Rea Group Ltd · ASX:REA
Rea — FY2015 Earnings Presentation
42 slides from Rea's earnings presentation, Aug 12, 2015
Slide 1: Investor & Analyst Presentation Full Year Results 2015
For personeall REA Group Investor & Analyst Presentation Full Year Results 2015 12 August 2015 Tracey Fellows — Chief Executive Officer Owen Wilson — Chief Financial Officer
Slide 2: Delivering on our purpose
Delivering on our purpose 2 (= oO a) 2 TO empower = people by making = property simple, D efficient and et stress-free = (©) i LL, @® REA Group
Slide 3: Strong growth in all financial metrics
Strong growth in all financial metrics 70.0c +23% Total dividend REA Group
Slide 4: The story behind the numbers
MD The story behind the numbers Australia residential depth revenue growth * Extended lead in consumer engagement * Strong take up of premium listing products drove value to customers and revenue growth * — Significant international expansion through investments in Move, Inc. and iProperty Group Lim
Slide 5: Investing in high growth markets
® Investing in high growth markets me@ve realtorcony USA (20%) Acquired 20% in Novem 2014 © O casaiit Italy (100%) © immoRegion.fr France (100%) @ atHome.de Germany (100%) © atHome.lu Luxembourg (100%) ATTICO, Italy (100%) @ atOffice.lu Luxembourg (100%) 6 @z8 China (100%) Launched January 2014 9 iP
Slide 6: Largest and most engaged audience lead extended
B® Largest and most engaged audience lead extended Main + mobile sites only (excludes app) No. 2mresanate 7 Propeny year on year ® (competitor app data not available) 36.5m |} 12.2m visits visits Vi S I ts (average monthly traffic) o Time (share of combined minutes spent on 85% 15% realestate.com.au
Slide 7: Driving audience growth where it counts
® Driving audience growth where it counts * Engaged property seekers come to realestate.com.au *~ Value to customers through quality audience * 65% of our monthly audience did not visit our nearest competitor on main and mobile sites “ Unique audience” Site section visits For Sale versus News sectio
Slide 8: Innovation
® innovation © reakestatecomaxt Discover a home for your lifestyle & budget me in a suburb like BOD) monen We found some similar suburbs Sor for your lifestyle & budget 9 Our first to market Apple Watch real estate app brings ‘Discover’ is a new property search experience timely and accurate informa
Slide 9: Innovation
® innovation @ rexestatecomas Connect your electricity, gas, internet & more. la S11. Ch) Si. Church Street SLL Christmas Roe 511. Chapman A Search for your new address XV lectrcity cas Pay TV Broadband a Select the utilities you want Tell us a few details to finish connected How our hassle free con
Slide 10: Innovation
® Innovation fee000 vodafone AU 4G O83 € inbox Today's auction results for Victoria published the latest results, Auction ° your next investment. Lear how you can Use auction results to be a smarter buyer. 829 Total auctions 72.74% Clearance rate” View results for: NSW, QLD, TAS, SA, WA, NT, act = w
Slide 11: Investment in world's largest property market
B® Investment in world’s largest property market MOVE realtorcom * Operates in the largest residential real estate market in the world * $14 billion spend on real estate advertising in the USA with less than $1 billion online spend between 3 largest players Opportunity to leverage our digital real e
Slide 12: Investment in world's fastest growing property market
Investment in world’s fastest growing property market 9 iProperty Group Asia’s No.1 Online Property Group iProperty (IPP) holds market leading position in Malaysia, Hong Kong, Indonesia, Macau, and Thailand Asia is one of the fastest growing real estate markets with a overall population over 500 mil
Slide 13: Financial results
For personal use only Financial results
Slide 14: Operating results
® Operating results Performance ($m) FY 2015 FY 2014 Growth Revenue Australia 472.8 392.2 21% Europe 45.6 42.9 6% Asia 45 2.4 88% Group revenue 522.9 437.5 20% EBITDA“? Australia 288.1 232.4 24% Europe 97 5.2 85% Asia 0.6 (1.2) 150% Corporate (12.6) (11.3) (12%) Group EBITDA %” 285.8 225.1 27% EBITD
Slide 15: EBITDA growth
