Hemnet Group AB (publ)

Good morning, and welcome to Hemnet Group's presentation of the Q4 and year-end results for 2023.

My name is Cecilia Beck-Fries, and I'm the CEO of Hemnet, and today I'm joined by Anne-Marie Andersen, Chief Financial Officer at the National Office, as well as Lisa Furr, our Chief Financial Officer. As seen on page two, the plan for today is to start with an overview of the fourth quarter results as well as a summary of the 2023 results. Afterwards, Anders will dive deeper into some of the financial aspects and following this list that will be taking us through a business aspect relating to our agent compensation model.

There will be opportunities to ask questions at the end of the presentation, and you can submit your questions via telephone or using the link shown on page two of the presentation. Starting with page three and the executive summary of Q4. I'm proud of the strong results that we are presenting today, particularly in that revenue from property sellers increased 55% year on year. This is largely driven by continued growth in demand for value-added services, as evident in the fact that ARPA contribution from VAS almost doubled from last year, meaning that sellers continue to see our value-added services as attractive investments in their property marketing strategy. Overall, investment in product pricing strategy and growing demand for VAS resulted in ARPA growing 46%.

This grew almost 37% during the quarter, with an EDTA margin of 51.5%. And these numbers further show that we have We saw some improvements to the market environment, and Q4 listings were higher than the listing volumes in 2022 for the first As I mentioned earlier, Lisa is joining us today to provide you with an upset on the aid and compensation model. agent community, and the compensation model is an important tool that enables the win-win relationship between agents and handouts. The changes that we are now making to the model are meant to increase the fairness, and to drive the right incentives to ensure that the win-win relationship can continue to flourish in line with our strategy. And we want to continue growing our business hand in hand with and we believe that we have found a sustainable model to enable this. But more on this later. Hamilton used to be the place for buyers and sellers to meet, and I want to turn the page for today. market as the best party to maximize the property listing or agent's brand. Our strategy is to show the most complete inventory of 14 properties combined with the best possible users. Reminders, on the left, that 9 in 10 properties sold in Sweden are listed on Hemnet. Last Friday, we received early data for 2023 from Statistics Reading 4.

We can also say that our users continue to be the most engaged with Hemnet, clicking on average 19 times more on Hemnet listings than on listings on other portals. It's therefore safe to say that as a property seller or buyer, you can be comfortable in the fact that Hemnet is the most relevant platform for your property transaction. Turning to page five for an update on ARPL development. Q4 ARPL grew 46% year on year as the ARPL contribution from value added services almost doubled. Increased demand for premium, driven by our investments in products throughout the year, as well as our ongoing pricing work, continue to be the largest driver of this growth.

Payment listings removed have now been live for several weeks, and the impact is in line with our pre-launch tests, specifically with regards to the increase flexibility for sellers. Now on to page six, and a note on the market. While we'll continue to see encouraging signs in the market, as shown on the we are still not out of the woods, as volumes have not fully rebounded to pre-2023 levels. Early January numbers suggest that listing volumes are slightly about last year and the market continues to be challenging for real estate and properties developers as you will see on the next page. So turning to page seven and next sales by customer category. I've already touched on the main drivers for seller revenue, so let's look at the remaining categories, namely the business customers. Marketing investments continuously as our main business-to-business customer groups and property developers continue to be restricted about further investments. Q3 data from IRM shows that the display market decreased 16% and has likely continued on a similar trend in Q4. On a more interesting note, though, with the growing demand for handmade business-to-business product, so called business-to-business value-added services, such as . This accounts for of total business-to-business revenue for the full year. products that deliver clear value to our customers. So all to take to eight and after the organization and recruitment.

We remain 164 employees at the end of Q4, the same number as the quarter before. For the full year, we've added 19 employees. I consider it to be a successful year for recruiting as we remained focused and successfully filled key roles in the market when many tech companies were instead forced to downsize. The market continues to be favorable to Hemnet and we remain focused on our investments in talent, especially as these investments are yielding clear results in execution of our strategy. We will continue to grow our organization during 2024 with a focus on key roles with product and tech. With that, I want to leave the quarterly update behind and focus more on the full year results starting with page nine.

