Slide 1: Q3 2023 Presentation of the interim report
Q3 2023 Presentation of the interim report Hemnet Group ⎸ 25 Oct 2023 1 Hemnet Group AB (publ) ｜Sveavägen 9 ｜111 57｜Stockholm｜Sweden
Slide 2: Q3 2023 Summary
Q3 2023 Summary Key financials Highlights Net sales growth ● Strong growth in ARPL of 27.9% - driven in part by a doubling in Premium revenue y/y. Seller 13.9% revenue up 23.5% (SEK 272.0m) ● Listing volumes have stabilized - down 4% in Q3 and 14.5% YTD (vs. 21.6% in Q2 2023) “Hemnet delivers 28% ARP
Slide 3: Q3 ARPL growth of 28% driven by increased demand for value-added services and pricing
Q3 ARPL growth of 28% driven by increased demand for value-added services and pricing Y/Y growth +38% +31% +28% +34% Strong growth in revenue from VAS driven by (most recent) product and pricing ● Increased demand for value-added services such as Hemnet Premium and Renewal ● Hemnet Premium revenue a
Slide 4: Sweden is a buy-to-live market - listing volumes have stabilized in Q3
Sweden is a buy-to-live market - listing volumes have stabilized in Q3 Our view of the Swedish property market remains Listing volumes have stabilized unchanged - stable over time Change in listing volumes Year-on-year change No fundamental change - Sweden is a buy-to-live market Annual volumes stab
Slide 5: Listing volumes have gone from below average trend to above during Q3 and into Q4
Listing volumes have gone from below average trend to above during Q3 and into Q4 Weekly published listings (Country, 12 week average - including historical average. Dotted lines indicate past annual volumes 2014-2021) Legend 2023 2022 Average (‘14-’22) 5 Source: Hemnet data
Slide 6: 24% growth in seller revenue is offset by a weaker market for property developers and advertising
24% growth in seller revenue is offset by a weaker market for property developers and advertising Product Result Change Key drivers Property ● Demand for VAS continues to increase B2C sellers 24% ● Listing volumes recovering vs. LY Real estate agents ● Lower display investments offset by continued h
Slide 7: We continue to invest in our future growth
We continue to invest in our future growth Investments in growth predominantly in product and 6 employees added by end of Q3 development teams Number of employees (At period end) ● Recruitment mainly geared towards areas that were previously difficult to recruit in, such as app devs ● Moved a number o
Slide 8: New corporate governance structure for increased alignment and improved execution
New corporate governance structure for increased alignment and improved execution The addition of our new COO Lisa Farrar on 6th November 2023 will lead to a smaller and more focused Group Management Team (GMT) supported by an Extended Leadership Team (ELT) Chief Executive Officer Cecilia Beck-Friis
Slide 9: We continue to actively develop our ESG agenda
We continue to actively develop our ESG agenda ● According to one of our sustainability targets for 2023, we have now mapped out all of our indirect emissions within scope 3 ● Based on this, we will commit to a long-term net zero emission target within the Science Based Targets initiative (SBTi). Su
Slide 10: Product updates
Product updates Cecilia Beck-Friis, CEO 10
Slide 11: Hemnet has significantly increased the engagement between agents and sellers
Hemnet has significantly increased the engagement between agents and sellers We want to create products that have a Sticky bar increased number of Sold properties with images get win-win proposition for agents and sellers contacting agents by 150% 50% more visits Hemnet Available for c. 150,000 list
Slide 12: "Pay when listing is removed" is a win-win proposition for Agents, Sellers and Hemnet
“Pay when listing is removed” is a win-win proposition for Agents, Sellers and Hemnet Select package… …and timing of payment Product overview ● Product launched on 24th October 2023 ● Invoice sent on sale, or 4 months after publication ● No change in credit risk from current model ● Agent compensati
Slide 13: "Sold by us" is a new product that leverages agents' sold properties
“Sold by us” is a new product that leverages agents’ sold properties to attract new sellers ● Capturing SEK1.1Bn of annual marketing spend¹ from the agent industry ● Product launch January 2024, sales ongoing ● Monthly subscription with an unlimited number of available slots for sale Exposure on Hem
Slide 14: Generative AI is an opportunity for the online classifieds space and for Hemnet
Generative AI is an opportunity for the online classifieds space and for Hemnet Current AI applications Future applications ● Currently exploring the use cases with most potential, including search, data, customer workflow and internal processes ● Reviewing which off-the shelf tools are most relevan
Slide 15: Financial Update
Financial Update Anders Örnulf, CFO 15
Slide 16: Financial highlights Q3 2023
Financial highlights Q3 2023 Net Sales ARPL 14% SEK 272.0m +28% SEK 4,353 EBITDA Cash conversion 21% SEK 156.0m 100% FCF/Adj. EBITDA EBITDA margin Leverage +3.6pp 57.4% 0.8x Net debt/Adj. EBITDA 16 Note: rounded growth numbers
Slide 17: 21.4% growth in EBITDA driven by listing volumes and strong growth for value-added services
21.4% growth in EBITDA driven by listing volumes and strong growth for value-added services EBITDA bridge Key drivers SEK million 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 sp
Slide 18: Strong cash flow and balance sheet provides growth and buyback flexibility
Strong cash flow and balance sheet provides growth and buyback flexibility Strong free cash flow to fund We continue to distribute excess With significant balance sheet investments and buybacks capital through buybacks flexibility LTM Free cash flow Share buybacks Net debt and leverage SEK million S
Slide 19: Net sales below financial target despite strong ARPL growth, EBITDA margin above 2023 target
Net sales below financial target despite strong ARPL growth, EBITDA margin above 2023 target of 45-50% Net sales growth target Adj. EBITDA target Leverage target 15-20% 5-year CAGR >55% <2.0x 5-year CAGR (Long-term, 45-50% for 2023) 19 Note: rounded growth numbers
Slide 20: Summary
Summary Cecilia Beck-Friis, CEO 20
Slide 21: Q3 2023 Summary
Q3 2023 Summary Key financials Highlights Net sales growth ● Strong growth in ARPL of 27.9% - driven in part by a doubling in Premium revenue y/y. Seller 13.9% revenue up 23.5% (SEK 272.0m) ● Listing volumes have stabilized - down 4% in Q3 and 14.5% YTD (vs. 21.6% in Q2 2023) “Hemnet delivers 28% ARP
Slide 22: Q&A
Q&A 22
Slide 23: IR Contacts
Dial-in instructions IR Contacts IR Contacts Hemnet invites analysts, investors and media to participate in the results presentation of the first quarter on 25th October 2023 at 10:00 CET. The Anders Örnulf results will be presented by CEO Cecilia Beck-Friis and CFO Anders Örnulf. CFO The presentatio
Slide 24: 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