Hemnet Group AB (publ)

Good morning and welcome to the teleconference where we will go over the results of Hemnet Group's second quarter of 2020. My name is Cecilia Beckfries and I am the CEO of Hemnet and today I am joined by Anders Örnulf, our CFO who joined Hemnet in May as well as our IR manager Nick Lundvall who will be assisting with the Q&A. I will start as usual with a summary of the key updates on page 3. This quarter we grew our ARPL 30.8% driven by a continued increased demand for our value added services as well as our ongoing pricing work. This is despite continued hesitation among buyers and sellers that led to yet another quarter of weak listing volumes coming in at almost 22% less than last year. I would particularly like to note that the investments we have made in product over the past year, such as enhancing Hemnet Premium and introducing a new model for renewals, are paying off, as sales from Hemnet Renewal have doubled since last year. The sum of these two factors, listing volumes and ARPL, resulted in 4% growth in revenue from property sellers, underscoring the resilience of our business model and our growth potential. On an aggregate level, however, net sales decreased marginally by 0.8%. By far, the biggest driver of the net sales decrease is the declining listing volumes. However, and as communicated before, we are also seeing our business to business partners being impacted by a weaker economic climate and are therefore having to review their discretionary investments. We continue to see demand for our value added products for real estate agents, as well as an increased spending among our bank customers. Profitability continues to be high, thanks in part to high operating leverage and continued cost control, and EBITDA margin came in at 52.6% for the quarter. In terms of product news, we reached an important milestone by becoming the first and only Swedish property portal to enable images on sold properties. One of the most sought after features by our consumers and one that will strengthen Hemnet's position in sales price and amongst users looking to educate themselves on the market or simply be inspired. Finally, we announced and recruited a new role in the management team, the chief operating officer. This is a strategic step to further strengthen our commercial operations, centralizing responsibility for our products, pricing, packaging, customer relationship and new growth areas under this new role. Now turning to page four and an update on our market position. Statistics Sweden recently published data on sold properties for 2022. This data reconfirmed that nine in 10 properties sold in Sweden are listed on Hemnet. This is a confirmation of what we have known for a long time, that Hemnet is the property market in Sweden and that this position has been stable over time. I find this data to be encouraging as it is a testament to the success of our recent product launches, our ability to cater to the various needs of our different customer groups, as well as of our pricing strategy. And to be clear, we are maintaining our market share despite the changes to our products and pricing over the years. Now turning to page five and the review of the ARPL development. Q2 ARPL grew by 31% and balances the 22% decline in listing volumes. On the product side, we have seen continued high demand for Hemnet Premium, our product that maximizes the exposure of a listing, and Renewal, the ability to restart a listing. Package recommendations continue to be an effective driver of conversion and the key product focus area for the year is to increase the number of agents that actively provide their seller with the recommendation. A new feature is that in the cases where there is no recommendation given by the agent, Hemnet will now recommend Plus to the property seller. We continue working with pricing with a long-term ambition to find the correct price for every property on Hemnet, taking careful consideration for the demand of each product as well as taking into account the various product improvements and launches over time. We believe that through our iterative pricing approach and with a clear focus on further segmentation on price and customer level, we can continue growing monetization to levels closer with international peers with a similar seller paid business model to Hemnet. Now turning to page six to talk about the listing volumes and property market. As you know by now, this is another quarter with listing volumes significantly below the previous year. You can also see a clear correlation between a rising interest rate and its impact on listing volumes in the chart on the left. Based on historical listing volumes, we have good reasons to believe that the market