I am thrilled that Hemnes has finally passed a milestone of 1 billion SEK revenue, while also delivering a respectable 52% EBITDA margin. on this chart, we are growing at a consistent pace and with high operational leverage. We continue to aid for annual net sales growth of 50% to 20%, and the long-term dividend margin of over 55%. And as a reminder, I have not provided financial forecasts or guided them, but those figures are our financial targets which we aim for. with 37% driven by the same forces as during Q4, even through the demand for HEMMA premiums and ongoing pricing work. On the high-level financials for 2020, let's turn to page 10. We're going to talk about the operational achievements for the year. On the left, I have included three achievements that I'm particularly proud of. with nine of 10 properties sold on HANZO. enjoy working here at hamlet we have a high emps to support this track with regards to some of the products of those that I consider the most noteworthy on the right side of this page. Our new rules for will have a positive impact on the value of premium as well as to our user as can be seen in the growing demand for the product throughout the year.

Total of sold properties give us a unique competitive advantage and was on one of the most requested features from users. And this launch is truly a milestone that delivers significant value out to both users and agents. We've also seen engagement with MyHome increase and are planning on adding more features to this product going forward. We launched the ability to pay for a listing once it's been sold or removed from Hemnet and the most requested feature from real estate agents. Finally, we launched an agent search tool, and we continue to develop this to better connect potential sellers and real estate agents going ahead.

All in all, it has been a productive year, and I expect nothing less from 2025. We think of arpal growth as derived from four distinctive levers. product and packaging, data and partnership, payment, and pricing. We can work with each lever separately and at any given time. time. Some periods will focus on certain features, and other periods will have a different focus. The key here is that we have built and are expanding a toolbox that should allow us for consistent article growth to We support the growth target of 50% to 20% annual net sales. Turning now to page 12 for a quick reminder on our review of the Swedish property market. And normally, when looking at the market, and especially listing volumes historically, we've never seen listing drop like it does during Q1 and Q2 of last year. But despite the drop in listing, of over 20% in the first half of the year, and the listing volume came in at just negative 12%. And certainly around affordability, interest rates, price transformation, and the shift in tendency to sell first and buy thereafter have all contributed to the state of the property market. That said, there continues to be a shortage of supply, a dysfunctional rental market, a recession, and immigration to Sweden, all of which increases the need for people to buy and sell property. We believe that in the long term, the Swedish market will continue to be stable over time, driven by the underlying need to move as it has been in the past.

Now turning to my last slide of this section on page 13 and an update on ESG. I am pleased to say that our long-term target for net zero greenhouse emissions have recently been approved by the science-based target initiative, giving us a clear goal by which to reduce our carbon footprint. Furthermore, we are preparing for the upcoming CSRD regulations and defining the process going forward. And finally, we have conducted two initiatives with our CSR partners during the Christmas period. With that, I want to hand over to Anders for some color on the financial update, starting with page 14.

Thank you, Cecilia. Let's turn to page 15 directly in the financial highlights. As you know, the first half of the year started very challenging, which resulted in around 20% fewer listings published during the first half of the year. These listings have improved during the second half of the year. And in Q4, the listings were up 5%, and then we ended the year at minus 12%, as Silja mentioned. Even though HEMS performed strongly in the first half of the year, we are seeing a completely different financial outcome as the underlying volume develops. are so starting off on the left hand side on this page we have net sales increasing 37 percent between 275 million as we mentioned earlier we want to highlight the strong development for property sales revenue, increasing 55% by the upper growth. It is also worth highlighting that due to the increased average time on our listings, we moved from 37 days in Q3, now increasing into 40 days in Q4. And remember, that's a roll into a month number. There are two effects to consider. With the increase in listing time, the revenues are recognized over 40 days, meaning that more revenues are moved into general But in Q4, you also have the reverse effect since September has been bigger than it was in December. Then more revenues were carried into Q4 this year. The net effect is plus 22 million Swedish kroner per quarter. in marketing and display advertising from our B2B customers, particularly property developers, is behind the decline of 99% in B2B revenue over the quarter. However, we'll continue to the increased revenue from value-added services to real estate agents, and a stable demand from our back-end customers. The decline is also a small improvement versus million, up 60% from last year. We will dive into the EBITDA development in the following slides.

