Online Real Estate Advertising

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Online Real Estate Advertising

1

st

_{Half Year FY 2009 (1}

st

_HY09)

Results Presentation

REA Group Ltd

25 February 2009

www.rea-group.com

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The first half of F09 was another record period in the history of REA

Group

$24.5 $47.7 $71.4 $91.3 1H06 1H07 1H08 1H09 $4.5 $8.5 $14.2 $20.0 1H06 1H07 1H08 1H09 7,058 12,140 18,931 22,099

Dec-06 Dec-07 Dec-08 Dec-09

REA GROUP KEY METRICS

Revenues

($m)

EBITDA

($m)

Closing number

of Paying Agents

Unique Browsers

(millions)

Source: REA Group, Nielsen, Google Analytics, Omniture

2.9

4.0

6.1

8.1

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REA Group - H1 2009 Results Presentation 3

* Excludes Interest Income

Note: Income Tax Expense is relatively high as most of the overseas tax losses are not being recognised.

Source: REA Group

FINANCIAL PERFORMANCE OF THE REA GROUP

The REA Group continues to deliver strong year-on-year growth across

all key metrics

*

Financial Comparative Data

FY 2006

FY 2007

FY 2008

FY 2009

($’000)

₁

st

_{Half-Yr 2}

nd

_{Half-Yr 1}

st

_{Half-Yr 2}

nd

_{Half-Yr 1}

st

_{Half-Yr 2}

nd

_{Half-Yr 1}

st

_Half-Yr

Revenues from Services*

24,507

35,884

47,733

59,560

71,396

84,237

91,285

Operating Expenses

(18,419)

(27,022)

(39,253)

(44,540)

(57,152)

(61,906)

(71,242)

Takeover Defence Costs

(1,607)

EBITDA

4,481

8,862

8,480

15,020

14,244

22,331

20,043

Depreciation and Amortisation

(848)

(1,449)

(2,119)

(2,855)

(3,366)

(3,970)

(5,542)

EBIT

3,633

7,413

6,361

12,165

10,878

18,361

14,501

Net Interest (Expense) / Income

(258)

(204)

139 (208)

(118)

(21)

112 Earnings Before Tax

3,375

7,209

6,500

11,957

10,760

18,340

14,613

Income Tax (Expense)

(765)

(3,178)

(3,215)

(4,254)

(5,802)

(7,535)

(7,783)

Profit attributable to members

2,610

4,031

3,285

7,703

4,958

10,805

6,830

Minority Interest (net of taxes)

252 1,329

2,392

1,684

2,809

3,772

4,616

Profit attributable to members of parent

2,862

5,360

5,677

9,387

7,767

14,577

11,446

Employees (FTE)

224

294

365

479

587

667

651

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The REA Group operates a global network of real estate websites

LOCATIONS OF WEBSITE OPERATIONS

Source: REA Group

Traffic agreement replacing former residential site

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78% of total revenues were derived from Real Estate Agents

$9.4M

(10%)

$71.0M

(78%)

$10.3M

(11%)

$0.6M

(1%)

DEVELOPERS

THIRD PARTIES

Total = $91.3M

REVENUE SPLIT BY CUSTOMER FOR 1

st

_{HY 2009}

Source: REA Group

CONSUMERS

REAL ESTATE AGENTS

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Key driver of the growth in revenues and profits is Australia

COUNTRY SEGMENT INFORMATION

* Fully consolidated Source: REA Group

Country in $’000 1st Half Year 2009 Australia 73,258 40,257 55% United Kingdom 10,129 (6,999) -69% Italy 2,958 (2,815) -95% Luxembourg 2,108 652 31% Other countries 2,832 (3,067) -108%

Loss of associate (homeguru.com.au)

-Unallocated overhead (7,985) Total 91,285 20,043 22% 1st Half Year 2008 Australia 54,936 25,707 47% United Kingdom 10,989 (4,582) -42% Italy 2,284 (1,249) -55% Luxembourg 1,569 339 22% Other countries 1,618 (1,308) -81%

Loss of associate (homeguru.com.au) (185)

Unallocated overhead (4,478)

Total 71,396 14,244 20%

Revenue EBITDA Margin

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The Australian business delivered 80% of revenues (78% in 1

st

_HY08)

$2.8M

(3%)

$2.1M

(2%)

$10.1M

(11%)

$73.3M

(80%)

$3.0M

(3%)

AUSTRALIA

Residential sites

Commercial sites

Holiday Rental sites

Agent office solutions

UNITED KINGDOM

Residential sites

Print publications

Total = $91.3M

REVENUE SPLIT BY COUNTRY FOR 1

st

_{HY 2009}

Source: REA Group

OTHER

Belgium

Germany

France

Hong Kong

United Arab Emirates

New Zealand

ITALY

Residential site

LUXEMBOURG

Residential site

Commercial site

Print publications

Agent office solutions

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Key highlights from the Group’s Australian operations

