Hemnet Group Interim report Q4 2022

Summary for the period October-December 2022

• Net sales increased by 13.4 percent to SEK 201.0m (177.3)
• Adjusted EBITDA increased 5.0 percent to SEK 88.8m (84.6)
• Operating profit increased 10.2 percent to SEK 71.3m (64.7)
• ARPL, average revenue per published listing, increased 33.5 percent to SEK 4,044 (3,029)

Summary for the period January-December 2022

• Net sales increased by 22.1 percent to SEK 889.2m (728.1)
• Adjusted EBITDA increased 26.2 percent to SEK 448.1m (355.0)
• Operating profit increased 68.6 percent to SEK 377.5m (223.9)
• ARPL, average revenue per published listing, increased 32.8 percent to SEK 3,275 (2,467)
• Total distribution to shareholders of SEK 374.0m, from dividend and share repurchases
• In line with the company’s dividend policy, the board of directors proposes a dividend of SEK 1.00 (0.55) per share, corresponding to approximately one third of earnings per share and an increase of +81.8%.

* Alternative Performance Measure, see pages 17-19 for derivation and definitions.

¹ The calculation of dilution of shares is made based on the number of days that the warrant programmes that have been active during each respective period. As no market price is available to set against the exercise price and the number of warrants is limited in relation to the number of ordinary shares, the dilution effect for periods before Hemnets IPO on 27 April, 2021, has been calculated based on the maximum theoretical dilution. For periods beginning after 27 April, 2021, the calculation of dilution is made based on the average share price during each respective period.

Chief Executive’s Comments

Operational highlights
 

• Average revenue per published listing (ARPL) increased 32.8 percent to SEK 3,275 (2,467) for the full year and 33.5 percent to SEK 4,044 (3,029) in the fourth quarter.
• Income from real estate agents increased by 18.7 percent for the full year and 9.5 percent for the quarter. Increase was driven by a high demand for display advertising and Hemnet unique products.
• Adjusted EBITDA increased 26.2 percent to SEK 448.1 (355.0) million for the full year and 5.0 percent to SEK 88.8 (84.6) million in the quarter. The lower increase for the fourth quarter is explained by published listing volumes decreasing 10 percent coupled with investments in talent and product development.

Comments
 

Hemnet delivers a strong result for the fourth quarter, despite a challenging property market. Looking at the full year, we have exceeded all of our financial targets, while at the same time continuing to invest for future growth.

Net sales from property sellers grew by 20.9 percent for the quarter. While net sales were impacted by lower listing volumes in the fourth quarter compared to previous year, growth was largely driven by an increasing share of our customers upgrading to a larger package to increase the visibility of their listing. Continued product enhancements resulting in higher demand, as well as continued active work on pricing, contributed to ARPL increasing 33.5 percent.

Over the year as a whole, the volume of listings on Hemnet was in line with 2021, but fluctuated more than in a typical year. The year began with a very active housing market and high volumes, which then declined in the autumn due to increased inflation and announced interest rate increases. In the fourth quarter, the number of listings decreased by 10% compared to the same period last year. It is difficult to predict how the property market will develop in the near future and how this will impact listing volumes. In the past, however, the Swedish property market has been stable over time and driven by people’s real need to move rather than by speculation.

Demand from real estate agents continued to be strong during the quarter due to a combination of product development, packaging and pricing, while advertising sales to property developers and other business customers declined due to market factors. We continued to expand our business partner offering and now have a strong platform from which to grow our product portfolio. Among other things, we have launched a new section where our visitors can search for agents, creating new opportunities for real estate agents to find home sellers, either organically or by investing in value-added services to increase visibility. Thanks to our large audience, Hemnet has become one of Sweden’s largest agent search destinations in just a few months. We have also launched a valuation service which is now available nationwide and repackaged our offering to property developers for greater clarity and more customer value.

During the year, properties with a total price of SEK 650 billion were listed on Hemnet and a total of 52.6 million hours were spent on our platforms, showing the strong engagement in our offering and content. Together with higher conversion and ARPL, increased demand from real estate agents, continued pricing power and exceeded financial targets, it is clear how Hemnet’s business model has proven itself during a challenging year for the property market. We have decided to reiterate our current financial target for profitability for 2023, despite current market conditions. In a more normalized market however, we believe the investments we are making, combined with the operating leverage of our business, creates good opportunities for margin expansion going forward and we therefore introduce a new  long-term, profitability target of an adjusted EBITDA margin exceeding 55 percent.

Cecilia Beck-Friis, CEO

January 2023

*****************************************

Webcast presentation

Hemnet’s CEO Cecilia Beck-Friis and Interim CFO Jens Melin will present the year-end report including a summary of 2022 and CPO Francesca Cortesi will present the company's plan for product development for 2023. After the presentation there will be a Q&A. The presentation will be held in English and is estimated to be finished by 11.00.

Date: January 27th 2023

Time: 10:00

The presentation can be viewed live via the link below. Written questions can be posted via the webcast. 

If you wish to participate via teleconference please register on the link below. After registration you will be provided with phone numbers and a conference ID to access the conference. You can ask questions verbally via the teleconference, or via the chat function in the webcast.   

The report and presentation material will be available on hemnetgroup.com.

*****************************************

For more information please contact:

Press enquiries
Staffan Tell, Head of PR
M: +46 733 67 66 85
E: staffan.tell@hemnet.se
 

IR enquiries
Jens Melin, Interim CFO
M: +46 709 99 33 59
E: jens.melin@hemnet.se

Nick Lundvall, IR Manager & Head of Corporate Development
M: +46 76 145 21 78
E: nick.lundvall@hemnet.se

This is information that Hemnet Group AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on 27 January, 2023 at 08:00 CET.
 

About Hemnet

Hemnet operates the leading property platform in Sweden. The company emerged as an industry initiative in 1998 and has since transformed into a "win-win" value proposition for the housing market. By offering a unique combination of relevant products, insights and inspiration, Hemnet has built lasting relationships with buyers, sellers, and agents for more than 20 years. Hemnet shares a mutual passion for homes with its stakeholders and is driven by being an independent go-to-place for people to turn to for the various housing needs that arise through life. This is mirrored in the Company’s vision to be the key to your property journey, supplying products and services to improve efficiency, transparency and mobility on the housing market. Hemnet’s is listed on Nasdaq Stockholm (‘HEM’).

Follow us: hemnetgroup.com / Facebook / Twitter / LinkedIn / Instagram