™® EBITDA growth : Strong EBITDA growth driven by: . woe (1) =~ Strong take up of premium listing Group EBITDA growth ($m) ° products and introduction of market 350 based pricing *~ Robust developer market drove 325 TAG strong take up of Project Profiles and Advertising 300 *~ Large, engaged audienc
Slide 16: Revenue growth driven by success of premium listing products
Revenue growth driven by success of premium listing products m Aus - Residential m Aus - Media & Developer FY 2015 FY 2014 . Group revenue: m@ Aus - Commercial Group revenue: $437.5m $522.9m m Europe Asia Revenue category ($m) FY 2014 FY 2015 Growth Australia Listing depth revenue 220.4 322.6 46% Su
Slide 17: Strong growth in premium listings
MD Strong growth in premium listings * -realestate.com.au experienced strong growth in premium listing products despite a 4% reduction in listings in the market * Success of highest yielding Premiere listing product providing increased return on investment to agents and vendors Premium Listing Penet
Slide 18: European results
MD European results ° Increased agents, audience and listings in all countries * New Italian app & mobile site «Partnership with FIMMA (Italy's national association of 12k+ agents and brokers) *, Luxembourg ("Lux") Apple Watch app first to market * Continued success of expansion into new regions of
Slide 19: Operating results and capital expenditure
® Operating results and capital expenditure Group operating results growth 20% 10% FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 = Revenue growth <= Operational expenses growth EBITDA margin growth Capital expenditure ($m) Group capital expenditure 50 40 30 20 i fi . to) FY 2011 FY 2012 FY 2013 FY 2014 FY
Slide 20: Group cash flow
MD Group cash flow 1,000 ») 18% increase in operating cash inflow 800 (before tax) *, 36% increase in 600 dividends paid to shareholders 400 = Significant investments in Move, Inc. and IPP funded via cash reserves 200 Group cash flow ($m) (109) Closing cash balance Receipts Paymentsto Taxpaid Sale o
Slide 21: For personal use only
For personal use only
Slide 22: Continued product innovation, audience, leverage expertise
For personal use only Access to largest and most engaged Continued product innovation audience of property seekers Leverage expertise Utility connections Revenue diversification Finance leads
Slide 23: Market opportunity
® Market opportunity * Real estate classifieds continued migration to digital *. Growth opportunity in core listings market Real estate classifieds General display online market size” advertising expenditure® PIPPINSHALL PIPPINGHALL FYiS FY18 12 months to March 2015 @ Digital c Offline Frost & Sulli
Slide 24: Property related services
B® Property related services — * The utility connections market is growing * We're participating in utility connections and finance lead markets *, Revenue growth and diversification opportunity Utility * Drive consumer engagement, develop deeper relationships with connections customers and reward p
Slide 25: Asian opportunity 36% bigger than Australia
® Asian opportunity 36% bigger than Australia Extract from iProperty Group trading update (ASX release, May 2015) 1400 5 1200 = 1000 Property's Markets Australia indonesia “Thailand Malaysia MHK/Macau Singapore @l Australia Source: Frost & Sullivan, IPP, DAAT. REA. Statista REAL ESTATE ADVERTISING B
Slide 26: USA opportunity
BD USA opportunity Extract from News Corp release, Acquisition of Move, Inc. (30 September 2014) Framing the Opportunity: Large, Growing, Merwrs Compe and Dynamic US Residential Real Estate Market US Residential Real Estate Market ~$14bn Annual Marketing Spend from Agents & Brokers ~$1bn at Move, Zi
Slide 27: FY15 summary
FY15 summary Strong results, demonstrating our capacity to deliver solid growth, despite listing volumes in the Australian market being down 4% We've accomplished this by providing our customers with more choice and better value and by giving the 3.4 million’ people who use our sites monthly an exce
Slide 28: Additional information
For personal Use only eae ae ey — information
Slide 29: Financial comparatives
