Hemnet Group AB (publ)

Good morning and welcome everyone to the presentation of Hemnet Group's results for the Q4 and year-end results for 2024. My name is Cecilia Beck-Fries and I'm the CEO of Hemnet and I'm joined today by Anders Örnulf, our Chief Financial Officer, as well as Lisa Farrar, our Chief Operating Officer. As seen on page two, the plan for today is to start with an overview of the fourth quarter results of the summer of the 2024 results. Afterwards, Anders will dive deeper into the financials and following this, Lisa will be taking us through a business update focusing on our key focus areas going into 2025. As always, there will be an opportunity to ask questions at the end of the presentation. Please follow the operator's instructions to ask these through the provided telephone dial-in. So, let's have a look at the Q4 summary on page 3. We ended 2024 on a high note. Net sales grew by more than 32% in the quarter. Revenues from property sellers increased by 41% as we continue to see a growing demand for our value-added services. A significant portion of the net sales growth in the quarter came from a more than doubling in ARPL contribution from Hemnet Premium, further underscoring that property sellers are willing to pay more to maximize their chances for a successful sale on Hemnet. The new compensation model launched in July continues to be a success, and it is a key driver behind the significant net sales and EBITDA growth during the second half of the year. The EBITDA margin amounted to 48.4% in Q4, which is a slight decline compared to the same quarter last year. The EBITDA margin development is mostly due to two factors, higher operating expenses and the less favorable sales mix. Anders will describe these effects in the detail later in the presentation. Ahead of 2025, we have a number of very exciting new product updates planned, including a new seller package. And Lisa will give a short update later in the presentation on what we have in store for 2025 across our different customer groups. Lastly, our strong financial development and cash generation enable us to significantly increase cash distribution to our shareholders. And we are proposing a dividend of 1.7 Swedish krona per share to be paid out this spring, representing an increase of more than 40% compared to last year. Now turning to page four and some further comments on our ARPL growth. In Q4, ARPUL grew by 43 year-on-year, driven primarily by a continued strong demand for Hemnet Premium. As we mentioned in Q3, we saw a step change in our conversion rates following the launch of the new compensation model, which is a direct result of agents embracing the new model and more actively recommending our higher packages. As always, we want to remind you that there is a clear seasonality in ARPL and that it fluctuates greatly from quarter on quarter, why it makes the most sense to monitor ARPL development on an LTM basis. With that said, let's move on to page five for a comment on the listing volumes in the past quarter and year. On the left side of the slide, you'll see a combined chart showing published listings per quarter and yearly, as well as the year-on-year change between quarters. For the full year 2024, published listings grew by 5.7% as market activity increased throughout the year. In Q4, published listings were down 1.6%. The slight year-on-year decrease is driven by the tougher comparables from Q4 last year. And as you can see in the chart, the number of published listings is still higher than in the same quarter in 2022. If we look at the general market activity, we saw that number of transactions grew in the quarter leading to a decrease in total supply. This is a healthy sign that the market continues to improve with more buyers and sellers being able to agree on price expectations. We're also seeing promising market signs from our buyer barometer where buyers continue to have a positive view of the market for the coming six months. Now turning to page six for a breakdown of our net sales. Similar to recent quarters, the key net sales growth driver is seller revenue, which increased by an impressive 41% in the quarter, despite the slight decline in listing volumes. We continue to see some challenges in the market environment for display ads with decreased spending across all our customer groups. This development is primarily driven by macroeconomic factors as advertising spending is down across the market. We, however, continue seeing encouraging signs from real estate agents where the demand for Hemnet's unique products continues to be strong, driving growth for the whole product area in the quarter. Having covered some of the main revenue drivers in the quarter, let's zoom out and look at our performance in 2024 on page seven. Looking back at the full year, we had a net sales growth of 39%, EBITDA growth of 37%, and ARPL growth of 42%, underscoring the strength of our business. These strong results have been driven by continuous improvements in product, packaging, and pricing, along with the introduction of an updated compensation model for real estate agents. The slightly lower margin in 2024 is a result of the higher operating costs with larger investments in product development, operational improvement, and marketing. With these investments, we feel confident to have built a solid foundation for achieving our financial targets and ensuring long-term success. Looking back over the past seven years, Hamlet has shown impressive growth with increasing profitability. Since 2017, Hamlet has grown net sales by more than 4x and EBITDA by almost 7x, showcasing the strength of our market position and the scalability of our underlying business. Turning now to page 8 and some of the product updates that we did during the year. During 2024, we have continued to improve the consumer and customer experience on Hemnet, launching several new product features and upgrading our tech platform. In July, we launched our new compensation model. I will get back to that in some more details. The new model has been the key driver for ARPL's increase while laying a strong foundation for future growth and improved industry collaboration. We'll touch on this topic again, as I said. During the year, we also launched our full digital flow, which has simplified the buying and publication process for both sellers and real estate agents on our platform and better captured the full market potential. We have made significant upgrades to the Hamnet app during the year, including a major tech lift that will enable more efficient development and faster go-to-market going forward, and strategic investments since the app is our primary channel with the most engaged users. We have also upgraded our maps, which has improved our user experience and will enable us to launch additional features going forward. In order to drive logged in user conversion, we are about to launch an updated authentication platform during the quarter that will play a key role in 2025. Lisa will come back to why later in this presentation. And finally, as we communicated in the previous report, we will place great focus on strengthening our product offering for property sellers during 2025. This work began last year and has laid the foundation for the rollout we are now about to see this year. On page 9, we'll zoom in on the new compensation model that we launched in July. As you know, our new compensation model went live on 1 July last year. The model moved to a fixed administration fee and a commission based on total revenue from all seller products, rewarding the real estate agents who actively lean in and recommend Hemnet's products. The model has been a success, driving a more than 20 percentage point increase in agent recommendations and significantly boosting conversions, particularly to handle premium. The new model has been the main driver of our impressive ARPL growth during the second half of the year. With the new model, we saw total compensation to the industry surpass 350 million Swedish SEK in 2024, further strengthening our collaboration with real estate agent offices across the country. Turning to page 10, where I want to talk a bit about the investments we have made across the organization in 2024. In 2023, we deliberately kept overall investment levels low due to the large market uncertainty. We have also been clear that when we start seeing signs of a market recovery, we will return to a more normalized investment level. Over the past year, we have seen an increasingly optimistic market and therefore we have started to increase cost levels again. Beyond products and what I spoke about previously, we have taken important steps to improve our operations in 2024. Among other things, we have organized our product organization into domains to achieve greater flexibility, coordination, and scalability. We have also reorganized parts of the sales department, which now has a broader mission to be able to carry both our business to business and business to consumer products. In addition, we have strengthened the organization overall with several important senior key positions that provide new energy and strengthen the team as we now enter 2025. As communicated before, we have also increased our brand and marketing efforts compared to last year, 2023. We believe it is important to have a baseline marketing spend to reinforce Hemnet's message as the leading property portal in Sweden. In addition to our outdoor brand marketing campaigns, we have focused on increasing visibility across digital channels and social media with promising results. In addition, we have continued to invest in our relationships with real estate agents and business to business partners, empowering them with better access to our data. With operational improvements and the investments we have made in the organization in 2024, I am confident that Hemnet is in a better position than ever to continue its growth journey for the years to come. Now turning to my last slide of this section on page 11 and an update on ESG. In 2024, we continue to strengthen our sustainability efforts across our ESG focus areas. We firmly believe that building a diverse and inclusive workplace not only makes Hemnet a great place to work, but it's also a key driver for our success. We are very proud to be a tech company with an almost 50-50 gender split, with many women holding leadership positions in tech. We continue exploring how Hemnet can guide property buyers towards more sustainable choices. Today, energy declarations are included in approximately two-thirds of our listings. And during the year, we started to highlight properties with the highest energy efficiency directly in our search result list. Furthermore, we continue to support our partners, Stockholm Stadsmission and UNHCR, in their commitment to helping people in vulnerable situations gain access to a place to call home. Alongside these efforts, we have actively prepared for the upcoming CSRD regulation by completing our double materiality assessment and started to assure CSRD compliance through improved data collection and reporting processes. And with that, I hand over to Anders for the financial updates starting with page 12.

