Slide 1: 1H23 Results Presentation
1H23 Results Presentation 23 February 2023
Slide 2: Important notice and forward statements
This presentation and the information accompanying it Forward Statements Market and industry data (Presentation) has been prepared and provided solely by No representation or warranty, expressed or implied, is made This Presentation contains statistics, data and other PEXA Group Limited (PEXA or the
Slide 3: Today's presenters and agenda
Today’s presenters Today’s agenda 1H23 Business Highlights 4 Glenn King Group Managing Director 1H23 Business Overview & Performance 9 and Chief Executive Officer 1H23 Financial Summary 17 Trading Update & Outlook 26 Richard Moore Q&A 29 Group Chief Financial Officer Appendix 30 3
Slide 4: 1H23 Business Highlights
1H23 Business Highlights \ Sil wa
Slide 5: A rapidly evolving international platform business
A rapidly evolving international platform business that seeks to redefine the property experience, leveraging our experience, intellectual property, technology, data and partnerships Number one Property Exchange Platform with resilient performance and growth potential Building momentum in services a
Slide 6: Purpose and priorities
PURPOSE PRIORITIES Enhancing the core Exchange Providing innovative data Bringing digital property Investing in our people, in Australia to build deeper insights and digital services settlement solutions to platform and brand to sustain customer relationships for multiple stakeholders, international
Slide 7: PEXA Group highlights
PEXA GROUP ENHANCE: PEXA Exchange EXTEND: PEXA Digital Growth1 EXPAND: PEXA International Resilient and reliable PEXA Exchange performed PEXA Digital Growth (PDG) well set for growth, Two lenders now transacting on the PEXA Go well in a challenging Australian property market with investments and M&A
Slide 8: Key financial metrics
KEY FINANCIAL METRICS VS 1H22 VS 2H22 KEY FINANCIAL METRICS VS 1H22 VS 2H22 GROUP REVENUE PEXA EXCHANGE REVENUE -$5m +$7m -$10m +$1m -3% +5% -7% +1% PEXA EXCHANGE GROUP OPERATING EBITDA1 OPERATING EBITDA1 -$24m -$5m -$12m +$1m -31% -8% -15% +2% PEXA EXCHANGE OPERATING GROUP NPAT EBITDA1 MARGIN -$6m
Slide 9: 1H23 Business Overview & Performance
1H23 Business Overview & Performance
Slide 10: PEXA Exchange Australia
PEXA EXCHANGE AUSTRALIA Australia’s leading Electronic Lodgement Network Operator (ELNO) Continued growth in the Delivering positive outcomes PEXA Exchange platform for customers > Number 1 trusted provider in the industry2 > 9,800+ practitioner firms > Practitioner Net Promoter Score and Customer >
Slide 11: PEXA Exchange Australia volumes and penetration
PEXA EXCHANGE AUSTRALIA Total market transaction volumes (000s) 1 PEXA Exchange transaction volumes (000s)1 > Total market volumes of 2.2m transactions were down 12% on 1H22 and down 3% 2H22 > Transfer market volumes down, but refinance market volumes up on both prior periods > Exchange penetration
Slide 12: PEXA Digital Growth
PEXA DIGITAL GROWTH Deepening services and growing customer base Practitioners / Financial Agents Institutions Property Government Developers Strategic Focus Areas Key Stats > Demand for Place > Organic revenue of $1.2m, >100% YoY > > Use and Value of Place Efficient Journeys Property Data Bureau >
Slide 13: Informing 300+ local governments
