REA : 2018 AGM - Address and Presentation

ASX Announcement 21 November 2018

REA Group 2018 Annual General Meeting

Melbourne, Australia

Chairman, CEO & CFO Addresses

Good afternoon. I'm Hamish McLennan, Chairman of REA Group Ltd, and on behalf of the Board I'm delighted to welcome you to our 2018 Annual General Meeting. Thank you for taking the time to attend.

Today's proceedings will be hosted through a live webcast for the first time. If you are joining us via webcast, welcome. A recording of this meeting will also be available on our website following this meeting.

Before we commence the formal proceedings, I would like to acknowledge the traditional owners of the land on which we are meeting, the Wurundjeri people of the Kulin Nation, and pay my respects to Elders, past and present.

The Company Secretary informs me that a quorum is present, and I now declare the meeting open.

I would now like to introduce my fellow Director - Tracey Fellows, our Chief Executive Officer, and our Non-executive directors: Roger Amos, Kathleen Conlon, Richard Freudenstein, Michael Miller and Nick Dowling.

Due to Thanksgiving in the US, Ryan O'Hara, one of our Non-Executive Directors is unable to attend today's meeting.

We are also joined today by our Chief Financial Officer, Owen Wilson, and our General Counsel and Company Secretary, Sarah Turner. A number of the Executive Leadership Team are also present in the room today.

The Company's auditors, Ernst & Young, are represented today by our Audit Partner, David McGregor.

Before addressing today's formal Agenda items, I will say a few words about the 2018 financial year and Tracey and Owen will also make a brief presentation.

We will then move on to the formal part of the meeting after which the Directors invite you to join us in the foyer for tea and coffee and light refreshments.

We have had another year of record results for REA Group, delivering double digit growth across Australia and Asia. Revenue1 has increased by 20% to $807.7 million, and our Group EBITDA2 from our core operations rose by 22%, finishing the year at $463.7 million.

• 1 Revenue is defined as revenue from property advertising and financial services less expenses from franchisee commissions disclosed in the Consolidated Financial Statements as operating income.

• 2 Financial results/highlights from core excludes significant non‐recurring items such as revaluation and unwind of contingent consideration, transaction costs relating to acquisitions, brand write‐off and the impact of the change in US tax rates on results of Move,Inc. In 2017, this included items such as revaluation, unwind and finance cost of contingent consideration, foreign exchange ("FX") on proceeds from European operations, impairment charge, transaction costs and discontinued operations (net gain on sale).

We also achieved a 23% increase in net profit from core operations,2 finishing the year off at $279.9 million.

These results have been achieved in a market of significantly lower new development project commencements, a moderate decline in residential listings in Australia, and continued challenges in many Asian markets.

Earnings per share increased by 23% to 212.5 cents and our total dividend for the year increased 20% to 109.0 cents per share fully franked.

This is an excellent result.

Our first quarter financial results were released earlier this month and Tracey will talk through these in more depth shortly.

Our Australian flagship site, realestate.com.au, continues to be the clear market leader with the largest3 and most engaged4 audience in the country.

This year, we extended our lead in the Australian market:

•  More than 1 million people now visit realestate.com.au each day5

•  We have a 2.8 times lead on our nearest competitor in monthly visits6

•  And people spend more time on our app than any other property app in Australia7

These measurements highlight that we have the largest and most engaged audience of property seekers in the country. An audience who come to us - and trust us - when they are looking to buy, sell or rent.

Agents continue to play a critical role in our business, and we thank them for their ongoing support. We are always looking for new ways to deliver value to our customers. This year, we launched a number of new products and services to help them build their brand and grow their business.

Tracey will take you through some of these products in more detail and share an overview of how they are performing in market so far.

As part of our strategy, we have entered new markets and now offer a suite of experiences beyond property listings. Home finance is an important part of the property process. This year, we moved into the Financial Services industry by launching realestate.com.au Home Loans in partnership with NAB.

In addition to our own white label home loan product, we acquired Smartline, a premier mortgage broking company. We now have more than 400 Smartline and realestate.com.au branded brokers in market, providing property seekers with greater choice when looking at ways to finance their property.