® Financial comparatives Core Operations inancial Statements FY 2011 FY 2012 FY 2013 FY 2014 Group results $m Growth sm Growth sm Growth Growth Sm Growth Sm Revenue from core operations 238.4 277.6 16%, 336.5 21%. 437.5 522.9 20%, Gain on sale of marketable securities 2 : 2 2 2 31.2 Total revenue &
Slide 30: Group results by quarter and half year
MD Group results by quarter and half year A-Group Ql Q2 Q3 Q4 Core operations ($m) FY15 FY14 Mvmt Growth FY15 FY14. = Mvmt Growth FY15 FY14 Mvmt Growth FY15 FY14. Mvmt Growth Revenue from core operations 121.0 98.7 22.3 23% 140.5 110.7 29.8 27% 122.9 108.2 147 14% 1385 119.9 18.6 1 Operating expense
Slide 31: Group cash flow reconciliation
MD Group cash flow reconciliation Cash flow reconciliation ($m) FY 2015 FY 2014 #£=Growth EBITDA” 285.8 225.1 27% Working capital movement (10.3) 5.0 (306%) Tax paid (88.4) (53.9) (64%) Capital expenditure (41.8) (26.2) (60%) Other 41 75 (45%) Free cash flow 149.4 157.5 (5%) Sale/(purchase) of other
Slide 32: Products
For personal use only Products @® REA Group
Slide 33: Core products — Customers
Core products — Customers Connecting real estate agents and developers to the largest audience of property seekers and movers® For personal use only (1) Based on site visits, unique audience and site sections visited refer to slides 6 & 7
Slide 34: Core products
Core products MacBook Ait @ PEA Group
Slide 35: Core products: Residential — Depth Listings
MD Core products: Residential — Depth Listings Desktop Mobile ae Standard ad Feature Property 2 times more views Premiere Property Highlight Property 7 times more views Premiere Property 20 times more views* Our depth listings products help any vendors and agents stand out in the Highlight f gen Pro
Slide 36: Core products: Residential - Agent Profiles
MD Core products: Residential - Agent Profiles @ rexestatecomau f os coy] uy Rent Invest Sold Share Newhomes Rete Findagents Homeless Blog Commercial wv resesteconns PIPPINOHALL PIPPINSHALL Jim Smith Sales tead RLASA428864 q Jim Smith Share e| Director, Auctioneer - RLALZS45 x a 0417 003. f jim_smit
Slide 37: Core products: Residential — Form
BD Core products: Residential — 1 Form Potential tenants can apply for rental properties, securely and easily online 1.8m applications submitted” 29.6m page views” Si formcom. You're always ready to apply for rental properties with 1Form Welcome back 7] Apply online @ PEA Group
Slide 38: Core products: Commercial — Native Advertising in iOS
BD Core products: Commercial — Native Advertising in iOS e e ee ceor Engaging advertising content that = realcommercialcomaul + = ea S connects consumers to commercial | properties ( STUNNING TOP FLOOR OFFICE SPACE!! ® ., Contact Agent realcommercial.com.au Foor are: 96 scooume Discover our Melbourn
Slide 39: Core products: Developer — 3D Property View
MD Core products: Developer — 3D Property View ® realestate.com.au Our 3D property tours bring off the plan apartments to life for consumers Shadow Play Shadow Play Priced from $391,000 9 9 En Project Location Display Location Total Size Completion Date 105 Street, 105 470 properties ‘April 2018 (es
Slide 40: Core products: Developer — Project Profiles
MD Core products: Developer — Project Profiles @ wxissatecomay Qe 8 South Road View on map ROCHER DEVELOPMENTS Living at Diablo Towers From $495,000 ROCHER DEVELOPMENTS Living at Diablo Towers From $495,000 DIABLO TOWERS We provide developers with the opportunity to showcase new apartments and land
Slide 41: Continuous innovation
M Continuous innovation 3D virtual tours Nearly a third of all properties sold are new builds”. That's why we've created a world first, self-guided 3D tours for new developments with our technology partner bringing off the plan properties to life Wearables Our Apple Watch & Android Wear™ real estate
Slide 42: Contacts
Media: Natalie Cerny Head of Corporate Affairs M: +61 407 487 221 E: natalie.cerny@rea-group.com Investors: Owen Wilson Chief Financial Officer P: +61 3 8456 4288 E: ir@rea-group.com News Corp (New York) media inquiries: Mike Florin SVP, Head of Investor Relations P: + 212 416 3248 E: investor@newsc