Domain Australia : FY22 Half Year Results Commentary

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ASX ANNOUNCEMENT

Domain Holdings Australia Limited 2022 Half-Year Results Commentary

Sydney, 17 February 2022: Domain Holdings Australia Limited [ASX:DHG] ("Domain" or "Company") today delivered its 2022 half-year financial results. Accompanying commentary from Chief Executive Officer and Managing Director Jason Pellegrino and Chief Financial Officer Rob Doyle is set out below.

Jason Pellegrino - Chief Executive Officer and Managing Director:

Slide 1

Good morning everyone. Thank you for joining me and CFO Rob Doyle for Domain's 2022 half year results briefing.

I'd like to start off today by acknowledging the Traditional Custodians of Country throughout Australia, and their connections to land, sea and community.

We pay our respects to their elders past and present, and extend that respect to all First Nations peoples today. For myself, I am on the land of the Gadigal people of the Eora Nation.

Slide 2,3

We'll follow our usual agenda with an overview of the result, and the pleasing progress we are making in implementing our Marketplace strategy. I'll provide some commentary on the current trading environment and outlook, and then Rob will take you through the group financials. We look forward to your questions at the end of our prepared remarks.

Slide 4

Through the volatile trading environment of the past three years, Domain has maintained the pace of our business strategy evolution. We have responded to the changing environment, while continuing to innovate for the future. I am incredibly proud of the hard work of our team in progressing Domain into a fundamentally better business. We have positioned Domain to take full advantage of the rebounding property environment.

The outcome of our strategic focus, and the increasing value we bring to our customers and consumers, is reflected in the outstanding set of results we are announcing today. We have delivered growth across every revenue line, and 53% EBITDA growth on an ongoing basis, and delivered on our commitment to deliver expanding EBITDA margins on an ongoing basis. The entire Domain team is delivering on the promise of our Marketplace strategy.

Domain Holdings Australia Limited | Level 5, 100 Harris Street, Pyrmont NSW 2009 | ABN 43 094 154 364 | www.domain.com.au/group

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Slide 5

The FY22 half year trading results on a reported basis are significantly impacted by the timing of the JobKeeper grant and repayment, and the benefits and costs of Zipline, our voluntary employee program undertaken during the early stages of the COVID pandemic. In the first half of FY21 we received a net $8.7 million EBITDA benefit from JobKeeper and Zipline, while in the first half of FY22 this reversed to an additional expense of $7.5 million. Rob will run through this detail later in the presentation.

In order to provide transparency on the underlying performance of the business, we have provided two tables which summarise the results. The trading "as reported" table includes the expenses of JobKeeper and Zipline in the first half of FY22, and the benefits received in the previous year. The ongoing table excludes the impact of JobKeeper and Zipline from both periods.

For the half, Domain delivered:

• Revenue of $175.3 million up 27.9%
• Trading expenses of $114.3 million, up 36.7% and ongoing expenses of $106.7 million, up 15.7%
• Trading EBITDA of $61.0 million up 14.2%, and ongoing EBITDA of $68.5 million up 53%
• Trading EBIT of $44.6 million, up 28.5%.

Net profit was $26.1 million and Earnings per Share were 4.5 cents, with both increasing by 34%.

An interim dividend of 2.0 cents was declared.

Slide 6

The segment results on a Trading basis are outlined on Slide 6. In order to focus on the underlying performance of the business, I propose to focus on the Ongoing result on the following slide.

Slide 7

Domain reported strong results across all our businesses in the first half.

Residential revenue increased around 29%.

Media, Developers & Commercial revenue increased 15%

Agent Solutions revenue increased 19% and Property Data Solutions, which we have broken out for the first time, increased 21%.

Together these categories delivered Core Digital revenue growth of 26% and ongoing EBITDA growth of 43%.

Consumer Solutions revenue increased 60% and ongoing EBITDA losses reduced by 43%, benefiting as the business scales.

Domain Holdings Australia Limited | Level 5, 100 Harris Street, Pyrmont NSW 2009 | ABN 43 094 154 364 | www.domain.com.au/group

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Total Digital revenue increased 26% and ongoing EBITDA increased 48%.

Print revenue increased 75% as we resumed a full printing schedule, with ongoing EBITDA increasing five-fold.

Pleasingly we delivered margin expansion across every segment, with the ongoing core digital margin of 50.9% a stand-out, and all-time record.

Slide 8

Domain is delivering to its purpose by creating a property Marketplace to inspire confidence for all of life's property decisions. Our leading property brands, large engaged audiences, effective listings parity and innovative technology solutions, are delivering a cohesive platform that delivers value at every stage of the property journey, and expands our addressable markets.

Our cohesive ecosystem of services includes:

• Core Listings which connects Domain's audiences with properties and agents;
• Agent Solutions which help agents grow their businesses;
• Consumer Solutions which deliver direct to consumer services such as home loans;
• and Property Data Solutions which provide actionable and customer centric solutions to financial institutions, government and consumers.

Slide 9

Domain's mantra of "Better Together" is driving impressive results across our Marketplace. Each of our solutions is leveraging their differentiated strategic position, while maximising the value for the group through close collaboration.

In our Core listings business, we achieved a 19% increase in controllable residential yield and record depth penetration. Core Digital EBITDA increased 43% on an ongoing basis and record margins. And our focus on high quality audiences has resulted in an 18% increase in conversion from sale views to enquiry, at a 12% lower cost per enquiry.