• 3 Nielsen Digital Panel, average monthly unique audience (Jul 17 - Apr 18) & Nielsen Digital Content Ratings, text, People 2+, average monthly unique audience, computer & mobile (May 18 - Jun 18)

• 4 Nielsen Digital Content Ratings, text, People 2+, average time spent per person, computer & mobile (Jul 17 - Jun 18)

• 5 Nielsen Digital Content Ratings (Jul 17 - Jun 18), average daily unique audience to the realestate.com.au site and app, people 2+, text, computer and mobile.

• 6 Nielsen Digital Content Ratings (Jul 17 - Jun 18), average monthly sessions, tagged, people 2+, text, computer and mobile. Metric multiple refers to the lead over the nearest competitor site and app.

• 7 Nielsen Digital Content Ratings (Aug 17 - Jun 18), total time on app compared with nearest competitor.

We acquired Hometrack Australia this year, a leading provider of property data services. This acquisition will allow us to provide richer data and insights to our customers and consumers.

And finally, Asia remains a key focus for our global strategy, and we continue to be extremely pleased with how our businesses are performing across the region.

This year, we increased our revenue by 18% to $44.3 million. This has been driven largely by our Chinese language site, MyFun.com, and our businesses in Thailand and Indonesia.

We finished the year in the best audience position we've ever been in, across all of our markets. Malaysia and Indonesia remain market leaders, and our business in Singapore now has one of the fastest growing audiences. This is a result of hard work and dedication from our teams to deliver new customer and consumer experiences.

Our investment in PropTiger is performing very well. While India is still in its infancy, the company's growth this year highlights the long-term opportunities of entering a market that is still transitioning from traditional to digital advertising.

In the United States, our investment in Move, Inc. continues to provide us with exposure to the largest residential real estate market in the world. This year we welcomed Ryan O'Hara, CEO of Move, Inc., to the REA Group Board, and we look forward to working closely with him and his team.

We have had an excellent year, and our share price remains strong in a volatile market. I look forward to seeing the progress we make in 2019.

I would like to thank my fellow Board members for their guidance and counsel this year. We will continue to remain focused on our strategy and delivering strong returns for our shareholders.

As you are undoubtedly aware, Tracey Fellows has recently accepted a new role as President of Global Digital Real Estate with News Corp, based in New York. This is an exciting new role where Tracey will be responsible for driving strategy and growth across all of News Corp's digital real estate interests including REA, Move, PropTiger and housing.com and any future acquisitions. Tracey will finish her tenure with REA Group in January 2019 however will remain a Director on the Board on behalf of News Corp.

The Board is now undergoing the process for appointing Tracey's successor, and Tracey will support the transition of leadership.

I'd therefore like to take this opportunity to thank Tracey for her leadership and commitment to REA Group over the past four years. Tracey's vision for the company, her expertise and her determination, have shaped REA as a leading global company. Tracey - I look forward to continuing to work closely with you as a Director on the REA Group Board.

Thank you also to the Executive Leadership Team who have helped deliver our outstanding results this year. They are experts in their fields; they continue toinnovate, and they recruit the best industry talent to support our business growth.

Finally, in closing, I would like to thank our customers, consumers, shareholders and staff who continue to support us.

I will now hand over to your Chief Executive Officer, Tracey Fellows, to address the meeting.

CEO Address

Good afternoon and thank you for taking the time to join us today. Thank you for the kind words Hamish.

I'm very grateful to you and the Board for all of your support and wise counsel over the past four years.

I will, as Hamish said, continue to be involved in a very real and tangible way, including remaining a Director on the REA Board.

I will also support the appointment of my successor and the transition of leadership.

Let me start with our consumer audience in Australia.

realestate.com.au is the clear number one property site with the largest8 and most engaged9 audience of property seekers in the country.

Our audience has grown across all platforms with more than 72 million average monthly visits.10

Consumers are spending over three times longer on our app than any other property app in the country.11 We've had over 23.9 million app launches in the year,12 2.7 times that of our nearest competitor.

