Hemnet Group AB (publ) (HEM) Earnings Call Transcript & Summary

Welcome to Hemnet investor presentation. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Good afternoon everyone, and a warm welcome to this September 2026 Investor Presentation for Hemnet Group on the back of this morning's announcement. My name is Jonas Gustafsson, and I'm the Group CEO of Hemnet. With me here are my side at our headquarters in Stockholm, I have our Chief Financial Officer, Peter Messner; and our Head of Investor Relations, Ludvig Segelmark. During today's session, we will go through the presentation that was attached to this morning's press release and published on our website. After the presentation, there will be opportunities to ask questions during the Q&A session. Today's presentation will be moderated by our operator, so please follow the operator's instructions to ask questions through the provided dial-in details. So with that, let's get started. We can skip the agenda into straight to today's announcement on Slide #4, please. This morning, we announced that we're taking decisive steps to reinforce our market position and build a stronger hemmed going forward. The strategic plan contains a number of levers, so let's break those down into different components. Number one, and first of all, we are introducing free entry-level listing format together the complete public market inventory into a single user-centered search experience on Hemnet. We're also simplifying and improving the paid package structure. Secondly, we're updating our compensation model for real estate agent offices introducing a simplified and more predictable structure for commission that focus on paid listing conversion. Number three, and thirdly, we're streamlining our operations to build a faster, leaner and more agile net. This is expected to yield annualized cost savings of approximately SEK 80 million to SEK 85 million. We will break down all these different components separately in today's session. Let's start by providing a better background and context. Please move to Slide #6. First of all, Hemnet is uniquely positioned in the Swedish property market. We have superior traffic and superior reach compared to our competitors, and we're bigger than #2 in the market. This is the market and brand position that we've built over the last 25 years. Our market position also means that we have access the more and better data than anyone else in the market on which we are able to build an even stronger platform going forward, not at least through the use of AI. We have also a unique position in the market that thanks to our agent relationships. Hemnet was founded by real estate agents more than 25 years ago, and we continue to engage and work with the real estate agent community in Sweden every single day. And most of all, Hemnet has a platform that works. Sellers and agents all know that if you want to sell a property in Sweden, buying a Hemnet added the most effective way to do it. With that said, let's turn to Slide #7, please. The Swedish property market has changed in the past years and Hemnet needed to adapt with it. We've seen new market dynamics with longer sales cycles and weak price development. This has caused more sellers to sell before they buy rather than the opposite way around. This has driven new consumer behaviors where more properties are sold earlier in the sales cycle and before they reach Hemnet. Meanwhile, competing platforms have gained traction by presenting a more holistic view of the market. In addition, new technology is effectively changing the way we work and enabling us to bring more embedded products to our user in a much faster way. Next slide, please. So again, while our core model remains strong, it's also clear that the market has changed. Our ambition is that Hemnet should be a part of every step of the journey for every property transaction. And a key part of that is having all relevant listings on our platform. And that takes us to the next slide. With the #1 traffic position, an exceptional brand awareness, Hemnet has an unmatched position in the Swedish property search. However, our core value proposition relies on gathering all buyers and sellers in one marketplace, providing a complete overview for the entire market. We recognize that this has not been the case currently and that the market has evolved faster than we have invested. We are now taking decisive action to address this. Going forward, Hemnet will aim to have all publicly available listings from the beginning of the transaction life cycle. In this expanded ecosystem of free and paid listings, spanning out because even more about Hemnet's paid packages will remain the natural choice for sellers seeking to maximize the other, higher bidding activity and best possible sales outcome. By combining audience leadership with supply leadership, we're strengthening our platform to create an unrivaled user experience buyers, sellers and real estate agents. Now let's dive into what that looks like in practice. Can we please move to Slide #11. So we are expanding our platform because they're all publicly available listings in a single unified search experience. We're doing that by introducing 2 new entry-level listing formats. A free end level option for real estate agents, paired with automatically aggregated listings. In practice, this means that all publicly available listings will be made available on Hemnet going forward. With all listings available on Hemnet, we reinforce our position as Sweden's leading property portal, simplifying the search process for home speakers while maximizing visibility for sellers and agents. In connection with the launch, we're also simplifying the strengthening our package structure where Hemnet bot will replace [indiscernible], incorporating all features invisible plus into bot at a robust price point. The product design is steered to balance value with clear upgrade incentives for high-intent sellers and agents to reduce paid listing cannibalization over time. [indiscernible], upgrading to paid marketing package will remain the most effective way to reach Hemnet's full buyer audience, create maximal interest and ensure a successful transaction. Next slide, please. So what does this mean for our platform. First, we are moving to have approximately 55% of all published listing at a given time to aiming to have all publicly available listings on Hemnet. This will mean that we will move from being the #1 platform in Sweden on traffic and reach, to being the #1 property platform of traffic, reach and supply. We will continue to focus on high-intent sellers and by becoming the single source platform for all new properties that come to the market with high intent sellers prioritized. We increased the value of our paid listing packages. Over time, our ambition is to build the world's best property platform. Hemnet has a unique market position and a business model in an international context. And with the update has announced to date, we're taking steps to significantly improve the product. Going forward, we will be even better positioned to take more product innovation to the market and further improve the user experience at a much more rapid pace. With the new model, we create even stronger alignment with real estate agents and remove all barriers to list on Hemnet from day one. We're also strengthening our platform for all advertisers and partners and ensuring that we become an even stronger platform with growing reach and impressions. Let's turn to Slide 13, please. Hemnet will continue to offer a differentiated paid packages for sellers on the platform with clear upgrade incentives. Already on the platform today, we see an incredibly strong demand for our paid listing packages with more than 75% of our sellers choosing to upgrade the listings to bigger, more value-adding packages. By becoming a single source platform for all the new properties that come to the market, we will further increase the value of our paid listing packages for both sellers and buyers. Paid listings were ranked the highest in search results, have larger and more photos and improved visibility on the platform, which increases the chances of a successful outcome with a higher price and a shorter selling time. Paid listings will also have richer details and more functionalities, both on the seller and the buyer side. For agents, a paid listing will also give more visibility for the agent driving more salary leads. Maintaining and even increasing the value of our paid listing is of the highest importance for us, and we will monitor user behavior to ensure that we continue to see a strong cushion to bigger packages going forward. Slide 14, please. With all publicly available listings from Hemnet, we reinforced our position in Sweden's #1 property portal. With this move, we will enable and we will be able to increase the number of things available on Hemnet by more than 70%. By reforcing our position as the #1 place for buyers, sellers in the regions, we're in a better position to drive on growth with a product across the full operating life cycle. With more listings on the platform, we will have direct relationship with significantly more sellers across the sales cycle enabling for upselling or budding services across the seller journey. Further strengthening the value on our platform by increasing both total samples and the number of projects will strengthen the balance of our paving and present further arc of growth drivers over time. Growing traffic and engagement on Hemnet is also a key driver of B2B revenues as impression is the main currency for display sales, and we know that there is a strong relationship between a number of listings on the platform and the number of sessions and in turn impressions that we can generate for our partners. Lastly, as we strengthen our network effect and reaffirm our position, we can continue to build out our new features and expand our value proposition to cover the full property life cycle. With that, let's move to the compensation model on Slide 16, and I will hand it over to Peter Messner.

