ASX:AU1 · 30 April 2019Price sensitive

Market Update Presentation

September 2018 April 2019

The Agency Group Australia Ltd ASX:AU1

Contents

Introduction 3

Real estate market 6

Company overview and business model 7

Key assets 10

Financials and operational metrics – LTM 11

Key management 13

Executive summary

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The Agency Group Australia Ltd (The Agency Group or the Company) (ASX:AU1) is one of Australia’s fastest growing integrated real estate services companies • In just over 2 year period since listing on the ASX, the Company has established a national presence across key metropolitan markets in Australia led by an industry-leading management team • The Agency Group today has built a fully serviced real estate firm creating an organisation designed to scale • The Company dual property sales business model, offering both premium (full-service) and independent brand offering underpins its strategy to reach leadership across Australia in terms of agent market share • Integrated services, from property sales, property management and ancillary services provides the Company with cross-sell opportunities, capturing revenue across the value chain • The traditional landscape of the real estate agency offering in the current economic environment provides great opportunities for The Agency Group to bring further consolidation to the industry

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Notes: (1) Company figures include Illawarra region acquisition. (2) Value of properties exchanged in the LTM to March 2019. (3) Properties Under Management (“PUM”) (4) Gross Commission Income (“GCI”) (5) Calculated on a blended valuation multiple of 3.5x on annualised management fee calculated from March 2019 quarterly management fee. (6) 3 Calculated on a valuation multiple of 2.4x on annualised trail income calculated from March 2019 monthly trail income.

Unique business model The Agency has a unique, scalable business model, disrupting the real estate services industry by returning value, previously given to franchisees and offices, to agents and shareholders. The Agency’s offering in the market continues to expand its agent network by recruiting the industry’s top talents and establishing market leadership based on property transaction volumes across Australia One of the highest commission models in the market place and provision of support services driving recruitment growth Franchisor Head Office c.10% c.15%-25% (1) Franchisee Principal c.40% c.40%

Traditional Independent Franchise Operations

Agent Agent c.50% c.60% Agent ✓ Brand support c.75%-85% (1) ₓ Brand support ✓ Overhead support ₓ Overhead support ₓ Add-on services ✓ Brand support ₓ Add-on services ₓ Corporate benefits ✓ Overhead support ₓ Corporate benefits ✓ Add-on services ✓ Corporate benefits

Notes: (1) Commission structure is tailored dependent on brand (The Agency or SLP) and agent performance. 4

Accelerating national presence In just over 2 year period since listing on the ASX, the Company has established a national presence with 10 physical locations across key metropolitan markets in Australia. Led by an industry-leading management team, The Agency has achieved and continues to capture Australia’s prominent property sales

#1office in WA (1)

#1in Lower North Shore (NSW) market (2)

Highest number of exchanges recorded since inception in March 2019 Highest GCI in NSW recorded since inception in March 2019 Highest residential sale result of c.$24m in Australia in CY19 (3) 17 QLD Significant listings including beachside property agents with price guide of c.$17m (4)

The Agency Gold Coast The Agency Perth Suite 301, The Wave, 89-91 Surf Parade 68 Milligan Street Broadbeach QLD 4218 Perth WA 6000

113 NSW agents (5) The Agency Hawthorn Level 1, 585 Burwood Road Hawthorn VIC 3122 135 WA The Agency Albert Park The Agency Central Coast PO Box 3223 The Agency Bondi Junction 17-25 Spring Street Wamberal NSW 2260 Bondi Junction NSW 2022 agents 89 Victoria Avenue Albert Park VIC 3206 The Agency Neutral Bay The Agency Eastern Suburbs Level 1, 3 Young Street 180 Campbell Parade Neutral Bay NSW 2089 Bondi Beach NSW 2026

12 VIC The Agency Wollongong The Agency Inner West agents 2/63 Burelli Street Wollongong NSW 2500 103 Johnston Street Annandale NSW 2038

Notes: (1) Based on value of listings sold in March 2019. (2) Based on number of listings sold in the Lower North Shore (NSW) area (February 2019) and the number of properties currently listed (March 2019). (3) 20B Tivoli Avenue, Rose Bay, Sydney. Sold by Ben Collier. (4) 125 year old heritage-listed home, “Le Fanu”, Cottesloe, Perth. On market by Pamela 5 Wilkinson. (5) Company figures include Illawarra region acquisition.