Thank you, Cecilia. Let's turn to page 13 in the financial highlights for the fourth quarter and the full year. We have already shown the number of published listings on the bottom left, which aligns with a typical Q4. It's worth emphasizing that 2023 was an unusual year, which impacts our percentages and growth figures, a point I will revisit later in the presentation as we discuss comparables. To set the stage, let's revisit 2023. As you may recall, the first half of the year was very challenging with approximately 20% fewer listings. However, listings began to recover in the second half of the year and were growing by 5% in Q4 2023, although we ended the year with an overall decline of minus 12. With that context, let's focus on the financial results in Q4 2024. We delivered the robust growth on both top and the bottom line again during this quarter, and I'll walk you through the key drivers behind this performance. Starting with net sales on the left-hand side of the slide, we recorded a 32% increase to 364 million. As Cecilia mentioned earlier, we're particularly pleased with the strong performance in property sales revenue, which grew by 41%. In the B2B segment, net sales decreased by 4%. While we continue to see strong underlying demand for add-on services and Hemnet's unique offerings in this space, a significant portion of our revenue still comes from display advertising under pressure. This revenue stream declined as a result of cautious broader market with ongoing macroeconomic challenges continuing to affect advertisers, especially property developers. Another noteworthy point in the quarter is the average listing time, which increased again from 44 days in Q3 to 46 days in Q4 on a rolling 12-month basis. In total, of course, Q4 is positively affected by longer listing times since Q4 has lower volumes than Q3. However, Q4 increasing two days has a negative impact of 2 million for the quarter. To smooth out seasonality effects, we recommend tracking ARPA growth on a rolling 12-month basis, as shown on page 5. Our EBTA for the quarter came in at 176 million, representing an increase of 25% compared to the same period last year. We will explore the EBTA development in more detail on the next slide. The EBTA margin was 48.4, down 3.1 percentage points versus Q4 last year. The low margin was again primarily driven by high operating expenses and unfavorable sales mix during the quarter. On the sales mix side, we saw significant growth in net sales from property sellers, plus the plus of 41, while net sales from our B2B customers with close to 100% marginal profit declined minus four. Additionally, commission of compensation to real estate agents increased both in absolute terms and as a share of property seller revenue in the fourth quarter. The increased commission is driven both by Hemnet continuing to reward agents for recommending vast products, as well as a slight adjustment from an accrual throw-up in the fourth quarter to reflect actual commission from the second and third quarters. In other words, it skews the costs somewhat unfavorably when viewed in isolation for Q4, but it's all right for the full year, right? We will discuss the cost structure in more detail shortly, but it's important to note that our ability to generate cash remains strong, with cash conversion landing at 97% on a rolling 12-month basis. The leverage ratio ended at 0.5, rolling 12-month EVTA, an improvement from the previous quarter and well below our financial target, of course. This decline in leverage is particularly encouraging, given that we continue to execute on our capital allocation strategy, including an attractive share buyback program. Finally, our headcount remained flat year-on-year for the quarter. This is largely due to a more technical factor. Last year, we had a high number of employees on parental leave, many of whom were temporarily replaced by substitutes, which impacted the reported headcount. Exact same effect as we saw in Q3. With that, let's move to our EBITDA bridge on page 14 to dive deeper into the Q4 figures. We have already covered what has driven the top line for the quarter, so let's go through the costs. 33 million higher compensation gradients due to the reason mentioned in the previous slide. The effective commission ended up at 31.5 for the quarter, primarily driven by increased conversion. We've said it many times before, but this is how the model works. The higher the recommendation and the higher the conversion, the higher the compensation as a percentage of said revenue. Other external expenses for the quarter follow the same pattern as in Q3, driven by increased activity across the board. This primarily relates to consultancy and marketing efforts as highlighted in Cecilia's earlier presentation, while also laying the groundwork for Lisa's upcoming business update. These increases include intensified marketing initiatives across the both online and offline channels, as well as high spending on product development. And again, percentage increase in costs is heavily influenced by the restrained spending in 2023. The personal cost increased by 21%. Besides salary inflation, there were one-off costs related to a variable remuneration, reflecting last year's reversal of 3.3 million and this year's accrual of a little bit more than two, resulting in a 5 million difference quarter on quarter. This adds up to the absolute EBITDA growth in the quarter of 35 million, or 