PEXA DIGITAL GROWTH Informing 300+ local governments covering over 80% of Australia’s population > .id brings almost the entire local government market to PEXA > Established for 25 years, .id is the overwhelming market leader > Expert team of geographers, demographers, housing analysts, forecasters,
Slide 14: PEXA International
PEXA INTERNATIONAL Bringing digital property settlement solutions to international jurisdictions Key Stats > Revenue of $1.8m from 1 month of Optima, annual run rate of >$20m Building the PEXA Go Platform > $23m investment in growth (excl. M&A) Delivering scale with Optima Legal > Integration progre
Slide 15: Optima Legal business snapshot
BUSINESS SNAPSHOT1 BENEFITS FOR PEXA GROUP +17 333 13.4 yrs. Business Model > Leverage Optima Legal to accelerate platform take-up > Prove PEXA’s integration model for other conveyancers Customer NPS FTE Average tenor of top 10 clients > Provide a range of pathways for lenders to access PEXA Custome
Slide 16: Our people, community and partnerships
OUR PEOPLE OUR COMMUNITY OUR PARTNERSHIPS > 76% people engagement score; top quartile 1 > Contribution to Housing Affordability, including > Melbourne University – analytics lab focused on whitepaper series with LongView current business challenges > 94% of PEXA employees feel genuinely supported wi
Slide 17: 1H23 Financial Summary
1H23 Financial Summary
Slide 18: PEXA Group financial performance
PEXA GROUP FINANCIAL PERFORMANCE PEXA GROUP REVENUE AND OPERATING EBITDA (A$M) V 1H22 6 months ended 31 December ($m) 1H211 1H22 1H23 $m % Revenue 99.7 145.5 140.9 (4.6) (3%) Operating costs incl. cost of sales (54.7) (69.5) (88.5) (19.0) (27%) Operating EBITDA2 45.0 76.0 52.4 (23.6) (31%) EBITDA 44
Slide 19: PEXA Exchange financial performance
PEXA EXCHANGE FINANCIAL PERFORMANCE PEXA EXCHANGE REVENUE AND OPERATING EBITDA (A$M) V 1H22 1 6 months ended 31 December ($m) 1H21 1H22 1H23 $m % Revenue 99.3 144.9 135.1 (9.7) (7%) Cost of sales (13.7) (17.6) (16.3) 1.3 8% Gross margin 85.6 127.2 118.8 (8.4) (7%) Operating costs (38.5) (44.2) (48.0
Slide 20: Total market transaction volumes
Total market transaction volumes (000s) 1 PEXA Exchange penetration (%)2 PEXA Exchange transaction volumes (000s)1 • Total market volumes of 2.2m transactions (billable events) were down 12% on prior year (1H22) and down 3% from 2H22 • Transfer market volumes were down 20% on PY and down 10% on 2H22
Slide 21: PEXA Exchange transaction volumes and pricing
PEXA Exchange transaction volumes (000s)1 PEXA Exchange average pricing (A$) PEXA Exchange revenue2 (A$M) • Total Exchange volumes of 1.92m were down 9% from prior year (1H22) and down 1% from 2H22 • Average price was up $1.60 (2%) on prior year, driven by • CPI price increase (+5%) ; and • Mix chan
Slide 22: PEXA Exchange operating expenses
PEXA Exchange operating expenses (A$M)1 GENERAL AND ADMINISTRATION • Costs of corporate team, Board and executive remuneration, professional fees, insurance, occupancy and administration • 1H23 opex was up 15% from 1H22 due to increased employee costs (incl. wage inflation), LTIP-related costs, high
Slide 23: PEXA Digital Growth financial performance
PEXA DIGITAL GROWTH FINANCIAL PERFORMANCE PEXA DIGITAL GROWTH REVENUE (A$M) V 1H22 6 months ended 31 December ($m) 1H21 1H22 1H23 $m % Revenue 0.4 0.6 4.0 3.4 571% Operating costs incl. cost of sales (0.8) (2.8) (12.2) (9.4) (329%) Operating EBITDA1 (0.4) (2.3) (8.2) (6.0) (265%) EBITDA (0.4) (2.3)
Slide 24: PEXA International financial performance
