Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hemnet Group AB (HMNTY, Financial) reported a 51% net sales growth in Q2 2024.
- Revenue from property sellers increased by 68%, driven by higher demand for value-added services.
- The company saw a 10% growth in published listings and a 16% increase in transactions.
- ARPL (Average Revenue Per Listing) grew by 52%, indicating strong demand for premium listings.
- Hemnet Group AB (HMNTY) maintained a high EBITDA margin of 53.4%, showcasing strong profitability.
Negative Points
- Net sales from other customers decreased by 6.2%, primarily due to lower display revenue.
- Many business-to-business customers, especially property developers, are still impacted by macroeconomic factors.
- The company faces challenges in converting positive market developments into higher sales and commissions for property developers and agents.
- Personnel costs increased by 21% due to higher FTEs and salary inflation.
- The new compensation model's impact on agent behavior and overall financials is still uncertain.
Q & A Highlights
Q: Have you received any early feedback from real estate agencies on the new commission model?
A: We have not received any feedback after the launch. We spent a lot of time in dialogue with the agents' community throughout the spring, getting input and explaining the new model, but no feedback has been received post-launch.
Q: Has the new commission model already resulted in any changes in terms of the mix of Plus and Premium ads promoted so far in July?
A: It is too early to say.
Q: Is there any way to quantify the impact of the new digital publishing flow on upsell?
A: During Q2, the full digital flow launched in May has had an effect, but it’s hard to quantify. Other factors include the new compensation model and happy customers buying premium products.
Q: What type of marketing investment do you anticipate for the second half of this year and into 2025?
A: We plan to continue investing in marketing, including branding, SEO, SEM, and social media. This is in line with our long-term strategy and not solely dependent on competitor activities.
Q: Could you help us by disaggregating the drivers of the big ARPL growth?
A: The ARPL growth is driven by a mix of product improvements, price adjustments, and the new digital publishing flow. We do not disclose exact figures but emphasize that it is demand-driven.
Q: Should we think of downside or upside to the 30% of listing revenue paid out to agents in Q2 with the new commission model?
A: It is too early to say, but the new model should drive top-line growth and potentially increase payouts to agents.
Q: Is the 20% growth in personnel costs in Q2 the right number to think through for the second half of the year?
A: Yes, the figures for Q2 and Q1 are the best forecast model for Q3 and Q4.
Q: How are you thinking about underlying pricing given the progress on premium upsell?
A: Our focus will continue on product improvements and enhancements rather than pricing adjustments.
Q: Can you give us more color on the medium-term plan to drive more premium upsell?
A: We see growth potential in product offerings, the new compensation model, and the publishing flow. We will continue to work on these areas without disclosing specific initiatives.
Q: Has the Pay Later product continued to see swift adoption?
A: The Pay Later feature has varied between 40% to 50% adoption and continues to do so.
Q: Are you working actively to turn around the decline in other services revenues?
A: Yes, we are working actively on this area with product enhancements and expect the market to show positive signals.
Q: What was the driver of the increase in payments administration and commission costs paid to agents if it wasn't a change in behavior?
A: The increase is due to more agents signing commission agreements and higher conversion rates, leading to higher payouts.
Q: Can you provide an update on the B2B segment and how you expect it to evolve?
A: We continue to expand our product offerings and expect the market to improve. We are working actively to ensure we have the best products and strategies in place.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