25%. With that, let's move to the full year summary on page 15. The key message for the quarter and the full year remains the same. The consistency is a positive indicator. However, zooming out and looking at the full year, we can clearly see the remarkable year we're leaving behind. A more active market led to a 6% increase in published listing for the full year, which of course supports our business in every way. Combining with our steadily improving VAS conversion rates, this resulted in net sales growth of nearly 40%. And again, RPEL growth played a significant role in achieving that. The typical sales mix between seller revenue and B2B is even more pronounced for the full year and remains a key factor behind the 0.7 percentage point decline in EBITDA margin year over year. Although the new compensation model was launched in July, we've seen its impact throughout the year, especially from Q2 and onwards. As we have communicated, this model is designed to drive top-line growth and it has certainly delivered. A free cash flow growth of 44% further demonstrates just that. When looking at our leverage ratio compared to the previous year, we see an improvement of 0.3 percentage points. This improvement is noteworthy, but should be viewed in the context of a volume constraint 2023 compared to the figures we are presenting today. Finally, our reported headcount decreased by two for the full year, again, largely due to last year's higher number of substitutes. The full year figure also reflects underlying adjustments within the existing headcount to strengthen and enhance the organization in line with what was previously mentioned within the organizational framework. Now let's turn to page 16 to review the EBIT development for the full year. As shown on the left, we achieved robust top line growth of 390 million. Compensation to real estate agents increased steadily throughout the year in total 134 million, sorry about that, with effective commission rate representing total compensation as a percentage of salary revenue actually rising more in the first half year than in the second. For reference, the effective commission was 30.4 in H1 and 30.4 in H2. Agents' engagement with the new model has been evident as they increased their recommendation and drove higher conversions, a true win-win outcome. All the cost categories have continued their upward trajectory versus last year, summing up to the higher overall cost levels at 23 million. Personal cost increased by 21%, driven by a high number of full-time employees, fewer employees on parental leave during 24, salary inflation and higher variable remuneration. We don't provide guidance on other operational expenses, but it's fair to assume that the growth rate in OPEX for 2025 will decrease, driven by the higher run rates in the comparison data, i.e. 2024. As previously mentioned, full year EBITDA grew by close to 200 million, worth 37%, marking a remarkable re-improvement. Moving on to page 17 and some spotlight on the cash flow. Let's start with the graph on the left, which shows a rolling 12-month figure for the free cash flow. The ability to consistently grow cash flow strongly validates both our business performance and our operating model. This year, we added over 200 million, bringing the total to close to 700. The primary driver, of course, has been the operating cash flow. In the fourth quarter, we repurchased 246,000 shares amounting to 84 million. This was at a slightly slower pace than in the early quarters this year, but should be viewed in the context of the total mandate of 450 million approved by the 2024 ADM. The current buyback program will continue until the 2025 ADM. As previously communicated, Hamlet remains committed to returning excess capital to shareholders through a combination of ongoing share buybacks and dividends. The board of directors have proposed a dividend of one krona and 70 öre per share, up from one krona and 20 öre last year. This aligns with the company dividend policy representing approximately one third of earnings per share. This proposal marks an impressive increase of 42% compared to the previous year. Moving on to net debt, it's important to consider this in the context of a growing EBTA, which ensures stable net debt to EBTA ratio. As you can see, this ratio has remained steady for some time now and has been gradually decreasing, driven by a strong cash flow. Notably, again, it remains well below our financial target of under two. In summary, proud to deliver strong financial results for both the quarter and the full year. It's particularly encouraging to see that the property seller willingness to upgrade their listings continues to drive the growth and profit. Additionally, the revised compensation model, which has been well received by the real estate agents, is not only contributing to our profitability, but also laying a solid foundation for future growth. Achieving full-year EBITDA growth of close to 200 million underscores the strength of the approach. As we look ahead, we are confident in our ability to work towards the financial targets for 2025 and beyond. There's no doubt that our business model benefits from operating leverage. Key factors working in our favor moving forward are a healthier mix of seller revenue versus B2B revenue, lower OPEX growth rates in 2025 as we leave the dynamics of 2023 behind. And with that, I want to hand over to Lisa for business updates, starting with page 18.