will turn at some point. We do not speculate as to when the market will turn, but as long as there is a lack of clarity around affordability, driven mainly by rising costs of mortgages, the market will likely continue to be uncertain for buyers and sellers. When rates stabilize, buyers and sellers should be more comfortable in transacting. We continue to see comfort in the fact that the Swedish market is driven by a need to live rather than by speculation, and annual volumes of published properties have historically been stable. While we're seeing declining listing and transaction volumes, we're also seeing prices stabilizing, and price expectations in Hemnet Buyers Barometer are at the highest level since May 2022. Turning to page 7 and revenue per customer group. Overall, net sales are marginally below last year, having declined by 0.8%. However, we have seen a 4% increase in seller revenue, demonstrating the strength of our core business model. As a result of the weaker, more uncertain property market, some of our business to business customers, property developers in particular, have had to review their marketing investments and allocations, which has naturally had an impact on our financial results. The result of this development is a 14.2% decline in revenue from our business to business customers. Because of this, we are tweaking our product development focus for the remainder of the year to be less on property developers and more on sellers and agent products, as these are revenue items that are closest to our core and include the largest contribution to our overall sales. Furthermore, fewer listings on Hemnet means consumers spend less time on Hemnet, which translates into less advertising inventory available for us to sell. We continue to see demand for our products from banks and real estate agents, especially the value-added services, as Hemnet continues to be an important marketing channel for both groups. The fact remains that property developers spend approximately 5% of their total marketing budget at Hemnet, whereas real estate agents spend approximately 10%. And that Hemnet only in recent years began developing products other than display advertising for our business-to-business customers, with most progress having been made with agent products. This investment should be higher given the importance of Hemnet to their business and despite weaker revenue from these customer groups, we continue to develop products for our business to business partners, real estate agents in particular, that generate clear value and provide a path through increased monetization for Hemnet once the market turns to the better. Now turning to page 8 for an update on the organization. We continue to invest in talent to optimize our organization through which we will execute our growth strategy. That said, we continue to maintain careful cost control and to focus on scalable growth with clear ROI. This quarter, we added seven headcounts, mostly in roles that have some exceptionally difficult to recruit in the past, including app development, Some of these recruitments are replacement for consultants or replacements for employees on long-term leave. Hemnet is in a unique position to strengthen the team while some other Swedish tech companies are downsizing. And we aim to leverage this opportunity to recruit key talent that will help us generate sustainable top-line growth while at the same time keeping our cost and control in line with what we have communicated earlier. In the middle of the page, you can see a picture of Lisa Farrow, our new Chief Operating Officer who joins Hemnet later this year. This is a new role for Hemnet that will combine the responsibility of our commercial operations, including product, packaging, pricing, go to market, as well as exploring new growth opportunities. Lisa is a senior leader and she brings extensive experience and knowledge from growing and transforming digital businesses. Her contributions to our continued work of strengthening our customer experience and relationships are much sought after. Finally, I want to recognize the amazing achievements of our people and culture team that have resulted in Hemnet being recognized for our employer branding efforts by Universum. It gives me great pleasure to see that investment in team, culture and the employer brand have paid off and we can leverage this success in our recruiting efforts to attract top tier individuals with key specializations that will have a positive impact on Hemnet's long term growth. With that, let's move to page 10 and an update on product. Starting off with a quick summary of our product roadmap, which remains unchanged since our CPO Francesca shared this with you during the year end report