Annual Report

Hemnet Group AB
2020
HEMNET GROUP AB | ANNUAL REPORT 2020 · i
Table of contents

Operations
4 CEO report
7 The year in numbers
8 Our business
12 Sustainability report

Corporate governance
18 Corporate governance
24 Board
26 Management

Financial statements
29 Directors’ Report
32 Consolidated income statement
33 Consolidated statement of financial position
34 Consolidated statement of changes in equity
35 Consolidated statement of cash flows
36 Notes, Group
54 Income statement, Parent company
54 .Balance sheet, Parent company
55 Report of changes in equity, Parent company
55 Statement of cash flows, Parent company
56 Notes, Parent company
58 Signatures
59 Audit report

Pages 29-58 cover Hemnet Group AB’s annual report and consolidated
financial statements and have been reviewed by the company’s auditor,
Ernst & Young AB. An audit report can be found on pages 59-60.

This publication is a translation of the original Swedish text. In the

event of inconsistency or discrepancy between the Swedish version
and this publication, the Swedish language version shall prevail.

2020 was a year in which the corona pandemic affected people and professions around the world in various ways. On the front page, we see real
estate agent Anna Hoffman showing a property for potential buyers in real time through the service Hemnet Live.
Sweden’s largest property portal
Each month Hemnet gets an average of 62.5 million visits to our various platforms.

202
SEK Million 85% 64.6 Million
HOURS SPENT ON
62.5
Million
AVERAGE MONTHLY
VISITS
ADJUSTED EBITDA 1) HEMNET 2020
PERCENT TRAFFIC FROM
MOBILE DEVICES

7,309 Visits
PER HOME LISTING 38 Min SEK 544
Million
ON AVERAGE
AVERAGE MONTHLY TIME
SPENT BY EVERY SWEDE
ON HEMNET 3) NET SALES

The world’s most popular property portal

For the second year in a row, a ranking of the 50 largest property portals shows that Hemnet has the
most traffic per capita.

Visits per 1.000 inhabitants (excl. apps) Incl. app 62.5 m(3) monthly visits

hemnet.se

funda.nl

realestate.com.au

daft.ie

etuovi.com

rightmove.co.uk

ingatlan.com

sreality.cz

zillow.com

immobilienscout24.de

0 500 1.000 1.500 2.000

Source: AIM Group Marketplaces Report - December 2020

1) Operating profit before interest expenses, tax, depreciation and write-downs .

2) According to a NEPA marketing survey.

3) Not including 17.5 percent of the population under 14 years. HEMNET GROUP AB | ANNUAL REPORT 2020 · 1
 About us
Hemnet is the number one property platform in
Sweden. We emerged as an industry initiative
and have since developed into a ‘win-win’ value
proposition for the housing market.
By offering a unique combination of products,
insights and inspiration we have built lasting

2 · HEMNET GROUP AB | ANNUAL REPORT 2020

relationships with buyers, sellers, and agents for over
twenty years.
Driven by our mutual passion for homes, we are an
independent go-to place enabling property journeys. Our
unmatched traffic and leading brand recognition makes
us the most popular property platform in the world.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 3

CEO Report

2020 was a year marked by a pandemic with unforeseeable consequences to the world. Already in
March, we had our focus clear: under these new and unpredictable conditions, Hemnet must do what
we can to ensure that the property market continues to function. We will contribute to a reduced
spread of infection in society, while we take our company and our employees through the pandemic in
a way that makes us emerge stronger on the other side. When we sum up this extraordinary year, we
note a new record year for Hemnet.

At the end of the first quarter, it was unclear to what extent the Hemnet has constantly been above the 2019 levels during all weeks
pandemic would affect the property market. For a few months during of the year. In 2020, 64.6 million hours were spent on Hemnet,
spring, there were signs of a stressed market with increased belief in corresponding to an average amount of time spent of 38 minutes per
falling prices among consumers. However, the property market capita and month. These are fantastic figures that show Hemnet’s
proved to be resilient to the crisis - during the early summer we ability to offer relevant and engaging content in a user-friendly way.
noted a stabilisation with high activity, price recovery and a growing
interest in housing which peaked during the autumn. In a time where HOME SELLERS INCREASINGLY UPGRADE THEIR LISTINGS ON HEMNET
our home has perhaps become more important than ever, the active One of our most important focus areas over the past years has been
market contributed to another record year for Hemnet where we to develop and establish more options for sellers to market their
continued our growth journey according to plan – despite an property on Hemnet. Today we have a clear product offering with
unpredictable world. three different packages: Hemnet Bas, Hemnet Plus and Hemnet
During the year, Hemnet broke traffic records a total of three times, Premium, which the home seller can choose between, often in
most recently in September with 72.6 million visits, which is an consultation with his or her real estate agent, based on need and
increase of 22 percent compared to the same period in 2019. At the marketing budget. During the year, an increasing number of people
same time, our visitors stay longer and longer – the time they spend at have chosen to upgrade their home listings on Hemnet to one of the

4 · HEMNET GROUP AB | ANNUAL REPORT 2020

larger packages to reach a great number of potential buyers, while
we have continued to develop and improve the products.
Looking ahead at 2021, we are taking the next step in the strategy
for our value added services, where we are shifting our focus from “We continue to focus on
establishing the products to driving even greater value and
increasing conversion. This area is one of our most important building a world-class user
drivers for future growth.
experience, the market’s
WE MAKE OUR JOURNEY TOGETHER WITH THE REAL ESTATE AGENT
INDUSTRY
most effective products for
Our ambition is for Hemnet to be the obvious choice or all the
country’s real estate agents who, with the help of our products, marketing homes and
strengthen their brands and carry out efficient and good property
transactions. Today, most real estate agents subscribe to our Hemnet brands - and on being the
Business product, which gives the real estate agent more exposure in
the results list on Hemnet, as well as access to the statistics tool
best employer we can.”
“Andelsstatistiken” and the ability to add video content to the property
listing. Our work with investing in and developing products, tools and
data that help real estate agents in their work and strengthens their
businesses will continue also in the coming year.
The real estate agents are Hemnet’s most important partners.
Since the start, the real estate agent industry has been involved in, HEMNET’S ADVERTISING BUSINESS PERFORMS STRONGLY
contributed to and been a part of Hemnet’s growth. From when During the year, we saw solid growth in our advertising business.
Hemnet started charging home sellers for the listing, a part of it has While noting how many of the country’s major media and advertising
gone back to the real estate agents through an administration fee. In platforms have been negatively affected by the effects of the
2019, we also introduced the opportunity to get commission from the pandemic over the year, we are looking at advertising sales that has
sale of Hemnet’s value added services. On March 1 2021, we increased compared with the previous year. It is of course positive
implemented a change in this incentive model in which we place a that the country’s advertising buyers are placing an increasing part of
somewhat less emphasis on the administration fee. Instead we their media investments in Hemnet and shows the strength of our
increase the opportunities for real estate agent offices to earn more content-close offer.
commission from the sale of Hemnet’s value added services. This is
an important change, where we continue to build our important A SUCCESSFUL YEAR IN AN EXTRAORDINARY TIME
partnership with the real estate industry, but in a sustainable way that is Like many others, we at Hemnet have more or less worked at home
also in line with our strategy and drives our business. since March 12, 2020. Overnight, we switched from being around 100
employees in the office to setting up 100 different offices in our
CONTINUED INVESTMENTS TO OFFER THE BEST USER EXPERIENCE ON homes. During the time with home working, we note an unchanged
THE MARKET high productivity and already satisfied employees who have become
Hemnet gathers more homeseekers than any other platform in the even more so. During the year, we also welcomed 30 new employees,
country. We take our task to help people find their new dream home 23 of whom started their employment at Hemnet completely remotely.
very seriously. We want to give our visitors access to the largest I am extremely proud of the way we as a company and our fantastic
number of homes that are for sale right now and have during the year employees have gone through an extraordinary period.
increased the exposure of homes that are on their way to the market. The past year proves that our company is built on a strong and
These homes that soon will be for sale can now be found by our stable foundation. Our business model, our products and our
visitors under the tab “Kommande” (Upcoming). An Upcoming listing organisation have proven to be able to withstand and deliver
is a great way for real estate agents and home sellers to create according to plan in unprecedented times. This offers good
interest in a sale even before the property is on the market. prospects for the future. When we enter the new year, we do so with
For us, a good user experience means not only offering the the goal that Hemnet will continue to be the first choice for
broadest selection of homes available on the market, but also the consumers, partners and employees. We continue to focus on
best possible information about the property for sale. Our efforts to building a world-class user experience, the market’s most effective
increasingly offer online home viewing and video content to products for marketing homes and brands - and on being the best
complement the images in the listing is a consequence of the need employer we can. I look forward to continuing to improve the world’s
for physical distance, but are features that are here to stay. Another most popular property portal together with our teams and business
new feature from the year is that we now also provide the partners - during a year where many of us hope that the world will
opportunity for real estate agents to visualise bids that have been have a chance to recover.
placed digitally through Bank ID (digital ID), to support a more
transparent and open bidding. Cecilia Beck-Friis, CEO Hemnet

HEMNET GROUP AB | ANNUAL REPORT 2020 · 5

6 · HEMNET GROUP AB | ANNUAL REPORT 2020
The year in numbers
REVENUES 1)

600
Revenue increased in all
revenue streams, primarily

544 +23

544
480
driven by revenue from

444
360 published listings and

373
% additional services for listings.

322
240

253
MSEK 120

0
2016 2017 2018 2019 2020

ADJUSTED EBITDA 1)

200 Adjusted EBITDA increased

18 percent, as a result of

202
202 +18
160
increased revenue and a

172
120 continued focus on cost

138
control at the same time as
% 80
108
we increased our staff.
82

MSEK 40

0
2016 2017 2018 2019 2020

TIME ON SITE 2)

65 Our visitors continue to spend

more time on our platforms as

64.6 +20
65

52
Hemnet becomes increasingly
54
50
48

39 mobile and accessible. In 2020,

% 85% of all our visits came from
36

26
a mobile device.
Million 13

0
2016 2017 2018 2019 2020

NUMBER OF VISITS PER MONTH 2)

65
Traffic continued to increase in
2020 as a result of increased

62.5 +19
63

52 interest in the housing market

53

as well as in content and

48

39
45

functions on Hemnet.
%
34

26

Million 13

0
2016 2017 2018 2019 2020

AVERAGE REVENUE PER LISTING (ARPL)

Revenue from published listings

1.800
continue to be Hemnet’s largest

1,760 +24
1,760

1.440 revenue stream. The number of

1,414

1.080 published listings increased

% slightly in 2020 compared to 2019.
1,079

720
ARPL continued to grow as we
946
823

SEK 360 reviewed the pricing of our seller

products, and as more sellers
0
2016 2017 2018 2019 2020 purchased value added services.3)

1) Figures for 2018 refer to the consolidated accounts of Hemnet Group AB, prepared in accordance with IFRS. Figures for 2017 refer to consolidated accounts of Hemnet Group AB, prepared in

accordance with IFRS, with the addition of the Hemnet Sverige Group’s results for January 1-8, 2017, when this was acquired by the new group on January 9, 2017. Figures for 2016 refer to
consolidated accounts of Hemnet Sverige AB.
2) Source: Google Analytics
3) ARPL includes revenue from all products related to the home listing.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 7

Our business
Hemnet’s business model is based on being the preferred meeting place for home buyers and sellers.
On our various platforms, in our apps and on our website, we gather the largest number of property
buyers, sellers and real estate agents in one place.

The largest property

platform *

User experience

Access to the
The first choice for
largest number of
people considering
Investments relevant customers
changing their home Technical Customer and potential buyers
platform relationships and
products

Traffic increase

90%** of sold
properties are
advertised on
Hemnet

Strong network effects create value for the housing market

Hemnet’s success is based, among other various companies and business partners, We create value by making the Swedish
things, on the strong network effect built into who want to reach consumers interested in housing market easily accessible to buyers,
the business model. As Sweden’s largest real estates, want to be seen on Hemnet to sellers and real estate agents. At Hemnet,
property platform with the most traffic, the expose and strengthen their brand. In that the housing market’s various stakeholders
majority of home sellers choose to advertise way, Hemnet becomes an obvious meeting meet in an accessible, intuitive and data-
their home on Hemnet. Conversely, the large place for the housing market, and the more driven environment, making the process
housing supply leads to our high traffic. The people who use Hemnet - the more useful surrounding changing home smoother for
large number of visitors also means that and valuable our services become. all parties.

* Based on traffic, brand awareness and preference amongst buyers and sellers. Source: Similarweb, Nepa.
** Data from Hemnet and SCB (2019)

8 · HEMNET GROUP AB | ANNUAL REPORT 2020

Our business and growth strategy
The starting point for our growth strategy is to continue to be the property platform to which home
buyers turn in the first place. This strengthens our position as the obvious meeting place for all
stakeholders in the Swedish housing market. With them gathered in one place, we have fantastic
conditions for creating products and services that make it easier and more efficient for home sellers
and business partners to get in touch with relevant buyers and consumers.

Our strategy re sts on three pillars:

Real estate agents and

Consumers Home sellers
business partners

Offer an experience and Develop our value added Create products and services
enable content to continue services for home sellers to that help our business
to be the property platform maximize the value of their partners strengthen their
that consumers turn to in property transaction brands and increase the
the first place efficiency of their work

Consumers

The core of our business is to be the available supply of housing for sale, while way to contact real estate agents. In addition,
property platform that consumers turn to we create engagement through data, we deliver content-relevant advertising, for
first – that is why the majority of our informative articles and individually example, mortgage calculations.
investments are made within this area. In tailored monitoring. In this way, we retain
2020, a record number of visitors turned to visitors’ interest until the time comes to
Hemnet, and above all to our mobile buy or sell a home.
platforms. We are proud to have 10 times More than half of our visitors state that Our strategy is to continue to be the
more traffic than our nearest competitor they plan to move home within the next six place home buyers and sellers
(to desktop according to Similarweb.com), months. Home buyers are usually very choose to visit first by continuing to
which underscores Hemnet’s strong engaged and visit Hemnet more often and for develop new and valuable tools that
position among consumers. longer than other visitors. To make the search help our visitors throughout their
Hemnet’s focus is on developing smart for a new home as efficient as possible, property journey.
and intuitive tools that help visitors Hemnet has developed smart search filters,
navigate among virtually all of Sweden’s individually tailored monitoring and a seamless

HEMNET GROUP AB | ANNUAL REPORT 2020 · 9

 Home sellers:
60 percent of revenue

Over 90% of all residential properties sold in channels. In 2020, we have devoted
Sweden through a real estate agent are significant resources to improve the effect
advertised on Hemnet. A property is on an of our value added services, increase
average sold after about three weeks after awareness of the various advertising
being listed on Hemnet. As the country’s opportunities on Hemnet and increase the
largest marketplace for properties, our aim is conversion rate to higher tier packaging. The
to offer the best possible conditions for a result is that 1 out of 5 sellers choose to buy
continued efficient housing market, and for at least one additional product from Hemnet
home sellers to reach a maximum number of in 2020. Our goal is to make our value added
home buyers. Home sellers have different services so attractive that a majority of home
needs, and we continue to develop different sellers who list their home on Hemnet
products to meet them. In recent years, we choose to upgrade their listing. Real estate
have developed and launched a number of agents are a key player in this journey as they
different value added services that home can guide and advise consumers on which
sellers choose in consultation with their real products are best suited to their particular
estate agent. This has resulted in us today real estate object.
having a clear offer with three different
marketing packages (Hemnet Bas, Hemnet
Plus and Hemnet Premium) that offer Our growth strategy for home sellers
different functions for exposure, the product is based on continuing to develop the
”Förnya Annons” which restarts the listing sales of our value added services in
and “Raketen” that places the home listing at close collaboration with real estate
the top of the results list for a few days. agents, our most important resale
These products are purchased in conjunction channel, to help sellers maximize the
with or after publishing a property ad, in order value of their property transaction.
to attract more potential buyers through
extra exposure on Hemnet and in other

10 · HEMNET GROUP AB | ANNUAL REPORT 2020

Real e state agents and busine ss partners:
40 percent of revenue

Common to all our business partners is that customers and have during the year
Hemnet enables them access to the target launched a number of improvements that
group of potential home buyers and make it easier for consumers and potential
consumers that they want to reach. buyers to take part of new construction
projects through our project pages.
Real estate agents
Real estate agents are our closest and most Advertisers
important partners and one of our largest Hemnet is a niche site with a broad reach, and
customer groups. Around 85 percent of all in addition to the previous two important
listings published on Hemnet come from real groups, we also attract display and native
estate agencies connected to Hemnet advertisers (editorial content sponsored by
Business – a subscription product that an advertiser) from a range of content-close
provides access to increased brand building industries, such as mortgages, consumer
as well as detailed statistics on how an agency loans, interior design or household services.
or individual agent performs on Hemnet All of our customer groups buy advertising on
relative to its competitors. Furthermore, real Hemnet in the form of display ads, native ads
estate agencies are investing in brand- or integrations, and we are one of the fastest
building advertising via Hemnet to strengthen growing players on the Swedish advertising
their position and increase the number of new market according to IRM. Our most rapid
contacts with potential home buyers and growth lies within the mobile advertising
home sellers. Real estate agents play an market where we have 6.64 percent market
important role in sales of value added services share (source: IRM, Q4 2020 report).
to home sellers as they are resellers of these Hemnet’s strategy for growing our partner
services. As partners and resellers, the real business is to continue to expand our B2B
estate agent office or franchiser get to take product portfolio beyond display ads and
part in Hemnet’s growth and revenue both create powerful products that meet our
through commission from selling Hemnet’s customers’ needs, provide tools and data for
value added services, as well as through wiser decisions and simplify everyday life. We
receiving an administration fee to spend a lot of time understanding the
compensate for the work they perform challenges and needs of our customers, and
when publishing a listing on Hemnet. developing new services in close
collaboration with them. The result is a
Property developers unique product that is richer in information
Property developers are the single largest and better adapted to solving our partners’
group of advertisers on Hemnet. In addition problems than any products that our
to purchasing marketing space in our competitors could offer.
various channels, property developers
publish both advertisements for upcoming
projects and current properties for sale on
Our growth strategy for real estate
Hemnet. Since the majority of Hemnet’s
agents and business partners is based
visitors are active in their property journey, it
on creating products that increase the
is essential for property developers to be
efficiency of our partners’ work and
seen on Hemnet as they have access to
strengthen their brands to attract the
virtually all potential customers. We are
largest number of potential buyers,
constantly working to improve and
sellers and consumers.
streamline our products aimed at property
developers in close consultation with our

HEMNET GROUP AB | ANNUAL REPORT 2020 · 11

Sustainability report
Hemnet is one of Sweden’s most visited digital platforms and a hub for the country’s property
transactions – for many being one of the most important transactions one makes in life. As an
employer, we currently employ over 100 employees. Both of these perspectives make us an
important player in society. In 2019, we took our first steps towards structured and effective
sustainability work, in this section we describe how the work is progressing.