Thank you, Anders. Let's turn to page 19 and an overview of our focus for this year. As Cecilia mentioned earlier, we've had a year behind us where we've done many important things and built a strong foundation for where we can now continue to develop and grow. Going into 2025, we will launch additional products and features to further create value across our three customer groups. We will continue to improve the user experience for buyers. We will strengthen our value across our packages for sellers, and we will improve our Hemnet unique products and ways of working with agents and business partners. Let's quickly break down our plans for the three customer groups, starting with buyers on page 20. Hemnet is the largest property portal in Sweden, and our ability to attract and engage potential buyers is key to our success and value creation. We have a unique position as the natural place for buyers to look for the next home, but we want our buyers to engage even more with our platform. We can see that users that log in and receive a more personalized experience are the ones that show the highest engagement on the platform. In 2025, we will continue to improve user experience and engagement by making it easier to access the app. We will further personalize the experience across the life cycle of owning and buying by continuing to improve my home. And we will enrich the buying experience with even more property data. Let's move on to sellers on page 21. We have several different levers to develop our business and grow ARPEL. In Q3 last year, we communicated that we will focus on further developing our seller products in 2025, and we're now taking the steps in that journey. Firstly, we will be strengthening the product offering across all of our existing packages, from BaaS to Premium. This means adding new features and enhancing the user experience on all three packages. Secondly, today we're announcing the launch of our fourth package, Hemnet Max. We see this launch as a natural next step following the strong development in recommendations and the conversion rates for Plus and Premium, much driven by the successful rollout of the new compensation model in 2024. Hemnet Max will be our new top-tier packaging with unique features for those who want to invest more in their property listing. Let's have a closer look at how the package will look on page 22. Hemnet Max will provide further differentiation and make it easier for real estate agents to help our sellers choose the right package that suits their specific needs. The new features include visibility for your property listing on Hemnet's landing page. It will rank at the top of the results list and it will both have a larger listing card as well as more pictures. One of the unique features with Hemnet Max will be the opportunity to attract more buyers to the viewing something we know can make a big difference to both the selling price and the time it takes to sell. For every Max listing, we will be sending a targeted communication to potential buyers that would otherwise not have seen the listing. This will be timed to drive maximum exposure before the viewing of a property. The new package will be launched in April. Let's move on to our third customer group on page 23. Although the market has been challenging and we have seen declining B2B revenue, we do have great confidence in our ability to grow our B2B offering over time. We see a healthy demand for our Hemnet unique products, and we have strengthened our offering to better meet our customer needs. Specifically, we see an increased demand for sold by us, which we launched last year. With new leadership and organizational structure in place, we have strengthened our entire go-to-market organization, We are now better positioned to grasp opportunities for when the market comes back. Finally, let's move to page 24 for a quick wrap up. Our core business and network effects continues to be the foundation for our success. With the investments we made last year and the plans we have for the future, where we continue to develop, improve, and add value across all of our different customer groups, our network model continues to grow stronger and we are widening our moat. With that, I now hand you back to Cecilia, who will finish off on page 26.

