Hemnet Group (HEM) Q2 2024 earnings summary

Executive summary

• Net sales grew 51.3% year-over-year to SEK 405 million in Q2 2024, driven by strong demand for value-added services and a 10.1% increase in published listings.

• EBITDA rose 53.7% to SEK 216.2 million, with a margin of 53.4%, reflecting operational leverage and product mix improvements.

• ARPL (Average Revenue Per Listing) increased 51.6% to SEK 6,274, mainly due to higher uptake of Premium and value-added services.

• Maintained dominant market position, with 9 out of 10 Swedish property sales listed and 5.5x more traffic than the next competitor.

• Continued product innovation and digitalization, including a new agent compensation model and enhanced user experience.

Financial highlights

• Q2 net sales: SEK 405 million (up 51.3% year-over-year); Q2 EBITDA: SEK 216.2 million (up 53.7%), with a margin of 53.4%.

• ARPL rose 51.6% to SEK 6,274; published listings increased 10.1% to 55.7 thousand.

• Free cash flow (LTM) reached SEK 578.4 million, with a cash conversion rate of 91.3%.

• Q2 net profit was SEK 148.7 million, up 61.8% year-over-year; Q2 earnings per share, basic: SEK 1.55 (up 64.9%).

• Q2 operating profit: SEK 195.6 million (up 60.7%).

Outlook and guidance

• Expect continued ARPU growth from new compensation model and digital purchasing flow, with a focus on value-added and Premium services.

• Marketing investments to increase moderately as market conditions improve; personnel and cost trends from H1 expected to continue into H2 2024.

• Hemnet targets annual net sales growth of 15-20% and an adjusted EBITDA margin exceeding 55% in the long term.

• Lower inflation and a recent policy rate cut by Sveriges Riksbank may support further market recovery.