ABOUT THE SUSTAINABILITY REPORT The materiality analysis identifies four areas as being most
This sustainability report has been prepared by Hemnet Group AB and important for Hemnet from a sustainability perspective. These are,
it also covers the Group’s subsidiaries. Hemnet Group AB prepared its with no relative ranking:
very first sustainability report in 2019 and the framework that was then
set up also forms the basis for the 2020 report.

APPROACH AND MATERIALITY ANALYSIS

In the process of identifying relevant areas for Hemnet regarding 1. Sustainable product offering
sustainability, we carried out a materiality analysis prior to the 2019
report. Here, Hemnet’s significant impact and stakeholders’ need for 2. Customer privacy
information has been assessed. The analysis looked at both risks
3. Hemnet as a workplace
and opportunities related to a sustainable business, as well as
environmental aspects, social conditions, human resources, respect 4. Anti-corruption
for human rights, anti-corruption and governance issues. As no
major changes have taken place in the company in the last 12
months that change the conditions for the materiality analysis, the
2020 sustainability report is based on the analysis made in 2019. We
have also begun work on a stakeholder analysis to ensure that the This report delves into the work in each area together with
areas that have been identified as essential to the business also performance indicators that provide an opportunity to monitor long
align with external stakeholder expectations of the company. The term developments in the area.
goal of our sustainability work going forward is for internal and In addition to the four most significant areas, the report covers
external stakeholder dialogues to form the basis for effective another five areas that are important for Hemnet’s sustainability
development of our sustainability work. work, but where the impact is of a lesser nature. These areas are
therefore reported at an overall level in the report:

1. Financial sustainability
2. Strategic collaboration
3. Emission of greenhouse gases
4. Purchasing
5. Social responsibility

The results of the materiality analysis are presented in the tables

on the next page.

12 · HEMNET GROUP AB | ANNUAL REPORT 2020

GOVERNANCE AND RESPONSIBILITY FOR SUSTAINABILITY has an impact on the outside world on a number of dimensions, and
WITHIN THE BUSINESS that impact can involve risks as well as opportunities.
The Board of Directors has overall responsibility for the management
of Hemnet Group AB, which also includes issues related to A fair marketplace
sustainability. A business model with a platform where sellers and buyers meet,
The CEO is responsible for carrying out the Board’s decisions and means taking responsibility to ensure that buyers, sellers and real
strategies. The company’s Chief Communication and People Officer estate agents are on equal terms and have access to the property
(CCPO) has overall responsibility for sustainability issues within market that Hemnet represents. We aim to offer a world-class user
company management and is responsible for developing the basis experience, which means high demands on quality and accurate
for decision-making, analysing and assisting other management in information of home listings. For example, it is vital that common
carrying out decisions. The CCPO also leads the work on producing rules apply to the agents who place property advertisements on the
the sustainability report. platform.
Our ambition is for all employees to feel ownership of
sustainability issues that are close to their own positions, as well as Accessibility and privacy
a commitment to the company’s overall sustainability. At the Hemnet should be accessible to users with different technical skills
beginning of the year, all employees were trained in our newly and different devices. Ensuring accessibility and continuous
developed Code of Conduct, which is based on the principles of the development and operation of technical systems is therefore crucial.
UN Global Compact and the UN Guiding Principles on Business and Everyone who uses Hemnet must also be able to access information
Human Rights. We have also implemented a separate external about how their personal data are processed.
Code of Conduct for suppliers to ensure that the principles we Hemnet as an advertising space
ourselves adhere to are also clear to our suppliers. No breaches of Advertising sales are an important source of revenue for Hemnet.
our Code of Conduct have come to our attention in 2020, and in Hemnet is a niche channel with a broad reach that has built a premium
order to strengthen the company’s opportunities to identify experience for visitors and advertisers, where advertisers expect to be
potential breaches, work is also underway to implement a visible in an environment relevant to their target audiences. Our
whistleblower function. strategy is to ensure this through restricting advertisements to
content- close and relevant advertisers. For example, we exclude
HEMNET’S BUSINESS MODEL FROM A SUSTAINABILITY PERSPECTIVE
advertisements from betting and gambling companies as this type of
The essence of Hemnet’s business model is that registered real estate business has no relation with Hemnet.
agents mediate an offer of home listings on Hemnet to home buyers.
Thanks to our knowledge and number of users, home sellers get Hemnet as a workplace
extensive exposure for the home they are selling, while giving agents Part of Hemnet’s business model is that the platform is developed by
an opportunity to market the property they have been commissioned its own staff. For the business model to work, we must retain and
to sell. Home buyers and those following the property market are attract talent who can drive the platform and continue to develop the
given access to information, and thanks to the large number of customer offering. So, it is important for Hemnet to be a workplace
visitors to the platform, Hemnet is an attractive advertising space for where employees feel comfortable and want to stay, and where new
those who wish to reach target groups. Our business model therefore talent is attracted to join.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 13

Hemnet’s most significant
sustainability areas
The four sustainability areas that we have identified as most significant are described below, just as related risks, risk management and
governance, as well as performance indicators and outcomes for 2020. Outcomes for 2019 are indicated in brackets.

Sustainable product offer

By advertising on Hemnet, one reaches picture of the property for sale can adversely PERFORMANCE INDICATORS
Sweden’s home buyers and the site visitors can affect consumers and home buyers. This could In 2020, Hemnet had on average 62.5 million
view virtually all properties for sale in Sweden. contribute not only to home buyers receiving the visits per month (54), with each visit lasting on
As an efficient and comprehensive marketplace, wrong background facts before buying, but also an average of 5 minutes (5).
Hemnet contributes to faster and simpler lead to distorted competition amongst agents. Hemnet is a stable platform without
property transactions for all market participants. operational disruptions with an availability in
We should be a fair marketplace offering DESCRIPTION OF RISK MANAGEMENT AND 2020 of 99.98% (99.97%).
equivalent terms and conditions for those who GOVERNANCE In 2020, we sent a total of 4.800 e-mails
advertise on and use the platform. It is important All development work at Hemnet takes place (2.391) regarding deviations from our publishing
for those individuals who visit us and for the real within the company. Work on continuous rules. All of these cases were resolved without
estate industry, that the content on Hemnet is improvements of the services the company the need for further action (such as suspension
accurate, credible and of high quality. Therefore, offers is part of the daily business. Because we from the platform).
all advertisers need to adhere to common rules have the full expertise on, and accessibility to,
for publishing. the platform, any operational disruptions or Comments on the performance indicators
problems can be handled immediately. The high volume of traffic and increasing length
SIGNIFICANT RISKS All home listings on Hemnet go through a of time that visitors choose to stay on our
If Hemnet as a platform were to lose its registered real estate agent. This professional different platforms is testament to the
accessibility, supply and quality, it could body of certified agents is an important important role we play. This is a pre-requisitie
negatively affect the ability of private individuals guarantor of Hemnet’s quality, as the content of for the advertising on Hemnet to be effective.
and real estate agents to carry out property any home listing is the real estate agent’s The high availability of Hemnet provides
transactions. Without access to Hemnet, the responsibility. To ensure common rules for all Sweden’s population easy access to the
home buyers’ ability to access the property players, we make publishing rules clear and property market 24 hours a day, 365 days a
supply is hampered, as is the home seller’s available to all real estate agents. Samples of year.
ability to advertise their home - and the real the property listings on Hemnet are taken daily By continuously sampling the content of
estate agent’s ability to do business. by a function within our customer service the advertisements on Hemnet and acting in
Inaccurate property advertisements or organization and those agents whose case of non-compliance with the publishing
content that in various ways attempts to advertisements fail to comply with the rules, we ensure a level playing field for all
manipulate the home buyer or give a false publishing rules are contacted. players on the market.

Anti-corruption

Our business is run on strong principles of ethics agent or home seller with Hemnet contacts would Legal. Hemnet must take relevant measures to
and responsibility that permeate all parts of our succeed in securing benefits for home advertising investigate such reported deficiencies, and
business. Our employees are exposed in different outside the company’s ordinary processes and violations may lead to legal consequences.
ways to influence from different quarters and in routines. In addition to the obvious legal risks,
turn expose others to influence through, for misconduct would potentially be a breach of trust PERFORMANCE INDICATORS
example, marketing and relationship-building and detrimental to the Hemnet brand. Reported incidents where employees have been
activities. These are a natural part of how exposed to undue influence: 0 (0)
businesses and long-term relationships are DESCRIPTION OF RISK MANAGEMENT AND Reported incidents where employees themselves
created and maintained, but it is of utmost GOVERNANCE have unduly tried to influence an external party: 0 (0)
importance that these processes are formally Anti-corruption is an important part of our Code
correct. Our employees must therefore be very of Conduct that is central to the work of Comment on the performance indicators
careful to always make a credible assessment of counteracting all forms of bribery, misconduct No events have come to the knowledge of the
the situation and should never end up in a and corruption within the company. A benefit or company that indicate that an employee has been
position that may violate the company’s internal advantage offered to an employee by an external unduly influenced, or has unduly tried to influence
guidelines on bribery and misconduct. person is not allowed if it affects or risks affecting any external party. At the beginning of 2020, our
the employee’s objectivity and ability to make a newly developed Code of Conduct was
SIGNIFICANT RISKS commercially sound decision. The Code of implemented in the organisation. Today, there is a
Failure to comply with laws and regulations Conduct addresses the company’s internal clear process for ensuring and monitoring that all
against bribery can have serious consequences guidelines on bribery and misconduct and existing and new employees have read and
for Hemnet and for the individuals concerned. provides support to employees in making accepted the Code of Conduct. We are also about
Possible situations where violations could occur judgement calls. to implement a whistleblower function to further
are, for example, in customer care or representa- Employees are asked to report violations to increase the possibility of serious irregularities
tion in the event that activities would go beyond their manager, their manager’s manager, coming to our attention by enabling reporting of
the limit of what is considered proper, or when an Hemnet’s HR Manager or Hemnet’s Head of serious violations completely anonymously.

14 · HEMNET GROUP AB | ANNUAL REPORT 2020

 Customer privacy

As one of Sweden’s largest digital platforms, we processing as simply and clearly as possible, PERFORMANCE INDICATORS
have access to large amounts of data. In there is always a risk that visitors have difficulty No personal data incidents linked to customer data
addition to the information being published, in getting information about, for example, have been reported to the Swedish Data Protection
which may contain information that is indirectly personalisation and data sharing within the Authority during the year.
linked to an individual, such as address, images framework of advertising networks with which The proportion of visitors who accept
and other relevant information about properties we collaborate. Hemnet’s administration where we ask for consent
advertised on the platform, the traffic to the is high, and the vast majority agree to the
platform drives a lot of data. DESCRIPTION OF RISK MANAGEMENT AND company’s personal data processing. This
Although Hemnet voluntarily offers its GOVERNANCE indicates that the personal data processing that
publication license on its website – which Data is an important asset for our business. It is visitors agree to meets their reasonable
means that applicable data protection clear from Hemnet’s Policy for Information and expectations.
legislation is not applicable to the core of our Data that the use of data must comply with The Swedish Data Protection Authority
business (publication of advertisements) – we applicable laws and regulations and take into received two (2) complaints in 2020 concerning
are careful that the information published is not account the individual’s interest in personal Hemnet. These have not resulted in any action by
perceived as a privacy violation to the average privacy. the authority.
person. We also consider it extremely important We carry out structured and continuous data
that visitors to our different platforms receive protection work, and respect for personal Comments on the performance indicators
clear information about how Hemnet uses integrity is a natural part of our Code of Conduct. Awareness of issues related to data and personal
cookies. We have established processes in privacy is growing, thanks in large part GDPR.
collaboration with the real estate agent industry Hemnet is humbled by the trust placed in us by our
SIGNIFICANT RISKS to ensure that sellers and buyers are aware of visitors when faced with an informed and active
Given the volume of information on Hemnet, which information is published. choice.
there is always a risk that situations arise where Transparency and clarity are key to ensuring In terms of Hemnet’s large number of visitors, a
a seller or buyer does not feel comfortable with that our visitors make informed decisions about very low number of complaints are registered
or in control of the data we publish. personal data processing that requires annually, which demonstrates that the company
Although we do our utmost to present customer consent. We regularly review our lives up to its stakeholders’ expectations regarding
information about cookies and personal data privacy information to ensure this. the protection of personal integrity.

Hemnet as a workplac e

The Hemnet site is developed and maintained by Manager in 2019. This has generated increased note a high level of trust between colleagues at 83
our own staff. The fact that we succeed well in control over our recruitment processes with also (75), that employees feel that they are treated with
retaining and attracting talent that allows us to reduced costs as a result. Hemnet’s human fairness and respect at 76 (75) and that they believe
continue to develop and improve our business is an resources (HR) policy handles control and regulation that our leadership is of a high quality at 74.8 (72).
important part of the business model. Hemnet of how we work with HR issues.
strives to be an attractive and competitive employer. The policy describes our goals and activities Comments on the performance indicators
2020 has been a very special year for the whole for attracting, retaining and developing employees. During the year, Hemnet continued to grow in terms
world. No individuals, or companies, have been We work actively to be an attractive workplace of number of employees, in line with our growth plan,
unaffected by the consequences of the corona where employees are happy and healthy. In 2020, despite the pandemic that swept the world.
pandemic. At the end of the year, we see that the we have increasingly recruited people who do not Hemnet’s ability to attract and retain staff
company has handled the pandemic very well, also speak Swedish, which places increased demands continues to develop positively. During the year we
from an employer perspective. Thanks to a on the company’s internal communication, where have received many relevant applications for our
continued very healthy development in our the company during the year switched to speaking open positions, creating good conditions for finding
business, Hemnet has not only been able to retain, and writing in English in all company-wide the right candidates. During the year, we also noted
but also continue to recruit new staff according to communication. This move has worked well and a very low staff turnover.
plan. Furthermore, our existing and new employees the new employees have also contributed to an It is positive that we see a more even gender
have not only managed the transition that the increased diversity within our staff. distribution within our management level. However,
pandemic has entailed, with, for example, home we notice a small decline in the percentage of
working and new ways of working, but have done PERFORMANCE INDICATORS women working for Hemnet on an overall level. This
so with increased productivity and maintained, Number of full-time employees: 108 (92) is explained by the majority of new recruits lying
high employee satisfaction. Number of new employees: 30 (30) within development, and like many tech-oriented
Number of job applicants: 2,300 (2,500) companies, we experience a challenge in recruiting
SIGNIFICANT RISKS Percent women/men: women for developer roles. The small percentage of
Should Hemnet face challenges in recruiting for Women: 34% (36%) Men: 66% (64%) female developers is a challenge for the industry
certain roles, this could have a negative impact Percent women/men in management: from both a skills supply and a diversity perspective.
on the rate of development of the company and Women: 52% (50%) Men: 48% (50%) In order to help elucidate the problem, we have for
on product development. three years in a row participated as a sponsor of the
Employee satisfaction: conference “Women in Tech”, which aims to help
DESCRIPTION OF RISK MANAGEMENT AND In our ongoing employee surveys, our results are increase the proportion of women who apply to the
GOVERNANCE well above average for issues regarding the tech and IT industry.
In 2020, 30 new employees were recruited to Hemnet, company’s leadership and corporate culture. It is Our employee surveys show that employees are
the majority in developer roles. Of these 30 especially worth noting that we maintained our satisfied, despite the changes that the year has
recruitments, 26 have been handled internally. very high employee satisfaction during a year entailed. Working sprint-based and with continuous
Our ability to recruit without the help of external where Hemnet’s employees for the most part monitoring of employee satisfaction gives us good
recruitment services has increased significantly over worked from home as a result of the corona pande- opportunities to actively work with areas of
the past two years by hiring a Talent Acquisition mic. In the result, which is graded from 1 to 100, we development and continuous improvement.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 15

Other significant sustainability
areas for Hemnet
Financial sustainability

WHY IS THE ISSUE SIGNIFICANT? FINANCIAL TARGETS

Running a financially sound and stable business is a basic requirement for • Growth: Hemnet targets an annual revenue growth of 15-20 percent.
Hemnet to continue to develop efficient and sustainable services for the property • Profitability: Hemnet aims to achieve a medium term adjusted EBITDA
market, to be an attractive employer and to deliver value to our owners. margin of 45-50 percent.

HOW DOES HEMNET WORK WITH THE ISSUE? • Leverage: Hemnet aims to achieve a Net Debt to Adjusted EBITDA
Hemnet has a high level of control of its operations. Through thorough work below 2.0x.
on our annual business plan and a budget that is monitored monthly, we • Dividend policy: Hemnet targets a minimum annual dividend of one
carefully plan our expenses and income. We monitor the development of the third of net income. In the event that the Company retains excess cash,
business on a daily basis, so we can adjust in a timely way so that we can this will be returned to shareholders e.g. through special dividends or
adjust quickly if we are not delivering as planned. share repurchases.