The EBITDA margin came in at 51.5%, up 7.3 percentage points from last year. With our business model, we had a great effect combining volume and RPEL growth, of course. Moving then to the right-hand side, we see RPEL increasing 46%. Cecilia talked about the drivers for this earlier, which were a combination of product updates, conversion to more expensive value-added services, and price adjustments across all seller products. As expected, we continue to see a high cash conversion, which was 92% in the quarter, and is further proof of our strong business model and cash generation. The small decline versus last year is primarily related to somewhat higher investments in the quarter. Leverage came in at 0.8 times, rolling 12-month EBITDA, which is in line with the third quarter.

This is an unexpected development with the current earnings and an effect of course due to the continued return of capital to shareholders through our share buyback program. And I will come back to that topic in a few slides. Let's move to our EBITDA bridge from page 16. I will go through the EBITDA development for both the fourth quarter and the fourth year as a summary. As we have mentioned, very strong EBITDA development in the quarter, an increase of $53 million. We have covered the drivers for the revenue dollar in this presentation, so let's look at the cost side. The compensation to real estate agents continues to It is, of course, recorded as an expense in our P&L that we also deal with as an investment in the agents' commitment to our business. In this, I will soon take us through the update we are are going to do this summer. Other external expenses excluding compensation to agents is down 25.5 million. Low productivity in general is generally driven by market conditions. So on this site, then we also find to some extent, the effect of successful recruiting consultants as permanent employees. For specific expertise, for example, in IRS developers, which naturally have a positive impact on the cost of items. in effect of recruiting between the quarters and salary inflation. Again, you have these . This is a year-round report. Sorry, let's move to the database on page 17. Since it's a year-end report, I will also do an overview of the full year. So the message is very much the same. As we have mentioned, full-year ABC development an increase of $77 million, 17%. The compensation to real estate agents continues to grow and is up $41 million from last year.

The absolute amount is $225 million that we contribute to the real estate agent industry.

As a proportion of listing related services, meaning the compensation was around 28% for the full year. Other external expenses, excluding compensation wages, is down 3 million, despite new increased costs for new head office and other costs related to an increased organization. Personal costs increasing 16 million as we continue to invest in product development for future growth, which Cecilia also talked about earlier in today's presentation, and that is, in summary, good cost control, which is one important component when investing in future products and services and features. ultimately improving profitability for the growth journey ahead of us. The billion is an important milestone, but I also want to highlight the half a billion in EBITDA for the year. That's also a milestone satisfying to break.

Moving on to page 18 and a few additional words on the cash flow. If we start with the graph on the left, it shows a role in the 12-month figure for free cash flow. You have heard me say this before, but being able to generate such a stable cash flow close to the 500s we just grew for the full year, in the market conditions we have had the first half of of the year. It's a very strong endorsement for the business and our model. We now live with the 2023 AGM decision to buy back 450 million for the coming period. Hamlet's intention is to continue buying back shares and distribute the excess cash to shareholders. During Q4, we brought back 506,000 shares, equaling 110 million Swedish krona. And for the full year, a total of 2.3 million shares, equaling 418 million Swedish krona. Happy New Year. bought back under both buyback programs. Buybacks have also played a part in the increased leverage during 2023. The current level of 0.8 is gratifying to see an improvement in stabilization in the third and fourth quarter, driven of course by the increased earnings. from the financial upstate down and revenue up and that with an increasing margin that is a meritorious business model. And with that, I would like to pass over to Lisa Ferraro to give a deep understanding of an important update for 2024. Thank you, Anders, and good morning, everyone. This is my 12th week as Chief Operating Officer at Hemnet, and I have so far spent the of my time meeting customers, agents, and getting to know the team. I've joined a company with an amazing culture and a unique relationship with customers and especially with the real estate agent community. And I see many opportunities going forward.