Real estate services market The Agency’s unique business model is disrupting the $24.9bn real estate services industry (1). The Agency capitalises on both expansion and contraction markets, opportunistically capturing sales agents and supported by its growing national property management business

Market trends Capitalising on market trends Technology disruption Business scalability • Technology disruption improving efficiencies of services processes to • Attractive commission rates against a backdrop of declining margins is complement real estate agents: attracting agents, both independent and from other agencies, to The Agency ‒ Reducing the need for offices ‒ Improving compliance, communication and marketing • Opportunistic acquisitions to drive scale of The Agency during a period of low business valuations ‒ Increasing dominance of online websites such as Domain and REA ‒ Use of data analytics to generate property valuations Defensive business in a contracting market ‒ Use of virtual reality in property inspections • Geographical diversity across metro and rural areas, with 10 physical locations across WA, NSW, VIC and QLD, as well as a national virtual Industry consolidation presence • Market decline is putting pressure on small offices as decreased sales commission and reducing management fees due to oversupply of • Cross-sell opportunities between property sales, property management rentals is reducing profit margins or offices – majority of real estate and ancillary services offices have less than 15 agents (2). • Reduced overall exposure to residential property real estate prices • Fair Work Australia’s new legislation has introduced a minimum $55,000 through property management and ancillary services earnings that has added further pressure to smaller agencies and seen an exiting of poor performing agents • Stable revenue and cash flow generated from property management business • Increasing trend of independent real estate agents joining larger organisations providing back office support in order to combat reduced margins

Reduced margins have encouraged M&A activity as synergistic cost savings become increasingly required

Notes: (1) L6720 Real Estate Services in Australia, IBISWorld October 2018. (2) Real Estate Industry Report, Macquarie Bank. 6

Company overview The Agency Group is comprised of three service categories, including property sales, property management and ancillary services

The Agency Group’s divisions

Property sales Property management Ancillary services

Conducts sales of residential Manages residential properties on Provision of ancillary services properties on behalf of property behalf of property owners. provides cross-sell opportunities vendors. Operates a unique agent incentive • Mortgage financing services: Operates a unique agent recruitment model that encourages agent mortgage loan book with c.4,400 model that delivers high growth to performance and in turn generating loans and $2.1m in annualised the company while generating value stable, recurring revenue for the trail income (1) for customers. business. • Financial planning: provision of Disrupting the Australian real estate The Agency Group’s property risk products and advice to clients brokerage market with its two management division operates under undertaking new mortgages differentiated offerings under the The Agency brand. brands The Agency and Sell Lease • Conveyancing: settlement Property (SLP). services

Premium, full service offering

Value, SaaS support offering

Notes: (1) Calculated from March 2019 monthly trail income. 7

Property sales Revenue model

The Agency’s dual offering, including a premium brand (The Agency) and a value brand (SLP) enables it to attract sales agents across the spectrum of potential requirements and needs

Revenue model Upon the successful sale of a residential property, a vendor commission, a percentage of the property’s sale value, is charged. This commission is subsequently split between The Agency Group and the agent.

LTM Rolling GCI ($m) 45.0 85% YoY Growth

$38.9m NATIONAL PRESENCE VIRTUAL PRESENCE 40.0 ACROSS 10 PHYSICAL PREDOMINANTLY ACROSS LOCATIONS WA AND QLD 35.0

The Agency is a premium brand with a SLP is a value brand with a SaaS full service offering that provides offering, boasting unique technology 30.0 agents with a progressive commission that supports the entire administrative structure. process for real estate transactions. 25.0 Graph of GCI over time An agent will typically retain c.75% of SLP provides agents with a progressive the vendor commission, with The commission structure. An agent will Agency Group receiving the remaining typically retain c.85% of the vendor 20.0 c.25%. commission, with The Agency Group receiving the remaining c.15%. Additional revenue to the business is 15.0 c.12 months generated from: Additional revenue to the business is from ASX listing • if an agent chooses to have a generated from: 10.0 physical desk provided, a desk fee of • $10,000 p.a. member fee;

Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 $6,000 p.a.; and • $720 p.a. I.T. platform fee; and • $250 per transaction fee. • $250 per transaction fee.

