24 February 2017 Full Year Results for the year ended 31 December 2016
Disclaimer This presentation may contain forward- looking statements, including ‘forward - looking statements’ within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting the Group. They are not historical facts, nor are they guarantees of future performance. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Further details of potential risks and uncertainties affecting the Group are described in the Group’s filings with the London Stock Exchange including the Prospectus. These forward-looking statements speak only as of the date of this presentation. This presentation and a press release will be posted on the investor section of the Rightmove website. 2
Highlights Revenue: Profit: EPS: Dividend: +15% +15% +18% +19% Revenue up to £220.0m Underlying operating profit 1 Underlying basic EPS 2 Final dividend increased by 5p to 32p (2016: 27p) making (2015: £192.1m) increased to £166.2m grew to 142.8p (2015: £144.3m) (2015: 121.4p) a total dividend of 51p (2015: 43p) per ordinary share Advertisers 3 : ARPA 3 : Cash returned: Site traffic: £131.3m 20,121 11.7bn £842 All free cash flow returned As at 31 December 2016, Time in minutes up 5% year Per month, up 12% to shareholders through up 2% (2015:19,752) on year (2015: 11.1bn) (2015: £754 ) dividends and buybacks (2015: £112.5m) 3 1. Before share-based payments and NI on share-based incentives 2. Before share-based payments, NI on share-based incentives and no related adjustment for tax 3. For Agency and New Homes customers
Revenue and costs Revenue Bridge Revenue 220.0 220.0 225 225 3.3 £ millions £ millions 3.5 21.1 200 192.1 200 192.1 175 175 167.0 150 150 139.9 125 125 100 100 75 75 50 50 25 25 0 0 2015 ARPA Customer Other 2016 2013 2014 2015 2016 Growth Growth Growth 4
Profit and margin Costs 1 Underlying Operating profit 1 74.6% 75.1% Margin: 74.3% 75.5% 60 180 £ millions £ millions 166.2 53.8 160 50 47.8 144.3 140 42.4 124.6 40 120 35.9 104.0 100 30 80 20 60 40 10 20 0 0 2013 2014 2015 2016 2013 2014 2015 2016 5 1. Before share-based payments and NI on share-based incentives. Source: Rightmove
Income statement Year ended Year ended 31 December 2016 31 December £m 2015 £m Revenue 220.0 192.1 Operating costs (53.8) (47.8) Underlying operating profit 166.2 144.3 Underlying operating profit margin 75.5% 75.1% Share-based payments (4.1) (3.8) NI on share-based incentives (0.5) (3.3) Operating profit 161.6 137.2 Net financial expense (0.1) (0.1) Profit before tax 161.5 137.1 Tax (32.0) (27.6) Profit for the year 129.5 109.5 6 Source: Rightmove
Balance sheet As at As at 31 December 2016 31 December 2015 £m £m Property, plant and equipment 2.3 2.2 Intangible assets 3.5 1.4 Deferred tax assets 7.0 6.8 Total non-current assets 12.8 10.4 Trade and other receivables 29.9 27.5 Cash and money market deposits 17.8 12.4 Total current assets 47.7 39.9 Trade and other payables (35.8) (31.6) Income tax payable (16.3) (11.9) Provisions (0.2) - Total current liabilities (52.3) (43.5) Provisions being non-current liabilities (0.2) (0.2) Net assets 8.0 6.6 Share capital 1.0 1.0 Other reserves 0.4 0.4 Retained earnings 6.6 5.2 Total equity 8.0 6.6 7 Source: Rightmove
Cash bridge and dividend Full year 2016 • £131.3m (2015: £112.5m) 200 returned to shareholders in 1.8 167.4 180 the period 160 • 2.2m (2015: 2.3m) shares (2.0) (27.8) (1.8) 140 bought back and cancelled 120 • Closing cash and money market deposits of £17.8m 100 (2015: £12.4m) 80 • Final dividend increased by 60 5p to 32p (2015: 27p) (88.6) 40 17.8 20 12.4 (0.4) (43.2) 0 Cash Dec EBITDA Working Tax payments Acquisition of Capex Share buy Dividends Purchase of Cash Dec 2015 before IFRS 2 capital The Outside backs (incl shares for SIP 2016 View costs) net of proceeds on exercise Source: Rightmove 8