forward, how we can continue to develop win-win products to further grow those relationships. Today, I will focus on a specific update we are doing to the compensation model. Turning to page 20, our starting point is a mutually beneficial win-win partnership with the real estate agent community. From our foundations in 1998 to our growth strategy that is founded on growing Oracle we work in close partnerships with the agent industry. I want to specifically focus on the point in the bottom left that says agents grow with Hemnet through the compensation model and spend some time on this on page 21. I think this is a powerful chart as it shows that our success is closely linked to the agent's financial success. This year, we will pay out 225 million Swedish kronor in total compensation to the industry.

That's up to 22% from last year. At the same time, our full growth has been 37% for the full year. We have designed a model that can benefit as well as the agent industry. Since launching in 2019, we have revised twice. Once when we added the sales commission on top of the administration fee in 2019. In 2021, we adjusted the commission levels and administration fee. We regularly review the impact of the compensation model to make sure that this is a signed investment for Hemnet, both from a relationship as well as an economic perspective. However, as a part of the portfolio, sellers have matured, and both conversion levels and recommendation levels have increased. we considered the timing to be right to review this again. In line with a more mature product portfolio, we have gathered richer data and insights. And it is based on these insights that we have decided to make changes to the compensation model. I therefore want to turn to page 22 to walk you through the rationale behind the changes, as well as an overview of the updated model. obvious choice among sellers. We see that the potential for a successful sale increases with these products. Specialists in listings with plus and premium generate more traffic, which statistically leads to a higher sale price. Increased exposure from such listings may generate more contacts and business opportunities for real estate agents. The agent's recommendations play an important role in the selection of packages, with three out of four sellers following the recommendation of their agent.

By changing the commission levels and calculating the commission based off total revenue from all products sold, not just all vast products, we can better reward agencies that recommend plus and premium. We will also make significant improvements in the publication process by removing the need for paper contracts for most sellers. and therefore consider making the administration fee a fixed amount an appropriate move following this change. We want to pay for performance similar to previous model and have therefore made a vast recommendation a prerequisite for an agent to earn sales commission. Starting 1st of July 2024, we will change the way we compensate agents in line with the updated model.

I want to highlight that the primary drivers of this change is to increase our vast revenue and to provide agents and offices a fair, simple, and incentivizing compensation model to grow their business alongside cabinets. page 23 for more details on the updated compensation model. Here you can see the previous model on the left-hand side and the updated model on the right. We will also include the main changes in bold form for clarity. Today, we have approximately a 50% recommendation level from agents. An advanced recommendation from agents has become a natural part of the agent's workflow and that the publication of the listing and will become even easier going forward. We believe that these changes will create the optimal foundation for agents to continue growing their total compensation alongside our articles. and a comment on the change to the publishing flow of a listing. Agents have a number of tools at their disposal to promote and inform about eminent spots. agents about key selling points and advantages of us is a priority for our sales team. We will also be launching better visualizations so that agents and office managers can better track their compensation levels. and to be able to see both the future as well as historical compensation. By launching a digital publishing flow, we are creating yet another tool for agents to better sell us. Agents have had to carry with them a paper contract to their sellers for signing up to a property listing. Starting in Q2, we will replace most physical workflows with the digital publication process, enabling agents to skip having to carry a physical contract with them to the intake meeting.

Furthermore, by digitizing the publication flow, this will create opportunities for more agents to recommend the VAST and for more sellers to see this recommendation and to closer track the progress of the listing online than before. This is a great benefit to Hemnet for increased compliance and satisfied customers and partners. And with that, I will hand you over back to Cecilia.

Thanks, Lisa. And I want to say again how proud I am of these results, as well as the upcoming changes to our business. We have shown not only that Hemnet can grow in a challenging market, but that they can grow in close partnership with our customers to create a great use experience for both property sellers as well as buyers.