Emission of
Strategic collaboration Purchasing greenhouse gases

WHY IS THE ISSUE SIGNIFICANT? WHY IS THE ISSUE SIGNIFICANT? WHY IS THE ISSUE SIGNIFICANT?
Hemnet has a variety of strategic As Hemnet’s services are developed and Hemnet, through its fully digitised service,
collaborations with advertisers and built within the company, purchases are has limited impact on the environment.
other business partners. Real estate limited. However, we expect the Reducing greenhouse gas emissions is an
agents, property developers and banks suppliers we work with to live up to the important issue, but from Hemnet’s
are among some of our most important human rights, legal, ethical and moral perspective we see no significant risks in
partners, along with companies that requirements that we as a company the area.
choose to advertise with us. impose on ourselves.
HOW DOES HEMNET WORK WITH THE
HOW DOES HEMNET WORK WITH HOW DOES HEMNET WORK WITH ISSUE?
THE ISSUE? THE ISSUE? We work actively to limit greenhouse gas
We work on a daily basis to manage, In 2020, we began to implement a Code emissions by limiting travel among staff
strengthen and develop our most of Conduct for suppliers to ensure that and by taking an environmental
important strategic partnerships. For the principles we ourselves adhere to perspective with our business decisions
example, Hemnet builds its business are also clear to our suppliers. The Code and product development.
together with real estate agents, whose of Conduct for suppliers describes our We use cloud-based IT solutions and
work with sales and administration expectations in relation to human rights, storage services as much as possible so as
around the home listings on Hemnet is working conditions, the environment to have the lowest possible environmental
reimbursed through an administration and anti-corruption. impact. At present, Hemnet has two main
fee. We also offer all real estate agents suppliers in terms of
the opportunity to earn commission IT solutions, both of which carry out solid
when selling our value added services. sustainability work, not least on emissions
and the environment.

Social responsibility

WHY IS THE ISSUE SIGNIFICANT? HOW DOES HEMNET WORK WITH THE ISSUE?
A well-functioning property market is an important foundation for our society. In 2019, Hemnet started a collaboration with the Stockholm City
Having a home of one’s own is necessary for much of life to function, Mission, where we chose to earmark our contribution to the Bobyrån
including work and relationships. As the country’s largest property portal, initiative, which helps socially vulnerable people find a more permanent
Hemnet plays an important function as a tool helping people to effectively housing solution. The target group is people who are homeless, have a
sell and find new homes. At the same time, many are completely outside the psychosocial problem and need some kind of support. The principle is
property market with no opportunity to obtain their own property. We want to that you can prove your ability to have your own home without having to
help everyone in Sweden to have their own home. We have therefore focused go through many steps along the way with, for example, housing
our social responsibility on supporting an initiative working to give homeless assistance. In 2020, we chose to extend the collaboration with
people the opportunity to obtain a tenancy contract. Stockholm City Mission.

16 · HEMNET GROUP AB | ANNUAL REPORT 2020

HEMNET GROUP AB | ANNUAL REPORT 2020 · 17
Corporate governance
This corporate governance report describes the structure and principles for managing our operations
to fulfil the vision of being the key to a simpler property transaction for all market participants. The
purpose of corporate governance is to ensure the company is managed as efficiently as possible for
the shareholders and that we comply with the applicable laws and regulations. Corporate governance
also aims to create order and procedures for both the Board and management.

BASIS FOR HEMNET’S CORPORATE shall be held within six months after the end of Christopher Caulkin, Anders Edmark, Thomas
GOVERNANCE the financial year and shall be called by letter or Hussey, Kerstin Lindberg Göransson and Pierre
Hemnet Group AB is a Swedish limited e-mail no later than two weeks before and no Siri to the Board. Nick McKittrick was elected
company based in Stockholm. The main earlier than six weeks before the Annual as new ordinary member. The AGM re-elected
decision-making bodies are the annual General Meeting takes place. Håkan Erixon as chairman of the Board. Håkan
general meeting (AGM), the Board of Directors Hellström was re-elected as deputy member
and the CEO. The AGM appoints the Board, Annual General Meeting and Henrik Persson was elected new deputy
which in turn appoints the CEO, who manages The AGM for the financial year 2019 was held member. Ernst & Young AB was re-elected as
ongoing administration in accordance with on 6 May 2020 in Stockholm and 98.6 percent auditor with Anna Svanberg as lead auditor.
the Board’s guidelines.The principles of of the votes in the company were represented. The AGM further resolved to adopt
corporate governance are taken from the Chairman of the Board Håkan Erixon was also Guidelines for remuneration to senior
Swedish Corporate Governance Code. appointed to chair the meeting. executives.
The AGM adopted the income statement The AGM resolved to authorize the Board
ANNUAL GENERAL MEETING and balance sheet for the financial year 2019 of Directors to, on one or more occasions
The AGM is the highest decision-making and discharged liability of the Board of during the period until the next Annual
body of Hemnet. At the AGM, all shareholders Directors and the CEO authority in respect of General Meeting, with or without preferential
are given the opportunity to exercise the the year. The AGM resolved to approve the rights for the shareholders, decide on a new
influence represented by their respective Board’s proposal for allocation of profits, which issue of a maximum of 560,400 Series C
shareholdings. meant that retained profits of SEK 1,119,071,256 ordinary shares.
Rules governing the AGM and what is to be were transferred to the next year.
dealt with during the AGM are found in the The AGM also approved the Board and audit Extraordinary General Meeting
Swedish Companies Act and the Articles of fees, and that the number of ordinary Board November 18, 2020
Association. Hemnet Group AB’s financial year members should be seven with two deputies. On November 18, 2020, an Extraordinary
runs from January 1 to December 31. The AGM The AGM re-elected Håkan Erixon, General Meeting in Hemnet Group AB was

Organisation chart

Annual General Meeting

Auditor

Audit Committee

Board of Directors

Remuneration Committee

CEO/Management

18 · HEMNET GROUP AB | ANNUAL REPORT 2020

held in Stockholm and 99.9 percent of the decide on a new issue of Series C ordinary Annual General Meeting 2020
votes in the company were represented. shares up to the maximum number of The next AGM will be held on April 9, 2021
The Extraordinary General Meeting resolved shares prescribed by the Articles of in Stockholm.
to elect Tracey Fellows as an ordinary Board Association, i.e. 17,060,000.
member. The EGM decided on a directed OWNERSHIP 1)
new issue of a maximum of 937,578 series C Extraordinary General Meeting March 1, 2021
ordinary shares, entailing an increase in the On March 1, 2021, an Extraordinary General
share capital by a maximum of SEK Meeting in Hemnet Group AB was held in
47,864.84. For the decision, the following Stockholm and 100 percent of the votes in the
conditions shall otherwise apply. It was company were represented.
resolved to revoke the previous The Extraordinary General Meeting resolved a
authorization registered with the Swedish reverse share split in each share class of 15:1 in General Atlantic 60 %
Companies Registration Office on May 26, each respective class of shares. Sprints Capital (f.d. Merro) 17 %
2020, and instead authorize the Board to, on It was also decided to dismiss Thomas Hussey Care of Hemnet 11 %
one or more occasions, during the period and Henrik Persson and to elect Håkan Mäklarsamfundet 11 %
until the next Annual General Meeting, with Hellström as an ordinary member. Finally, the Senior executives 1%
or without preference for shareholders, AGM adopted a new Articles of Association. 1) Based on the number of shares outstanding.

Attendanc e at Board meetings 2 020

Name Position Present Total meetings

Håkan Erixon Chairman 9 9
Christopher Caulkin Ordinary member 9 9
1) Left the Board at the
Kerstin Lindberg Göransson Ordinary member 8 9 AGM on May 6, 2020
Anders Edmark Ordinary member 9 9 2) Elected as an ordinary

Erik Olsson 1 Ordinary member 4 4 member at the AGM

on May 6, 2020
Pierre Siri Ordinary member 9 9
3) Elected as an ordinary
Thomas Hussey Ordinary member 9 9 member at the Extraordinary
General Meeting on
Nick McKittrick 2 Ordinary member 5 5 November 18, 2020
Tracey Fellows 3 Ordinary member 1 1 4) Ordinary member until

Håkan Hellström Deputy member 7 9 the AGM on May 6, 2020,

alternate thereafter
Henrik Persson 4 Deputy member 5 9
5) Left the Board at the
Marta Suarez 5 Deputy member 1 4 AGM on May 6, 2020

AUDITOR The Board annually reviews and adopts a set of women and 6 men. No one from the company’s
At the AGM 2020, Ernst & Young AB was elected rules for its work, as well as for the Board’s management team was a member of the Board.
as auditor with Anna Svanberg, Authorized Audit and Remuneration Committees. The At the AGM, Håkan Erixon was re-elected as
Public Accountant as lead auditor. Board also establishes instructions for the CEO. Chairman of the board.
The Board receives annually in The work is based on the rules of procedure
conjunction with the financial statements a adopted annually by the Board, which The Board’s work in 2020
presentation from the auditors without determine work distribution among the Under its rules of procedure, the Board has fixed
company management present. Each year, members of the Board, the number of Board information and decision points that are descri-
the auditors align their audit plan and risk meetings, matters to be dealt with at Board bed in the Board’s annual cycle (see below). All
assessment with the Audit Committee. meetings and the chairman of the Board’s Board meetings include approval of previous
The auditors are invited to all Audit responsibilities. During the year, we performed minutes, a report on significant events from the
Committee meetings. The auditors conduct an internal evaluation of the Board work. CEO, and a financial report from the CFO.
an audit of the Parent Company and During the year, the Board reviewed the
provides an audit opinion over the Group’s Composition of the Board company’s strategic direction. Other
annual report. According to the articles of association, important issues for the Board were the
Hemnet’s Board of Directors shall consist of further development of value added services,
BOARD OF DIRECTORS minimum one and maximum 11 members, with the company’s relationship with the real
The Board’s main task is to ensure company maximum 11 deputy members. If the Board estate industry, minor updating of the
and shareholder interests, appoint the CEO, consists of one or two members, at least one company’s financing as well as updating of
decide on company strategy and be deputy member shall be appointed. the three-year business plan. Attendance of
responsible for complying with applicable At the end of 2020, the Board consisted of 8 Board members at the meetings is shown in
laws and the articles of association. members elected by the AGM, including 2 the table above.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 19

 Board of Directors annual cycle

• Business plan • Annual Report and Financial

• Budget Statements
• Preliminary financial • Notice of Annual General Meeting
and business update • Guidelines for compensation and
other terms of employment for
Q4 Q1 senior executives

• Inaugural Board meeting

Q3 Q2 • The Board’s rules of procedure,
CEO instructions and other
governing documents
• Strategy meeting
• Financial reports and • Financial reports and business
business update update

BOARD COMMITTEES Audit Committee does not have its shares listed on any public
The Board has set up two committees to According to the Committee’s rules of market, the Board has chosen to establish an
monitor and prepare Board issues within procedure, the Committee shall facilitate the Audit Committee in line with Hemnet’s work
each committee focus area. Committee work of the Board by preparing audit towards becoming a sustainable company
members are elected at the statutory Board questions. In accordance with the Swedish with a well-developed corporate governance.
meeting held immediately after the AGM. At Companies Act, the Board of Directors of a The Audit Committee’s rules of procedure
committee meetings, representatives from company, whose shares are listed on a are approved annually by the Board at the
the business such as the CEO and CFO may regulated market, shall establish an Audit statutory Board meeting and are valid until
participate as presenters. Committee. Although Hemnet Group AB there is a need to update them.

Audit Committee ta sks

In accordance with the rules of procedure adopted by the Board of Directors of Hemnet Group AB, the Audit
Committee shall handle the tasks outlined below:

• Review the financial results of Hemnet Group AB and its subsidiaries

• Review the effectiveness of internal controls, audit and risk management
• Suggest initiatives to become a more mature and sustainable company from a financial and audit perspective
• Stay informed about accounts and monthly reports
• Review and monitor the impartiality and independence of the external auditor
• Assist with preparation of proposals for shareholder and Board meetings
• Other financial and auditing issues raised by the Board for further investigation

20 · HEMNET GROUP AB | ANNUAL REPORT 2020

Until the AGM held in May 2020, the Audit
Committee consisted of Kerstin Lindberg
Göransson, (Chairman), Thomas Hussey and
Henrik Persson. In connection with the AGM,
Henrik Persson declined re-election to the
Board and Nick McKittrick was newly elected
to the Board and the Audit Committee. The
company’s auditor Ernst & Young AB and
CFO Carl Johan Åkesson were invited to all
Audit Committee meetings, which are held at
least twice a year as well as when needed.
The Audit Committee does not make its
own decisions, but make recommendations
to the Board.
In 2020, the Audit Committee focused on,
among other things, self-evaluation of
controls, updating of controls and reporting
of policy compliance.
The Audit Committee also adopted a
couple of governing documents.
sustainable company with a well-developed In 2020, in addition to the recurring information,
Remuneration Committee corporate governance. the Remuneration Committee also followed
According to the Committee’s rules of The Remuneration Committee’s rules of up on how Covid-19 affects HR-related areas
procedure, the Committee should facilitate procedure are approved annually by the such as work environment, staff turnover and
the work of the Board by preparing Board at the statutory Board meeting and are HPI (Human Performance Indicator) in the
remuneration questions. In accordance with valid until there is a need to update them. three parts: commitment, culture and
the Swedish Corporate Governance Code, a In 2020, the Remuneration Committee leadership.
company whose shares are listed on a consisted of Håkan Erixon (chairman),
regulated market must draw up formalised Anders Edmark, Pierre Siri and Christopher COMPANY ORGANISATION
and public decisions on remuneration to Caulkin. Cecilia Beck-Friis, CEO, is presenter The CEO is responsible for day-to-day
senior executives (including members of the unless otherwise agreed with the chairman management in accordance with
Board of Directors and senior managers). of the Committee. The Remuneration applicable laws and regulations and the
Although Hemnet Group AB is not listed on Committee shall meet at least twice a year CEO instructions. Corporate management
any public exchange, the Board has chosen and as needed. The Remuneration consists of seven members including the
to establish a Remuneration Committee in Committee does not make its own decisions, CEO, of which four are women and three
line with Hemnet’s work in becoming a but makes recommendations to the Board. are men.

Remuneration Committee ta sks

In accordance with the rules of procedure adopted by the Board of Directors of Hemnet Group AB, the Remuneration
Committee shall handle the tasks outlined below:

• Prepare decisions to be adopted by the Board regarding remuneration guidelines, remuneration and other terms
of employment for the CEO and all members of senior management

• Propose, monitor and evaluate programs for variable compensation for senior management

• Monitor and evaluate compliance with the guidelines for remuneration of the CEO and other senior management
adopted by the shareholders at the AGM

• Prepare and monitor long-term remuneration programs for senior management, including issuance and
distribution of shares within the Management Incentive Program (MIP)

HEMNET GROUP AB | ANNUAL REPORT 2020 · 21

INTERNAL CONTROLS AND RISK the Board’s rules of procedure, CEO instructions, ted at one location, which means that commu-
MANAGEMENT financial policy, sustainability policy, insider nication can take place continuously within the
policy and communication policy. organisation. Information is reviewed and
The goal of internal controls is to assess which updated as needed. Internal communication is
risks are significant for Hemnet and should be Risk assessment largely carried out in staff meetings and via the
managed through continuous monitoring and We use various methods to assess and limit company’s internal communication platform.
control. Through a risk analysis, work can be risks, and to ensure that the risks Hemnet is
concentrated on those areas most important in exposed to are managed in accordance with COMPENSATION FOR SENIOR EXECUTIVES
reducing the overall risk exposure of the company. established policies and guidelines.
Each year, the Board conducts a review of Guidelines for remuneration to senior
Board responsibility for internal controls identified risks that are deemed to exist and executives 2020
We encounter daily risks that can affect the determines measures for managing and
business and the ability to achieve goals. Good reducing these risks. In accordance with the Principles for compensation
internal controls and management are required rules of procedure, the Board also reviews We will strive to offer remuneration that attracts,
to limit risks. internal controls annually together with the motivates and retains senior executives in com-
According to the Swedish Companies Act company’s auditors. petition with comparable companies, in particular
and the Swedish Corporate Governance Code, Risk management is part of the ongoing platform companies and service companies.
the Board is ultimately responsible for ensuring work, not least in the area of financial reporting,
the company organisation is designed so that where the company strives to continuously Remuneration to senior executives shall
financial reporting, management and analyse the risks that can lead to errors in consist of:
operations are followed up on and controlled financial reporting. - Fixed market salary
satisfactorily. The Board shall ensure that the - Variable remuneration linked to clear goals
company has good internal controls and Control activities set for the company
continuously stays informed and evaluates The risks that the Board considers to be signifi- - Opportunity to participate in incentive programs
that internal control systems work. The Board cant for internal control are followed up on. Par- - Pension and other customary benefits
has further delegated to the CEO operational ticular emphasis is placed on the area of finan- In the case of variable remuneration, it shall be
responsibility for maintaining an effective cial reporting, where the CFO is responsible for linked to concrete, measurable goals for the
control environment and compliance with ensuring overall control. The Board and mana- company and/or the department for which the
ongoing work on internal controls. The internal gement of Hemnet receive monthly information senior management is responsible. A decision
control is a process that is affected by the on the Group’s results, financial position and on the variable remuneration model and out-
Board, the Audit Committee, the Remuneration how operations are growing. In addition to the comes shall be made by the Board of Directors.
Committee, the CEO and management team and central control of clear decision-making proces- Senior management should be encouraged
other employees. Internal controls are designed ses and decision-making methods for major to invest in Hemnet, for example through parti-
to provide reasonable assurance that we investments, performance analyses and cipation in long-term incentive programmes, to
achieve set financial and non-financial goals, accounting, there is a structure through guideli- link the interests and rewards of senior mana-
that operations are run efficiently, that reporting nes and role descriptions with a mandate des- gement with those of the shareholders. A deci-
information is reliable, and that applicable laws cription for how the work is to be conducted and sion on the opportunity to participate in incen-
and regulations are complied with. followed up in the organisation. Guidelines and tive programs and the outcome of such pro-
The process is based on our control instructions are intended to detect and prevent grammes shall be made by the Board.
environment and the context for the other the risk of errors in reporting.
components: risk assessment, control activities, Control activities include elements such as Pension and other customary benefits
information and communication, and follow-up. account reconciliation, approval and accoun- The retirement age is normally 65 years.
ting of business transactions, proxy and aut- Pension plans for senior executives must
Control environment horisation structures, and accounting and comply with the ITP plan or match the ITP plan
The control environment is the basis for valuation principles. Following the internal with respect to the level of remuneration.
internal controls. The control environment control work, the Board can select specific Other customary benefits (such as
consists of the values and ethics the Board, areas in which extra follow-up may be needed. corporate health care and health insurance)
Audit Committee, CEO and management group must be market-based.
communicate and operate from, as well as the Information and communication
Group’s organisational structure, leadership, Our publication of information and communi- Remuneration Committee
decision paths, powers, responsibilities and cations aim to ensure that accurate and effec- The Board of Directors of Hemnet Group AB
employee expertise. tive information is available to all parts of the shall appoint a Remuneration Committee´to
To create a control framework for how the business, and that external stakeholders, inclu- monitor and evaluate compliance with these
work should be carried out, we have ding relevant authorities, receive access to guidelines. The Remuneration Committee shall
implemented a number of governance relevant information. External information con- also prepare and make recommendations for
documents in the form of internal policies and sists, for example, of statutory reporting to aut- decisions to be adopted by the Board with
guidelines. This framework regulates decision- horities and reporting of financial information. respect to remuneration principles, remunera-
making paths, powers and distribution of Guidelines on how to communicate with inter- tion and other terms of employment for the CEO.
responsibilities within Hemnet. The Board of nal and external parties are described in our Furthermore, the Remuneration Committee
Hemnet has set up a working process and communication policy. The purpose of the shall prepare, propose, monitor and evaluate
procedure for its work and the work of the Board policy is to ensure that all information respon- programs for variable compensation and long-
Committees. In addition, the Board has a sibilities are complied correctly and completely. term remuneration programs for senior executives.
number of basic policies and guidelines, such as In principle, our business is in its entirety situa- Regarding matters related to fixed remune-