Housing Market Housing Transactions 1986-2016 and House Prices 2002 - 2016 * * • The number of housing transactions in 2016 was the same as 2015 and 2014 • Housing transactions are 40% higher than the lows of 2008 – 2011 and with house prices up by nearly 30% the estate agency fee pool has significantly increased • Two-thirds of our estate agency customers now also generate revenue from lettings • Agency is an attractive business – the number of agents has grown c20% since 2011 to record levels 9 * Housing transactions for England & Wales – all of UK data only available from HMRC 2005 onwards
Stable Housing Market Sold Subject to Contract (YoY change) +6% vs Jan ‘15 20% x 0% Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 -20% -40% Housing Transactions (YoY change) +6% vs Jan ‘15 x 10 Source : Rightmove and HMRC
More customers Agency and New Homes Record customer numbers, up 2% to over 20,000 22 Thousands sands ousands • Growth driven by both Agency and New Homes 20,121 • Agency offices up 126 19,752 20 Thou 19,304 • Agency retention rates in line with historical highs 18,425 18 • New Homes developments up 243, their highest level since 2012 • Customers advertising 1 million UK residential 16 properties on Rightmove • We continue to be the only place to see virtually 14 the whole UK property market 12 10 2013 2014 2015 2016 11 Source: Rightmove
More consumers and engagement Time Record engagement, up 5% to 11.7 billion minutes 12 11.7 Billions of Minutes 11.1 • Nearly 1.5 billion visits in 2016, up 10% 10.2 • Growth driven by continued mobile adoption with 10 two-thirds of time spent on mobile 8.1 • Traffic to our research tools grew 20% with 8 consumers spending 350 million minutes on features such as sold prices 6 • We sent nearly 47 million leads to our customers, 6% down on 2015, but up on 2014 • The quality of our leads continue to stand out. We 4 generate six times as many sales and lets for our Agency customers as our nearest competitor 2 0 2013 2014 2015 2016 12 Sources: Google Analytics & Rightmove
More consumers and engagement Market share of top 4 property portals 77% 73% 13 Source: Comscore (Market share of time on desktop and mobile)
Customers choosing to spend more ARPA Record ARPA £ per office/development per year £842 • ARPA 1 up £88 (+12%) to £842 per month per month 10,500 (2015: £754) £754 • ARPA growth driven by product sales and pricing 9,000 £684 • Continued healthy adoption of our highest value £607 7,500 Optimiser package • Significant headroom to grow revenue through 6,000 more product sales, product innovation and pricing 4,500 • 2017 product sales and pricing progressing according to plan 3,000 1,500 0 2013 2014 2015 2016 14 Source: Rightmove 1. Agency and New Homes customers.
Summary • Record customer numbers at over 20,000 • Record traffic • Record absolute ARPA growth driven by customers spending more on products 1 up 15% • Revenue and underlying operating profit • £131m cash returned in the year with almost £750m returned in total since IPO 15 1. Before share-based payments and NI on share-based incentives
The power of data Data driving market efficiency and transparency 24 Acacia Avenue Competitor 13 Presented by Johnson & Rankin For John Doe London, UK Competitor 12 Competitor 1 Competitor 11 Competitor 2 Competitor 3 Competitor 10 Competitor 4 Competitor 5 Competitor 9 Competitor 6 Competitor 8 Competitor 7 • New Marketing Report Tool tracks • The Best Price Guide helps an agent • 90% of customers use our Intel Software and usage is up 30% YoY and analyses the performance of a justify their valuation to a potential property against the whole market vendor • A comprehensive toolset that • Already being used on 100,000 • In 2016 agents generated an average focuses on what matters most to customers properties each month of 620,000 Best Price Guides per month • The tool enables agents to clearly • Unique whole of market view • A property is 40% more likely to be demonstrate their marketing efforts and expertise to a vendor sold by the agent who first marketed it, if it is priced in line with our AVM 16
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