Thank you, Anders, and thank you, Lisa, for your updates. I'm very excited about the plan ahead, and I'm really looking forward to seeing those initiatives come to life. In summary, 2024 was a fantastic year for Hemnet, both from a financial and an operational perspective. We had a net sales growth of 39%, EBITDA growth of 37%, and ARPA growth of 42%. These strong results have been driven by continuous improvements in product, packaging, and pricing, along with the introduction of an updated compensation model for real estate agents. With the product updates, the operational improvements, and the investments we made in the organization in 2024, Hemnet is in a strong position to continue its growth journey for the years to come. This is my final report before I hand over to my successor, Jonas, on February 5th. Before we move on to the Q&A, I want to take a moment just to express my gratitude to all of you, analysts, shareholders, and everyone who has supported us along the way. Your trust and engagement have meant a great deal to me and I have deeply valued our discussions and the confidence you have placed in us. It has been a truly privilege to get to know all of you. Hemnet is, in my view, a truly unique company. While we have accomplished a great deal, there's so much more potential in the future. Over the past weeks, I've had the chance to get to know my successor, Jonas Gustavsson, and I feel confident that he's the right person to lead Hemnet into its next chapter. I'm excited to follow the journey ahead and see what the future holds for this great company. With that, let's open up for Q&A.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from William Packer from BNPP. Please go ahead.