AUSTRALIA

ITALY

UNITED

KINGDOM

LUXEMBOURG

OTHER

COUNTRIES

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ARPA (Average Revenue Per Agent)

0 200 400 600 800 1,000 1,200

Dec-05 Dec-06 Dec-07 Dec-08

The Australian business has delivered significant growth across all key

dimensions

Key Information

• Revenues up from $55m (1st_{HY08) to $73m (1}st_HY09)

• EBITDA up from $26m (1st_{HY08) to $40m (1}st_HY09)

• Increased EBITDA margin from 47% (1st_{HY08) to 55% (1}st _HY09)

• Average revenue per agent (ARPA) per month up from $758 (Dec07) to $926 (Dec08). A seasonal highpoint of $1,001 was reached in Sep08

• Number of agents using one of the Australian sites up from 8,945 (31 December 07) to 9,284 as at 31 December 08 $926

AUSTRALIA AT A GLANCE

residential online advertising commercial online/ advertising holiday rentals online/ advertising Paying Agents 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 9,284

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Paying Subscribers 7,500 7,600 7,700 7,800 7,900 8,000 8,100 8,200 8,300 8,400 8,500

Jun-07 Dec-07 Jun-08 Dec-08

realestate.com.au continues to be the leading Australian realestate site

Key Information

• #1 Australian residential real estate site with revenues of $64m for 1st_{HY09 (1}st_{HY08: $48m)}

• Estimated 95% of agents use the site

• Unique Browsers in Dec08 considerably higher than all major competitors in Australia put together

• Depth products represent 38% of the agent spend

• Property developer and third party advertiser segments continue to perform strongly and generate $18m of revenues in 1st_HY09

(1st_{HY08: $14m)} 8,437 471,000 Listings 300,000 320,000 340,000 360,000 380,000 400,000 420,000 440,000 460,000 480,000 500,000

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In December 2008, realestate.com.au had more than two times the

Australian unique browsers than the number two, domain.com.au

Source: Nielsen MarketIntelligence

Total no of Australian Unique Browsers (000s)

Dec 08

214

267 1,591

3,509

-

500 1,000

1,500

2,000

2,500

3,000

3,500

homehound.com.au

realestateview .com.au

domain.com.au

realestate.com.au

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In December 2008, visitors to realestate.com.au looked at nearly three times

the pages of information compared to visitors to domain.com.au

Comparison of

Page

Impressions to Top 2 Australian Residential Property sites

December 2008

Source: Nielsen MarketIntelligence

397m

143m

0

50

100

150

200

250

300

350

400

450 domain.com.au

realestate.com.au

millions

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REA Group - H1 2009 Results Presentation 13 Unique Browsers 0 50,000 100,000 150,000 200,000 250,000 300,000

Jan-07 Jul-07 Jan-08 Jul-08

realcommercial.com.au commercialrealestate.com.au Paying Subscribers 900 950 1,000 1,050 1,100 1,150 1,200 1,250 1,300

realcommercial.com.au has continued to consolidate its position as the

number one commercial realestate site in Australia

Source: Nielsen MarketIntelligence, REA Group

Key Information

• #1 Australian commercial real estate site with revenues of $7m for 1st_{HY09 (1}st_{HY08: $4m)}

• Estimated 95% of agents use the site

• Unique browsers during approximately twice as high as those of the number 2 site, commercialrealestate.com.au

• Listings and Subscribers continue to perform strongly despite current economic conditions 1,208 102,441 Listings 60,000 65,000 70,000 75,000 80,000 85,000 90,000 95,000 100,000 105,000 110,000

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Listings 21,000 21,200 21,400 21,600 21,800 22,000 22,200 22,400

Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

realholidays.com.au has shown significant growth in a declining

economy

Source: Nielsen MarketIntelligence, REA Group

Key Information

• Paying subscribers doubled during 1HY09

• Conversion of real estate agents from non-paying via REA subs to 'paying' holiday subs has been consistent

• Dec 08 saw a record number of subscriptions signed as part of a end of year wine offer.