22 · HEMNET GROUP AB | ANNUAL REPORT 2020

ration to other senior executives, such issues financial concrete, measurable goals for the The duties of the Remuneration Committee are
should, as a starting point, be handled by the Company and/or the department that the described in more detail in the Rules of
CEO in accordance with these guidelines. Howe- manager is responsible for. Decisions Procedure for the Remuneration Committee,
ver, decisions on such remuneration to senior regarding variable payment models and the adopted by the Board of Directors.
executives made by the CEO must be reported to outcome of such models shall be made by the
the Remuneration Committee and the Board Board of Directors. Yearly Review
before it is deemed to have been determined and The variable cash remuneration may Remuneration for senior executives shall be
may be communicated. The Remuneration amount to not more than 50 percent of the fixed reviewed yearly at least every fourth year, on the
Committee’s duties are described in more detail annual cash salary. In addition to the basis of area of responsibility, performance and
in the rules of procedure adopted by the Board aforementioned remuneration forms, competence, as well as the principles for
for the Remuneration Committee. remuneration may also in certain exceptional remuneration described above.
cases and in accordance with the principles set
Yearly audit forth in the Company’s HR Policy, be paid in Termination Notice and Severance Pay
Remuneration to senior executives shall be connection with new employment in order to The notice period for senior executives, and
audited annually on the basis of responsibility, attract certain key individuals to the Company the period of time during which salary pay-
performance and competence, as well as the for the purpose of supporting Hemnet’s ment will continue, shall generally be six (6)
principles for remuneration described above. business strategy. Such remuneration shall be months. However, in situations where Hemnet
limited to the first year of employment. terminates the employment, severance pay
Termination notice and severance pay may amount to a maximum of twelve (12)
The notice period, and the time for payment of Pension and other customary benefits monthly salaries. Fixed cash salary during the
severance pay to senior executives shall gene- The retirement age is under normal period of notice and severance pay may
rally be six (6) months. In the event of termina- circumstances 65 years. Pension plans for together not exceed an amount equivalent to
tion by Hemnet, however, severance pay shall senior executives shall follow or match ITP in the fixed cash salary for twelve (12) months
be payable up to twelve (12) monthly salaries. terms of compensation level. for senior executives.
Other customary benefits (such as Additionally, remuneration may be paid for
Remuneration to Board members company health care) shall be on market terms. non-compete undertakings. Such
Board members can, by exception and when Such benefits may amount to not more than 20 remuneration shall compensate for loss of
especially justified in light of their competence percent of the fixed annual cash salary. income and shall only be paid in so far as the
and suitability, perform services outside the Remuneration under employments subject to previously employed executive is not entitled to
ordinary Board assignment. For such services, other rules than Swedish may be duly adjusted severance pay. The remuneration shall be
market compensation shall be paid, which is to to comply with mandatory rules or established based on the fixed cash salary at the time of
be decided by the Board. Remuneration of this local practice, taking into account, to the extent termination of employment and be paid during
type is reported in the financial statements in possible, the overall purpose of these guidelines. the time the non-compete undertaking applies,
accordance with current accounting rules. however not for more than twelve (12) months
Remuneration Committee following termination of employment.
Deviations The Board of Directors of Hemnet Group AB
Deviations from these guidelines may in shall appoint a Remuneration Committee to Compensation to Board Members
exceptional cases occur where the Board finds monitor and assess compliance with these gui- Members of the Board of Directors may, in cer-
that special reasons exist. Information on such delines. The Remuneration Committee shall also tain cases where particularly motivated in light
deviations and the underlying reasons shall be prepare and make recommendations for resolu- of the board member’s competence and suitabi-
reported at the next AGM. tions to be adopted by the Board of Directors lity, perform services outside of the ordinary
pertaining to matters regarding remuneration directorship. Market compensation shall be paid
Proposal for a resolution to the annual general principles, remuneration and other terms of for such services, which is to be decided by the
meeting 2021 on guidelines for remuneration employment for the CEO. The CEO and other Board of Directors. Remunerations of this kind are
to senior executives. senior executives do not participate in the Board to be presented in the financial reports in accor-
of Directors’ processing of and resolutions dance with applicable accounting legislation.
Remuneration Principles regarding remuneration-related matters in so far
Hemnet shall strive to offer a compensation as they are affected by such matters. Deviations
that attracts, motivates and retains senior The Remuneration Committee shall also Deviations from these guidelines in whole or in
executives in benchmark with its peers, which prepare, propose, monitor and assess long part may be made in exceptional cases if the
primarily are platform companies and digital term share-based incentive programs for Board of Directors find that there are special
service companies. variable compensation and long term incentive circumstances at hand and a deviation is
programs for the company management. necessary to serve the Company’s long-term
Remuneration to senior executives shall As regards matters concerning fixed interests, including its sustainability, or to
consist of: remuneration to other senior executives, such ensure the Company’s financial viability.
- Fixed market salary matters shall as a starting point be made by the Information about such deviation and the
- Variable cash remuneration based on CEO in accordance with these guidelines. reasons therefore shall be given at the
fulfillment of clear goals for the Company However, decisions regarding such following Annual General Meeting. As set out
- Possibility to participate in long-term share- remuneration to senior executives that have above, the Remuneration Committee’s tasks
based incentive programmes been made by the CEO shall be presented to the include preparing the Board of Directors’
- Pension and other customary benefits Remuneration Committee and the Board of resolutions in remuneration-related matters.
As regards variable remuneration, such Directors before it shall be deemed final, and This includes any resolutions to deviate from
compensation shall be tied to financial or non- before that point it shall not be communicated. the guidelines.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 23

Board of Directors

Håkan Erixon Kerstin Lindberg Göransson

Chairman since 2017 R Ordinary member since 2018 A

Born: 1961 Born: 1956

Experience: Board member of Vattenfall and Alfvén & Experience: CEO for Akademiska Hus, Board member
Didrikson Invest. Former member of the Corporate of Sveaskog and Vice Chairman of Win Win
Committee of Nasdaq OMX Stockholm, Chairman of Gothenburg Sustainability Award.
Capacent Holding and Orio, Director at Merrill Lynch, Former Airport Director at Stockholm Arlanda Airport
Vice Chairman of Investment Banking at UBS and and Vice President of the Scandic group.
Senior Advisor in Corporate Finance to the Education: MSc in Economics from Umeå University.
Government Offices.
Education: MSc in International Economics from
Gothenburg University.

Tracey Fellows Nick McKittrick

Ordinary member since 2020 A Ordinary member since 2020 A

Born: 1965 Born: 1968

Experience: President of Global Digital Real Estate at Experience: Accenture, Co-founding executive and CEO
News Corp and board member of REA Group Ltd. of Rightmove, CEO and board member of Homegate AG.
Former CEO of REA Group, Vice President of Education: Electronic Engineering degree at
Microsoft Asia-Pacific and CEO of Microsoft in Southampton University.
Australia. Education: Bachelor’s degree in Economics
A Audit Committee from Monash University.
R Remuneration Committee

24 · HEMNET GROUP AB | ANNUAL REPORT 2020

Christopher Caulkin Anders Edmark
Ordinary member since 2017 R Ordinary member since 2017

Born: 1980 Born:1959

Experience: Managing Director at General Atlantic Experience: Real estate agent since 1982. Founder
with a focus on the internet and media sectors. Board and CEO for real estate agency Mäklarhuset
member of Property Finder, ManoMano, Doctolib, Örnsköldsvik. Board chair of the Association of
OpenClassrooms, Studio Moderna and Typeform and Swedish Real Estate Agents. Anders is also a board
with previous experience from Boston Consulting member of SAH Invest as well as Chairman of the
Group and the investment company Warburg Pincus. Board of statistics organisation Svensk
Education: Degree in engineering from Cambridge Mäklarstatistik.
University and a masters degree in finance from
London Business School.

Pierre Siri Håkan Hellström

Ordinary member since 2017 R Ordinary member since 2021*

Born: 1974 Born: 1958

Experience: Co-founder and Operating Partner of Experience: Vice chair of the Association of Swedish
Sprints Capital. Board member of Chrono24. Real Estate Agents and chair of real estate agency
Previously CEO and investor in Blocket and Hitta.se, Svensk Fastighetsförmedling. Board member for
as well as other digital companies such as Klart.se, statistics organisation Svensk Mäklarstatistik,
Sleep Cycle, Eltiempo.es and Dubicars. Investor and co-owner and CEO of real estate agency Svensk
advisor for Propertyfinder, the leading property portal Fastighetsförmedling Sydost. Vice chair of Dina
in the Middle East. Försäkringar Öland, Board member of Linnéakademien
för Vetenskap och Näringsliv, Stiftelsen Barometern,
and Mspecs.

* Deputy 2017-2021

25
Management

Cecilia Beck-Friis Carl Johan Åkesson

Chief Executive Officer since 2017 Chief Financial Officer since 2018

Born: 1973 Born: 1975

Experience: Twenty years experience in senior Experience: CFO of Sdiptech and CFO of Mediaplanet
positions within media. Previously Vice President at International. Prior to that served as Controller of EF
TV4 as well as Chief Digital Officer at Bonnier Education and of Modern Times Group.
Broadcasting. Board member of Paradox Interactive. Education: Master’s degree in accounting and
Education: Executive Management Program, SSE finance from the Stockholm School of Economics.
Executive Education as well as studies in sales and
marketing at Berghs School of Communication.

PerOla Schelvander Pierre Bergström

Chief Technology Officer since 2018 Sales Director since 2017

Born: 1980 Born: 1972

Experience: Previously Development Manager at Experience: Twenty years experience in senior posi-
Kambi, Director of Development at Ping Pong AB and tions within sales. Previously Sales Director of
Team Manager at Isotop AB. Svenska Dagbladet and senior positions within the
Education: MSc in Media Technology and Masters in Manpower Group.
Philosophy of Technology from the Swedish Royal Education: Master’s degree in Economics from Mid
Institute of Technology. Sweden University.

26 · HEMNET GROUP AB | ANNUAL REPORT 2020

Sarah Wu Francesca Cortesi
Chief Commercial Officer since 2020 Chief Product Officer since 2020

Born: 1985 Born: 1983

Experience: Commercial Director at KRY, Business Experience: Several years of experience in agile
Area Manager at Blocket. Previously worked with product development and helping companies build
strategy at Schibsted and as a management successful product organizations. Former Head of
consultant at Capgemini Invent. Engagement and Retention at Stardoll.
Education: Master of Science in Molecular Education: Master in Communication and Media
Biotechnology and holds a Bachelor of Business Studies and Bachelor of Arts in Communication,
Administration. Università degli studi di Milano.

Jessica Sjöberg
Chief Communication and People Officer
since 2019

Born: 1977
Experience: Long experience in senior positions
within PR and communications, most recently as
Vice President Corporate Communications at MTG/
Nordic Entertainment Group. Prior to that she has
held positions as, among other things, Director of
Information at Com Hem and Director of
Communications at TDC Sverige.
Education: Media and Communications Studies, and
Political Science, Stockholm University.

27
FINANCIAL STATEMENTS

Financial statements

28 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Directors’ Report

The Board of Directors and the CEO of Hemnet Group AB, hereinafter Hemnet, Work on organization and work processes
with corporate identity number 559088-4440 and its registered office in Since the current Hemnet Group was formed in 2017, in connection with the
Stockholm, hereby submit annual report and consolidated financial company gaining new principal owners, Hemnet has worked on
statements for the financial year Jan. 1 - Dec. 31, 2020. strengthening the organization and its work processes. The purpose of the
work has been to be able to meet the demands that the company’s current
Operations and future stakeholders may place on the company and create good control
Hemnet Group AB is Parent Company to the Hemnet Group ("the Group"). The over and increased predictability regarding Hemnet’s business. During
main operations of the Group are carried out by the subsidiary company 2020, this work has been intensified and efforts have been made throughout
Hemnet AB. Hemnet aims to be the marketplace for property and related the company to also meet the various requirements that a possible
services that is the most appreciated and visited by estate agents, site admission to trading of the company’s shares would entail. The work has
visitors and advertisers. resulted in certain one-off costs, which have had a negative effect on the
profit for the year. To increase comparability between periods, a new
Hemnet is Sweden's largest real estate site and offers virtually the entire alternative performance measure, Adjusted EBITDA, has been defined,
property stock of the country. Hemnet's services are offered on Hemnet.se where adjustments are made for such types of items affecting
and its platforms for Android and iOS. comparability.

Hemnet continued to show excellent visitor numbers in 2020 and the number
of unique visitors per week increased by 19 percent compared to 2019. This
means that on average the platform has about 62.5 million visits per month
and the visitors spent a total of 64.6 million hours on Hemnet’s platforms in
2020, an increase of 20 percent compared with the previous year.

In 2020, a total of 189,305 home listings were published on Hemnet, an

increase compared to the 185,031 that were published in 2019.

During 2020, Hemnet has continued to develop its product portfolio,

Hemnet Group AB
especially regarding services to home sellers. The additional services for
home sellers launched in previous years have been gradually improved, 559088-4440
including the introduction of a digital payment alternative, which together led
to increased use of these services.

The trend for the number of published listings, sales time and listing prices
also have a direct impact on the Group's financial results. Therefore, Hemnet Hemnet Holding AB
continuously analyses developments in the property market and 559088-4457
communicates these insights to the media and the public.

Group structure
The chart to the right shows the Group structure. All companies are owned
100 percent. Hemnet Holding II AB
559088-4465
Significant events during the fiscal year
Covid-19
At the beginning of 2020, the spread of Covid-19 gained momentum globally
and has greatly affected society as a whole since then. However, the
pandemic has not had a negative financial impact on Hemnet, instead the Hemnet Holding III AB
number of published home listings, as well as visitor traffic, have increased
559088-4473
compared with the previous year. Increased work from home is probably
something that has benefited the interest in Hemnet since one’s own home
and housing related matters have become an even more important part of the
public’s everyday life.
Hemnet Sverige AB
Debt contingent consideration
The Group has had deferred consideration and contingent consideration 556536-0202
liabilities to the Hemnet Sverige AB Group’s previous owners. The last part of
the contingent consideration, SEK 79.2 million, was settled on January 9, 2020.