presentation. We have three priorities for this year. Engaging our consumers to ensure we offer the best tools and inventory through which our users can navigate the Swedish property market. Growing our seller business through ARPL through continued pricing and segmentation and leveraging agent recommendations. And transforming business to business by creating and developing products that help agents find sellers. As I mentioned earlier in the presentation, we will focus less on new value-added products for property developers near-term, given that this customer group has been forced to cut discretionary marketing spend as a result of a significantly weaker market for new developments. With that quick overview done, I will now turn to page 11 for an update on the Pay Later project. We have been receiving some questions about our Pay Later test that we announced earlier this year, and I wanted to take this opportunity to provide you with an update. Starting off with a reminder of why we're testing Pay Later on the left side of the page. We believe that by moving the timing of the payment closer to when the seller receives their sales proceeds, we can lower the threshold to list on Hemnet. Secondly, by delaying the payment, we can ensure that sellers opt for the value added product that is most relevant for them, not just most affordable. We can also work with pricing to drive artful of consumers wanting to delay the payment or reward consumers looking to pay right away. Finally, this is a highly requested feature, especially by real estate agents, and we believe that it could have a beneficial effect on our customer satisfaction from agents as well as sellers. On the right hand side of the page, you can see the factors that we are currently testing. We do not share specific data on this test, but so far the test has been very promising and I look forward to providing you with a more concrete update in due course. Now moving to page 12 for what I think is the most important product update to our user experience in a long time. By launching the ability for agents to display photos on sold properties, Hemnet creates a unique advantage as the only property portal in Sweden with this highly requested feature. In the past, users visiting a sold listing would only be shown a generic graphic, making it difficult to determine to what extent the attribute of that property impacted the sale price. This has been a hugely requested feature, especially from our users, as it gives them tools to become even more knowledgeable about the property market most relevant for them. To make this happen, we have a strategic agreement with one of the major property photography chains in Sweden and have also launched a tool that allows agents not connected to this specific chain to easily add images of sold properties on their own. Doing so gives an even better contact point between the potential seller and the property agent, as the seller might make the decision to contact an agent based on the quality of the sale. I'm especially proud of this product as this is a feature totally unique to Hemnet among the Swedish property portals. Let's now move to page 13 and an overview of another product change. On the right hand side of this page, you can see a new feature called the sticky bar. The sticky bar has been launched on all mobile devices and is as accessible to the vast majority of our traffic. The intention of this product is to give users a better way to contact the responsible real estate broker by having their phone number and email really accessible just one click away on any listings. For real estate agents, this is a great way to get additional leads as well as increase personal branding. The sticky bar is available to all brokers free of charge and is a great example of a feature that adds value to several customer groups and improves the user experience of Hemnet despite the low investments to implement. Now turning to page 14 for a quick comment on MyHome. MyHome is a user's personalized hub on Hemnet, showing an indicative valuation of their property. This is a long-term initiative through which we hope to grow engagement as well as customer stickiness and loyalty over time, giving users more reasons to visit Hemnet. Over time, we will add more areas of contact with the consumer through which we can generate more business opportunities by, for example, showing personalized offers such as the ability to contact an agent for a more precise valuation. During this year, we have made several improvements to the valuation algorithm and will work to improve this over time. So that is it from my side and I will now turn over to Anders who will present his first financial update as CFO of Hemnet on page 15.