So, Maria, I want to thank you for your attention and turn to the Q&A. If you wish to ask a question, please dial £5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial £6 on your telephone keypad. The next question comes from Daniel Oving from Nordea. Please go ahead. Yes, good morning Cecilia, Anders and Lisa. Congratulations on a very strong report and thank for taking my questions so the first question is on the very strong uptick we have seen here in the average stress revenue predicting and it had also been strong previously this year up around 30 percent but now you have this very very strong uptick here. And Anders, perhaps you can elaborate a bit on this effect of longer duration of listings going up to 40 days. And if I hear correctly, you mentioned a number of 22 million positive from that. So that seems to explain quite a big share of that uptick. So maybe you can talk a little bit more if that is correct, and also how should we think about this for QA. one what would be that effect that's my first question hi Daniel thank you of course i will and i also can start with again or that this is not a new accounting principle or something new that we have changed in our way of reporting. It's just an effect of the increased listing time. You also said that. But then again, there are two effects to consider, the special effect you have in Q4 is the fact that September has a bigger volume than December.

So we are carrying over more revenues from Q3. I mean, the old Q3 we talked about now is the Q4 this year. And that effect, if you combine those two effects, the net effect is plus 22 million in Q4. and how to think about in the future, you will have the same effect going further, but also very much depending on how the listing time are developing. But if you have a 22 million in revenue, that is, yes. And of course, we will have the same story next year, meaning that if you end the quarter with a big volume month, more volumes will be carried over to next quarter, all else being equal, of course. I hope that gives you a little bit more

understanding the effect March is not considered a big month because the effect for Q1 is typically negative March is a big month, yes Okay, all right. Yeah, all right, okay. Yeah, all right. Then just following up on that uptick in average revenue listings, so even including that 22 million seems to have been a bit of an uptick as well. And I I just wonder if this launch of pay when removed has been a meaningful driver of that. And if that is the case, maybe you can just mention if the conversion related to higher premium or... premium listing, for example, or is that more based on pricing up for that service? That's the second question. I would say that the premium listing is removed It adds the flexibility for the sellers. They can now choose when they remove the listing. It's one part of but I wouldn't say that the uptake is linked to the listing. I would say that we have many, like I mentioned, and we have many different movers. uh but i would draw the point to you that these products uh during last year increased over time and the special events during Q4 moving up to two years then. Okay, perfect. Jen, just one final comment

question here also and that's on the cash flow side here and there seems to have been a quite big negative impact from networking capital much larger than we have seen in previous quarters and I'm just thinking here that that is related to this pay when removed service. So perhaps you can Anders talk about that if that is the case and also how to think about that going forward. Should we continue that to come up even further or will you still be kind of operating with negative networking capital going forward? That's my last question. Thank you.

Sure. Yes, you're right. Payment listings removed is one of the reasons why the capital movement is negative in the quarter. But again, looking at the working capital movement for the full year, you see something else.

Only a negative 4.1 million or so. But there are one other effect that you need to understand. It's Q3, again, ends with a high revenue amount. September, with correspondingly high amount of deferred income. Q4 ends with a low revenue amount. on the low amount of deferred income liabilities. Of course, this is an effect of the long existing duration. I mean, capital liabilities are essentially free financing for operations. So, go ahead. going down, that's negative for us. So I would say there are two big explanations for the negative development in the quarter. But if you look at the positive cash flow development, the line below us, Yeah, okay, okay. Great. All right. That's all my questions. Thank you very much. Thank you. The next question will come. from Morgan Stanley. Please go ahead. Hey, guys. Yes, it's Pete. Three questions from me. Could you give some color on how common has the pay when removed become amongst consumers? So I'm not talking about the upsell impact of that, but has it become a popular product with with sellers. The second question is on the commission share with agents and more precisely the fixed 600 kroner fee per published listing. Will this fee be updated on an annual basis, or do you expect it to stay at that 600 over time? And then the last one would be, how do you think about hiring new heads for product development in 2024? Thanks.

