Slide 1: FY23 Results Presentation
FY23 Results Presentation 25 AUGUST 2023
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer This presentation and the information accompanying it Forward Statements Market and industry data (Presentation) has been prepared and provided solely by PEXA No representation or warranty, expressed or implied, is made This Presentation contains statistics, data and
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: Agenda
Agenda FY23 Financial Outlook Q&A Appendices business performance review Glenn King Group Managing Director and Chief Executive Officer 4
Slide 5: PEXA evolution and expansion
PEXA evolution and expansion International digital exchange Start-up Trusted digital Infrastructure and insights solution business 2010 - 2014 2015 - 2022 2023 - onwards Solving complex issues in title registration Nationwide coverage (ex. Tasmania and NT) Delivering new and deeper connections and s
Slide 6: Delivering a solid result
Delivering a solid result Exchange continues to deliver > World class infrastructure asset > National market share increased to 88% > Half on half Exchange margin improvement from 52.2% to 55.1% > Robust and resilient platform delivering in a challenging market Growth businesses delivering > Remortg
Slide 7: Powering property markets in Australia and internationally
Powering property markets in Australia and internationally PEXA Exchange PEXA Digital Growth PEXA International World-leading digital property lodgement Property insight solutions enriching PEXA’s Leveraging PEXA’s unique IP into major and settlement platform customer proposition Torrens Title marke
Slide 8: Clear and consistent strategy
PURPOSE PRIORITIES Clear and consistent strategy ENHANCE EXTEND EXPAND EVOLVE We will enhance the core Exchange in Australia to We will provide innovative insights and digital We will bring digital property solutions to international We will invest in our people, platform, and brand to build deeper
Slide 9: Australian Exchange delivering comprehensive coverage and integration
Australian Exchange delivering comprehensive coverage and integration Extensive Integration Critical infrastructure 2 12,000+ +81 Reserve Bank of Australia Families safely settling their homes Australian Tax Office (weekly) 6 5 Customer Effort Score 100% 3.7m+ Land Titles Offices State Revenue Offic
Slide 10: Digital Growth building out extensive solutions
Digital Growth building out extensive solutions Efficient journeys – Use case Demand for land Use and value of land Climate and environmental Efficient journeys - Partner Financial Institutions 250 140 65 TAM 40 45 (2027, $m) Customer issue Where to invest resources How to maximise the value of How
Slide 11: UK proposition built and operational
UK proposition built and operational PEXA Pay Lenders > Seventh net settlement payment scheme to > Hinckley & Rugby Building Society settle through the Bank of England and Shawbrook Bank onboarded and transacting > The only payment scheme dedicated to property transactions in the UK > Seven addition
Slide 12: UK roll out progressing ahead of Australian timeline
UK roll out progressing ahead of Australian timeline First lender Initial customer onboards release Ten remortgage transactions completed Connection with central bank established First remortgage transaction completed UK Month since platform design and build commenced 1 2 3 4 5 6 7 8 9 10 11 12 13 1
Slide 13: Challenging market conditions
Challenging market conditions Australian market transaction volumes (#’000 ph) Australian market refi mix ((% of total transactions) UK market re-mortgage volumes (#’000 ph)1 2,485 24.2 195 193 2,239 22.2 2,188 2,059 168 160 18.2 18.3 1H22 2H22 1H23 2H23 1H22 2H22 1H23 2H23 1H22 2H22 1H23 2H23 1 Sou
Slide 14: Actively managing market impacts while building future value
Actively managing market impacts while building future value Operating EBITDA bridge: FY22 to FY23 $133m -$39m +$24m -$19m $99m FY22 Market movements Management actions Growth investments FY23 AU volumes -$28m Penetration +$7m Digital Growth -$10m AU refi mix -$8m Efficiency +$3m International3 -$9m
Slide 15: Solid result in slowing markets while growing revenue in key adjacencies