Thank you, Jonas, and good afternoon also from my. As announced today, we are also awaiting and simplifying our compensation model to real estate agent firms to be fully aligned with the newly introduced listing structure. So the new model has a simple and clean structure. Every agent recommendation that leads to paid package will account for a commission, and that is new, including the Hemnet base package. We have kept the basic administration fee untouched, which means that all agents will be compensated at a fixed SEK 600 administration fee per published paid listing as before. In total, that means that agents will have better incentives to recommend the best possible package for every seller given the basic admin fee when no recommendation is given and the commission for every recommendation that leads to paid package. Finally, we will introduce a cap of SEK 4,000, including the admin fee per published paid listing and agent compensation to enable for a sustainable compensation model over time. Let's take a closer look on the next slide for how the model works. So as a start, for real estate agent offices that have a general corporation agreement with Hemnet in place, each public paid listing will generate a SEK 600 administration fee in the same way as it does today. In addition, the new compensation model will generate a commission of either 20% or 30% of revenue generated per paid listing depending on the chosen package and subject to an agent recommendation for this package. Per published paid listing, there is SEK 4,000 commission cap, including the admin fee to ensure the model is sustainable in the long term. So what's the total compensation that Hemnet can expect from the new model? Well, that, of course, depends on the conversion to the various paid listing packages and the share of agents that recommend those various packages. With that, let's turn to Slide 19 and the final component of today's announcement, which is the organizational streamlining. What we announced today is a streamlining of our operations to build a faster, leaner and more agile organization in order to unlock further growth potential and to support this new strategic phase for the company. By streamlining operations, modernizing workflows and shortening decision paths, Handled will be better positioned to accelerate product innovation and ultimately improve the customer experience of our offering. The restructuring program is estimated to deliver annualized savings of between SEK 80 million to SEK 85 million as compared to the expenses run rate as of the second quarter of 2026, with full run rate effect on costs expected during the first half of 2027. The program is expected to reduce the number of employees from 184 at the end of the second quarter 2026 to roughly 115 employees. Taking into account natural attrition and the phase out of consultants, which happened now during the third quarter. Approximately 50 employees are expected to be directly affected. Kindly note that all these changes are subject to customer trade union negotiations. We expect onetime restructuring charges of SEK 30 million to SEK 35 million, which will be recognized as an item affecting comparability on the group's income statement now in the fourth quarter 2026. While this is obviously a very composition to take, in particular as it means parting ways with highly valued and talented colleagues, it's a responsible step to ensure Hemnet has the speed, agility and focus required to continue investing in product innovation and couple of that. And with that, let's move to Slide 21, and I hand back to Jonas for a summary of today's session.