So the first question I can answer was on PIREN listing is removed and we don't disclose the exact numbers but we do say we can see that it's very well received and it's in line with during the test that we ran during last spring. So I think it landed very, very well. And I mean, our strategy going forward is to continue working with kind of giving our customers the flexibility. And this is one step in that direction. Maybe I can take the second question as well. And yes, you mentioned on the commission field that I mean, the starting point now is 600, and we might review that going forward, but that's a question for later.

But we will review it on a regular basis at the website. And on the third question with recruiting, we've had successful recruitment last year, especially when when it comes to certain talent and certain that we have been lacking actually before. So we're very happy with that. But as you saw what we were doing before, we were quite flat. And looking into this, We will continue to recruit if there are any specific competence or any specific skills, but we will also put a lot of effort into making sure that we are to kind of make sure that we are in, that we have the best possible way of working. we have today so that to deliver on our long-term growth strategy So it sounds like you are a little bit more like opportunistic in terms of personnel needs as opposed to saying that, yes, we already know that we have a need for at least like 20 new people next year. Is that correct? Yeah, I would say I think that we're in the middle right now of making sure that we are fully set to take on the next step on our journey. And we know that, I mean, That's the biggest for the years that I've been here. We need to make sure that we add all new people while we grow. For example, the last year, We have a lot of focus on active developers, for example.

We've also brought in more BI and so forth. I think that it's in a way natural to bring in an up-grade, an up-skilled organization with new competence as we go. But I would say we haven't really set. It's rather making sure that we have the people and the skills set to be able to deliver on the strategy and the plan going forward.

All right. Many thanks for these. Thanks.

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

Thank you.

The first question, not surprising to me, is on the – in fact, all questions are on the new commission model. was it would be interesting to know how many agents would see their total compensation go down under the new model, assuming no change in their behavior, no change in their level of recommendations. The second question is it would be interesting to hear at what point the value of premium to a seller begins to diminish because many people in that area have taken it and actually whether you're thinking about in any particularly popular areas of Sweden And then finally, and forgive me for asking the obvious question, and apologies if I've completely missed it, but what's going to be the impact, do you think, on margins from the new competition model? Thanks. So what we can see on the compensation model is that we have seen increased uptake on unions signing on this provision. agreement and also that more and more agents are recommending these products. It's a very positive momentum, I would say. And we have also, I mean, we are in a way maturing at we go along the journey, and we get more data as we go. One thing that we had, I don't know if it was a year ago or a half year ago, was also the possibility to follow and track and make sure that we could link the data the work that the agents are doing and recommending the product with actual sales. So when reviewing this model, I think it's a very natural step to kind of review this model

It's clearly so with this model that we want to award an incentive. I mean, we want to incentivize everyone to put some time and effort into recommending and selling this product. But it's also clear that it's a pay for performance model. It was the case before as well, but I would say it's even a bit sharper this time, meaning that We want to make sure that we reward the agents that actually put the effort in there. So there will be agents that get more rewarded and some people that will in a way lose out. But I would say everyone has the same possibility going forward. And we will also put a lot of effort in both time and resources during the spring to make sure that the community or the officers that they are aware of the model and making sure to help them how to kind of address this.

So we want to be a partner in that sense. We have some time now to explain the model and make sure. are fully aware and ready for the model is launched first of july so the second person was on the valued sellers and i think that it's um to see this as a journey where we are maturing and where we're improving, adding future functions in the different products and packaging. And for example, if you look at And there are two clear values to add to that. One is that you can stand out in the social self-list. You have more pictures, for example. And the other one is also the food renewal. and both of them are drivers behind the sale. We don't see and we don't hear from our customers that the value of those sales products are diminished. We're all actually that the sellers appreciate this product and that this is obviously something that will make sure that we have the most relevant products depending on the market situation. And I think it's worth repeating that this is the product portfolio we have to do. It's the one we have today. But going forward in the next coming years, that's important. and so forth to make sure that we always are on top of and delivering value. We did a change.