Property sales Market position

The Agency’s offerings across both brands boast a superior financial and non-financial value to sales agents above independent operations and traditional franchises

Enhanced fee offering across the market Whilst franchised based brand networks dominate the Australian brokerage market, it creates significant fee leakage away from agents with multiple layers of administration and costs that sit above an agent, including the franchisee and the franchisor.

The primary alternative for agents has been to establish their own operations, either standalone or with peers. In exchange for a higher share or their fee income agents take on significant overhead cost and administrative burden.

The Agency and SLP brands provide overall larger profits to the agent than a traditional franchise or an independent operations, respectively:

The Agency brand returns previously leaked fees to the agent, with the same level of support as a traditional franchise
The SLP brand enables agents to operate an independent operation with a highly sophisticated cost efficient technology platform

Portion of commission to an agent

Independent Operations

Traditional Franchise

Level of support to agent

Key financial assets Property management Mortgage financing Revenue under the property Mortgage financing is one of The Agency’s ancillary services, under PUM (#) 12% YoY Growth the brand Mortgage and Financial Solutions. The Agency’s management division is predominantly composed of management fees. For all 4,500 mortgage book currently consists of c.4,400 loans. Revenue 4,324 predominantly consists of upfront fees and trail income. properties under management (PUM), 4,400 the management fee, a percentage of rental income, is retained by The 4,300 $5.0M VALUE OF MORTGAGE BOOK (4) Agency Group. (5) 4,200 4,324 PUM 4,100 (1) 4,000 3,900 Unlike traditional property managers, Apr 18 May 18 Jun 18 Jul 18 Aug 18 The Agency incentivises agents through Sep 18 Oct 18 Nov 18 Dec 18 a long-term value proposition. Jan 19 Feb 19 Mar 19

As at 31 March 2019 WA NSW VIC QLD PUM Number of properties # 922 3,331 46 25

Annualised rental income $m 13.94 118.5 1.8 0.8 Rental income per property (2) $’000 17.6 36.7 39.1 32.9 Management fee % 8.7% 4.9% 5.9% 3.1% Annualised management fee (1) $m 1.1 5.6 0.1 0.02

Value of Rent Roll (1,3) $m 3.1 20.7 0.3 0.1

Notes: (1) Calculated from March 2019 quarterly management fee. (2) Calculated on occupied properties under management. (3) Calculated on a blended valuation multiple of 3.5x. (4) Calculated on a valuation multiple of 2.4x on annualised trail income calculated from March 2019 monthly trail income. (5) Calculated from March 2019 monthly trail income. 10

Financials – LTM The Agency recognised a loss of $0.2m in 3Q FY19, an 84% improvement on the pcp (loss of $1.5m EBITDA in 3Q FY18). The Company will continue to benefit from further cost synergies as it looks to 0.0 achieve scale and reap the benefits of its growth initiatives 0.0 EBITDA ($m) (1) 0.0

(0) (0.2) (1.0) (0) (2.4) (2.4) (0)

(0) 4Q FY18 1Q FY19 2Q FY19 3Q FY19

4Q FY18 1Q FY19 2Q FY19 3Q FY19

Property sales revenue 6.1 5.5 5.1 5.7

Property management revenue 2.1 2.2 2.2 2.2

Ancillary services revenue 1.1 1.3 1.2 1.1

COGS (1) (5.3) (4.8) (4.8) (4.3)

Gross Profit 4.0 4.1 3.6 4.8

Expenses (2.8) (2.3) (2.2) (1.8)

Corporate costs (3.6) (2.9) (3.8) (3.2)

Cost Base (6.5) (5.1) (6.0) (5.0)

EBITDA (2.4) (1.0) (2.4) (0.2)