Thanks a lot, Peter. So to wrap it up and to summarize, first of all, we take both the decisive steps to restore Hemnet as the most efficient and powerful property platform for buyers, sellers and agents. Number two, we strengthened our market position through a superior combination of trend leadership and listing supply leadership. Number three, we roll out the new simplified and more sustainable compensation model that is better aligned with Hemnet's new listing structure. Metaphor, we streamlined our operations to build a faster, linear and more agile organization that is better positioned to accelerate product innovation and improve customer experience. All in all, today announcement and the measures were taken mean that Hemnet will reinforce its position as Sweden's #1 property portal while unlocking growth opportunities for many years to come. With that, we conclude our presentation, and we'll open up for questions.

[Operator Instructions] The next question comes from Georg Attling from Pareto Securities.

Both of you, I have a couple of questions, if I may. Just starting with the penetration of free listings and your expectations here. I'm sure you found the scenario analysis, so wondering of your sort of base case for how many of the listings will be free, so to speak?

I'll take that one. So obviously, we are launching a completely new product we have various tools to ensure that we maintain a high paid listing penetration. And the most obvious one is Peter referred to and spoke about, we're changing the compensation model in a way to ensure that paid listing becomes the #1 component and the #1 incentive. Second to that, when we launched this new product, we will obviously monitor this in real time, and there's a lot of different components that we can ensure to change and adopt given the development. I think that's the sort of the short-term answer. If you take a more longer-term view, it's obvious for us that with the changes that we're doing today, we will get more traffic, we'll get higher audience. So the actual value to differentiate in a sort of more crowded marketplace and a more crowded property portal becomes even more important. So I think that's how we resonate around it.

Okay. And just on how these 3 leasings will look at a good starting point to look at the under the radar listings as they are also free to just get a feel for how it will look on the platform? Or it was what...

So essentially, I mean what we're launching, Georg, is 2 different sort of 3 alternatives. You'll have the ones where agent has the opportunity to upload a steer. They will be stronger than the aggregated listings. The aggregated listings would have limited information in one picture, whereas a sort of pre uploaded listing will come with more pictures and slightly more content it's clear to us, and that's why I think the comparison on their home is not 100% fair. I think the clear distinction is the sort of the level between a paid and nonpaid listing. But there is a clear sort of ladder driven from sort of where you start from the bottom, which would be the aggregated listing. But we have a strong belief that the free outflow at listing will take a quite large share compared to that, whereas the importance of differentiating and having big listings remains very strong.

Okay. That's clear. Just a final question on the commission cap. So if that cap has been in place over the last 12 months, how much lower would the effective commission rates than?

It will be just slightly lower if everything else would be equal. And that's just a modern question, which I fully understand from it, Georg. The key item, however, is if you think forward and what Jonas indicated and what we said now during the session is this is not an exercise to lower the commission. The exercise here is to align the commission model this the change in the listing structure and to have a very clear incentive for all the agents out there to recommend paid packages. And with that, it is absolutely possible, and that is what we would like to see. That agents actually earn more. So there is not necessarily in the mid- to long term, any effect on that effective emission model. But if based on your question, you apply the same model and simply the effect of the cap on the last 12 months, then you would end up slightly below that.

Okay. But bottom line here, I guess, is that -- your hope is that commission comes up as a share of paid listings because that means the penetration is high, right?

Yes, that would mean the penetration is higher. What we are saying and can easily calculate not easily, you can calculate from a cap perspective. But -- so the point is that what we want to incentivize here is a clear behavior to recommend paid packages and that can drive the compensation in real terms, in absolute terms for agents upwards as compared to today, in particularly because the base package is now part of the recommendation that also allows for a commission. In absolute terms, we could end up in a very slightly higher commission than today, but that is rather theoretical than practical. Your long-term view should probably be that you are in the same area of a commission of an effective commission model than we are today.

The next question comes from Marcus Diebel from JPM.