PEXA INTERNATIONAL FINANCIAL PERFORMANCE PEXA INTERNATIONAL REVENUE (A$M) V 1H22 6 months ended 31 December ($m) 1H21 1H22 1H23 $m % Revenue - - 1.8 1.8 N/A Operating costs incl. cost of sales (1.8) (4.8) (12.1) (7.3) (152%) Operating EBITDA1 (1.8) (4.8) (10.3) (5.5) (115%) EBITDA (1.8) (4.8) (13.9)
Slide 25: 1H23 PEXA Group cash movements
1H23 PEXA Group Cash Movements (A$M) Statutory Cash Flows (A$M) $ millions V 1H22 6 months ended 30 June 1H211 1H22 1H23 $m % EBITDA 44.2 52.2 45.0 (7.3) (14%) Changes in working capital (1.9) (14.6) 6.6 21.2 (145%) Operating cash flow before capex 42.2 37.6 51.6 14.0 37% Acquisition of intangible a
Slide 26: Trading Update & Outlook
Trading Update & Outlook
Slide 27: Volumes and FY23 outlook
Comparison of PEXA Exchange volumes (000s) Quarterly Volumes +29% +46% +5% > Exchange volumes performed in line with guidance given at the AGM +14% -7% -11% > Volumes have been relatively stable on 2H22 but downside risk remains as interest rates rise and Australian economy slows FY23 outlook > Exch
Slide 28: Continuing to execute on clearly articulated strategy
Continuing to execute on clearly articulated strategy, delivering strong outcomes for customers in Australia and UK > Exchange revenue broadly in line with second half of FY22 with growth in refinance volumes offsetting lower transfers ENHANCE > Disciplined cost management resulted in lower Exchange
Slide 29: Q&A
Q&A
Slide 30: Appendix
Appendix
Slide 31: Transfer penetration by jurisdiction
Transfer penetration by jurisdiction ( % of transfers lodged via PEXA Exchange)1 98% 97% 97% 96% 95% 85% 85% 78% 78% 65% 36% Notes: 1. Based on market volume estimates from BIS Oxford Economics and PEXA Transfer volumes 31
Slide 32: Primary segments and segment TAM
Practitioners Government Developers Primary Segments FIs Developers Developers Government Agents Segment TAM (est. FY27) $140m $250m $85m Demand for Place Use and Value of Place Efficient Journeys Strategic Focus Area Where and how much do we How do we optimise How as a business in a property value
Slide 33: PEXA Digital Growth roadmap
Ethical Advisory Council formed, to guide product development In market with suite Market testing of of Australian consumer and property reports Postcode Insights tool practitioner oriented Extending Landchecker launched, delivering new platform underway and Elula capability to MyView launched, with
Slide 34: PEXA International roadmap
Platform build for first release of remortgage product completed within 12 months More testing slots Invested $31m made available by in FY22 BoE for CY23 Remortgage goes live: > Hinckley & Rugby BS Sept'22 Seven lenders successfully > Shawbrook Bank Nov’22 Building scale with completed testing of PE
Slide 35: 1H22 vs 1H23 AUD financials by segment
1H22 1H23 V 1H22 AUD ($ millions) EXCH1 PDG INTL PGL EXCH PDG INTL PGL EXCH PDG INTL PGL ($) PGL (%) Revenue 144.9 0.6 - 145.5 135.1 4.0 1.8 140.9 (9.7) 3.4 1.8 (4.6) (3%) Cost of Sales (17.6) (0.3) - (18.0) (16.3) (1.0) (0.2) (17.5) 1.3 (0.7) (0.2) 0.5 3% Gross Margin 127.2 0.3 - 127.5 118.8 3.0 1.
Slide 36: Balance sheet vs financial year end
$ millions vs Financial Year End As at 30-Jun-22 31-Dec-22 > Cash and cash equivalents in Dec-22 below Jun-22 Current assets position following investment in Value Australia and Cash and cash equivalents 75.4 39.8 the acquisitions of .id and Optima Legal. Other current assets 42.9 23.4 > Other curre
Slide 37: pexa.com.au
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