New compensation model for real estate agencies and new segmented pricing model for Hemnet Bas On 1March, Hemnet launched a new compensationmodel for real estate agencies. The newmodel places greater emphasis on commissions for selling and recommending Hemnet’s value-added services, and less emphasis on remuneration for the administration of the base listing. This creates a good opportunity for real estate agencies to participate in Hemnet’s growth journey, while at the same time providing incentives for the sale of our value-added services - one of our most important strategic goals. On 1March, an important step was also taken in Hemnet’s pricing strategy when the pricingmodel for the base listing (Hemnet Bas) was adapted to the rest of our product portfolio of marketing packages (Hemnet Plus and Hemnet Premium). All of Hemnet’s products for home sellers now have flexible and segmented pricing, which gives the company improved opportunities to offer the right price to customers. New credit facility In connection with Hemnet’s listing on Nasdaq Stockholm, as of 27 April, 2021, the previous credit facility of SEK 683.5 million was repaid and a new rolling credit facility of SEK 500 million was raised. Voluntary repayments on the new loan have since been made on an ongoing basis during the year, after which the outstanding loan as of 31 December, 2021 amounts to SEK 280 million. The new credit facility runs over three years and its credit terms and interest rates have generally improved. The loan has no mandatory amortisations until the redemption date. In connection with the redemption of the previous credit facility, previously capitalised arrangement fees were also treated as cost, which affected net financial items negatively by SEK -13.8 million. Covid-19 The Covid-19 pandemic continued to have a major impact on society during the period but has not had any significant negative impact on Hemnet’s financial results. The number of visits to Hemnet.se increased during the beginning of the pandemic and the first half of 2021, before returning to more normal levels in the end of 2021. The same trend was also been seen with published listings which have increased more than normal, primarily during mid-2021. ARPL (average revenue per listing) has steadily increased in 2021. Overall increased remote working during the pandemic has likely benefitted the interest in Hemnet, as the home and living environment became an even more important part of people’s everyday life.
Net sales Net sales increased by 33.8 percent and amounted to SEK 728.1 (544.1) million. All three service categories showed good growth. Sales fromproperty listing increased by 31.6 percent to SEK 411.5 (312.7) million, mainly through higher average prices but also as a result of an increase in the number of home listings from home sellers. Revenue from value-added services increased by 81.9 percent to SEK 140.9 (77.5) million, mainly driven by services targeted at home sellers in the form of Hemnet Plus, Hemnet Premium, Raketen and Förnya annons (renew ad). The conversion rate for these services for home sellers has continued to increase and has thus contributed, together with a segmented price model, to a significant growth in revenue. The growth in income from property listings and from value-added services to home sellers has meant that the average revenue per published listing, ARPL, increased by 40.2 percent to SEK 2,467 (1,760). Turnover from advertising and other business increased by 14.2 percent to SEK 175.7 (153.9) million, mainly driven by a strong display ad business. Advertising revenues include revenues of SEK 5.7 (4.3) 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 102.6 percent to SEK 223.9 (110.5) million, corresponding to an operating margin of 30.8 (20.3) percent. Other external costs increased by 22.3 percent and amounted to SEK 299.9 (245.3) million. Administrative compensation and commission compensation to affiliated real estate offices together constitute the largest item in other external costs and decreased by 0.7 percent to SEK 150.1 (151.2) million, primarily as an effect of the changed compensation model for real estate offices. The remaining part of other external expenses increased by 59.2 percent and amounted to SEK 149.8 (94.1) million. Part of the increase comes from consultancy costs, which have primarily increased as a result of the work on preparations for Hemnet’s IPO, as well as frommarketing costs. 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 13.2 percent and amounted to SEK 130.0 (114.8) 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. Bonuses to the management team have also contributed to the cost increase. Net financial items The net from financial income and financial expenses amounted to SEK -25.8 (-23.7) 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 198.1 (86.8) million. Taxes Reported total tax expense amounts to SEK 41.6 (19.1) million, which corresponds to an effective tax of 21.0 (22.0) percent. Current tax expense amounted to SEK 55.8 (32.7) million, while deferred tax income amounted to SEK 14.2 (13.6) million. Profit for the year Profit for the year after tax amounted to SEK 156.5 (67.7) million. Earnings per share Earnings per share, basic & diluted, amounted to SEK 1.55 (0.67). 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 year, 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 6.5 (6.0) 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 0.5 (1.0) million.
Financial overview Below is a multi-year comparison for the Group’s five fiscal years.
2021 2020 2019 2018 2017 728.1 544.1 444.4 373.1 317.2
Net sales
EBITDA
302.9 188.0 171.9 138.1
76.2
EBITDA margin, % Adjusted EBITDA Adjusted EBITDA margin, % Operating profit
41,6% 34.5% 38.7% 37.0% 24.0%
355.0 202.1 171.9 138.1
76.2
48.8% 37.1% 38.7% 37.0% 24.0%
223.9 110.5 13.0 Operatingmargin, % 30.8% 20.3% 22.2% 19.6% 4.1% Income after financial items 198.1 86.8 83,6 47.7 -23,2 Profit after tax 156.5 67.7 65.6 53.2 -25.4 Profit margin, % 21.5% 12.5% 14.8% 14,3% -8.0% Average revenue per published listing (ARPL), SEK 2,467 1,760 1,414 1,079 946 Equity/Assets ratio, % 71.1% 56.9% 53.4% 54.7% 55.4% Net debt 188.6 415.1 521.4 471.3 545.5 Net debt/ EBITDA, times 0.6 2.2 3.0 3.4 7.2 Net debt/adjusted EBITDA, times 0.5 2.1 3.0 3.4 7.2 98.7 73.3
Debt/Equity ratio, times Number of employees
0.2
0.5
0.6
0.6
0.5
112
108
92
79
61
Number of published listings in the period
198.4 189.3 185.0 188.0 189.4
28 · HEMNET GROUP | ANNUAL AND SUSTAINABILITY REPORT 2021
ADMINISTRATION REPORT
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