Hi, Cecilia, and congrats on a great stint as CEO. Two sort of buckets of questions from me. Firstly, I know that management at Hemnet is typically relatively cautious in providing guidance for the year ahead. So perhaps framing my questions through a couple of specific areas. On Hemnet Max, early days, but could you talk us through how, one, you're framing that in terms of relative price premium versus the existing top package? And secondly, any impact on the commission model? And then in terms of the second topic, in terms of 2025, there's lots of uncertainties, but could you help us think through on those elements of the cost space where you do have visibility, personnel costs, other external costs, how much inflation we should expect for the year ahead? Thank you.

So maybe I can start and then hand over to Anders. But just also to, you know, we don't provide the guidance for the year. As you know, we have the financial targets, the 15 to 20% and the long-term EBITDA target of 55%. And maybe that's just an intro, Anders, and then you can pick up on both Max and the cost structure if you want to add any more flavor or color on those areas.

I can try. When it comes to pricing, as we said before, the way we work with pricing, we have tens of thousands of price points from all our products. And in April, we had even more. So we don't have a fixed price list, so it's hard to comment on that. But as always, our pricing is very transparent. So when we decided on the price premium, you will see that on our site, right? So we will see about that. When it comes to the compensation model, of course, it's included. You know how the compensation is structured with one component is fixed when it comes to administration of the listing, and the one is variable when it comes to upsell of the value-added service, right? And, of course, Max is indeed a value-added service when it comes to listings. So it will be included, of course. Then when it comes to general thoughts about inflation, I will really come back to what I said, that it's going to be good to have the unusual 2023 behind us. So with the current run rates we've had in 2024, the growth rates will look different in next year and going forward. With that said, we still need to invest. We need to improve. So we can expect our costs to continue to grow, but not with the pace that we've seen this year.

Maybe I can also add a bit on just putting some more context also around Max and the position of that product. So how we view it, I mean, first of all, we had a great uptake in conversion to our value-added services for quite some time, and we feel very encouraged that The demand is high and the time is right to both make sure that we'll improve the current product, but also add another package. We have a long-term view of Max. Max is a product that will hopefully gradually increase over time and also looking back at the products when we launch them and then We put Plus and Premium to life in 2019, and it's been taking some time to kind of find the perfect products and seeing them kind of gradually increase over time. And that's pretty much the same view we have with Max as well. We see the demand. We're confident that there is some demand out there, but we also have a very long-term view.

Thanks for the color. I suppose just to come back on both points. So in terms of the relative pricing of max versus premium, is it right to think of it as a kind of similar difference as you see premium versus plus? Would that be a fair assumption or is that too aggressive? And then on the inflation, historically, you know, it has varied quite a lot. So it's like a high single digit inflation, the right kind of ballpark, low double digits for the non-commissioned costs or is it just no comment? Thank you.

I think on the second part, there will be no comment. Again, coming back to 4 versus 2023 as a base year will be what we can talk about at the moment, at least. Then the first part of the question comes to pricing. I mean, we have four good packages, four different price premium when it comes to how they relate to each other. We don't have the final decisions on the exact price when it comes to Max, but you will in due time see. Thanks for the call.

Thank you.

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

Thank you. My first question was on the marketing message today, and I'd be interested to understand why exactly you feel you need to uh your your market position in the eyes of uh swedish vendors um and indeed is any of your actions reactive to what you're seeing from um competitors um and secondly and i suppose this is linked to the first question um how do you solve the problem you have around pre-market listings so boolean is obviously differentiating itself very well around How do you solve for that problem? And then finally, Max, inevitably probing around central Apple impact, the targeting feature appears to be one of the big new aspects of the package. Can you talk a bit about how you see value for the consumer there, and if you can illuminate those comments with anything you've done on testing around how this actually could impact the the attendance is an open day for a vendor. That would be great. Thanks.

So it was a bit hard, sorry, it was a bit hard to hear. Could you please just repeat the first question, the second and third I heard, but maybe if you can just repeat that, sorry.

No problem, Cecilia. So the first question was, why do you feel you need to reaffirm your or position in the eyes of the Swedish consumer through marketing?