EBITDA margin (26%) (12%) (28%) (3%)

Notes: (1) COGS excludes non-cash Future Fund item. 11

Operational metrics – LTM The Company, has experienced a strong improvement in GCI in the last quarter despite maintaining agent numbers as its strategic transformation of SLP has removed poor producing agents. The Agency continues to be supported by a strong property management division Number of agents (#) (1,2) Number of new listings (#) Number of PUM (#)

286 285 283 0.0 0.0 0.0 277 1,040 4,324 0.0 3,966 4,013 4,020 0.0 914 0.0 832 0.0 100 97 90 68 0.0 739 0.0 0.0 0.0 0.0 0.0 3,331 0.0 3,355 3,375 3,323 0.0 0.0 193 209 0.0 0.0 186 188 0.0 0.0 0.0 0.0 922 592 604 639 – – – 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY18 1Q FY19 2Q FY19 3Q FY19 The Agency SLP WA NSW VIC QLD

GCI ($m) Value of exchanges ($m) Annualised management fee ($m) (3) 0.0 0.0 0.8 680 6.6 6.6 6.9 0.0 11.0 0.0 6.5 10.3 0.7 630 596 613 0.0 0.0 1.8 9.0 8.7 1.4 0.6 0.0 1.2 0.5 0.0 2.0 0.4 0.0 5.6 0.0 5.7 5.7 5.7 0.3 0.0 9.1 8.9 0.0 7.5 7.0 0.2 0.0 0.0 0.1 0.0 0.8 0.8 0.9 1.1 – – – 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY18 1Q FY19 2Q FY19 3Q FY19 4Q FY18 1Q FY19 2Q FY19 3Q FY19 The Agency SLP WA NSW VIC QLD Notes: (1) Company figures include Illawarra region acquisition from 3Q FY19. (2) Following Fair Work Australia’s recent legislative changes the Company have performed a strategic review of the SLP agent network. (3) Calculated from quarterly management fee. 12

Key management

Senior management Board of directors Paul Niardone Andrew Jensen Managing Director Chairman Previously Executive Director and founder of Professional Public Relations (WA), Andrew, formerly CFO of Top Level Real Estate (acquired by The Agency), has the largest PR and communications firm in the State until he sold the business to extensive knowledge in the management of all aspects of finance with strong WPP. Experience in marketing and strategic planning for clients in both commercial, strategic, M&A, and change management experience. He has Government and the private sector and over 15 years experience with public financially led companies engaged in various fields including real estate and companies. ancillary services sectors globally. Fellow of IPA and member of the AICD.

Matt Lahood Paul Niardone Chief Executive Officer – The Agency Executive Director More than 30 years in real estate sales; 2,000+ property sales worth over $2bn. Previously Director of Sales for McGrath Real Estate, responsible for market entry strategies and management of 22 company owned offices and more than 250 people.

Steven Chen Matt Lahood Director of Projects Executive Director Over 20 years’ experience in real estate sales delivering over 3,000 properties worth in excess of A$2.5bn. Ranked 16 in the top 100 agents of 2016 by REB. x Previously Head of Projects for McGrath Real Estate where he was responsible for a team of eight Associate Directors and over 50 agents and support staff across Sydney, Brisbane and Gold Coast.

Maria Carlino John Kolenda Director of Property Management Non-Executive Director Over 27 years of real estate experience in key markets incl. Sydney, Brisbane and John is the co-founder and Managing Director of Finsure Group, one of Australia’s the Gold Coast. Previous senior roles at RUN Property, Ray White and McGrath fastest growing retail finance brokerages, writing over $1 Billion in new mortgages Real Estate where she was responsible for the management and growth strategies every month across 1300 brokers. He formed the Loan Market Group with Ray of the rental portfolio and team across all company owned offices. White and before that worked as the General Manager of Sales & Distribution of Aussie Home Loans.

Adam Davey Non-Executive Director Adam is Director, Private Clients and Institutional at Patersons Securities. His expertise spans over 25 years and includes capital raising (both private and public), mergers and acquisitions, ASX listings, asset sales and purchases, transaction due diligence and director duties.