Launch of new products

With the spread of Covid-19 gaining momentum in early 2020 when Hemnet AB
restrictions began to be introduced and working from home was 556260-0089
recommended, Hemnet saw a need for digital home showings. This need led
to a record fast development of the service Hemnet Live, which gives the real
estate agent industry the possibility to have digital showings of its listing
properties. In October 2020, Hemnet also launched the service Renew
property listing, which gives the home seller and real estate agent the
opportunity to easily publish the home listing on Hemnet anew – at the top of
the search results and with reset statistics.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 29

FINANCIAL STATEMENTS

Financial overview loans, which were increased during the latter part of 2019 and hence average
interest-bearing liabilities are higher in 2020 than previous year. Profit before
Below is a multi-year comparison for the Group's four fiscal years.
tax amounted to SEK 86.8 (83.6) million.
2020 2019 2018 2017
Taxes
Net sales 544,079 444,394 373,084 317,155
Reported total tax expense amounts to SEK 19.1 (18.0) million, which
EBITDA 187,963 171,897 138,071 76,247 corresponds to an effective tax rate of 22.0 (21.5) percent. Current tax
EBITDA margin, % 34.5% 38.7% 37.0% 24.0% expense amounted to SEK 32.7 (27.7) million, while deferred tax income
Adjusted EBITDA 202,110 171,897 138,071 76,247 amounted to SEK 13.6 (9.7) million.
Adjusted EBITDA margin, % 37.1% 38.7% 37.0% 24.0%
Net income
Operating profit 110,516 98,695 73,278 12,952
Net income for the period amounted to SEK 67.7 (65.6) million.
Operating margin, % 20.3% 22.2% 19.6% 4.1%
Profit before tax 86,793 83,637 47,691 -23,178 Investments
Profit after tax 67,741 65,636 53,185 -25,428 The company's intangible assets consist mostly of goodwill, customer
relationships, platform and trademarks that have been identified in
Profit margin, % 12.5% 14.8% 14.3% -8.0%
connection with the original acquisition. There was no impairment identified
Average revenue per during the current financial year. During the year, as in the previous year, the
listing (ARPL), SEK 1,760 1,414 1,079 946
company worked on developing its product offering. Development has been
Equity/Assets ratio, % 56.9% 53.4% 54.7% 55.4% performed by both the company's own staff and by external consultants.
Net debt 415,125 521,447 471,345 545,489 Some specific development projects have been deemed of such a nature and
Net debt/EBITDA, times 2.2 3.0 3.4 7.2 with such expected future earnings that they have been treated as capitalised
development costs. A total of SEK 6.0 (8.9) million was capitalised for the year,
Debt/Equity ratio, times 0.5 0.6 0.6 0.5
thus increasing intangible fixed assets. Otherwise, the business has only a
Number of employees 108 92 79 61 minor need for investment in equipment with the year's new purchases
Number of properties amounting to SEK 1.0 (0.9) million.
listed in the period 189,305 185,031 188,012 189,390
Cash flow
Net sales Cash flow from operating activities amounted to SEK 127.0 (138.8) million, of
Net sales increased by 22.4 percent and amounted to SEK 544.1 (444.4) million. which changes in working capital amounted to SEK 1.3 (3.9) million. The
All three service categories showed good growth. Sales from property listing decrease in cash flow is mainly due to increased tax payments that take place
increased by 16.4 percent to SEK 312.7 (268.6) million, mainly through higher with a certain delay from reported earnings and the Group has had a strong
average prices but also as a result of a certain increase in the number of home earnings trend in recent years. Cash flow from investing activities in tangible
listings from home sellers. Revenues from additional services increased by and intangible assets resulted in a cash flow of SEK -7.0 (-10.8) million. Cash
64.0 percent to SEK 77.5 (47.2) million, mainly driven by services aimed at home flow from financing activities amounted to SEK -92.3 (-219.2) million.
sellers in the form of Hemnet Plus, Hemnet Premium and Raketen. The
conversion rate for these services for home sellers has continued to increase Financial position
and has thus contributed, together with a segmented price model, to a The Group’s cash and cash equivalents, including interest bearing securities,
significant growth in revenue. The revenue growth from property listings and amounted to SEK 271.6 (243.5) million at the end of the period and total
from additional services to home sellers has meant that the average revenue per interest-bearing liabilities to SEK 686.7 (765.0) million. Net debt thus
listing, ARPL, increased by 24.5 percent to SEK 1,760 (1,414). Sales from amounted to SEK 421.1 (521.5) million, which corresponds to a net debt/
advertising services and other increased by 19.7 percent to SEK 153.9 (128.5) EBITDA ratio of 2.2 (3.0) times rolling twelve-month EBITDA.
million, mainly driven by strong growth for programmatic advertising revenues.
Advertising services and other also include revenues of SEK 4.2 million related Equity amounted to SEK 1,349.6 (1,280.4) million, which corresponded to an
to a marketing campaign together with Mäklarsamfundet, this revenue has been equity/assets ratio of 56.9 (53.4) percent.
treated as an item affecting comparability when calculating adjusted EBITDA.
Quality and sustainability
Operating profit Hemnet's sustainability work is conducted as an integral part of its ongoing
Operating profit increased by 12.0 percent to SEK 110.5 (98.7) million, operations, which is described in more detail in the sustainability report, which
corresponding to an operating margin of 20.3 (22.2) percent. Other external can be found on pages 12-17. The report has not been reviewed by the auditor.
costs increased by 29.8 percent and amounted to SEK 245.3 (189.0) million.
Administrative compensation and commission compensation to affiliated The company does not conduct any permit or notification activities according
brokerage offices together constitute the largest item in other external costs to the Swedish Environmental Code.
and increased by 21.0 percent to SEK 151.2 (124.9) million as a result of
increased revenue from property listings and additional services for home Research and development
sellers. Remaining parts of other external costs increased by 46.8 percent Hemnet's corporate culture is characterised by a constant desire to refine and
and amounted to SEK 94.1 (64.1) million. Part of the increase comes from improve our products and services. The property platform is built and
consultancy costs, which have primarily increased as a result of the work on managed by specialist teams in development, sales, market and product.
preparations for a possible admission to trading of the company’s shares, as Learning and development occurs naturally in everyday life among teams.
well as from marketing costs. One-off items consisting of both consultancy Testing, exploring and taking on new challenges to strengthen our position in
costs for work on organization and work processes (SEK 5.1 million) and the market by building simple and effective services for our users is a key part
costs for a marketing campaign together with Mäklarsamfundet (SEK 13.4 of our business. A business characterised by a high rate of development. The
million) are treated as items affecting comparability when calculating the vision to be the key to your home journey guides Hemnet's development work.
alternative performance measure adjusted EBITDA. During the year, SEK 6.0 (8.9) million was capitalised regarding development
costs. The capitalised development costs are recognised in the balance sheet
Personnel costs increased by 29.4 percent and amounted to SEK 114.8 (88.7) as intangible assets.
million following a growing organization where personnel reinforcements
were made primarily within the product development teams to continue Corporate governance
strengthening Hemnet’s customer offering through the development of new The corporate governance report describing the structure and principles for
and existing products. Bonuses to the management team and adjustment of managing Hemnet's operations is found on pages 18-26. The company is not
remuneration to the CEO have also contributed to the cost increase. required to prepare a corporate governance report in accordance with
Chapter 6, § 8 of the Annual Accounts Act, therefore the report has not been
Net financial items overseen by the auditor.
The net from financial income and financial expenses amounted to SEK -23.7
(-15.1) million and consists mainly of interest expenses on the Group’s bank

30 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Ownership structure Management and employees

Hemnet's largest shareholders as of Dec. 31, 2020 is shown in the table below. The organization has continued to grow and the number of employees at the
end of the year amounted to 108 people, which is an increase of 16 people
compared with the beginning of the year. The average number of employees,
Share in the Parent Company defined as equivalent full-time positions, at Hemnet in 2020 was 102, with 35
are distributed as below: Owner share, % Vote share, % of them women and 67 men.
General Atlantic RR B.V 60.0% 67.5%
Significant events after the end of the financial period
Sprints capital Rob R Partners S.A 17.2% 19.3%
In the beginning of 2021, Hemnet communicated an upcoming revised model
Mäklarsamfundet Bransch Sverige AB 10.5% 11.8% for administration and commission compensation to the brokerage industry.
Care of Hemnet AB 11.1% 1.2% Hemnet’s compensation model, until the introduction of the revised model, is
Other 1.2% 0.1% based partly on a compensation to real estate agencies for the work
performed in relation to administration and intermediation carried out, and,
Total 100.0% 100.0%
for affiliated real estate agencies, a commission compensation for the sale of
the company’s additional services for home sellers. The new revised model
Outlook has the same components, but the compensation levels for each part have
Hemnet sees continued strong visitor development and sees no diminished been adjusted to give the commission compensation a greater weight. This
interest in the property market. change will take effect on March 1, 2021. Hemnet’s assessment is that this
change can have a positive impact on sales of listings related additional
The company will continue to develop and improve the product portfolio that services and thus on the company’s profit margins.
is now in place for the main customer groups: property sellers, real estate
agents and property developers, as well as evaluate and prioritize the At an extraordinary general meeting on March 1, 2021, it was decided to
additional needs of the housing market players that the company can meet perform a reverse share split, whereby 15 existing shares in each of all the
through new or improved services. Furthermore, the focus will continue to be company’s share classes (series A, B, C, D, E, F) were merged into 1 share. At
on strengthening our co-operation and our relationships with real estate the EGM it was further resolved to change corporate category for the Parent
agents and property developers, which are important partners in the company from private to public limited company and to change the company
co-operation. name to Hemnet Group AB (publ).

Group risks and risk factors No other events have occurred after the end of the financial year that have had
All operations are associated with a certain degree of risk-taking, risks that any significant impact on the business or assessments and assumptions
can affect operations, standing and results. Risks related to Hemnet's used in the preparation of the annual report.
operations, as well as its expectations and management, are analysed
annually by the Board and Group management. Parent Company's earnings and financial position
Hemnet Group AB is Parent Company to the Hemnet Group. From January
Hemnet has continued strong visitor development for both hemnet.se and the 2020, the Group’s CEO is employed by the Parent Company. The Parent
apps, and we see no signs of a dwindling interest in the property market. Company’s net sales of SEK 7.1 (-) million is wholly related to intra-group
However, there are pressures from old and new competitors and with that services invoiced to other Group companies. The Parent Company’s costs
competition comes a risk that both visitors, real estate agents and amounted to SEK 15.4 (1.4) million, where the cost increase consists partly of
advertisers use services other than Hemnet, which could have a negative personnel costs for the CEO who is now employed by the Parent Company,
impact on the business. and partly increased external costs, mainly consultancy costs related to the
work on preparing for a possible admission to trading of the company’s
In recent years, Hemnet has diversified its revenue streams through a number shares. Group contributions received from the subsidiary Hemnet Holding AB
of changes, including by developing additional services that give property amounted to SEK 8.3 (2.7) million, with earnings before tax amounting to SEK
sellers the opportunity to influence their property sale. Hemnet has also 0.0 (1.4) million.
introduced new products for companies operating in the property market
such as real estate agents, property developers and banks. It is important for Cash and cash equivalents amounted to SEK 4.7 (1.2) million. Equity
the company to continue to develop new and existing services that meet the amounted to SEK 1,188.8 (1,187.4) million. The number of shares in the Parent
needs of current and future customer groups. company amounted to 1,338,930,905 (1,338,544,847).

The income from property listings is a significant part of sales. Developments The following earnings are available to the Annual General Meeting:
in the Swedish property market can therefore have a significant effect on
Share premium reserve 1,245,109,654
Hemnet's operations. Hemnet's advertising business has continued to
develop positively and the company offers advertising both through direct Retained earnings -124,629,692
sales and through programmatic trading. The development and trends for ad Profit for the year -5,507
purchases in the market can affect Hemnet's revenue both positively and Swedish krona 1,120,474,455
negatively.
The Board proposes that the accumulated earnings
The Covid-19 pandemic, and the global and regional economic and political available for disposition be carried forward, SEK 1,120,474,455
changes occurring as a result thereof, as well as changes due to possible
future virus outbreaks, can affect the volumes of property transactions and
thus also the number of property listings published on the company’s
platform.

For Hemnet, it is central to have a good relationship with real estate agents
and to have a substantial range of property listings. Hemnet's future business
may be threatened if a deteriorating estate agent relationship would lead to a
deterioration in the range of property listings. In addition to its own funds, the
Group's operations are also financed through borrowing. As a result, the
business is exposed to financing risks, interest rate and credit risks. The
Group has a long-term credit agreement that extends until May 2025. Further
information on the Group's debt can be found in notes G20 and G21.

For further information on risks, see the section on internal controls and risk
management on pages 22-23.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 31

FINANCIAL STATEMENTS

Consolidated income statement

Amount in thousand SEK Note 2020 2019

Operating income
Net sales 3 544,079 444,394
Other operating income 4, 10 1,767 1,975
Total 545,846 446,369

Capitalised development costs 12 3,896 4,249

Operating expenses
Other external expenses 6, 7 -245,308 -189,027
Personnel costs 8 -114,756 -88,679
Depreciation of tangible and intangible non-current assets 12,13,14 -77,447 -73,202
Other operating costs 5 -1,715 -1,015
Total -439,226 -351,923
Operating profit 110,516 98,695
Financial income 9, 10 477 1,749
Financial costs 9, 10 -24,200 -16,807
Financial items - net -23,723 -15,058
Profit before tax 86,793 83,637
Income tax 11 -19,052 -18,001
Net income 67,741 65,636

Other comprehensive income - -

Total comprehensive income for the period 67,741 65,636

Net income and total comprehensive income for the period belong entirely to the shareholders of the Parent Company.

32 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Consolidated statement of financial position

Amount in thousand SEK Note Dec. 31, 2020 Dec. 31, 2019
ASSETS
Non-current assets
Goodwill 12 902,815 902,815
Customer relationships 12 870,086 925,471
Platform 12 8,402 16,557
Trademarks 12 241,468 241,666
Capitalised development costs 12 12,974 12,392
Equipment 13 1,874 1,999
Right of use assets 14 12,690 5,265
Deferred tax assets 15 95 7
Total non-current assets 2,050,404 2 106 172

Current assets
Accounts receivable 16 20,399 26,268
Other current receivables 17 13,960 1,031
Prepaid expenses and accrued income 18 16,929 21,711
Interest bearing securities 20 24,525 24,132
Cash and cash equivalents 25 247,092 219,397
Total current assets 322,905 292,539
TOTAL ASSETS 2,373,309 2,398,711

EQUITY AND LIABILITIES

Equity 19
Share capital 68,354 68,335
Other capital contributions 1,245,110 1,243,701
Retained earnings (including net income for the period) 36,155 -31,586
1,349,619 1,280,450
Non-current liabilities
Liabilities to credit institutions 21 667,860 674,400
Leasing liabilities 14 5,687 262
Deferred tax liabilities 15 234,370 247,910
907,917 922,572
Current liabilities
Liabilities to credit institutions 21 7,622 7,789
Leasing liabilities 14 5,573 3,396
Accounts payable 10,290 12,996
Tax liabilities 12,516 18,947
Other current liabilities 22 10,855 82,125
Accrued expenses and deferred income 23 68,917 70,436
115,773 195,689
TOTAL EQUITY AND LIABILITIES 2,373,309 2,398,711

HEMNET GROUP AB | ANNUAL REPORT 2020 · 33

FINANCIAL STATEMENTS

Consolidated statement of changes in equity

Retained earnings
Other capital (including net income for
Share capital contributions the period) Total equity
Amount in thousand SEK (Note G19) (Note G19) (Note G19) (Note G19)
Opening balance as of Jan. 1, 2019 68,335 1,292,155 27,757 1,388,247
Profit for the period 65,636 65,636
Other comprehensive income - -
Total comprehensive income for the period 65,636 65,636
Transactions with shareholders in their capacity as owners
Dividends -124,978 -124,978
Share redemption -1,408 -48,592 -50,000
Issue of bonus shares 1,408 -1,408 -
Rights issue (shareholder program-warrants) * 1,895 1,895
Issue costs -349 -349
Total transactions with owners 0 -48,454 -124,978 -173,432
Closing balance as of Dec. 31, 2019 68,335 1,243,701 -31,586 1,280,450

Opening balance as of Jan. 1, 2020 68,335 1,243,701 -31,586 1,280,450

Profit for the period 67,741 67,741
Other comprehensive income - -
Total comprehensive income for the period 67,741 67,741
Transactions with shareholders in their capacity as owners
Share redemption -37 -2,614 -2,651
New C share issue 56 4,023 4,079
Total transactions with owners 19 1,409 0 1,428
Closing balance as of Dec. 31, 2020 68,354 1,245,110 36,155 1,349,619

* The Group's shareholder program for Hemnet employees is described in Note G8.

Equity is entirely attributable to the shareholders of the Parent Company

34 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Consolidated statement of cash flows

Amount in thousand SEK Note 2020 2019

Cash flow from operating activities
Operating profit 110,516 98,695
Adjustment for items not affecting cash flow:
Depreciation of fixed asset: 77,448 73,202
Disposal of fixed assets -9 -
Interest received 84 103
Interest paid -23,419 -20,187
Paid income tax -38,983 -16,933
Cash flow from operating activities before changes in working capital 125,637 134,880

Cash flow from changes in working capital

Change in operating receivables -2,406 -3,057
Change in operating liabilities 3,738 6,931
Total changes in working capital 1,332 3,874
Cash flow from operating activities 126,969 138,754

Cash flow from investing activities

Investments in intangible non-current assets 12 -6,038 -9,947
Investments in tangible non-current assets 13 -967 -868
Disposal of tangible non-current assets 13 17 -
Cash flow from investing activities -6,988 -10,815

Cash flow from financing activities

Borrowings 24 - 285,725
Dividend paid to Parent Company owners - -124,978
Rights issue 4,079 1,546
Share redemption -2,651 -50,000
Repayment of lease liabilities 24 -6,990 -5,979
Amortisation of loans and contingent consideration 24 -86,724 -325,555
Cash flow from financing activities -92,286 -219,241

Cash flow for the year 27,695 -91,302

Cash and cash equivalents at beginning of the year 219,397 310,699
Cash and cash equivalents at end of the year 247,092 219,397

HEMNET GROUP AB | ANNUAL REPORT 2020 · 35

FINANCIAL STATEMENTS

Note G1 Summary of important excluded from the consolidated financial statements from the date on which
the controlling influence ceases.
accounting principles
Asset or business acquisitions
Hemnet Group AB (“the Parent Company”) and its subsidiaries (collectively Acquisitions of companies can be classified as either business combinations
“the Group”) aim to be the marketplace for property and related services that or asset acquisitions in accordance with IFRS 3. It is an individual
is the most appreciated and visited by estate agents, site visitors and assessment that is made for each separate acquisition. Corporate
advertisers. acquisitions, whose primary purpose is to acquire a company's assets and
where the company's possible management organisation and administration
The Parent Company is a limited company registered in Sweden and based in are of secondary importance to the acquisition, are classified as asset
Stockholm. The address for the head office is Klarabergsgatan 60, 111 21 acquisitions. Other acquisitions are classified as business combinations.
Stockholm. On March 17, 2021, the board of directors approved this annual
report and consolidated statements for publication. Consolidated income Asset acquisitions
statement and consolidated statement of financial position and the Parent For acquisitions of subsidiaries considered as asset acquisitions, the
Company's income statement and balance sheet will be subject to adoption acquisition cost is allocated to individual assets and liabilities, based on their
at the Annual General Meeting (AGM) on April 9, 2021. fair values at the time of acquisition. In the case of asset acquisitions, no
deferred tax is attributable to the acquisition.
The Group uses the calendar year (Jan. 1 - Dec. 31) as its fiscal year. In a
multi - year overview, figures from 2017 are shown, the year in which the Business combinations
Group was formed, as well as the Parent Company's first extended fiscal The difference between the acquisition value of business combinations and
year. The Parent Company was formed on Dec. 2, 2016 and thus had an the acquired share of the net assets at fair value in the acquired business is
extended first fiscal year in 2017: Dec. 2, 2016 - Dec. 31, 2017. The Group was classified as goodwill and is recognised as an intangible asset in the balance
formed on Jan. 9, 2017. sheet. Goodwill is measured at cost minus accumulated impairment losses.
Transaction costs are expensed directly under profit for the period.
Unless otherwise stated, all amounts are reported in thousand SEK. Rounding
is done to the nearest thousand. Business combinations are reported in accordance with the acquisition method.
The purchase price consists of the fair value of transferred assets, liabilities if the
This note contains a list of material accounting principles that were applied Group takes on previous owners of the acquired company, and shares issued.
when the consolidated financial statements were prepared, to the extent that The purchase price also includes the fair value of all assets or liabilities that
they have not already been indicated in previous notes. Unless otherwise result from the agreed conditional purchase price. The fair value of the
specified, these principles have been applied consistently for all years contingent consideration agreement is based on management's assessment of
presented. The consolidated financial statements include the legal Parent what is likely to be paid, given the terms of the share transfer agreement.
Company Hemnet Group AB and its subsidiaries.
In business combinations, full deferred tax is based on the temporary
For the Parent Company's accounting principles, see Note P1. differences between the asset's fair value and their book value.

