Hemnet Group Ab · OMXSTO:HEM
Hemnet Group Ab — Q4 2023 Earnings Presentation
29 slides from Hemnet Group Ab's earnings presentation, Jan 31, 2024
Slide 1: Q4 2023 Presentation of the year-end report
Q4 2023 Presentation of the year-end report Hemnet Group ⎸ 31 Jan 2024 Hemnet Group AB (publ) ｜Sveavägen 9 ｜111 57｜Stockholm｜Sweden
Slide 2: Agenda
Agenda 10:00 CET START Q4 2023 and Year-end report Cecilia Beck Friis, CEO Financial highlights Anders Örnulf, CFO Business update Lisa Farrar, COO Closing remarks and Q&A Submit your questions via the webcast: 11:00 CET END https://ir.financialhearings.com/hemnet-q4-report-2023/ 2
Slide 3: Q4 2023 Summary
Q4 2023 Summary Key financials Highlights Net sales growth ● Revenue from property sellers up 55%, driven by increased demand for value-added services 36.8% (ARPL contribution from VAS almost doubled from LY) (SEK 275.0m) ● Improvements to the market environment, with “Strong ARPL growth ARPL growth
Slide 4: Hemnet is the Swedish property market, and the best portal to maximise your listing
Hemnet is the Swedish property market, and the best portal to maximise your listing and brand 9 in 10 properties sold in Sweden are on Hemnet Hemnet delivers 19x more clicks to listings Average number of clicks to a property listing 19x Other portal 4 Source: Statistics Sweden (2022), Hemnet data So
Slide 5: Q4 ARPL growth of 46% as contribution from value added services almost doubled
Q4 ARPL growth of 46% as contribution from value added services almost doubled from LY Y/Y growth +38% +31% +28% +46% Strong growth in revenue from VAS driven by (most recent) product and pricing ● ARPL from our value-added services nearly doubled compared to last year ● A significant part of the VAS
Slide 6: Q4 number of listings exceeded last year's volumes for the first time in 2023
Q4 number of listings exceeded last year’s volumes for the first time in 2023, up 5.3% Paid published listings per month (Y/Y change) Property market commentary 2022 2023 Annual listing volumes are down 11.6%, but Q4 volumes are up 5.3%. The number of transactions has decreased in line with these fig
Slide 7: Marketing investments remain under pressure as uncertainty persists
Marketing investments remain under pressure as uncertainty persists Product Result Change Key drivers Property ● Demand for VAS continues to grow B2C sellers 55% ● Listing volumes recovering vs. LY Real estate ● Strong demand for Hemnet unique products such as agents -3% Mäklartipset and Hemnet Busi
Slide 8: 19 employees added in 2023, with Q4 headcount unchanged
19 employees added in 2023, with Q4 headcount unchanged from Q3 2023 at 154 19 employees added during 2023 2023 was a successful recruitment year Q/Q growth ● Successful year where we filled a number of key +11 +6 +7 +6 - (most recent) roles and moved several consultants into full-time roles ● Majori
Slide 9: Milestone of SEK 1Bn net sales at 52% EBITDA margin reached in 2023
Milestone of SEK 1Bn net sales at 52% EBITDA margin reached in 2023 Net sales growth ARPL growth EBITDA growth Margin expansion +13% +37% +17% +2 pp Hemnet aims to achieve annual net sales growth of 15-20 percent Hemnet aims to achieve an adjusted EBITDA margin of over 55 percent in the long term 9
Slide 10: A productive year, despite market challenges
A productive year, despite market challenges Success in business …as well as product operations… execution 13% net sales growth, despite 12% decline in Buyers Sellers Agents published listings Strong market position, Photos on sold properties Republishing included in Sold by Us with 9 in 10 sold Pre
Slide 11: We have developed several levers to drive sustainable ARPL growth
We have developed several levers to drive sustainable ARPL growth Product & packaging Agent recommendations - Product and package features - Increasing % of agents - Clarifying value recommending VAS - Strong network effects - Finding the right incentives - Direct communication channel - Win-win sol
Slide 12: Our thesis is unchanged - the Swedish property market is stable over time
Our thesis is unchanged - the Swedish property market is stable over time Published listings (Country, 12 month moving sum - including trendline) 12 Source: Hemnet data based on paid published listings. Does not include new development listings published under subscriptions or republished listings
Slide 13: We continue to actively develop our ESG agenda
We continue to actively develop our ESG agenda ● Long-term target for net-zero greenhouse Science Based Targets gas emissions by 2050 approved by the Initiative (SBTi) Science Based Target initiative (SBTi) Corporate Sustainability ● Defined process for 2024 to prepare for Reporting Directive upcomin