I will thank you. Let's turn directly to page 17 and the financial highlights for the second quarter. As Cecilia talked about, 2023 has started challenging, which resulted in 22% fewer listings published during the quarter compared to the same period last year. And this, of course, affects the financial performance. That said, I think this quarter again shows the resilience of Hemnet's business model as we can present a strong result in these tough market conditions. So starting off on the left-hand side of this page, we have net sales decreasing the minus 1% to SEC 267 million. As we mentioned earlier, we want to highlight the strong development for the property sellers revenue, which increased 4%, though the listings volumes again down 22. Reduced investments in marketing and display advertising from our business to business customers, particularly property developers, is behind the decline of 14% in B2B revenue over the quarter. However, we see continued strong demand for our products from banks and real estate agents, especially the value added services. It is also worth highlighting that due to the increased average time on our listings from 30 days in Q1 to 35 days in Q2, these are 12 month figures, we have an accrual effect on net sales of minus 4 million in the quarter, all else being equal. This means that already listed objects income is distributed over 35 days instead of 30 and are not fully recognized in Q2. That effect will return positively when the listing time comes down again. Our EBITDA came in at 141 million, down 4.5 million, or 3% from last year. We will dive into the EBITDA development on the next slide. The EBITDA margin came in at 52.6, down 1.3 percentage points from last year. This is, again, with the current market conditions, a strong rating for the business model to be able to maintain a profit margin roughly in line with previous years. Moving then to the right-hand side, we saw ARPL increasing 35% in the quarter. Cecilia talked about the drivers for this earlier on page 5, which were a combination of product updates, conversion to more expensive value-added services, and price adjustments across all set of products. As expected, we continue to see high cash conversion, which was 99% in the quarter. This is the free cash flow in relation to EBITDA. It's in line with the full year 2022 and Q1 and is further proof of our strong business model and cash generation. Leverage came in at 0.9 times, rolling 12-month EBITDA, which is a slight increase compared to 2022 and the first quarter. This is an expected development with current earnings and an effect of our dividend. And of course, due to the continued return of capital to shareholders via our share buyback programme. And I will come back to that topic, the buyback programme, in a few slides. Let's then move to our EBITDA bridge on page 18. As we have mentioned, we have slightly decreased EBITDA in the quarter. However, bear in mind that the accrual effect in net sales hits around 3 million on EBITDA. So with the exception of that, results are well in line with the previous year. We have covered the drivers for the revenue earlier in the presentation, so let's instead dive into the cost side. The compensation to real estate agents continues to grow at a pace similar to our seller revenue and is up 2 million from last year. As a proportion of seller revenue, this meant that the compensation was around 29% for the quarter isolated. Other external expenses, excluding compensation to agents, is down 4 million. Despite the increased costs for our new head office and other costs related to an increased organization, we succeed on cost control to maintain the controlled growth journey and hopefully increase profitability over time. Personnel costs have increased 3 million or 8% as we have continued to invest in product development for future growth, which you also mentioned earlier in the presentation today. Then moving on to page 19 and a few additional words on the buyback program. As we already communicated, the 450 million buyback programs initiated of the 2022 AGM is now completed and the shares are cancelled. We now live with the 2023 AGM decision to buy back at maximum 450 million for the coming period. And Hemnet's intention is still to continue buying back shares and distribute excess cash to shareholders. During Q2 and including July to date, we have bought back 445,000 shares. Please note that the buyback started in the beginning of May, so it's not a full quarter of volumes we report. In total, we have bought back almost 3.6 million shares under the buyback programs, including the 2.8 million that were redeemed, canceled after the AGM, which in total equals to 3.5% of total shares. As mentioned previously, the buybacks have also played a part of the increased leverage to the current level of 0.9, again, net debt to EBITDA. Before handing back to Cecilia to wrap things up, the final slide in this section is the financial targets perspective on page 20. Short recap on the targets. The company's financial targets for net sales growth are 15 to 20%. When it comes to leverage, it's below two times net debt to EBITDA. And in conjunction with our year-end report for 2022, we introduced a new long-term EBITDA target of exceeding 55%, but at the same time reiterated the old profitability target of 45 to 50% margin for 2023, considering the market conditions for this year. In a more normalized market, the company believes that the investments that are made into future growth, combined with the operating leverage of the business, creates good opportunities for margin expansion going forward. Our growth rate measured as an LTM is now at 9%. Our profitability measured as LTM EBJ margin remains at 50. And leverage again was 0.9. Financial targets plays an important role to transparently follow performance versus ambition over time. And a balanced assessment for me is that the second quarter is a good return on the core business and gratifying to maintain profitability in a very uncertain market. So that concludes my section today and with that over to you Cecilia.