Basis of preparation Transactions within the Group, balance sheet items and unrealised gains and
The consolidated statement for the Group has been prepared in accordance losses on transactions between group companies are eliminated. Accounting
with International Financial Reporting Standards (IFRS) and interpretations principles for subsidiaries have been changed, where appropriate, to ensure
from the International Financial Reporting Interpretations Committee consistent application of the Group's principles.
(IFRIC) as adopted by the EU, RFR 1 Supplementary Accounting Rules for
Groups and the Swedish Annual Accounts Act. The financial statement has Segment reporting
been prepared in accordance with historical cost approach, except The operating segments are reported in a manner consistent with the internal
regarding the revaluation of financial assets measured at fair value through reporting provided to the chief operating decision maker who for Hemnet is
profit or loss and financial liabilities (including derivatives) valued at fair the Group CEO. The chief operating decision maker is the function
value through profit or loss. responsible for the allocation of resources and assessment of the
performance of the operating segment. The Group has identified one
Preparing reports in accordance with IFRS requires use of several important operating segment, which is the Group as a whole. The assessment is based
estimates for accounting purposes. Furthermore, management is required to on the fact that the Group is followed up as a whole when some form of
make certain judgement calls when applying the Group's accounting geographical breakdown or division of business/product category, etc., is not
principles. Those areas that require a high degree of judgement, which are applicable. Financial reporting is based on a Group-wide organizational and
complex or such areas where assumptions and estimates are of material management structure.
importance to the financial statement, are specified in Note G2.
Conversions of foreign currency
For the Parent Company's accounting principles, see Note P1. Functional and reporting currency
The various units in the Group have the local currency as the functional
New standards, changes and interpretations applied by the Group currency, as the local currency has been defined as the currency used in the
International Accounting Standards Board (IASB) and International Financial primary financial environment in which each unit is mainly operating. In the
Reporting Committee (IFRIC) have issued and the EU adopted new and financial statement, Swedish krona (SEK) is used, which is the Parent
revised standards and interpretations with application from the financial year Company's functional currency and the Group's reporting currency. All
2020. These have not had any significant impact on the Group’s financial companies in the Group have Swedish krona (SEK) as their functional
results and position. currency.

A number of new standards, amendments and interpretations of existing Transactions and balance sheet items
standards have been published but not yet been adopted. The Group has Foreign currency transactions are converted into the functional currency at
assessed that these will have no significant effect on the Group’s financial the exchange rates prevailing on the transaction date or the date the items are
results and position. revalued. Exchange rate gains and losses arising from the payment of such
transactions and when converting monetary assets and liabilities in foreign
Consolidated financial statements currency at the closing date are reported under comprehensive income.
The consolidated statement of financial position and balance sheet include
all companies in which the Parent Company directly or indirectly holds more Exchange rate gains and losses related to loans and cash and cash
than half of the voting rights of the shares and companies in which the Group equivalents are reported under comprehensive income as financial income or
otherwise has a controlling influence. The Group controls a company when it expenses.
is exposed to or is entitled to a variable return from its holding in the company
and has the opportunity to influence the return through its influence in the Revenue recognition
company. Subsidiaries are included in the consolidated financial statements The Group’s net sales are generated from sales of services, mainly property
from the date the controlling influence is transferred to the Group. They are listing and advertising services.

36 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Sales revenues are reported in accordance with IFRS 15, where a principle- to either the same taxpayer or different taxpayers, where there is an intention
based five-step model is applied to identify agreements and any separate to settle the balances through net payments.
performance commitments, determine and distribute the transaction price for
each performance commitment. Revenues are reported when the performance Intangible assets
commitment according to the agreement is fulfilled and the customer has Goodwill
gained control of the service. Revenue is reported over time if the customer Goodwill with an indefinite useful life is not amortized on an ongoing basis
receives or consumes the benefits at the same time as the service is but is tested for impairment annually and also as soon as indications arise
performed. Where the term of the agreement is not stated, the average term of that the asset in question has decreased in value.
the service used is based on historical information. Revenue is valued at the
agreed transaction price after deduction of any discounts and VAT. Goodwill arises from the acquisition of subsidiaries and refers to the amount
by which the purchase price, any non-controlling interest in the acquired
Sale of services – Property listings company and the fair value per acquisition day of the former equity interest in
Revenue from property listings and related additional services is accrued the acquired company, exceeds the fair value of identifiable acquired net
over the average life of a listing. assets. In order to test for depreciation, goodwill acquired in a business
combination is distributed to cash-generating units or groups of cash-
Sale of services – Advertising generating units that are expected to benefit from synergies from the
Revenue from advertising is reported over the period in which the advertising acquisition. Each unit or group of units that goodwill has been allocated to
campaign is published on Hemnet.se and in Hemnet’s apps, either in step corresponds to the lowest level in the Group at which the goodwill in question
with the delivery of agreed page views or over the term of the agreement, is monitored in internal control. Goodwill is currently monitored for the Group
depending on what is applicable. as a whole since the Group is judged to be one cash-generating unit, which is
one segment.
See Note G3 Revenue from customer agreements.
Goodwill depreciation is tested annually or more frequently if events or
Financial income and expenses changes in circumstances indicate a possible value decrease. The carrying
Interest income amount of the cash-generating unit to which the goodwill was attributed (the
Interest income is recognised in revenue using the effective interest Group as a whole) is compared with the recoverable amount, which is the
method. When the value of a receivable in the category of loan receivables higher of the value in use and the fair value minus selling costs. Any
and accounts receivable has decreased, the Group reduces the carrying depreciation is accounted for immediately as an expense and is not put back.
amount to its recoverable amount, that is estimated future cash flow,
discounted with the original effective interest rate for the instrument, and Other intangible assets
continues to dissolve the discount effect as interest income. Interest Customer relationships
income on impaired loans and accounts receivable is recognised at the Customer relationships that were acquired as part of a business acquisition
original effective interest rate. (see Note G12 Intangible Assets for details) are recognised at fair value at the
acquisition date and amortised on a straight-line basis over the forecasted
Interest expenses useful life corresponding to the estimated time they will generate cash flow.
Financial expenses consist of interest expenses on borrowing and other The useful life is 10 and 20 years respectively.
financial expenses. Borrowing costs are recognised in the income
statement using the effective interest method. Other financial costs include Platform
bank charges. Exchange rate gains and losses are reported net. The Platforms acquired as part of business acquisitions (see Note G12 for details)
effective interest rate is the interest rate that discounted the estimated are recognised at fair value at the acquisition date and are amortised on a
future cash flows during the expected term of a financial instrument to the straight-line basis over the projected useful life, corresponding to the
net asset value of the financial asset or liability. The calculation includes all estimated time they will generate cash flow. The useful life is 5 years.
fees paid or received that are part of the effective interest rate.
Trademarks
Taxes Trademarks acquired as part of a business combination are reported at fair
The tax expenses for the period include current and deferred tax. Tax is value on the acquisition date (see Note G12 for details). As long as trademarks
recognised in the statement of comprehensive income, except when the tax are used, maintained and invested in, they have been assessed to have an
relates to items that are recognised in other comprehensive income or indefinite useful life and are reported at cost and tested annually for
directly in equity. In such cases, the tax is also recognised in other impairment. Trademarks with indefinite useful life are distributed to cash-
comprehensive income and equity. generating units in the same way as goodwill. The depreciation period for
intangible assets with a definite useful life is also tested annually and on
Management regularly evaluates the claims made in self- declarations indication that the useful life has changed. The useful life of a trademark that
regarding situations where applicable tax rules are subject to interpretation. is amortized is 3 years.
Tax liability is reported, when deemed appropriate, for amounts that are likely
to be paid to the tax authority. Capitalised development costs
Maintenance costs are expensed as incurred. Expenditures on development
Deferred tax is recognised, according to the balance sheet method, on all work that is directly attributable to the development and testing of identifiable
temporary differences that arise between the tax value of assets and and unique software that is controlled by the Group, are recognised as
liabilities and their reported values in the Group financial statements. intangible assets when the following criteria are met:
However, deferred tax liability is not recognised if it arises as a result of the • it is technically possible to complete the software development as well as
initial recognition of goodwill. Deferred tax is also not recognised if it arises products associated with it so it can be used,
as a result of a transaction that constitutes the first recognition of an asset or • the company's intention is to complete the software and to use or sell it,
liability that is not a business combination and which, at the time of the • there are conditions for using the software and associated products,
transaction, does not affect the reported or fiscal result. • it can be shown that the software generates probable future economic
benefits,
Deferred income tax is calculated using the tax rates (and laws) that have • adequate technical, financial and other resources for completing the
been decided or announced on the balance sheet date and are expected to development and for using the software and related products are available, and
apply when the deferred tax asset concerned is sold or the deferred tax • the expenses associated with the software during its development can be
liability is settled. reliably calculated.

Deferred tax assets are reported to the extent that it is probable that future Other development expenses, which do not meet these criteria, are
fiscal surpluses will be available, against which the temporary differences expensed as incurred. Development expenses that were previously
can be utilised. expensed are not recognised as assets in the subsequent period. Expenses
for development work reported in the balance sheet are entered at cost
Deferred tax assets and liabilities are offset when there is a legal set-off right minus accumulated depreciation and any impairment losses. The useful life
for current tax assets and tax liabilities and when the deferred tax assets and is 3 years. See also Note G2, Important estimates and assessments for
liabilities relate to taxes charged by one and the same tax authority and refer accounting purposes.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 37

FINANCIAL STATEMENTS

Tangible fixed assets Classification and valuation

Equipment The Group's classification of financial assets as debt instruments is based on
Equipment is reported at cost minus depreciation. The acquisition value the Group's business model for asset management and the nature of the
includes expenses that can be directly attributed to the acquisition of the asset's contractual cash flows. The Group classifies its financial assets in the
asset. Additional expenses are added to the asset's carrying amount or following categories: financial assets valued at fair value via the income
reported as a separate asset, whichever is appropriate, only when it is statement and financial assets valued at accrued amortised cost.
probable that the future economic benefits associated with the asset will
benefit the Group and the asset's acquisition value can be measured reliably. a) Financial assets valued at amortised cost
The carrying amount of the replaced part is removed from the balance sheet. Financial assets classified at amortised cost are initially valued at fair value
All other types of repairs and maintenance are reported as expenses in the with the addition of transaction costs.
report on the comprehensive income during the period in which they arise. Accounts receivable are initially reported at fair value, which normally
corresponds to the invoiced value. After initial recognition, the assets are
Depreciation of assets, in order to distribute the acquisition value down to the valued using the effective interest method. Assets classified at amortised cost
estimated residual value over the estimated useful life, is made linearly as are held, according to the business model, to collect contractual cash flows
follows: that are only payments of capital amount and interest on the outstanding
• Equipment 2–5 years capital amount. The assets are subject to a loss provision for expected credit
losses. The Group's assets classified at amortised cost consist of accounts
Assets residual values and useful lives are tested at the end of each reporting receivable, cash and cash equivalents and other current receivables.
period and adjusted if necessary. An asset's carrying amount is immediately
written down to its recoverable amount if the asset's carrying value exceeds b) Financial assets valued at fair value through profit or loss
its estimated recoverable amount. Financial assets valued at fair value through profit or loss refers to all other
debt instruments that are not valued at amortised cost or fair value through
Gains and losses on divestitures are determined by comparing sales revenue other comprehensive income. Financial instruments in this category are
with the carrying amount and are reported under other operating income/ initially recognised at fair value. Changes in fair value are recognised in profit
other operating expenses - net in the consolidated income statement. or loss. The Group classifies derivatives and short-term investments
(investments in funds) in this category. The fair value is determined as
Impairment losses of non-financial assets described in Note G20.
Assets with an indefinite useful life (goodwill and trademark) or intangible
assets that are not ready for use are not amortised but are tested annually for c) Financial liabilities valued at amortised cost
any impairment. Assets that are amortised are assessed for impairment Financial liabilities are classified at amortised cost with the exception of
whenever events or changes in circumstances indicate that the carrying derivatives and contingent consideration in connection with
amount may not be recoverable. An impairment loss is determined by the business combinations. Financial liabilities recognised at amortised cost are
amount by which the asset's carrying amount exceeds its recoverable initially valued at fair value, including transaction costs. After the first
amount. The recoverable amount is the higher of the asset's fair value minus accounting period, they are valued at amortised cost using the effective
selling costs and its utility value. When assessing impairment, assets are interest method. The Group's financial liabilities classified at amortised cost
grouped at the lowest levels where there are essentially independent cash consist of liabilities to credit institutions, accounts payable, accrued expenses
flows (cash- generating units), which for the Hemnet Group AB refers to and the portion of other current liabilities relating to financial liabilities.
the Group. For assets (other than goodwill) that have previously been
written down, a review is made on each balance sheet whether a reversal d) Financial liabilities valued at fair value through profit or loss
should be made. Derivatives and contingent consideration in connection with business
combinations are classified at fair value through profit or loss. The Group
Financial instruments does not apply hedge accounting. The fair value is determined as described in
Financial instruments are any form of agreement that gives rise to a Note G20.
financial asset in one company and a financial debt or equity instrument in
another company. Financial instruments recognised in the balance sheet Impairment of financial instruments
include on the asset side cash and cash equivalents, current investments, The Group's financial assets, in addition to those that are classified at fair
accounts receivable and other receivables. On the liabilities side are value through profit or loss, are subject to impairment losses for expected
liabilities to credit institutions, contingent consideration, debt deferred loan losses. Impairments for loan losses in accordance with IFRS 9 are
consideration, derivative instruments, other liabilities and accounts proactive and a loss provision is made when there is an exposure to credit
payable. The accounting depends on how the financial instruments have risk, usually at the first accounting date. Expected loan losses reflect the
been classified. present value of all cash flow deficits attributable to default, either for the
next 12 months or for the expected remaining maturity of the financial
Accounting and removal instrument, depending on the type of asset and the deterioration in credit
A financial asset or financial liability is recognised in the balance sheet when since the first reporting date. Expected credit losses reflect an objective,
the company becomes a party in accordance with the contractual terms of probability-weighted outcome that takes into account the majority of
the instrument. Rent receivables and accounts receivable are recognised in scenarios based on reasonable and verifiable forecasts.
the balance sheet when an invoice has been sent and the company's right to
compensation is unconditional. Debt is recognised when the counterparty The simplified model is applied for accounts receivable. In the simplified
has performed and a contractual obligation to pay exists, even if an invoice model, a loss reserve is reported for the receivable or the asset's expected
has not yet been received. Accounts payable are recognised when an invoice remaining maturity.
is received.
For other items subject to expected loan losses, the general method is applied
Financial assets and financial liabilities are offset and recognised with a net using a three-stage impairment model.
amount in the balance sheet only when there is a legal right to set off the
amounts and there is an intention to settle the items with a net amount or to Initially, as well as on each balance sheet date, a loss reserve is reported for
simultaneously sell off the asset and settle the debt. A financial asset is the next 12 months, or for a shorter period of time depending on the remaining
removed from the balance sheet when the rights in the agreement are term (Stage 1).
realised, expire or when the company loses control of it. The same applies to
part of a financial asset. A financial liability is removed from the balance If there has been a significant increase in credit risk since the first accounting
sheet when the obligation in the agreement is fulfilled or otherwise date, which results in a rating below investment grade, a loss reserve for the
extinguished. The same applies to part of a financial liability. At each remaining maturity of the asset is reported (Stage 2). An assessment of
reporting date, the company evaluates the need for write-downs regarding whether a significant increase in credit risk exists is based on whether
expected credit losses for a financial asset or group of financial assets, as payment is delayed for more for 30 days, or if a significant deterioration in
well as any other credit exposure. rating occurs, resulting in a rating below investment grade. The Group has
defined default as when payment of the claim is delayed by 90 days or more,
Profits and losses from items removed from the balance sheet as well as or if other factors indicate that payment suspension exists. For assets that
modifications are reported in the income statement. are considered to be credit impaired, reserves are still kept for expected credit