And now it's three years ago when we did a bit of a change where we changed the foundation of the model. And this is the next step. I would say that this is another type of change. It's another update. And the main focus and our main ambition here is the interest of our products. That's the main part. And we're very happy with partnering with the agents and also seeing the value that they add into the process. So that is kind of our focus. our key focus. And hopefully, this will also help us continue growing for the years to come and reach our 50 to 20% and also making sure that the agents are part of that growth. So that was a very long answer without answering your specific question. Very good.

Thank you. The next question comes from Eric Craft from Carnegie. Yes. Hi, team. Eric from Carnegie here. Thank you for taking my question. I've got a couple. I think maybe this first one goes to Lisa. You said that around 75% of the sellers follow the recommendations. from the agent and that around 50% of agents actively recommend today. Could you say anything about those 50% that are actively recommending a package today? How many of them are already recommended? recommending a plus or a premium package. Thank you for your question, Eric. I think we don't need to comment on those details, unfortunately, further than what I gave in the comments earlier. Okay. If that's fair, and just to follow up on the Commission model as well, again, beyond the whole three, to the pricing structure would be altering any other terms within the model that we should be aware of. further than what we already shared with you, so no other changes. Okay. Perfect. Thank you. And just a final one from me as well. You know, you're heading into the year where volume um um if

a long-term growth guidance like you did in 2021 and 2022. How should we think about capital allocation and excess cash in 2024?

I think, should I start Cecilia or Jan?

Yes.

I think there's no change to that. I think the dividend policy we have together with the same we have done this year and together with AGM decision that we will continue to use excess cash to distribute to shareholders, that won't change.

And then we can anticipate the proposal for a new buyback program by the new or the next AGM maybe?

Yeah, that's what you can prepare for at least.

Perfect. Thank you for taking my questions.

The next question comes from . Please go ahead. Thank you. I think it's great to get back on so quickly. It was a single question. It would be useful to understand how involved agents were in the development of the new commission model. Were they in the room giving feedback as you went along, or were they nowhere and they're just learning about it today? Just some comments there would be very useful. I think for us it's been very, very important when reviewing this model to make sure that we put the right incentives in place. I would say that the term here has put a lot of effort into looking at different alternatives to make sure sure that we really, truly find the win-win and sustainable model over time. And we have not communicated this model until today, actually. So this is the The first time we communicated, we had had some agents having some pre-information, but otherwise we're now putting a lot of effort from today and the rest of the spring to make sure that everyone understands the benefits of the model and the change that will take place from 1st of July. As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. Thank you. It looks like there are no phones. So we will address a couple of the questions that we have received in the chat function, starting with the following.

As you have started to digitalize the listing workflow, still early days, but can you discuss any initial science trends in package selection? Is it developing as you expected so far?

It's a bit too early. We're still in development steps. This is an initiative where we have had a lot of differences back throughout the journey from agents, making sure that we put a good workflow in place. But it's still too early. It's something that we will roll out during the spring. So no data as of today.

Thank you, Cecilia.

The next question is, can you talk through your revenue recognition of pay when listing is removed and premium products? Should we expect cash flow from operations to lag revenues? And similarly, Can you talk about when agent commission costs are recognized? Yes. A bit of background, a short one. Before introducing payroll listing rules, We had a pricing structure based on payment . And we introduced payment option. We would actually require to differentiate them into a practice that is common today. and of course we take that into consideration and this and everything else i mean determining our pricing remember is that when you choose to pay when listing is removed option, it's actually based on the pay when listing is removed or at the latest for a month. And then you also know that the average listing So then, you know, we can calculate fairly well how the effect would be. So the people choosing the later option would pay for the listing in average 40 days after. But today it exists. When it comes to premium, it does not change. And when it comes to revenue recognition, it does not change. The revenue recognition is steered by the average listing period. Can you talk? There's no change in the Commission question. I think it will be the same as previous.

Thank you, Anders. Here's another question for you. We mentioned that 22 million SEK was carried over to Q4 due to longer listing times. Is that total accrued income carried over in Q4 2023, or is it plus 22 compared to Q4 2022?

So that's a comparison with Q4 2022, so the net effect in Q4 2023.