• Recent UB spike caused by ‘Nude Dude’, an online viral marketing campaign which massively exceeded expectations which saw RHA significantly overtake nearest rival Stayz, who only had 66% of RHA’s UBs in December 2008 and 32% in January 2009

• Total number of listings now match Stayz, whose pay-on-performance business model has steadily lost listings through 1HY09

359 22,304 1,875,689 Paying Subscribers 150 200 250 300 350 400

Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08

Unique Browsers

100,000 300,000 500,000 700,000 900,000 1,100,000 1,300,000 1,500,000 1,700,000 1,900,000

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Key highlights from the Group’s overseas operations

AUSTRALIA

ITALY

UNITED

KINGDOM

LUXEMBOURG

OTHER

COUNTRIES

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Italian Unique Visitors (Panel Data*) 0 100 200 300 400 500 600 700 800 900

Aug-07 Feb-08 Aug-08

casa.it Immobiliare.it Paying Agents 3,000 3,500 4,000 4,500 5,000 5,500 6,000

Feb-07 Aug-07 Feb-08 Aug-08

Casa.it continues to lead in the emerging Italian market

Not on casa.it 36% Added in 1st_{HY 2009} 3% As per June 2008 37% Trials 24%

Total = 15,000 agents (est.)

ITALY AT A GLANCE

Market share

Key Information

• Casa.it defended its market leading position in UBs by the end of the period

• 34% recognition of the brand as online advertising portal for real estate (Source: Oto Research)

• Paying agents increased significantly from 4,489 (Dec07) to 6,002 (Dec08), consolidating Casa.it’s position following further

investment in sales and marketing

• Additional 3,560 agents on trial subscriptions. Historically up to 40% of agents convert to paying subscriptions after 3 month trials

6,002

Dec-08

Jan-09 774k

Source: Nielsen NetView, REA Group

* Based on panel data and estimates Italian visitors only to be used for comparison only

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REA Group - H1 2009 Results Presentation 17 Paying Agents 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000

Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08

Propertyfinder with its ‘sister’ sites continue to make progress in the UK

market and have clearly moved into second place

Not on PF <50%

As per June 2008

45%

Total = 10,000 agents (est.) 5,049

Key Information

• Propertyfinder UBs remain strong despite poor economic conditions, moving into second place in the market.

• Paying agents offices remain steady over 5,000 agent offices (sales, lettings, or combined offices) despite very adverse market conditions; market reports suggest total number of sales agents decreased from 12,500 to 9,000 to 10,000 over the year.

• Relaunch of newly designed website in July 2008

• Acquisition of estate agent directory ukpropertyshop.co.uk in July 2008 • Launch of platinum website for premium properties

UNITED KINGDOM AT A GLANCE

Market share

UK Unique Browsers*

* Based on panel data and estimates UK visitors only Source: Comscore, REA Group

Dec-08 Effect of reduction in market size through 1st_HY09 5% -500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 Jul-0 7 Aug -07 Sep -07 Oct -07 Nov -07 Dec -07 Ja n-08 Fe b-08 Mar -08 Apr -08 May -08 Ju n-08 Jul-0 8 Aug -08 Sep -08 Oct -08 Nov -08 Dec -08

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330 350 370 390 410 430 450 470 490

Feb-07 Aug-07 Feb-08 Aug-08

The Luxembourg market is small but very profitable

Not on atHome 15%

As per June 08 80%

Total = 550 agents (est.) 469

Key Information

• Profitable operation with EBITDA margin 31% for 1st_HY09

(1st_{HY08: 22%)}

• Market leader in Luxembourg

• Very low agent churn rate (~0.2% per month)

LUXEMBOURG AT A GLANCE

Market share

Luxembourg Unique Browsers

* Based on panel data and estimates LUX visitors only Source: Metriweb, REA Group

Added in 1H09 5% Dec-08

Paying subscribers

0 20,000 40,000 60,000 80,000 100,000 120,000 Ja n-08 Fe b-08 Mar -08 Apr -08 May -08 Ju n-08 Jul-0 8 Aug -08 Sep -08 Oct -08 No v-08 Dec -08 Ja n-09 atHome.lu immostar.lu

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REA Group is managing a portfolio of growth options

OTHER MARKETS

New Zealand

• Exited residential business

allrealestate.co.nz in November 2008 and entered into a strategic partnership with realestate.co.nz

• Maintained commercial site as the newest commercial real estate site in New Zealand

Belgium

Acquired with athome.lu in Feb 2007

• Paying agent numbers increased by 14% to 209 in 1H09

• Residential agent revenues only

•Exit of Altowin business

France

Acquired with athome.lu in Feb 2007 • Both websites are leaders in their region • Only residential agent revenues

• Number of paying agents increased by 44% in 1H09

Germany

Acquired with athome.lu in Feb 2007 • 21% growth in paying agents in 1H09 • Focus on residential agent revenues

United Arab Emirates

Acquired Feb 2008

• Initial Focus on Dubai and entry into Abu Dhabi but now expanding to other emirates • Focus on Developer and Residential Agents • During 1HY09 transformation from a print to

online business

• Content deals signed with Maktoob.com and MSN Arabia

Hong Kong

Acquired Sep 2008

• Two publications squarefoot.com.hk and Inside Discovery Bay

• Residential website targeting the English speaking users continues to attract customers and consumers

