PowerPoint Presentation ?· 2 Forward-Looking Statements This presentation includes “forward-looking…

  • View

  • Download

Embed Size (px)


  • May 2019

    Investor Presentation

  • 2

    Forward-Looking Statements

    This presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are often identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” “anticipate,” “may,” “will,” “would” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. Forward-looking statements include statements related to: agent count; franchise sales; revenue; operating expenses; dividends; non-GAAP financial measures; housing and mortgage market conditions; economic and demographic trends; competition; technology initiatives; potential transactions; future expansion of Motto Mortgage and such expansion’s impact on revenue; statements regarding agent productivity and the Company’s agents performing well in any market; statements regarding our recently announced referral relationship and its impact on our business; and the Company’s strategic and operating plans and business models, including our belief that our agent-centric model is resilient and more insulated to a slowdown in real estate transactions compared to more traditional broker-centric businesses. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily accurately indicate the times at which such performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Such risks and uncertainties include, without limitation, (1) changes in the real estate market or interest rates and availability of financing, (2) changes in business and economic activity in general, (3) the Company’s ability to attract and retain quality franchisees, (4) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (5) changes in laws and regulations, (6) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (7) the Company’s ability to implement its technology initiatives, (8) fluctuations in foreign currency exchange rates, (9) the impact of recent changes to our senior management team, (10) the impact of the findings and recommendations of the previously disclosed Special Committee investigation on the Company and its management and operations, including the effect of measures taken in response to the investigation, reputational damage to the Company relating to the investigation, time and expenses incurred in implementing the recommendations of the Special Committee, any legal proceedings or governmental or regulatory investigations or actions related to the underlying matters of the Special Committee’s internal investigation or other matters, and the diversion of management’s time and resources to address such matters, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no obligation, to update this information to reflect future events or circumstances.

  • 3

    Why Invest in RE/MAX Holdings, Inc. Today?

    Organic Growth Catalysts Return of Capital

    Shareholder Return Driven By

     Stable recurring revenue

     High margin & strong free

    cash flow

    Driven by:

    1) Agent growth

    2) Motto Mortgage

    3) Franchise sales

    4) Rising average home prices

     Independent region


     Reinvest in the business

     Other acquisitions within our

    core competencies of

    franchising and real estate

     Committed to returning

    capital through dividend

    payments over time

     Dividend metrics:

    – ~35% of FCF in 20181

    – $0.21 quarterly dividend

    FCF Fuels Catalysts and Return of Capital to Create Shareholder Value

    1Free Cash Flow (“FCF”) = Operating Cash Flow – Capital Expenditures; $24M 2018 quarterly dividend payments / $68M 2018 FCF = 36%;

    see Appendix for reconciliation of non-GAAP measures

  • 4

    Our Differentiated Business: Strength and Resiliency in Times of a Shifting Housing Market

    Strong Annual Adjusted EBITDA3 Conversion to Free Cash Flow3

    Differentiated Business


     Multiple, primarily recurring, fee-based revenue streams

     100% franchised1

     “Asset light”

     Healthy margins

     Low net leverage of 1.6x2

    coupled with strong cash flow generation

    Capital Allocation


     Acquire Independent Regions

     Reinvest in the business to drive future organic growth

     Other strategic acquisitions & partnerships

     Return of capital

    1Excluding booj 2Based on twelve months ended March 31, 2019, Adjusted EBITDA of $104.5M and net debt of $162.5M, net of unamortized debt discount, debt issuance costs

    and unrestricted cash balance at March 31, 2019 3Non-GAAP measure. See the Appendix for definitions of non-GAAP measures.

  • 5

    Smarter Agents, Smarter Technology The RE/MAX + booj Platform

  • 6

    The Real Estate Franchisor

  • 7

    Unique product or service offering

    Brand name and market share

    Training and productivity tools

    Group purchasing power

    Hallmarks of a Successful Franchise Business

    Key Success Factors of Franchisors Successful Franchisors

  • 8

    RE/MAX is a Premium Franchisor

    Nobody in the world sells more real

    estate than RE/MAX1

    100% franchised business, delivering

    the full economic benefits of the model2

    Dual-brand franchisor, focused on our

    core businesses

    Among the best-in-class franchisor

    operating margins

    1As measured by residential transaction sides 2Excluding booj

  • 9

    Realogy Brand

    Transactions Per

    Agent (Large

    brokerages only)1

    U.S. Transaction

    Sides2 Brand Awareness

    (unaided)3 Countries and

    Territories Offices Worldwide Agents Worldwide

    16.3 1 million+ 30.2% 110+ 8,229 124,280

    10.3 Not Released 0.4% 11 500 8,000

    8.6 128,416 1.3% 36 2,300 40,300

    8.0 709,117 15.0% 44 3,200 94,200

    7.9 Not Released 4.5% 3 1,450 50,000

    7.6 393,184 21.0% 80 9,600 127,500

    6.8 76,844 0.8% 4 360 12,100

    6.5 1 million+ 8.0% 37 1,000 180,000

    6.5 123,113 2.1% 72 1000 22,600

    4.7 74,678 0.1% 2 53 15,570

    4.6 51,000 0.3% 2 160 11,000

    4.2 34,644 0.1% 1 238 8,155

    3.9 56,000 0.1% 1 168 16,000

    ©2019 RE/MAX, LLC. Each office independently owned and operated. Data is full-year or as of year-end 2018, as applicable. Except as noted, Coldwell Banker, Century 21,ERA, Sotheby’s and Better Homes and Gardens data is as reported by Realogy Corporation on SEC 10-K, Annual Report for 2018; all other competitor data is from company websites and industry reports.1Transaction sides per agent for all but Realty ONE Group are calculated by RE/MAX based on 2019 REAL Trends 500 data, citing 2018transaction sides for the 1,757 largest participating U.S. brokerages. Coldwell Banker includes NRT. Berkshire does not include HomeServices of America. Transaction sides per agent for Realty ONE Group calculated using company’s data included in above chart.2Compass and eXp Realty totals are for residential transactions only and do not include commercial transactions; totals for all other brands include commercial transactions.3MMR Strategy Group study of unaided awareness among buyers, sellers, and those planning to buy or sell; asked, when they think of real estate brands, which ones come to mind?

  • 10

    the Mortgage Brokerage Franchisor

  • 11

    Motto Mortgage Fact Sheet

     100% franchised mortgage brokerage business

     Not a lender and does not underwrite loans

     Offers convenience to home buyers by bringing real estate

    agents and licensed loan originators together under one roof

     Motto Mortgage loan originators access a variety of quality

    loan options from multiple leading wholesalers

     Core operational team is scaling as Motto grows

     Franchises can be purchased by select qualified candidates

    both within and outside of RE/MAX network

  • 12

    Motto Mortgage Timeline


    Sold License