In July, we passed eight million downloads for both the Android and iOS app.13

Providing our customers with access to the largest and most engaged audience of property seekers in the country continues to be at the core of our success.

If I look at the three pillars of our strategy, they remain the same.

Property advertising is the core of what we do. Our customers pay us to advertise property be that residential, commercial or developer.

We've also moved into key adjacent markets. This year, we have seen two key areas of our strategy come to life - Lifestyle and Financial Services. Both have delivered new consumer experiences in FY18 and will bring significant opportunities for the future.

• 8 Nielsen Digital Panel, average monthly unique audience (Jul 17 - Apr 18) & Nielsen Digital Content Ratings, text, People 2+, average monthly

  unique audience, computer & mobile (May 18 - Jun 18)

• 9 Nielsen Digital Content Ratings, text, People 2+, average time spent per person, computer & mobile (Jul 17 - Jun 18)

• 10 Nielsen Digital Content Ratings, average monthly sessions, tagged, People 2+, text, computer and mobile (Jul 17 - Jun 18)

• 11 Nielsen Digital Content Ratings, total time on app compared with nearest competitor (Aug 17 - Jun 18)

• 12 Nielsen Digital Content Ratings, tagged, People 2+, text, app launches (Jul 17 - Jun 18)

• 13 App Store and Google Play, realestate.com.au total app downloads to July 2018.

And then there's our global footprint, which includes Asia as well as investments in India and the United States.

The success of this strategy was evident in our Q1-2019 financial performance - the results we posted just a few weeks ago.

It's been a strong start to the year for REA. We've delivered a revenue14 growth of 17%, delivering $221.9 million and EBITDA15 growth of 23%, delivering $130.9 million.

This is driven in a large part by our Australian residential business, as well as the inclusion of Hometrack Australia, the data business we acquired last year.

These results demonstrate that despite the tougher market conditions, our customers and consumers are clearly seeing the value in the products and experiences that we're creating.

If I look at products within property advertising, it has been a year of unprecedented product launches, focused very much on delivering value for our customers as well as rich experiences for consumers.

For our customers, this has really been led the Agent Edge suite of products. Two of these came to life this year: Agent Elevate and Agent Match.

Agent Match, as the name suggests, matches sellers to an agent that is best suited to them. Since its launch in May, we've delivered over 5,300 qualified leads.16

Agent Elevate allows our agents to increase their presence on-site. Agents who have subscribed to this product have experienced 32% more views on their profile page.17 In the first week alone, over 475 agents subscribed to the product.

For our rental consumers, we improved the 1form experience (1form is a digital application form allowing you to apply for multiple properties by filling in a form just once). We have had over 2.8 million applications on the 1form platform18 and we've improved the quality of that experience as well. We've added a new feature, Pet Profiles. I'm pleased to share with you that within the first 24 hours, over 4,000 pets were added to 1form applications.19 We truly are a country of pet lovers.

Our Developer business onboarded 500 new customers. This has been an important part of how we've been able to sustain our revenue even in light of the significant market headwinds we saw in FY18.

This year, we extend our content with a Lifestyle experience for consumers.

• 14 Revenue is defined as revenue from property advertising and financial services less expenses from franchisee commissions disclosed in the Consolidated Financial Statements as operating income.

• 15 Financial results/highlights from core excludes significant non‐recurring items such as revaluation and unwind of contingent consideration, transaction costs relating to acquisitions, brand write‐off and the impact of the change in US tax rates on results of Move,Inc. In 2017, this included items such as revaluation, unwind and finance cost of contingent consideration, foreign exchange ("FX") on proceeds from European operations, impairment charge, transaction costs and discontinued operations (net gain on sale).

• 16 REA Internal Data, total qualified leads provided through Agent Match as at October 2018

• 17 Adobe Analytics, average increase in agent profile page views comparing at least 30 days pre and post activation of Agent Elevate (Jul 2018)

• 18 REA Internal Data, total rental applications for the year ended 30 June 2018 compared to the prior year.

• 19 REA Internal Data, total 1form applications that included a Pet Profile (10 Apr - 11 Apr 2018)