Thank you Anders. I will now turn to page 21 for a summary. So despite the challenging market we deliver a stable report with solid profitability and strong ARPL growth in line with our strategy. The fact that we are able to grow our revenue from property sellers despite the 22% decline in listing volumes is a testament to the strength of our business model and shows the potential of Hemnet in a more normal market. I'm proud to be leading the largest property platform in Sweden that increases effectiveness, transparency and trust of the property market and that provides property sellers with the best possible tools to increase the exposure of their properties on a platform that captures nine out of ten sold properties in the country. Thank you for your attention and we will now move over to Q&A.

If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Pete Vako Kujala from Morgan Stanley. Please go ahead.

Hey guys, it's Pete from Morgan Stanley. Two questions from me. The first one on ARPL and actually like renewals. So you mentioned that the renewals doubled year over year, but can you give any kind of idea how it compares to Q1 revenues? Basically, is demand for the renewal like accelerating or decelerating? Because I'm trying to understand how the ARPL behaves, especially versus Q1. And then the second question is on employee costs. Because you have around 20% more employees now versus last year, but employee costs are up only 8%. And I doubt that underlying salaries are seeing deflation in this environment. So it would be interesting to hear some color on the employee costs as well. Thanks.

Hi, Pete. Thank you for your question. I can take the first question and Anders take the second question. So in ARPL, we don't disclose the exact conversion numbers, but we can say to put some more color on it that we have since the fall an increased demand for renewals. And the change that we made during Q1, I think it was in mid, like in February in Q1, has resulted in an increased uptake for the product.

And the second part of the question linked to the personnel cost, you have to remember that what we discussed was that what we presented was the headcount for the period. So with the fact that the employees were mostly hired in late 22 and early 23, I would expect to that percentage point going up in the future. All right. Thank you.

The next question comes from Andrew Ross from Barclays. Please go ahead.

Hi. Good morning, all. I've got two, if that's okay. The first one is on Apple growth in Q2 against Q1. Can we just walk through why it's slowed down? I know there can be quarterly volatility in this, and we've had quarters in the past where it's been faster or slower, but it would be helpful to understand what the drivers of slower growth in Q2 versus Q1 were. And if there's anything you can say on pricing in Q3, that would be helpful. And then the second question is on the impact on the accrual of listing revenue from a longer dwell time. So you called out the 4 million headwind in Can you just give us that number in Q1 as well so we get a sense of how much of an impact that had on the growth? Thank you.

Thank you, Andrew, and good morning.

Again, I'll take the first question and then take the second question. So in ARPA growth, I think it's important to note that we don't have a set target for ARPA growth on each month. We look at the ARPA growth over time. And what we can say on the ARPA growth is that I would say it's the same drivers behind the ARPA growth in Q1 than Q2, having the premium and renewal. And it can vary depending on when we do price hikes, the uptake and so forth.

And we have a long-term view rather than setting a fixed target on how to grow. And I think that, looking back, we have steady growth in art. That is what we continue working for.

And we also, I mean, also depending, I think, looking at the market, I mean, we're looking at the art ball, it's uptake, it's when we do pricing, it's also being, you know, mindful when we do adjustments and so forth. So, yeah. And on the second question, Anders?

Yes. Again, I highlighted that, that the moving from 30 to 35 days is an ltm figures so that we have a situation with a five days change among quarters are very huge again those five days are translated to form the swedish stroke so i think you can do the math yourself but the five days increase are

higher than before so i mean taking two cases it's one or two things which will give you a view okay thanks the line was a little bit unclear there but i think i've got that but maybe we can circle back after the call just to clarify that absolutely thanks

The next question comes from Rickard Engberg from Eric Penzer Bank. Please go ahead.

Good morning, guys. I have two questions, if I may. And the first one, with your initiative to have the Buy Now Pay at Sale feature, how will that affect your cash conversion going forward?

Okay, so the test that we have been running during spring is a test, like I said, it's a test to make sure that we don't have a necessary threshold to list on Hemnet. And the test we're looking into is both, of course, the conversion, the interest, the different price points, as well as how it will affect the cash conversion. But we're working with Klarna in this test, so it doesn't affect

I don't know, Anders, if you... No, but it's good you started, Cecilia, bringing all the good things with the project. I mean, for us, all the aspects are valid when it comes to the decision of whether to launch or not. But I mean, the projected change in working capital is one out of several. So we'll follow that, we'll monitor that, we'll see how that affects our cash flow. That will be one part of the discussion. And Cecilia said as well that, I mean, The credit risk and those kind of things are really important. We have a great operating model as it is and we will not.