Slide 14: Financial Highlights
Financial Highlights Anders Örnulf, CFO 14
Slide 15: Q4 2023 Financial Summary
Q4 2023 Financial Summary Net Sales ARPL 37% SEK 275.0m +46% SEK 5,911 EBITDA Cash conversion 60% SEK 141.6m 92% FCF/Adj. EBITDA EBITDA margin Leverage +7.3pp 51.5% 0.8x Net debt/Adj. EBITDA 15 Note: rounded growth numbers
Slide 16: 60% growth in EBITDA versus Q4 2022
60% growth in EBITDA versus Q4 2022 EBITDA bridge Key drivers SEK million, Y/Y change 55% growth in net sales from property A A Net sales sellers Compensation to B B Grows in line with seller revenue real estate agents Other external C C Lower consulting and marketing costs expenses No changes in nu
Slide 17: 17% growth in 2023 full year EBITDA
17% growth in 2023 full year EBITDA EBITDA bridge Key drivers SEK million, Y/Y change ARPL growth and stabilisation in listing A A Net sales volumes Compensation to B B Grows in line with seller revenue real estate agents Other external Paused marketing spend and reduced C C expenses consultant spen
Slide 18: LTM cash flow grows and is used for investments & share buybacks
LTM cash flow grows and is used for investments & share buybacks, while leverage remains stable LTM Free cash flow Share buybacks Net debt and leverage SEK million SEK million, thousand shares bought SEK million, leverage 18 Note: definitions of alternative key ration can be found in the financial rep
Slide 19: Business Update
Business Update Lisa Farrar, COO 19
Slide 20: The Swedish agent industry and Hemnet have a unique and mutually beneficial partnership
The Swedish agent industry and Hemnet have a unique and mutually beneficial partnership Agents founded Hemnet 9/10 properties sold in in 1998, and all listings Sweden each year are are agent intermediated published on Hemnet Hemnet is a significant revenue Agents administer the listings and stream fo
Slide 21: The unique relationship enables Hemnet to grow ARPL and the total compensation to agents
The unique relationship enables Hemnet to grow ARPL and the total compensation to agents Total agent compensation and ARPL growth Total compensation to agencies Change #2: Increasing ARPL (SEK) commission to 20-40%, Change #1: Introducing a 20% lowering admin fee to 30%* commission on top of 50% adm
Slide 22: Updating the compensation model to drive simplicity, fairness and the right incentives
Updating the compensation model to drive simplicity, fairness and the right incentives Why we are updating the model? What are we changing? ● Our Plus and Premium packages have become the obvious choice among sellers Changing the Admin fee commission ● Agents play a crucial role to help sellers unde
Slide 23: The updated model is designed to reward offices that actively promote Hemnet's VAS
The updated model is designed to reward offices that actively promote Hemnet’s VAS Before the update After the update ✓ Administration fee variable ✓ Administration fee fixed ✓ Commission calculated only on revenue ✓ Commission is calculated on total revenue from all seller from VAS products ✓ Commis
Slide 24: Giving agents the right tools and information to be better ambassadors and resellers
Giving agents the right tools and information to be better ambassadors and resellers for our VAS Tools that help agents be better ambassadors and resellers for VAS Main benefits from a full digital flow implementation The right process and sale arguments ● Better track progress of listing Sellers ●
Slide 25: Summary
Summary Cecilia Beck-Friis, CEO 25
Slide 26: Q4 2023 Summary
Q4 2023 Summary Key financials Highlights Net sales growth ● Revenue from property sellers up 55%, driven by increased demand for value-added services 36.8% (ARPL contribution from VAS almost doubled from LY) (SEK 275.0m) ● Improvements to the market environment, with “Strong ARPL growth ARPL growth
Slide 27: Q&A
Q&A 27 Hemnet Group AB (publ) ｜Sveavägen 9 ｜111 57｜Stockholm｜Sweden
Slide 28: IR Contacts
Dial-in instructions IR Contacts IR Contacts Hemnet invites analysts, investors and media to participate in the results presentation on 31st January 2024 at 10:00 CET. The results will be Anders Örnulf presented by CEO Cecilia Beck-Friis and CFO Anders Örnulf. CFO The presentation will be held in En
Slide 29: Disclaimer
Disclaimer This presentation may contain forward-looking information and statements with respect to the financial condition, results of operation and business of Hemnet Group AB (publ) (the "Company"). Such forward-looking information and statements are based on current expectations, estimates and p