Ah, okay, okay. Okay, so maybe I can start, and Anders Orlis, I can also jump in. So on the first question, when it comes to investing in marketing, and also I think it's... it's good practice to have a certain level of marketing and investing in your position. Hemnet, if you take one step back and look at what we've done the last few years, we've done a lot of changes in our overall product. And we need to also remind people about the value that we deliver to our different customers. We cannot take it for granted. I would be more worried if we kind of just leaned back and didn't move forward and and kind of, yeah, just reminded everyone about the great position and the value we deliver. So I think it's good practice to do it. And we've been, I would also say, we've been handling that in a good way. I would say 2023, obviously, a bit of a special year where we set some awesome investments. But we've also been very clear to the market that when we see the market coming back, we will come back to more investments. to our modern levels in investments. And the second part, when you talk about the market, and yes, also a reminder. So pre-market or listing outside the open market is not a new thing. It's just important to take that with us. So historically, it varies a bit depending on the market sentiment. A bit more in a hotter market and a bit fewer when the market is slower, so to say. From our point of view, I mean, we go to work every day in order to make our products the best possible products for all our different customer groups. And we do see that from the value we can deliver, if you are If you want to sell, you want to reach out to as many as possible to get as many speculants as possible to get that one extra bid there. And I'll come back to that also in the third question. So that is important to take with you. So it's of great value both for the property seller, but also for the real estate agents to be visible on the open market. It's an ecosystem, I would almost say. We've also done things in order to clarify our value proposition for upcoming, but those upcoming are also, they have a dedicated seller or seller that is investing in the market. And what we've seen the last, I would say a year, year and a half, it's been a lot of listing with uncertain sellers. So there's been more listings out there with sellers that might want to sell. So I think that that's what we have seen the last one and a half year. But for us, I mean, mid-focus, continuing driving great value through our products, current products. That's also, I mean, we're investing and expanding and working with our current product portfolio and adding new ones. And the third, and I don't know if you want to, maybe Jules can put some more color into that, but it's a lot about finding, you know, that extra bitter.

Exactly. Thanks, Charles, for the question. So regarding Max, if we take a step back, we are, when we're improving Max, we're also improving all of our seller packages, right? So we've taken a step back that we put more value into all of our existing three packages as well as Max. And within Max, we are adding several features, both a bigger image, more photos, and the feature that you mentioned, which is the targeted email. Now, the aim of this is to drive more viewers to the open home and specifically more viewers that might not have seen your listing previously. We have tested all of these features during the last months or so and seen positive reactions. But with that said, I really want to emphasize that we are putting more value into all of the packages to make sure that we have flexibility for our sellers.

Understood. Thank you.

Thank you.

The next question comes from Girat Ling from Pareto Securities. Please go ahead.

Hello guys and congrats Cecilia on the very successful stint as a CEO. I just have just one question first on the duration maybe for Anders. You said that Q4 had a negative impact of 2 million in the quarter. Did I hear that correctly?

You hear it correctly, and that's the figure when we were talking about all else being equal. So with the exact same listing period in Q4 as in Q3, it would have been 2 million higher. So you're absolutely right.

Okay, so if Q4 would have been the same as Q3, but if we look, because in Q4 last year, we had increasing days, but a positive effect from duration. So just could you help me understand that?

Yeah, that's also why I said that in the call today that, I mean, in general, as you can see going back, Q4 is a revenue recognition effect is positive for Q4. So Q4 is always going to be a boosted quarter. And that relates to September being a huge volume month. So no matter how many listing days, a lot of revenue is pushed into Q4, right? And December, a very small month. Whatever happens in the duration time, a small portion will move into Q1 next year. So always a good positive quarter for when it comes to revenue recognition. But this year, the additional two days have a 2 million negative impact on that sales.

Okay. And just on the price growth here for next year, I think I read something on your FAQ that price growth will be a bit slower ahead than historically. Could you comment on the outlook for price increases here in the coming year?

So a bit of a boring answer, but I mean, pricing is such an important component for us. together with packaging product and partnering with real estate agents. But when it comes to price, we know that we work in one way today with a fairly granular pricing, dynamic price list. So we don't know. We look at the pricing all the time. We have to have relevant pricing for the right product at the right time. What that means in the future, we honestly don't know, but it will still be important. But we also said that over time, we do believe that the biggest price increases in percentages is behind us. So with that said, we don't say that we're not going to look at the prices. We look at prices all the time and we adjust them when we feel it's appropriate.