And I think it's also important to note that this test is not pay when sold, pay when removed. So it's still, even if you don't sell, you pay for the ad. So we're not changing the model, we're just changing the payment timing.

And with the later cash flow coming, that will also affect the commission, of course. We will pay the agents later as well.

Okay, thank you for the clarification. And given that July is a slow month, have you seen any changes in the trend of listings during July?

I think it's a bit too early. We've seen somewhat of a positive sign, but I think again, it's a slower month and it will be very interesting now when we move into August and September to follow this, of course.

Okay. Thank you. That was all for me. Thanks.

The next question comes from Giles Thorne from Jefferies. Please go ahead.

Thank you. My first question is on the impact of the incoming COO. Cecilia, it would be useful to have a sense or a KPI of the impact she could have on product development and product cadence as we move forward. Secondly, in fact, second and third questions are on the pay later product. Firstly, I appreciate your reluctance to give a sense of the impact. But nonetheless, I'm sure you're out there doing some A-B testing around the willingness of the consumer to list under the new product versus the old product. Any insights to likely conversion would be useful there. And then moving to pay later is obviously a huge change. You could say it might radically alter the way an average Swedish householder thinks about selling their property. So with such a big change, and you've touched on a couple of these things already, but with such a big change, I'd be interested to hear your thinking on the potential negative, unintended consequences of moving to a pay later product. Thank you.

Thank you. I can start off and Anders and Nick can jump in. But on the first on the CEO, so we are in the phase, I would say, when we have grown the organization and we work with different, several different product teams. I could also say that up until now, we've been able, because we're still a small company, but we're growing, that we've been able to handle the commercial and product and sales in different parts of the organization. And it's very clear for me that the next phase, we need to make sure that we are aligned in between the product, the packaging, the pricing and go to market. So that will be Lisa's primary focus and responsibility to make sure that we combine and work in a better way actually to improve the way we work. and cater for a growing organization. So it's not only about the cadence in the product development per se, it's also about how we actually take the product to the market, how we continue strengthening the customer relationship and the customer experience. We do have, I mean, there really is a super important both partner and customer, and we have products where they are resellers, they are paying and so forth. So we need also to make sure that we are aligned and continue working with that. So that is a very, for me at least, very natural step in the organization to upgrade with the COO and also to help, I mean, since helping help me to drive the business on a daily basis. So that's on the first. On the second, I think, I mean, we do absolutely test. We do test, and we've been running this test for a couple of, maybe two, three months during the spring, and they're still underway. We do see very positive signals from the customers, that I can say, and we are very positive to this. We don't think that we rather see the positive side than the negative side. But as Anders said, obviously, we need to follow and track and make sure that we don't do anything that will change anything or that we will have any negative surprises. I don't know if you want to add anything to that, Anders.

I think it was a good summary. But I mean, it's not... we're not it's not that radical it's not that we're going from pay now to pay later as we're introducing new ways to maybe introducing the possibility to pay later but again look to the payment solution we have today working with Klarna you already today can pay on all different type directly or through invoice i.e pay later so it's not a dramatic change we will introduce if we introduced it we will do it With all the learning from the test, it's too early to publish today. I would not describe it as a radical change to the market or the business model.

Maybe I can also add, and I think maybe it's our fault a bit, because we early on communicated this test. We normally don't communicate tests in this way, but we did, and we have had a lot of follow-up questions. I think it's really important to emphasize that we're not changing the model. We're not changing to pay when sold. We're not changing, like Andrew said, it's just another option for testing. for sellers to pay at the latest stage and pay another, you know, you can postpone your payment. But we are testing it and we see positive signals. And, you know, this is something that we'll continue monitoring and hopefully continue developing for the future.

Understood. Thank you.

The next question comes from Eric Raftel from Carnegie. Please go ahead.