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As at 31 December 2008, 22,099 paying agents used at least one of

the REA Group sites

9%

6,002

5,514

casa.it Italy

-3%

89

92

Propertyfinder.ae United Emirates

28%

78

61

squarefoot.com.hk Hong Kong

22,099*

353

209

122

323

549 5,049

41 9,284

December 2008 realcommercial.co.nz

14%

183

atHome.be Belgium

22%

449

atHome.lu Luxembourg

44%

224

atHomeLorraine.fr France

21%

101

atHome54.de Germany

-30%

504

International section All Other

-2%

-10%

-92%

1%

Growth

22,478

5,633

527 9,190

June 2008 propertylook.com.au Total Paying Agents Propertyfinder.com propertylook.co.nz allrealestate.co.nz realcommercial.com.au realestate.com.au Site United Kingdom New Zealand Australia Country

PAYING RESIDENTIAL AND COMMERCIAL AGENTS USING REA GROUP SITES

* additional 4,239 agents on trials Source: REA Group

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During 1HY09, property listings across the group have only grown

slightly

LISTINGS ON REA GROUP SITES AS AT DECEMBER 2008

22,573 15,641 atHome.be Belgium 12,216 5,912 squarefoot.com.hk Hong Kong 21,007 15,966 atHomeLorraine.fr France 360,712 298,956 Casa.it Italy 1,458,053 78,996 7,817 5,479 7,122 1,019 17,110 417,542 5,999 40,725 21,474 86,150 432,145 June 2008 102,441 realcommercial.com.au 18,671 propertyfinder.ae United Emirates 93,566 International section All Other 20,603 atHome.lu Luxembourg 10,463 atHomeAlsace.fr 1,214 atOffice.lu 365,190 propertyfinder.com United Kingdom atHome54.de realcommercial.co.nz allrealestate.co.nz realholidays.com.au realestate.com.au Site 1,555,054 7,353 9,851 16,044 22,304 470,846 Dec 2008 Total Germany New Zealand Australia Country

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January 2009 was a record month across many sites

REA GROUP PERFORMANCE IN DECEMBER 2008 AND JANUARY 2009

Source: Nielsen Market Intelligence (REA, PCA, RCA, RHA)

Nielsen SiteCensus (REA Group, RCNZ, Casa, AtHome, SQF, AGP, Homeguru, Ozhomevalue) Omniture (PFUK, HotProperty)

Google Analytics (UkPropertyShop)

Google Analytics / Nielsen SiteCensus derived data (PFAE)

Bold indicates record high

Jan-09 Dec-08 Jan-09 Dec-08

rea-group.com reales tate.com.au property.com.au realcommercial.com.au realholidays .com.au homeguru.com.au ozhomevalue.com.au realcommercial.co.nz propertyfinder.com hotproperty.co.uk ukpropertys hop.co.uk cas a.it 1,258,980 athome.lu atoffice.lu athome.be athomeals ace.fr athomelorraine.fr athome.de s quarefoot.com.hk propertyfinder.ae 56,823 allglobalproperties.com TOTAL (accumulated) Total (unduplicated) 3,813 2,854  34% 11,425 8,968  27% 4,830,725 3,867,163  25% 555,176,845 396,922,730  40% 58,914 39,211  50% _1,078,145 _651,828 _ 65% 275,356 207,742  33% 6,616,862 4,736,678  40% 1,875,689 649,735  189% 7,851,666 3,842,220  104% 52,785 39,931  32% _142,498 _102,078 _ 40% 12,183 17,068  -29% 58,565 58,466  0.2% 5,973 3,647  64% 61,782 39,835  55% 2,477,200 1,625,970  52% 37,103,672 21,996,761  69% 413,298 239,432  73% 3,339,978 1,843,820  81% 622,963 345,661 _ 80% _2,095,250 1,062,407 _ 97% 826,829  52% 33,531,274 20,194,682  66% 65,595 49,020  34% 3,566,212 2,375,796  50% 4,627 3,018 _ 53% _94,653 59,862 _ 58% 64,439 52,561  23% 1,300,407 981,190  33% 24,141 16,645 _ 45% 451,244 273,732 _ 65% 32,903 24,480  34% 769,662 526,584  46% 26,322 17,961  47% 367,329 250,463  47% 20,871 18,487  13% 394,293 341,179  16% 44,056  29% 508,858 375,795  35% 34,806 23,823  46% 576,583 411,407  40% 12,218,406 8,115,294  51% 655,097,203 457,056,481  43% 11,527,377 7,713,563  49% 654,865,775 457,520,538  43%

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