid (1.7) (2.6) 31% Income taxes paid (119.1) (88.8) (34%) Capital expenditure (31.2) (34.5) 10% Other (14.5) 3.2 <(100%) Free cash flow 93
Slide 31: Visit our investor site at rea-group.com
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 only. Investors and po