38 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

losses for the remaining term (Stage 3). For credit impaired assets and such occur. Such agreements are not reported in the balance sheet. Leasing
receivables, the calculation of interest income is based on the asset's fees for these agreements are reported as cost linear over the leasing period.
carrying amount, net of loss provision, as opposed to the gross amount as in
the previous stages. The valuation of the lease debt initially includes payments for the right to use
the underlying asset during the lease period that were not paid before the
The Group's assets have been assessed to be in Stage 1, that is, there has starting date. The payments can relate to fixed fees, variable leasing fees that
been no significant increase in credit risk. depend on an index or price, amounts that are expected to be paid by the
lessee according to residual value guarantees, redemption price for an option
The valuation of expected credit losses is based on different methods. The to buy the underlying asset or penalty fees paid upon termination in
method for accounts receivable is based on historical accounts receivable accordance with a termination option, if the Group is reasonably certain to
combined with forward-thinking factors. Other receivables and assets are exercise these options. Leasing liabilities are reported in the balance sheet as
written down according to a rating-based method based on probability of leasing liabilities divided into long-term and short-term part. After the
default, expected loss in default and exposure in default, through the commencement date, the lease liability is valued by increasing the carrying
application of an external credit rating or assessed rating. Expected credit amount to reflect the interest on the lease liability and decreasing the value to
losses are measured at fair value to the product by probability of default, loss reflect paid lease fees. Revaluation of the carrying amount is made to reflect
due to default and exposure at default. For credit-impaired assets and any reassessment or lease modifications or to reflect revised in-substance
receivables, an individual assessment is made taking into account historical, fixed lease payments.
current and forward-thinking information.
Right of use assets (right to use a leased asset) are reported at cost minus
The financial assets are recognised in the balance sheet at amortized cost, depreciation and any write-downs and taking into account adjustments for
i.e. net of gross value and loss reserve. Changes in the loss reserve are any revaluation of the lease debt.
recognised in the income statement as other external costs.
The acquisition value of the right of use assets consists of the lease debt, all
Accounts receivables leasing fees paid on or before the starting date, any initial direct expenses and
Accounts receivable are financial instruments consisting of amounts to be an estimate of costs for dismantling and disposal of the underlying asset and
paid by customers for services sold in the day-to-day operations. If payment any restoration costs.
is expected within one year or earlier, they are classified as current assets. If
not, they are reported as non-current assets. Depreciation of right of use assets is made from the starting date to the time
that occurs earliest, the end of the useful life or the end of the lease period. If
Accounts payable are initially recognised at fair value and thereafter at there is a purchase option for a contract that is reasonably safe to use, the
amortised cost using the effective interest method. Accounts receivable are asset is depreciated over the useful life (i.e., does not take into account the
subject to a loss provision for expected credit losses. lease period).

Cash and cash equivalents The value of the right of use asset and the period of use are tested when there
Cash and cash equivalents include, in the balance sheet as well as in the is an indication that an asset may be impaired. The reported value of the right
report on cash flows, cash and bank balances. Cash and cash equivalents of use is immediately written off to its recoverable value if the asset's carrying
are subject to the requirements for loss provision for expected credit losses value exceeds its estimated recoverable value.
and provision for expected credit losses is made in accordance with the
general method. If the amounts are not deemed to be insignificant, a reserve Employee compensation
for expected credit losses is also recognised for these financial Short-term compensation
instruments. Short-term employee compensation such as salaries, social security
contributions, holiday pay and bonuses are expensed in the period when the
Accounts payable and other liabilities employees perform the services. Liabilities for salaries and remuneration,
Accounts payable are financial instruments and refer to obligations to pay for including non-monetary benefits and paid absences, which are expected to
goods and services acquired in the day-to-day operations of suppliers. be settled within 12 months after the end of the financial year, are reported as
Accounts payable and other liabilities are classified as current liabilities if current liabilities at the undiscounted amount expected to be paid when the
they fall due within one year. If not, they are reported as non-current liabilities. liabilities are settled.

Accounts payable and other liabilities are initially recognised at fair value and The cost is recognised as the services are performed by the employees. The
thereafter at amortised cost using the effective interest method. debt is reported as a liability regarding employee compensation in the
consolidated balance sheet.
Borrowing
Borrowing is initially recognised at fair value, net after transaction costs. Pension obligations
Borrowing is then reported at amortised cost and any difference between The Group only has defined contribution pension plans. A defined
the amount received (net after transaction costs) and the repayment contribution pension plan is a pension plan according to which the Group
amount is reported in the statement of comprehensive income distributed pays fixed contributions to a separate legal entity. The Group does not have
over the loan period, using the effective interest method. Fees paid for loan any legal or informal obligations to pay additional fees if this legal entity does
facilities have been reported as prepaid costs and are expensed during the not have sufficient assets to pay all compensation to employees related to
facility's term. employee service during the current or prior periods. Consequently, the Group
has no further risk. The Group's obligations regarding contributions to
Borrowing is classified under current liabilities unless the Group has an defined contribution plans are recognised as an expense in the results for the
unconditional right to defer payment of the debt for at least 12 months after year at the rate they are earned by the employees performing services for the
the end of the reporting period. Group during the period.

Leases Compensation upon termination

Leasing agreements where the Group is the lessee are reported in the balance An expense for compensation in connection with layoffs is only reported if the
sheet. Lease liability is valued at the present value of lease fees that have not company is demonstrably obliged, without realistic possibility of
been paid at the time of valuation. The leasing period is determined as the withdrawing, of a formal detailed plan to terminate an employment in
non-cancellable period together with periods to extend or terminate the advance. When remuneration is submitted as an offer to encourage voluntary
agreement if the Group are reasonably sure of exercising the options. resignation, an expense is reported if it is probable that the offer will be
Discounting is based on the implicit interest rate of the lease, if this can be accepted and the number of employees who will accept the offer can be
easily determined. If this interest rate cannot be easily determined, the reliably estimated.
lessee's marginal loan interest rate is used.
Share-based transactions
The company applies the relief rules regarding short-term agreements Incentive and shareholder programs exist where those covered have the
(leasing agreements where the leasing period is less than 12 months) and opportunity to acquire shares or warrants at market value, see also note G8.
leasing agreements where the underlying asset is of low value in cases where As market value is paid, there is no cost to report for these.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 39

FINANCIAL STATEMENTS

Note G2 Important estimates and the property sellers' listings on Hemnet and provide information about
Hemnet's services.
assessments for accounting
Revenue recognition and performance commitments for the various product
purposes areas are shown below:
The estimates and assessments are evaluated on an ongoing basis and are
Listings: Revenue is accrued over average maturity. Hemnet is considered to have
based on historical experience and other factors, including expectations of
satisfied its performance obligation with regard to property listings when the listing
future events that can be considered reasonable under the prevailing conditions.
is removed for advertising, which is done by way of terminating the assignment by
the real estate agency who arranged it. For arranging the property listing, the real
Important estimates and assessments for accounting purposes
estate agent firms receive administrative compensation. See also note G6.
The Group makes estimates and assumptions about the future. The estimates
for accounting purposes that result from these will, by definition, rarely corres-
Additional services: Revenue for additional services attributable to the
pond to the actual result. The estimates and assumptions that pose a signifi-
property sellers' property listing, such as the products Hemnet Plus and
cant risk of material adjustments in the carrying amounts of assets and liabili-
Premium, is accrued over average maturity. Hemnet is considered to have
ties during the next financial year are dealt with in the main feature as follows.
fulfilled its performance commitment for additional services related to
property listing when the listing is removed for advertising or when the period
(a) Impairment testing of intangible assets
for which the additional service extends is over. For example, the product
Customer relationships and platform acquired as part of business acquisitions are
Raketen is active for a certain number of days after purchase. For mediating
recognised at fair value at the time of acquisition and are amortised on a straight-line
additional services linked to property listings, there is an option for real estate
basis over the forecasted useful life corresponding to the estimated time, they will
agent firms to enter into an intermediation agreement and receive commission
generate cash flow. Assets are assessed for impairment whenever events or
compensation. See also note G6.
changes in circumstances indicate that the carrying amount may not be recoverable.
Goodwill and trademarks have been assessed to have an indefinite useful life and are
Advertising services and other: Advertising services consist, among other
tested for impairment annually or as soon as indications arise that imply that the
things, of income from real estate developers who market their properties and
asset in question has decreased in value. Trademarks are attributable to the value in
brands. Advertisements are recognised as revenue over the period that the
Hemnet as a brand and is held with ownership. The company does not see any limi-
advertising campaign is exposed on Hemnet.se and in Hemnet's apps. Other
tation in the useful life of trademarks and their useful life is thus considered indefina-
services are recognised as revenue during the period in which the service is used.
ble. See notes G1 and G12 for accounting principles and estimated useful lives and
Advertising and similar services are considered to be delivered when the
note G12 for reported values. The majority of customer relationships have an estima-
advertisement is published according to agreed conditions and the agreed
ted useful life of 20 years and the remaining depreciation period is 16 years.
publication time has expired.
(b) Capitalised development costs
The majority of the services are invoiced with 30 days payment due. Advertising
The Group conducts development work of software attributable to the technical
services are billed in line with campaign times. Invoicing for property listings
platform and the website hemnet.se. Accounting for self-accumulated intangible
takes place in connection with publication. In 2020, the property listing sellers
assets means that the company must make a number of assessments about the
have been offered to pay for their property listing via Klarna up to seven days after
future. The decision to activate an asset is based on an estimate of whether it is
the time of publication. In the event that the sellers choose to pay via Klarna, an
technically feasible to complete the asset, the company intends to complete the
invoice will be drawn up via Klarna and Hemnet will receive a settlement claim on
asset, it is likely that the asset will generate future economic benefits and that
Klarna. If the property seller does not choose to pay via Klarna within seven days,
there are resources to complete the development. See also notes G1 and G12.
a paper invoice will be issued. Accrued income is reported in the balance sheet for
published listings that have not been invoiced as of the balance sheet date.
(c) Reporting of preference shares
Implementation of a new publishing flow where the seller chooses invoicing
The Company's assessment is that there is no contractual obligation to pay a divi-
alternatives before publishing, and invoicing can thus take place on the day of
dend between Hemnet and the holders of preference shares at the time of issue of
publication regardless of digital or paper invoice, is planned to be introduced in
the preference shares. A payment of dividend is ultimately dependent on a decision
2021. The portion relating to the remaining publication period regarding invoiced
by the AGM. With this in mind, the preference shares have been classified as equity.
and accrued invoicing is reported as prepaid income in the balance sheet.

Note G3 Revenue from contracts with The remaining performance commitments as of Dec. 31, 2020 amounted to SEK
8,228 thousand (12,878), including prepaid income reported as contractual
customers liabilities. Performance commitments are essentially expected to be executed
and revenue is reported within one month from the balance sheet date.
Furthermore, no revenue related to performance commitments that were fulfilled
Revenue breakdown
in previous years has been recognised as revenue in 2020.
by customer category 2020 2019
Property sellers 325,815 256,685
Real estate developers 56,491 61,973 Note G4 Other operating income
Advertisers 81,052 61,146
Real estate agents 80,721 64,590 2020 2019
Total 544,079 444,394 Reminder fees and interest
for late payments 1,114 919
Revenue breakdown by service category 2020 2019 Commission income 217 247
Listings 312,720 268,606 Exchange rate differences
Additional services 77,468 47,246 receivables of an operative nature 128 92
Advertising services and other 153,891 128,542 Other 308 717
Total 544,079 444,394 Total 1,767 1,975

Hemnet's revenues come from services that target the following main customer
groups: Property sellers, real estate developers, advertisers and real estate agents. Note G5 Other operating costs
The single largest revenue stream comes from the property sellers' property
listings. In order for property sellers to be able to influence their property 2020 2019
sales, additional services such as Hemnet plus and Hemnet premium are Foreign exchange losses -646 -114
offered, which give a more prominent exposure of the property listing Reminder and debt collection costs -1,058 -894
compared with the basic version. Advertising services consist, among other Other -11 -7
things, of income from real estate developers who market their properties and
-1,715 -1,015
brands. The real estate agents are an important partner, as they administer

40 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Note G6 Other external expenses Board and senior executives salaries and remuneration

2020
2020 2019 Social costs
Salaries and Pension incl.
Administration and commission
remuneration costs payroll tax Total
compensation -151,187 -124,915
Håkan Erixon, chairman 500 - 157 658
Other -94,121 -64,112
Anders Edmark 100 - 31 131
-245,308 -189,027
Kerstin Lindberg
Administration and commission compensation refers to compensation to Göransson 250 - 79 329
affiliated real estate agent firms regarding mediation to property sellers. Pierre Siri - - - -
Christopher Caulkin - - - -
Erik Olsson *** 39 - 12 51
Note G7 Auditor remuneration Thomas Hussey - - - -
Nick McKittrick * 163 - 51 214
2020 2019 Tracey Fellows **** 30 - 9 40
Ernst & Young Henrik Persson,
- Audit engagement 2,955 2,095 deputy ** - - - -
- Audit activity in addition to Håkan Hellström, deputy 100 - 31 131
the audit engagement 758 - Marta Suares
- Tax services - - Estebanez, deputy *** - - - -
- Other services - 450 Cecilia Beck-Friis, chief
executive officer 4,982 508 1,667 7,158
Total compensation for the auditors 3,713 2,545
Other senior
Audit means review of the annual report and accounts and the administration executives ***** 9,016 1,233 2,906 13,155
of the board of directors and the CEO, other duties that it is incumbent upon the Total 15,181 1,741 4,945 21,867
company's auditor to perform and advice or other assistance that is the result
of observations in such an audit or the performance of other such duties. Salaries and remuneration consist of board fees and salaries of senior
Everything else is other assignments. executives

* from May 6, 2020

Note G8 Employee remuneration, etc. ** from May 6, 2020, before this board member
*** until May 6, 2020
**** from November 18, 2020
2020 2019 ***** the group of other senior executives includes Erik Segerborg 2 months,
Salaries and Social Salaries and Social Sarah Wu 4 months and the group consists of a total of 7 people
remuneration costs remuneration costs
Board and other senior
executives (including 2019
profit-sharing) 15,181(-) 6,686 10,816 (-) 5,660 Salaries and Social costs
Of which, pension costs 1,741 1,820 remunera- Pension incl.
tion costs payroll tax Total
Other employees 63,364 27,598 48,172 21,391
Håkan Erixon, chairman 450 - 141 591
Of which, pension costs 6,615 4,916
Anders Edmark 100 - 31 131
Total 78,545 34,284 58,988 27,051
Kerstin Lindberg
Of which, pension costs 8,356 6,736
Göransson 250 - 79 329
Pierre Siri - - - -
Senior executives include CEO and other senior executives Christopher Caulkin - - - -
Henrik Persson - - - -
Average number of employees
Erik Olsson 100 - 31 131
2020 2019 Thomas Hussey * - - - -
Average Average
Håkan Hellström, deputy 100 - 31 131
number of Number of number of Number of
employees women employees women Magnus Miramadi,
deputy ** 50 - 16 66
Sweden 102 35 80 29
Marta Suares
Group total 102 35 80 29 Estebanez, deputy *** - - - -
Cecilia Beck-Friis,
"Group CEO and CEO
Gender breakdown for the Group (including subsidiaries) for board members
for Hemnet AB" 2,967 439 1,038 4,444
and other senior executives.
Other senior
Dec. 31, 2020 Dec. 31, 2019 executives **** 6,799 1,381 2,472 10,652
Number on Number on Total 10,816 1,820 3,840 16,476
balance Number of balance Number of
sheet day women sheet day women Salaries and remuneration consist of board fees and salaries of senior
Board members 8 2 8 1 executives

CEO and senior

* from May 2, 2019, before this deputy
executives 7 4 6 2
** until June 28, 2019
15 6 14 3 *** from June 28, 2019
**** the group of other senior executives includes Anna Lagerborg 3 months
and the group consists of a total of 6 people