Yes, you're really approaching to tackle the USP of your competitor. My question is how you actually want to make sure that the free listings that you're getting will eventually also transform into paid listings. What are the measurements and what are the early hope services? It just about getting about 45% of the free listing and making sure that the traffic come to your side? Or do you have something place that you also think these free listings will turn because the experience so far has been slightly different? That would be my question how you drive this. And you kind of answered this in terms of cannibalization, you don't expect current paid listings or the share of paid listings to sort of like cannibalize and go down as a result, just to clarify.

Marcus, so on the first one, I think I mean the -- in the marketplace and in the property portal, we will get more listings. I think the key component here is that the need for differentiating becomes even more important. I would go back to sort of the core elite on Hemnet. When you are selling or property, it's the largest private transaction that you typically do in life ensuring that we maximize the value, ensure that you will reduce the lead time to the largest extent that we can, holds true very much to this because the way our product features and the different packages, whether it's free way there is paid, is that the pay packages will have a superior ranking and a better product experience meaning that the sort of the rationale to invest basically stays strong. In terms of cannibalization, what we're seeing is that -- in terms of potential sort of impact is something we're launching the product here now in a couple of weeks' time. we're confident that we have a number of different tools to impact a potential cannibalization and we can steer it in real time. I think one thing that I'm 100% convinced of is that the product that we will launch on day 2 will not look exactly the same on day 2. This is all about sort of optimizing as we roll it out and ensuring that we get to the right level. Hopefully, that's helpful, Marcus.

The next question comes from Eirik Rafdal from DNB Carnegie.

I've got a couple, so I'll do at a time, if that's okay. If we look at the kind of you giving us call it the scraping functionality or the aggregated listings, will you do this from day 1 or will you allow the agents sort of a grace period to get free listings, which are controlled by them onto the site? And if you're not planning to plug the inventory gap from day 1, how long do you expect it to take? That's my first question.

So simple answer on your first question, Eirik, we're planning to get all the listings by day 1, and we're planning not only to close the gap, but also ensure that we have more listings than our competitors on day 1.

That's very clear. The second question also on the kind of free tier, how easy or hard is it for the brokers to control that free listing? Is that one and the same, you could say, publication platform as regular Hemnet listings are handled?

Also quite a straightforward answer, Eirik, on your second question. It will be the same publication flow. We'll use the same platform. And the key for us here is that obviously, and why we would benefit from having sort of uploaded free listing is that when the agent is uploading a free listing, we would obviously get a digital relationship, meaning that from that second, we could also start that are poking the customer and ensure that we can drive upsell. So that's also why the sort of the free uploaded listing comes with benefits from our perspective compared to a potentially aggregated listings, where you wouldn't have the same sort of digital relationship.

Yes, that makes a ton of sense. And also, sorry, just 2 more questions. Can you just run through the kind of a renewal feature and how this will look on free listing controlled by agents, prelisting [indiscernible] listing and [indiscernible] listing?

Eirik, could you please repeat that question? You dropped out a bit.

Yes, sorry. On renewal which has been or free renewal, which has been a tremendous success for at least premium. How will this you can say, pre renewal or just renewal functional let your feature work on the different tiers going forward?

When we roll it out. So basically, per your point, there is an included renewal feature in our premium and in our Max listing. That will remain the same, not the sort of the new box listing will not have that specific renewal feature. So there's no differences compared to today. And obviously, I mean, the renewed premium and Max listings would sort of would be premiering free listings. So that's the entire sort of sorting flow that I think we laid out in the presentation. The renewal feature will remain the same and a strong U.S. sale for our higher-tier packages.

That's very clear. And just one last one for me, and I'll jump back in the queue. If you go to -- if you plug the be differential from day 1 at least in our book, this becomes kind of an engagement game. What are your plans for product innovation, Updates AP improvement? And how does that resonate with the cost out that you're planning for now?

So we have a lot of things that we're going to do in terms of UX and in terms of product innovation. I think I don't want to go into too much specific details on those things, but we have very ambitious plans. And in terms of the sort of the organizational streamlining that we're doing, one thing that is very clear and has become very clear over the past 18 months is that AI is a super powerful tool to improve productivity. I think if we look back at this, and I know I've been mentioning these numbers a few times in the past as all, but if we look at the code that we generated in December 2025, roughly 20% was enabled by that is closer to 90%, so 9-0 base. And I think that significant sort of leap that we take in, in leveraging AI will ensure that we can continue to drive product innovation to a large extent. Then in terms of UI and UX, I think there's quite work to be done also by removing certain things to simplify the user experience that we would benefit from. But I feel confident that we will continue to drive and even accelerate that development.