Significant events during the fiscal year
through higher average prices but also through higher conversion rate for value-added services for home sellers, which has continued to increase and has thus contributed, together with a segmented price model, to a significant growth in revenue. The growth in listings revenue has meant that the average revenue per published listing, ARPL, increased by 32.8 percent to SEK 3,275 (2,467). Turnover from other services increased by 0.5 percent to SEK 220.8 (219.8) million, mainly driven by a strong display ad business. In 2021, other services included revenues of SEK 5.7 million related to a marketing campaign together with Mäklarsamfundet. This revenue has been treated as an item affecting comparability when calculating adjusted EBITDA. Operating profit Operating profit increased by 68.8 percent to SEK 377.5 (223.9) million, corresponding to an operating margin of 42.5 (30.8) percent. Other external costs decreased by -0.3 percent and amounted to SEK 299.0 (299.9) million. Administration and commission compensation to affiliated real estate offices together constitute the largest item in other external costs and increased by 22.8 percent to SEK 184.3 (150.1) million, primarily as an effect of the increased revenues from property sellers. The remaining part of other external expenses decreased by 23.4 percent and amounted to SEK 114.7 (149.8) million. Part of the decrease comes from that 2021 included costs in relation to preparations for Hemnet’s IPO, as well as from marketing costs. These non- recurring items consisting of consultancy costs for work on Hemnet’s IPO (SEK 48.7 million) and costs for a marketing campaign with Mäklarsamfundet (SEK 9.1 million) are treated as items affecting comparability in the calculation of adjusted EBITDA. Personnel costs increased by 17.8 percent and amounted to SEK 153.2 (130.0) million as a result of a growing organisation where personnel reinforcements took place primarily within the product development teams to continue strengthening Hemnet’s customer offering through the development of new and existing products. Net financial items The net from financial income and financial expenses amounted to SEK -6.8 (-25.8) million and consists mainly of interest expenses on the Group’s bank loan. In 2021, net financial items were also charged with SEK -13.8 million regarding capitalised arrangement fees treated as cost as part of the repayment of the Group’s previous credit facility in connection with the stock exchange listing. Profit before tax amounted to SEK 370.7 (198.1) million. Taxes Reported total tax expense amounts to SEK 76.9 (41.6) million, which corresponds to an effective tax of 20.8 (21.0) percent. Current tax expense amounted to SEK 86.8 (55.8) million, while deferred tax income amounted to SEK 9.9 (14.2) million. Profit for the year Profit for the year after tax amounted to SEK 293.8 (156.5) million. Earnings per share Earnings per share, basic & diluted, amounted to SEK 2.93 (1.55). Investments The company’s intangible assets consist mostly of goodwill, customer relationships, platform and trademarks that have been identified in connection with the acquisition of the then Hemnet group. There was no impairment requirement during the current financial year. During the year, as in the previous years, the company worked on developing its product offering. Development took place with both the company’s own staff and with external consultants. Some specific development projects have been deemed of such a nature and with such expected future earnings that they have been treated as capitalised development expenses. In total for the year, SEK 13.7 (6.5) million has been capitalised, thus increasing intangible fixed assets. Otherwise, the business has only a minor need for investment in equipment, with the year’s new purchases amounting to SEK 1.8 (0.5) million. Cash flow Cash flow from operating activities amounted to SEK 356.0 (235.0) million, of which changes in working capital amounted to SEK +8.2 (-3.3) million. The increase in cash flow is mainly attributable to the higher profit from operations. Cash flow from investing activities in tangible and intangible assets resulted in a cash flow of SEK -15.5 (+17.7) million. Cash flow from financing operations amounted to SEK -334.6 (-405.3) million.
Share repurchases The 2022 Annual General Meeting resolved to initiate a share repurchase programme of maximum SEK 450 million until the 2023 Annual General Meeting. The purpose of the programme is to adjust the Company’s capital structure by reducing the share capital. The Board of Directors therefore intends to propose to the Annual General Meeting 2023 that the repurchased shares be cancelled. During 2022, the Company has repurchased a total of 2,235,683 shares for a total amount of SEK 318.3 million. Board and management team changes On 31 August 2022, Hemnets previous Chair of the Board resigned and was replaced by Christopher Caulkin as interim Chair until the 2023 AGM. On 8 August 2022, Hemnets previous CFO left the company and was replaced by Jens Melin as interim CFO until a new CFO joins. On 17 August 2022, Hemnet strenghtened its management team with Anna Kempe joining as Chief People and Culture Officer, while Peter Frey replaced PerOla Schelvander as Chief Technology Officer. Covid-19 The Covid-19 pandemic has had a major impact on society but has not had any significant negative impact on Hemnet’s financial results during 2022. The number of visits to Hemnet increased during the beginning of the pandemic and during the first half of 2021, after which the number of visits has returned to more normal levels. During the period, the number of published listings increased as well as the ARPL (average revenue per listing). Overall increased remote working during the pandemic has likely benefited the interest in Hemnet, as the home and living environment became an even more important part of people’s everyday life. War in Ukraine The war in Ukraine may have had a negative impact on traffic to Hemnet during a period of time. However, the company’s assessment is that this has not had and will not have a material financial impact. Financial overview Below is a multi-year comparison for the Group’s five latest fiscal years. 2022 2021 2020 2019 2018 Net sales 889.2 728.1 544.1 444.4 373.1 EBITDA 448.1 302.9 188.0 171.9 138.1 EBITDA margin, % 50.4% 41.6% 34.5% 38.7% 37.0% Adjusted EBITDA 448.1 355.0 202.1 171.9 138.1 Adjusted EBITDA margin, % 50.4% 48.8% 37.1% 38.7% 37.0% Operating profit 377.5% 223.9 110.5 98.7 73.3 Operating margin, % 42.5% 30.8% 20.3% 22.2% 19.6% Income after financial items 370.7 198.1 86.8 83,6 47.7 Profit after tax 293.8 156.5 67.7 65.6 53.2 Profit margin, % 33.0% 21.5% 12.5% 14.8% 14,3% Average revenue per published listing (ARPL), SEK 3,275 2,467 1,760 1,414 1,079 Equity/Assets ratio, % 68.4% 71.1% 56.9% 53.4% 54.7% Net debt 228.1 188.6 415.1 521.4 471.3 Net debt/ EBITDA, times 0.5 0.6 2.2 3.0 3.4 Net debt/adjusted EBITDA, times 0.5 0.5 2.1 3.0 3.4
Debt/Equity ratio, times Number of employees
0.2
0.2
0.5
0.6
0.6
135
112
108
92
79
Number of published listings in the period
198.3 198.4 189.3 185.0 188.0
Net sales Net sales increased by 22.1 percent and amounted to SEK 889.2 (728.1) million. Both service categories grew during the year. Property listing related revenues increased by 31.5 percent to SEK 668.4 (508.3) million, mainly
32 · Hemnet Group | Annual and sustainability report 2022
Administration report
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