Solid result in slowing markets while growing revenue in key adjacencies PEXA Group PEXA Exchange PEXA Digital Growth PEXA International Business Revenue4 Business Revenue Business Revenue Business Revenue4 $283m $263m $12m $9m 1% 6% 9x ✓ Initial revenue ✓ vs 10% market decline3 Operating EBIT
Slide 16: Business significantly developed
Business significantly developed PEXA Exchange PEXA Digital Growth PEXA International Trusted and resilient Comprehensive solution set Rollout accelerating > Cumulative transaction value of $3t, up 33% > Acquired ID, Value Australia and Land Insight1 > PEXA Go launched and two lenders live > Market
Slide 17: Supporting our people and communities
Supporting our people and communities > People engagement of 77% > Staff 52% female, with 38% female leadership Winner of HR Awards for Employer of Choice and > finalist in 4 other categories Launched PEXA Academy – innovative learning > and development capability People > Uluru statement from the h
Slide 18: Agenda
Agenda FY23 Financial Outlook Q&A Appendices business performance review Scott Butterworth Chief Financial and Growth Officer 18
Slide 19: Group result - lower transfer volumes offset by Refi and growth
Group result - lower transfer volumes offset by Refi and growth Group financial performance vs FY22 Annual business revenue bridge (A$m) $Am FY22 FY23 $m % 5.6 14.3 6 Business Revenue 279.8 283.4 3.6 1% 10.3 35.6 20.2 Cost of sales (34.5) (34.8) (0.2) (1%) 279.8 283.4 Gross margin 245.3 248.6 3.3 1%
Slide 20: Amortisation and tax profile changing
Amortisation and tax profile changing Group financial performance2 vs FY22 Drivers for the change in Amortisation and Tax $Am FY22 FY23 $m % Amortisation increase arising from Operating EBITDA 133.0 98.7 (34.3) (26%) > Exchange customer functionality deployed Specified Items 1 > PEXA Go platform now
Slide 21: Sequential Exchange margin improvement through efficiencies
Sequential Exchange margin improvement through efficiencies Exchange financial performance vs FY22 Exchange revenue and Operating EBITDA by half year (A$m) $Am FY22 FY23 $m % 144.9 Business Revenue 278.5 263.1 (15.5) (6%) 133.7 135.1 127.9 Cost of sales (33.9) (32.0) 1.9 5% Gross margin 244.6 231.0
Slide 22: Lower Exchange revenues reflect lower volumes and refi mix
Lower Exchange revenues reflect lower volumes and refi mix Exchange transaction volumes (#’000) Exchange share of market transactions (%) 2,105 89% 1,946 1,919 1,829 88% Other 266 262 267 87% 251 Refinance 448 408 480 494 85% Transfer 1,391 1,276 1,172 1,084 1H22 2H22 1H23 2H23 1H22 2H22 1H23 2H23 A
Slide 23: Exchange costs managed effectively
Exchange costs managed effectively Annual Exchange operating expense bridge (A$m) Half yearly Exchange capex (A$m) 0.2 3.2 3.8 1.9 20.6 92.6 16.8 89.9 14.1 12.1 FY22 Inflation Labour Capitalisation Non-labour FY23 1H22 2H22 1H23 2H23 management cost efficiency 8% 11% 12% 16% xx% Capex / Business Rev
Slide 24: Digital Growth starting to scale
Digital Growth starting to scale Digital Growth financial performance vs FY22 Digital Growth revenue, opex3 and capex by half year (A$m) $Am FY22 FY23 $m % Business Revenue 1.3 11.6 10.3 793% Cost of sales (0.6) (2.0) (1.4) (219%) 7.6 0.6 0.7 4.0 Gross margin 0.7 9.6 8.9 Large Operating costs (7.5)
Slide 25: Strong revenue growth, costs reflect investment and capability
Strong revenue growth, costs reflect investment and capability Digital Growth annual revenue bridge (A$m) Digital Growth annual operating cost bridge (A$m) 1.3 4.4 2.1 0.4 2.8 2.8 1.7 11.6 25.4 7.8 7.6 7.5 1.3 FY22 ID - initial run ID - uplift PEXA solutions FY23 FY22 Acquired Organic Data Risk & Gr
Slide 26: International transitioning from project to a business
International transitioning from project to a business International financial performance vs FY22 International revenue, opex3 and capex by half year (A$m) $Am FY22 FY23 $m % Business Revenue 4 - 8.7 8.7 nm 6.9 Cost of sales - (0.7) (0.7) nm 1.8 Gross margin - 8.0 8.0 nm (4.8) (7.4) Operating costs
Slide 27: International reflects UK market disruptions and business scale-up
International reflects UK market disruptions and business scale-up Estimated impact of market disruptions on Optima Legal Remo volumes International annual operating EBITDA bridge (A$m) (#’000 pm) Optima FY22 Optima lo sses integration Business sca ling FY23 1.2 1.2 (12.2) 6.3 (26.6) (5.6) 3.8 (0.7)
Slide 28: Resilient cashflow generation