Thank you for taking my questions. I've got a couple. In the Q1 report, you pointed to a couple of factors influencing the short-term market in terms of volumes. You gave a brief update on some of those catalysts today. But could you give us an update on the number of fixed-rate loans that are coming up for refinancing in the second half of this year or early next year, which could trigger more sellers back to the marketplace?

We don't have any more updates on that. I think we can only say that that might be a factor. It's a factor in the market, but no updates since Q1.

Okay, thank you. And just one note on the SEB data that was published in July as well, showing 9 out of 10 properties sold in Sweden still listed on Hemnet, which was stable from last year and I guess the last couple of years as well. Are you seeing any of your competitors kind of growing their share last year versus 2021? So, you know, more sellers dual listing?

No, so we don't see any indication. I mean we have our data and now SEB has communicated their data and that kind of reconfirms what we've seen before that nine out of ten properties is sold through Hemnet and published on Hemnet sometime during the sales process.

Perfect, thank you. And just one One last housekeeping question. In the quarter now, interest expense is running at something like 20 to 25 million per year, with gross debt that's around half a billion. Is it fair to say that you're paying around 4.5% debt now, or are there other items in net financial items that affect that in the quarter?

You mean the interest cost in the financial net? Yes, yes. Something is absolutely right.

Perfect, thank you. Thanks for taking my questions.

Thank you.

The next question comes from Pete Vacco, Kujala, from Morgan Stanley. Please go ahead.

One more from me on the PayLater product. Because to me, the fact that you want to secure content, it sounds like a defensive move with this PayLater product. But based on the questions here, it seems that people also see it as a potential growth driver. So I guess my question is, which one do you see this product as? Because obviously, it will impact the way that you price it. going forward so do you still want to drive like majority of people to the normal funnel or are you willing to kind of price it in a way that more and more people are going to take the pay later option for some extra income so this is the question thanks

So maybe I can say that in any way, actually, for us, it's about growth mainly and giving the options to the sellers so they can choose if they want to pay now or pay at a later stage. And we believe that by doing so, we will secure content. That's one thing. And making sure that we can have the content we have and maybe add more content even and growing the content. So I wouldn't say it's a defensive move. It's more about growing. And obviously also, like you're saying, also looking at the different price points. What we also want to test and what we're also seeing is that we, like I also mentioned in the presentation, is that we also want to see if the sellers are willing to opt for a higher package. Maybe paying later could trigger that you actually opt for a higher package. And you know how we work with the pricing strategy and the pricing matrix. It's not a steady state. It's an ongoing development, both on the current products, but also in how we actually package and sell it. And that will continue. So I foresee that if and when we kind of go ahead with this, we will continue working with a different price point in order to optimize and increase our product.

Yeah, I understood. So the main kind of growth driver you would see from this is through conversion, not necessarily like the direct pricing of the pay later product itself.

Sorry, I missed you. Maybe Nick did.

Eric, I think we would see both as drivers, both pricing potential as well as conversion potential.

All right. Thanks a lot.

The next question comes from Andrew Ross from Barclays. Please go ahead.

Hey, guys. Thanks for squeezing me back in. I've got one more on the My Home Hub and the valuation data that you're using to tell an owner of a home how much it's worth. Can you just talk through the actual house price data that you guys have? Obviously, a lot of listing price data, but how do you access for the transaction data. And I guess I'm asking this in the context of one of your European peers having just made an acquisition in this space. Could you just talk us through how that kind of transaction data ecosystem looks in Sweden? Thank you.

So the data that we use is the primary data that the agents, they publish the sold prices on Hemnet. We use the data on an aggregated level. For example, on the property page on Hemnet, you can see sales trends and so forth. That's data that we use from our own data. We also use it to build the algorithm for the valuation that we have in my home. And apart from using our own data, and we do cover most of it, we also can leverage and use the data to make sure that we have the data we need.

Got it.

Thank you. Thank you. There are no more questions at this time, so I hand the conference back to the speakers for any written questions.

Okay, so thank you for your attention and for your questions. And I wish you a very happy.