In Agent solutions we delivered subscriber growth of 12% at Pricefinder and 54% at Real Time Agent, with RTA's revenue increasing 88% year-on-year;

In Consumer Solutions, our new management team delivered underlying revenue growth of 65% at Domain Home Loans, with DHL operating losses reducing by 34% illustrating the strong unit economics of the business model as we grow volumes. Over the past 2 years DHL has seen a 25% uplift in conversion to approval, demonstrating the increased efficiency of the business.

In Property Data Solutions we significantly expanded the size of our addressable markets, with the acquisition of IDS which serves the government sector. We continued to expand the size of the LeadScope trial, with a 43% increase in strategic agent partners, and ongoing delivery of high prediction accuracy. And we accelerated the investment in our data capability to deliver value right across the group.

Domain Holdings Australia Limited | Level 5, 100 Harris Street, Pyrmont NSW 2009 | ABN 43 094 154 364 | www.domain.com.au/group

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Slide 10

Before I run through the detail of our results, I want to touch briefly on Domain's commitment to ESG initiatives. As a people-based business, we aim to be a home for everyone, where diversity and inclusion are prioritised, and we are united by our purpose and values. Despite the personal challenges of ongoing COVID disruptions in recent times, the passion of our employees to contribute to the communities we serve remains powerfully on display. We have committed additional resources to progress our ESG initiatives, and are working on plans to achieve carbon neutrality.

Slide 11

Turning now to the detail of the results and the key drivers of Domain's revenue.

Slide 12

Residential revenue increased 29% to $120.3 million, benefiting from strong depth revenue growth of 33.5%. Canberra's first lockdown of the pandemic was a noticeable drag on performance given Allhomes' strong market position. As lockdown conditions have eased, we have seen the Canberra market bounce back strongly in January. Excluding Allhomes, residential revenue increased 31% and depth revenue increased 36.5%. Buoyant market conditions supported a 14% increase in new listings volumes, and controllable yield grew 19%, an exceptional performance.

Slide 13

The chart on the left of the slide illustrates the high level of volatility in the new 'for sale' listings market over the past three and a half years. The performance in the second quarter of FY22 is particularly impressive given the market had already recovered from the COVID lows in the same quarter a year ago. Importantly, the specific actions we have taken since early FY19 to establish a micro-market strategy have improved the resilience of the Domain business. While recent market conditions have clearly been supportive, this strategy is driving the significant gains in controllable yield you can see in the chart on the right, with a 19% increase in the six months to December. The 19% uplift was made up of a pleasing even mix of 10% price and 9% depth, a strong endorsement by agents of the value Domain delivers. The successful execution of our micro-market strategy is the basis for our confidence in our long-term target of an average controllable yield increase of 12% through the cycle.

Slide 14

Our micro market strategy customises our approach to price and depth across individual zones. The results are summarised on this slide in broader buckets of Established, Expanding and Emerging markets.

Each of these broad market groups delivered solid listings volume growth in the first half, with outperformance in our expanding markets driven by a strong bounceback in outer Melbourne and inner Brisbane markets. The performance in our established markets was held back by the weak listings environment in Canberra which experienced the first lockdown of the pandemic.

Domain Holdings Australia Limited | Level 5, 100 Harris Street, Pyrmont NSW 2009 | ABN 43 094 154 364 | www.domain.com.au/group

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Our audiences continued to build on the very strong base achieved in recent years, with a particularly strong performance from Victoria as it recovered from the prior year's lockdown.

Agent coverage continued to grow, with a higher number of depth contracts across our three broad buckets. While the highest year-on-year growth was delivered in our least penetrated Emerging markets, we continued to see pleasing growth in our more penetrated Established and Expanding markets, with stand-out growth in Queensland.

In the first half of FY22 revenue per listing benefited from our July price increase and strong depth performance, with particularly strong depth growth in our emerging markets.

Slide 15

Despite the COVID disruptions during the first half, overall depth penetration and Platinum penetration increased in every state to reach a new record. We're particularly pleased with the progress in Victoria and Queensland, both of which have been focus areas in recent years. Victoria's performance in the first half of FY21 was held back by the significant restrictions on real estate activity that accompanied that COVID lockdown, and it's great to see the results of our efforts being delivered in the most recent period. The overall performance in Queensland, and acceleration in platinum penetration is equally pleasing. In the smaller states of South Australia and WA, the significant value we are providing has driven a substantial uptake of our silver and gold tiers, as well as strong momentum in new platinum depth contracts.

Slide 16

Domain delivers large, high-quality audiences, with a unique digital audience of more than 8 million in the first half. We continue to deliver growth in key audience metrics, building on the extraordinary uplift of the past two years. Our focus is on delivering the high value activity that matters most to agents. We delivered an 18% higher conversion of sale-views-to-enquiry. There are also continuing efficiency gains from this focus on quality, with cost per sale enquiry reducing 12% year-on-year.

Slide 17

Domain's product teams deliver to our purpose by providing great agent and consumer experiences at every stage of the property journey. You can see examples on this slide with enhancements to our Early Access and Social Boost products for agents, enhancements to our listings, property research and Find an Agent tools for consumers.

Slide 18

Turning to Media, Developers & Commercial.

Revenue increased 15%, with relatively consistent growth rates across all three verticals.

Slide 19

Developers' solid performance benefited from good momentum in Victoria and significant growth in Queensland, somewhat offset by weakness in the ACT reflecting the COVID shutdowns. Queensland was the strongest performing of the states, leveraging higher audiences and delivering substantial yield gains.

Domain Holdings Australia Limited | Level 5, 100 Harris Street, Pyrmont NSW 2009 | ABN 43 094 154 364 | www.domain.com.au/group

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