Resilient cashflow generation Group cash balance bridge (A$m) Free cash flow before financing and investments bridge (A$m) 7.0 67.3 82.4 27.3 17.3 21.3 7.7 45.1 52.1 Free cashflow before investments and financing = $22.1m 1.1 75.4 21.8 36.5 Opening Ad justed Change in Capex Net finance Net Other Clo
Slide 29: Strong balance sheet
Strong balance sheet Net gearing (%)1 Net debt / EBITDA (x)2 EBITDA / Finance Charge (x)3 16.1% 2.7x 22.9x 14.1% 20.2x 1.8x FY22 FY23 FY22 FY23 FY22 FY23 > Net debt / EBITDA – mainly due to lower EBITDA, lower cash > EBITDA / Finance charge – impacted by lower EBITDA, lower balances. Gross debt actu
Slide 30: Disciplined capital allocation
Disciplined capital allocation FY23 position Management discipline Sources of net free cash flow Operating EBITDA margin1 35% Grow margin over time Net working capital cycle2 (50) days c5% annual improvement Uses of net free Strengthen Exchange Ongoing investment supporting resilience and customer e
Slide 31: Agenda
Agenda FY23 Financial Outlook Q&A Appendices business performance review Glenn King Group Managing Director and Chief Executive Officer 31
Slide 32: PEXA productivity enhancements – reflective of maturing and scaling
PEXA productivity enhancements – reflective of maturing and scaling > Extract benefits of Group purchasing scale across major spend categories such as spend on technology, > Maintain operating cost growth at professional fees, etc ≤ inflation levels — Excluding annualised impact of acquired business
Slide 33: 2024 strategic priorities
2024 strategic priorities Enhance: PEXA Exchange Extend: PEXA Digital Growth Expand: International Competitive position Competitive position Competitive position #1 ELNO1 in Australia Differentiated data – through Exchange2 and our World’s only integrated property registration and Property Bureau se
Slide 34: Outlook and guidance
Outlook and guidance Emerging Businesses PEXA Exchange PEXA Group Digital Growth & International FY23 outcome FY23 outcome FY23 outcome Exchange margin1 54% Digital Growth Operating cashflow2 -$22m Group margin1 35% International Operating cashflow2 -$51m FY241 outlook FY241 outlook FY241 outlook Ex
Slide 35: Delivering on our promise
Delivering on our promise Exchange continues to deliver > World class infrastructure asset > National market share increased to 88% > Half on half Exchange margin improvement from 52.2% to 55.1% > Robust and resilient platform delivering in a challenging market Growth businesses delivering > Remortg
Slide 36: Agenda
Agenda FY23 Financial Outlook Q&A Appendices business performance review 36
Slide 37: Agenda
Agenda FY23 Financial Outlook Q&A Appendices business performance review 37
Slide 38: Experienced management team
Experienced management team Glenn King Scott Butterworth Eglantine Etiemble Krystle Kocik Group Managing Director and Chief Chief Financial and Growth Officer Chief Technology Officer Acting co-CEO, UK Executive Officer Financial services, legal services, Consulting, telco, manufacturing, Consulting
Slide 39: Key operating metrics and performance for the Exchange
Key operating metrics and performance for the Exchange vs FY22 $A in mil FY21 FY22 FY23 # % Transfer 2,878 3,131 2,551 (580) (19%) Refinance 655 862 984 122 14% Other 687 732 712 (20) (3%) Market volumes (000's) 4,220 4,724 4,247 (477) (10.1%) Transfer 80% 85% 88% 3% Refinance 99% 99% 99% - Other 56
Slide 40: Reconciliation of FY23 statutory to operating FY23
Reconciliation of FY23 statutory to operating FY23 Share of gain / Optima Legal Professional Merger & (loss) from FY23 Interest Redundancy & Fees / Acquisition Deferred Investments in Unrealised FX FY23 #039;000 Statutory Income Restructuring Integration Expenses Consideration Associates gain / (loss)
Slide 41: Reconciliation of FY22 statutory to operating FY22
Reconciliation of FY22 statutory to operating FY22 Share of gain / Professional (loss) from Redundancy & Fees / Investments in Unrealised FX #039;000 FY22 Statutory IPO costs Restructuring Integration Associates gain / (loss) FY22 Operating Revenue 279,839 - - - - - 279,839 Cost of sales (34,525) - - -
Slide 42: Investor relations Media
Investor relations Media Hany Messieh Danielle Tricarico + 61 414 446 876 + 61 403 688 980 hany.messieh@pexa.com.au danielle.tricarico@pexa.com.au