Thank you. The next question, I believe, is for you, Cecilia. You commented that nine out of ten sales in 2022 went through Hemnet. However, there has been media talk about this now being only eight out of ten. Do you monitor this yourselves and do you see a negative trend?

First, I think it's very important to say that there has always been property sold outside of the open market, and that will probably continue to be so going forward. When we look at our data, every day is separate. 9 out of 10 sold properties have been advertised during this journey. And that type of change that has been very stable over time, you know, down but very stable over time. So we haven't seen anything changed. And I would also add that last week we also received the first preliminary DELTA prospective statistics for VILAS last year. And when we were looking at the DELTA analysis, I think that we cannot see any change. Then I would like to add also that using a different service. I mean, I've been with the company for seven years. And I think that a couple of times, you know, once you... sometimes you get the service and I think it's very important also to make sure that you ask yourself who is actually I think it's important to look at the fact and the solved data versus some of the services on the field. or subjective feeling of something. So obviously, I mean, we monitor. This is very key to us that we'll get, you know, as many properties for the cell as possible. platform and we haven't seen any change to that.

Thank you, Cecilia. We have one more question in the chat and then after that we can address a final question in the telephone queue. But here's one more for you, Cecilia. Could you please elaborate on how the payone listing is removed, adds flexibility to the historical setup, as well as how it adds value to Hemnet?

Okay, so flexibility, I think we're coming from a place where everything was quite fixed. So you had one product, you had one way of paying and so forth. And we're moving into now a world where we will add flexibility to cater for different needs. So from a seller perspective, you can choose now to pay up front or you can wait with the payments until you remove your listing or sell when your listing or your property is sold.

So that adds a big flexibility and it's also been a great opportunity requests from both agents and sellers. And obviously, for Hemnet, I mean, it's also, I think, this new accessibility, I mean, we work with pricing and packaging on different ways, and today, if you If you choose to pay now, you pay one price, and if you pay after this stage, you pay another price. Thank you, Cecilia. Those were the questions in the chat. We would now like to address the final question. The next question comes from Pete Baker from Morgan Stanley. Okay, guys, it's... I actually have two. But one... One follow-up on the commission changes. Still, well, not necessarily the change, but... I know Giles was asking about whether agents have been involved in this update process or not, but I guess I would frame it a bit differently. How actively does MNET have discussions with agents about the commission in general. Essentially, what portion of agents in the market might not even notice this change that you're making? That's the first question. I mean, we have an ongoing dialogue with the agents regarding different matters, always. The basis from our first team to our customers support to our business development, to product development. So there's a lot of dialogue and a lot of feedback coming in.

And I think with this model, Our model is that we have an agreement with the agent office, and as I said, now we have some time to roll this out during the spring to make sure that everyone is involved. We did pay out almost a quarter of a billion last year to the agent community, and we're very proud of that. I mean, our ambition is to increase our sale and also make sure that we grow and the agents grow with us. And that's our key messaging and our key ambition here.

Right. So basically, like the agents out there on the street, like helping their customers, how closely do you think they are thinking about this commission structure when they are guiding and talking with their clients?

No, but I think today it varies. I think it varies a lot, and I think that we also need to also of the different benefits, and we'll need to make sure that they understand our products, the value of our products, the delivers, and so forth. So that's our focus during this thing, to make sure that So that is our focus. But then also from another perspective, I would say that the models that we are bringing out there, it's also very important that we know that these projects are adding a lot of value. But, I mean, it could vary depending on where you are in Sweden, what kind of product you need to take on. And we trust that agents, you know, have high integrity and they are the ones that know the local market, they know what So the model is also, I mean, we're not forcing everyone into the recommending class of premium. That's also very important to say. So it's a flexible model in that sense. Yeah, understood. The second one is a quick one. Kind of a triple checking on the 22 million impact that you were talking about from the listing duration. So just to be clear, like, is this 20, million, that the impact was 22 million larger than it was in Q4 last year in 2022. Is that the way how you interpret this? All right. Yeah. Thanks a lot. That's all from me. Thank you.