And maybe can I add also one thing? I think it's important to take with you also that when we often come back to the different levers we have in order to increase ARPL, And pricing is one of them. But we have other things that we also work with. And I think it's very evident when you look at last year's numbers that we have increased ARPL through a lot of different initiatives and investments in our product, in our packaging, in the partnership and so forth. And now we are looking into products, what Lisa talked about. So pricing, like Anders said, very important component, something we look at all the time. But we also have a lot of other levers to work with.

Yeah, that's clear. Just a final question on the other service revenue line decelerating here a bit year over year if you compare it to Q3. What can you say here more than the headline figures that we have? Is it that you see the market has been more challenging in Q4 for these type of revenues or is it just a matter of different comps?

Well, I mean, it's good to look at the folio figure. It could fluctuate between the quarters, as you pointed out yourself there, but... I think we all maybe underestimated the lagging effect, especially for property developers, but also the longer listing duration times is affecting the real estate agents as a B2B partner for us. So even though now in Q4 we saw some growth actually from the real estate agents as a whole, we do have respect that it's still macroeconomic uncertainties out there and that affects our partners and especially property developers, but also real estate agents. So, as Cecilia mentioned in her presentation, we work very hard preparing for when the market turns and look at operational changes we can do before that. So, again, we don't know. We are positive about our future, but also have respect that there are a lagging effect of an uncertainty on the property market.

Okay. That's all I have. Thank you very much.

Thank you.

The next question comes from Raymond K. from Nordia. Please go ahead.

Yeah, hi. A couple of questions from me. First one, could you maybe help us better understand the distribution of agents within each of the five tiers you have, maybe by ranking the tiers by size?

no, we can't do that because it changes all the time within the quarter, right? So it's a quarterly average and it's changed a lot between the quarters. So it's a big job for us within the finance department to do allocating and see how actual each and every real estate agent office is performing in the quarter. And it's average, you can see in the tier. So it's moving all the time, but in general, you can say that it's a positive trend. So they move upwards that you can understand seeing the effective commission, but yeah, that's what we can say.

Yeah, that makes sense. And in Q3, you disclosed that over two thirds of customers choose either plus or premium. Could you disclose maybe where that level is here in Q4?

What we can say is that it's continued to growing.

Got it. And then a question on Hemnet Max. Looking forward, you say it would be launched here in spring. Would you say the timing of the launch is more determined by the conversion of customers into premium or plus? Or is it more a matter of you internally needing to ensure that the pricing, commission model, et cetera, et cetera is ready for launch, so to speak?

So we aim to launch this product in April, and that's what we are communicating today. Launching and also updating the seller packaging, it is a huge effort, not only when it comes to go to market, but also from a product development perspective. So we've been working with it for a while, and this is kind of the time frame and the roadmap that we are working with.

Yeah, got it. And what about sort of your recruitment needs here in 2025? How do they compare to this year? Could you provide any more detail into that?

I think just as this year, you can expect us to continue to recruit key competence and so on. Looking at Hamlet's history, we have been growing. headcount and the FTE costs over time, but it has been very controlled. So it's not about us throwing in 20 or 30 new engineers in Q2. But I would expect us to continue with that, seeing that we have an opportunity, whether it's within AI or CRM or marketing, it's We will see that in 2025. But no drama.

No, I think maybe it's fair to say that last year we did some updates and changes in the organization, even within kind of our framework and our plan. So we haven't grown that many, actually, but we have done a lot of operational improvements and changes. So we are today, I would say, standing stronger than we did a year ago, for sure.

Happy to hear that. And just a final question in terms of market share. Do you see yourself having the same market share here in Q4 or still 9 out of 10 real estate sales being done on Hemnet?

So again, first of all, the nine out of 10, it's based on official data and that data is just published once a year. And I think it's important to take with us that that share has, I mean, it's been around that, it's a few percentage up and down from one year to another year. And this is the last official number. And we work every day harder to make sure that we continue improving our products and keep the momentum and the most around the business. And some of the things that Lisa also pointed out, I want to say that that is, I'm very excited for the plan for this year. We are putting a lot of effort and have done so last year also to kind of build the foundation for the things that we're now kind of gradually launching, both from a buyer perspective, seller perspective, and a partner perspective. So I think the team is working on the right things.

Perfect. Thank you so much for answering my questions and congratulations, Cecilia, and good luck on your new journeys here.

Thank you very much. Thank you.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

No, I just want to again say thank you to everyone and have a good day.