HEMNET GROUP AB | ANNUAL REPORT 2020 · 41

FINANCIAL STATEMENTS

Remuneration to the CEO and senior executives follows the guidelines constitutes a good leaver or if the board in its sole discretion determines that
established by the Board, which are set out in the corporate governance the participation of the participant in the MIP should be terminated and that
report. Remuneration to senior executives shall consist of fixed market the participant in the MIP should be terminated and that the participant shall
salary, variable remuneration linked to clear goals set for the company, be classified as a bad leaver.
opportunity to participate in incentive programs, pension and other
customary benefits. Since the initial investment in the 2017 program, further investments have
been made in the 2018 program with 1,223,600 shares at a price of SEK 1.23
In the case of variable remuneration, it shall be linked to concrete, measurable per share and 2020 with 1,102,578 shares at a price of SEK 3.70. In 2018,
goals for the company and/or the department for which the senior 1,200,600 shares were sold at a price of 1.09 and in 2020, 716,520 shares were
management is responsible. A decision on the variable remuneration model sold at a price of 3.70. Seven people have newly invested in the program since
and outcomes shall be made by the Board of Directors. Senior management inception and two people have sold all their shares, which means that the
should be encouraged to invest in Hemnet, for example through participation program as of Dec. 31, 2020 includes 17 people.
in long-term incentive programmes, to link the interests and rewards of
senior management with those of the shareholders. A decision on the The average acquisition value of the 16,720,658 shares subscribed is SEK
opportunity to participate in incentive programs and the outcome of such 1.27 (1.10) and has been determined by an estimated market price in the range
programmes shall be made by the Board. of 1.09-3.70, depending on when the investment was made. Since the shares
have been subscribed for at market value and the program is regulated with
The retirement age is normally 65 years. Pension plans for senior executives equity, no cost for the program is recognised in the income statement. The
must comply with the ITP plan or match the ITP plan with respect to the level market value is derived from an external valuation based on a model that
of remuneration. Other customary benefits (such as corporate health care calculates the value based on discounted expected return. The value that has
and health insurance) must be market-based. been discounted has been calculated based on the management's forecasts
of EBITDA (weighted based on different scenarios) and multiples of the
According to the employment agreement, the CEO has a notice period of six original transaction and comparable transactions on the market.
months and is in addition entitled to severance pay corresponding to six months' The discount rate has been estimated based on the accepted method Capital
salary. The notice period for other senior executives is six months. Asset Pricing Model. Furthermore, an illiquidity and minority discount was
also applied to the value of the shares.
Incentive program
Incentive program for senior executives and board of directors - MIP The market value of shares awarded in 2020 has been generated via an
In 2017, 11 key executives were offered to invest in Hemnet Group AB by external valuation based on a model that calculates the value based on the
subscribing to 16,311,600 Series C shares. Shareholding is conditioned by traded value of shares in Care of Hemnet at Pepins. A Monte Carlo simulation
employment for employees and to continued board commitment for board model has been used to calculate the market value of all shares in Hemnet,
members, which means the company has the right but no obligation to which is implied by the market's valuation of shares in Care of Hemnet at the
repurchase the shares if employment or board assignment should cease. most recent trading opportunity. Furthermore, an illiquidity and minority
discount has also been applied to the value of the shares.
If a person in the management resigns, the company has the right to redeem
or assign acquirers of all C shares (both earned and unearned). If the MIP As of Dec. 31, 2020, the current Group management holds 2,946,278 C shares.
participant is defined as a good leaver, the redemption price must correspond
Accumulated number
the C share’s market value for earned shares and the acquisition cost in
Number of shares outstanding
respect of unearned shares. If the MIP participant becomes a so-called bad
leaver, the redemption price must correspond to either the MIP participant’s Dec. 31, 2017 16,311,600
acquisition cost or the lower of the acquisition cost and the market value of Dec. 31, 2018 16,334,600
the C share. 50 percent of MIP participating executives’ shares are earned Dec. 31, 2019 16,334,600
over a five-year period from the day the participant subscribes for the C
Dec. 31, 2020 16,720,658
shares, with 20 percent earned on the anniversary of the time the shares were
subscribed and the remaining 80 percent earned linearly monthly during the Number Number
following four-year period. In the event of an IPO, all shares are earned Awarded per year, incentive outstanding outstanding Value per
automatically, while in the event of another exit, the company may decide that program for management and as of as of share, span
unearned shares shall be rolled over into a new structure and replaced by board Dec. 31, 2020 Dec. 31, 2019 (SEK)
securities in such a new structure at the same value. Such a rollover is
MIP - Senior executives 3,716,258 3,930,200 1.09-3.70
conditional on the existence of an arrangement that ensures that the
participant can sell or otherwise obtain liquidity for their new securities Holdings, members of
management team
within a reasonable time after exit. The remaining 50 percent of the shares
that have not been earned are earned automatically at exit but not earlier. Cecilia Beck-Friis 1,572,578 1,194,200
Carl Johan Åkesson 496,800 496,800
If a person on the Board terminates his or her Board assignment, the company Jessica Sjöberg 248,400 248,400
has the right to redeem or assign acquirers of all or parts of the MIP
Pierre Bergström 255,900 255,900
participant’s C shares, whereby the price for each redeemed share
corresponds to the lower of the MIP participant’s acquisition cost for share Francesca Cortesi 124,200 -
and the share’s market value. If the MIP participant is defined as a bad leaver, PerOla Schelvander 248,400 248,400
the redemption right covers all the MIP participant’s C shares. If the MIP Not current executives 769,980 1,486,500
participant becomes a so-called good leaver, the redemption right only
covers unearned C shares. MIP participating Board member’s C shares are
MIP - Board 13,004,400 12,404,400 1.09-3.70
earned over a 4-year period either by 30% at the start and the remainder on a
straight-line basis or all of them on a straight-line basis. In the event of an Holdings, board members
exit, all shares are earned automatically. and deputies
Håkan Erixon 662,400 662,400
For a person on the board and management, they are defined as a bad leaver Kerstin Lindberg Göransson 150,000 150,000
in the event, that they have acted in such a way that the board deems to be a Pierre Siri 7,452,000 7,452,000
relevant cause or has committed a significant breach of commitment.
Nick McKittrick 450,000 -
Relevant cause refers to significant breaches of MIP agreements, shareholder
agreements, service agreements and other significant agreements with the Tracey Fellows 150,000 -
company. Also, the participant's intentional or material breach of fiduciary Henrik Persson 4,140,000 4,140,000
duties or similar obligations or failure to perform his duties as a board
member and fraud, embezzlement, theft or other criminal act. A person in
Total awarded shares to
management is also defined as a bad leaver in case notice for termination of incentive programs 16,720,658 16,334,600
the service is given (irrespective of who gives the notice) or if the service is
otherwise terminated or discontinued unless the participant otherwise

42 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Shareholder program for Hemnet employees

At the Extraordinary General Meeting on September 30, 2019, it was resolved to
Note G10 Exchange rate differences, net
authorise the Board of Directors to decide on the issuance of a maximum of
Exchange rate differences have been reported in the statement of
4,729,228 warrants entitling to subscribe for Series B ordinary shares on market
comprehensive income as follows:
terms. On October 17, 2019, the Board of Directors resolved to issue a maximum
number of warrants, to Hemnet Group AB, with the aim of transferring the 2020 2019
warrants at market price to participants in a shareholder program for employees Other operating income (Note G4) 128 92
at Hemnet. The participants acquired warrants for SEK 0.57 per warrant as of
December 1, 2019. A total of 3,324,104 warrants were acquired at a value of SEK Other operating costs (Note G5) -646 -114
1,894,758 which is considered to be market value according to valuation with the Financial items, net (Note G9) -126 103
so-called Monte Carlo model. The company's market value at the end of the -644 81
subscription period has been simulated based on a log-normal distribution
based on a risk-free interest rate and volatility based on comparable listed
companies. Based on the simulated market value, any profit per warrant has
been calculated. The risk-free interest rate is based on Swedish government
bonds with a maturity corresponding to the maturity of the warrant. Note G11 Income tax
The warrants entitle the holder to acquire shares at a price of SEK 2.05 each.
2020 2019
The warrants are earned over 36 months, but according to the warrant terms
can also be used earlier in the event of a Board decision for a listing of the Current tax:
company or a sale of all shares to an external buyer. The warrant agreement Current tax on profit for the year -32,680 -27,722
contains a provision which means that the warrants are repurchased by the Total current tax -32,680 -27,722
company if the employee's employment ends.
Deferred tax (Note G15):
The shareholder program for employees does not apply to the management Deferred tax on temporary
group, which is already covered by a separate incentive program. differences and tax loss 13,628 9,720
Total deferred tax 13,628 9,720
Awarded per Number Number Total income tax -19,052 -18,001
year, warrants outstanding outstanding Value per
acquired as of as of Exercise awarded The income tax on the Group's profit before tax differs from the theoretical
by employees Dec. 31, 2020 Dec. 31, 2019 price warrant Maturity amount that would have been obtained when using the Swedish tax rate for
Awarded 2019 3,324,104 3,324,104 2.05 0.57 2022 the results of the consolidated companies as follows:

2020 2019
Note G9 Financial income and costs Earnings before tax 86,793 83,637
Income tax calculated according
to tax rate in Sweden (21.4%) -18,574 -17,898
2020 2019
Tax effect of:
Liabilities valued at amortized cost Non-deductible costs -502 -452
Interest expenses to credit institutions -23,523 -15,215 Non-taxable income - 74
Renegotiation results, net * - 4,305 Utilisation of previous year’s
Other interest expenses -267 -7 unrecognised loss carry forwards - 240
Interest expense deferred consideration -67 -4,430 Other 24 36
Total interest costs according to Income tax expense -19,052 -18,001
the effective interest method -23,857 -15,347
This year's effective tax rate is -22.0% (-21.5%).
Assets and liabilities measured
at fair value in profit or loss
Change in value contingent consideration - -633
Interest-rate cap, pre-fixed coupons - -733
Total costs at fair value 0 -1,366
Other
Foreign exchange losses, net -126 -
Interest expenses, leasing liabilities -217 -94
Total other -343 -94
Financial costs, total -24,200 -16,807
Interest bearing securities
valued at fair value
Interest bearing securities 393 705
Interest rate cap - 904
Total revenue at fair value 393 1,609
Other
Foreign exchange gains, net - 103
Other 84 37
Total other 84 140
Financial income, total 477 1,749

Financial items, net -23,723 -15,058

* Renegotiation results attributable to renegotiation of the Group's liabilities
to credit institutions, see also Note G21.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 43

FINANCIAL STATEMENTS

Note G12 Intangible assets

Customer Capitalised
Fiscal year 2020 Goodwill relationships Platform Trademarks development costs Total
Opening acquisition value 902,815 1,090,436 40,463 241,748 15,087 2,290,549
Acquisitions for the year - - - - 6,039 6,039
Closing acquisition value 902,815 1,090,436 40,463 241,748 21,126 2,296,588
Opening accumulated depreciation - -164,965 -23,907 -82 -2,695 -191,649
Depreciation for the year -55,385 -8,155 -198 -5,457 -69,195
Closing accumulated depreciation - -220,350 -32,062 -280 -8,152 -260,844
As of December 31, 2020
Acquisition value 902,815 1,090,436 40,463 241,748 21,126 2,296,588
Accumulated depreciation - -220,350 -32,062 -280 -8,152 -260,844
Closing carrying amount 902,815 870,086 8,402 241,468 12,974 2,035,745

Customer Capitalised
Fiscal year 2019 Goodwill relationships Platform Trademarks development costs Total
Opening acquisition value 902,815 1,090,436 40,000 241,190 6,162 2,280,603
Acquisitions for the year - - - - 8,925 8,925
Increase through asset acquisitions - - 463 558 - 1,021
Closing acquisition value 902,815 1,090,436 40,463 241,748 15,087 2,290,549
Opening accumulated depreciation - -109,579 -15,828 - -171 -125,578
Depreciation for the year - -55,386 -8,079 -82 -2,524 -66,071
Closing accumulated depreciation - -164,965 -23,907 -82 -2,695 -191,649
As of December 31, 2019
Acquisition value 902,815 1,090,436 40,463 241,748 15,087 2,290,549
Accumulated depreciation - -164,965 -23,907 -82 -2,695 -191,649
Closing carrying amount 902,815 925,471 16,557 241,666 12,392 2,098,901

For fiscal year 2020, the Group estimated that SEK 6,039 thousand meets the The recoverable amount of goodwill and trademarks with an indefinite useful
criteria for capitalisation of development costs, see Note G1 for accounting life has been determined based on calculations of value in use. These calcu-
principles. lations are based on estimated future cash flows before tax based on finan-
cial budgets and forecasts approved by company management and covering
Goodwill is attributable to the acquisition of Hemnet Sverige AB Group in a five-year period. Cash flows beyond the five-year period are extrapolated
2017. The useful life is deemed to be indefinite with impairment testing done using the estimated growth rate as stated below. The growth rate does not
annually. exceed the long-term growth rate for the market in which the Group operates.

Customer relationships, platform and trademarks, like goodwill, are mainly Sensitivity analysis Goodwill
attributable to the acquisition of Hemnet Sverige AB Group in 2017. The recoverable amount exceeds the carrying amount of goodwill with a good
margin. This also applies to each individual assumption that:
During 2019, a minor asset acquisition took place when Tryggabud Sweden AB – the discount rate before tax had been 1 percentage point higher,
was acquired. Tryggabud Sweden AB has been merged with Hemnet AB in 2020. – the estimated growth rate to extrapolate cash flows beyond the five-year
period was 0 percent.
Customer relationships are attributable to established customer relation-
ships to brokers and advertising. The useful life of customer relationships Essential assumptions used for calculating utility values:
attributable to brokers is 20 years and customer relationships attributable to
Discount rate before1), % 15.5
advertising is 10 years. The remaining depreciation period amounts to 16 and
6 years respectively. Long-term growth rate2), % 2.0
1)
 re-tax discount rate used in the present value calculation of estimated future cash flows.
P
Platform refers to intangible assets attributable to websites and apps. The 2)
Growth rate used to extrapolate cash flows beyond the budget period.
useful life is 5 years and the remaining depreciation period is 1 year.
The discount rate used is stated before tax and reflects the specific risks that
Trademarks are for the most part attributable to the value in Hemnet as a exist for the Group.
brand and is held with ownership. The company does not see any limitation in
the useful life of the brand Hemnet and its useful life is therefore considered The most significant assumptions during the five-year forecast period are
indefinable. The trademark Tryggabud, which has an acquisition value of SEK sales growth and profitability development, where the operating margin is
558 thousand, is depreciated over 3 years. assumed to increase as a result of sales growth. A change in the assumption
of sales growth of 2 percentage points in the forecast period and an assump-
Impairment testing of goodwill and trademarks tion of unchanged operating margins would not result in any impairment.
Management assesses the company's performance based on the Group's
overall results. This means management has determined that there is only No impairment needs for goodwill and/or trademarks have been identified for
one cash-generating unit. Goodwill and trademarks are thus monitored by the fiscal year.
management at the Group level.

44 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Note G13 Tangible non-current assets Note G14 Leases

The company's leasing liability consists mainly of the head office's contract
Equipment Fiscal year 2020 Fiscal year 2019
for premises in Stockholm.
Opening acquisition value 9,617 9,301
Acquisitions for the year 967 882 A new agreement has been signed with an extension of the rental period by
Sales for the year -49 -16 two years to apply until September 2022.
Disposals for the year - -550
The table below shows the value of access rights and leasing liabilities and
Closing acquisition value 10,535 9,617 the change during the period:
Opening accumulated depreciation -7,618 -7,039
Depreciation for the year -1,082 -1,130 Right of use assets
Sales for the year 39 9 Office Leasing
Disposals for the year - 542 Offices equipment Total liabilities
Closing accumulated depreciation -8,661 -7,618 As of January 1, 2020 5,118 146 5,265 3,658
Closing carrying amount 1,874 1,999 Contract extensions 14,790 14,790 14,790
Depreciation
for the year -7,121 -49 -7,170
Completed contracts -195 -195 -198
Interest expenses 217
Payments -7,207
As of December
31, 2020 12,592 97 12,690 11,260

Right of use assets

Office Leasing
Offices equipment Total liabilities
As of January 1, 2019 11,070 195 11,266 9,949
Depreciation
for the year -5,952 -49 -6,001
Interest expenses 94
Payments -6,385
As of December
31, 2019 5,118 146 5,265 3,658

The table below shows the amounts reported in the income statement:

Right of use assets 2020 2019

Depreciation of access rights 7,170 6,001
Interest expenses for leasing liabilities 217 94
Revaluation results -3 -
Short-term equipment 18 -
Total amount reported in year-end results 7,402 6,095

Future leasing fees are shown in the table below:

Maturity analysis (undiscounted flows) Dec. 31, 2020 Dec. 31, 2019
Year 1 5,718 3,467
Year 2 5,719 210
Year 3 4 50
Year 4 - 4
Total 11,441 3,731

HEMNET GROUP AB | ANNUAL REPORT 2020 · 45

FINANCIAL STATEMENTS

Note G15 Deferred tax

Deferred tax assets and liabilities are distributed as follows:

Dec. 31, 2020 Dec. 31, 2019

Deferred tax assets:
deferred tax assets assessed to be utilised after more than 12 months 49 7
deferred tax assets assessed to be utilised within 12 months 46 -
95 7
Deferred tax liabilities
deferred tax liabilities assessed to be utilised after more than 12 months 219,898 233,116
deferred tax liabilities assessed to be utilised within12 months 14,472 14,794
234,370 247,910

Net change in deferred taxes is as follows:

Dec. 31, 2020 Dec. 31, 2019

Opening balance -13,628 257,624
Reported in statement of comprehensive income -13,627 -9,720
Closing balance 234,275 247,903

Changes in deferred tax assets and tax liabilities during the year, without regard to offsets made within the same tax jurisdiction, are shown below:

Customer
Deferred tax liabilities relationships Platform Trademarks Other Total
As of December 31, 2018 202,942 5,108 49,685 88 257,823
Reported in statement of
comprehensive income -11,852 -1,712 - 3,651 -9,913
As of December 31, 2019 191,090 3,396 49,685 3,739 247,909
Reported in statement of
comprehensive income -11,852 -1,713 - 26 -13,539
As of December 31, 2020 179,238 1,683 49,685 3,765 234,370

Deferred tax assets Interest rate cap Rights of use Total

As of December 31, 2018 200 - 200
Reported in statement of comprehensive income -194 - -194
As of December 31, 2019 6 - 6
Reported in statement of comprehensive income -6 95 89
As of December 31, 2020 - 95 95

Note G16 Accounts receivable Dec. 31, 2020 Dec. 31, 2019
Not overdue accounts receivable 17,766 20,301
Dec. 31, 2020 Dec. 31, 2019 1-30 days 2,396 5,512
Accounts receivable 24,753 29,795 31-60 days 326 471
Reserve for expected credit losses -4,354 -3,527 > 61 days 4,265 3,511
Total 20,399 26,268 Total overdue accounts receivable 6,987 9,494

The carrying amount of accounts receivable is considered to be a good approx- Change in reserve for
expected credit losses:
imation of the fair value, since the discounting effect is not significant.
Opening balance 3,527 2,317
As of Dec. 31, 2020, net accounts receivable amounted to SEK 20,399 thousand Reserve for expected credit
(26,268) after the provision of expected customer losses. Accounts receivable losses/reserve reversal 895 1 384
due amounted to SEK 6,987 thousand (SEK 9,494 thousand). Of the SEK 2,722 Credit losses recovered and reversed -68 -174
thousand accounts receivable due between 1-60 days at the balance sheet Closing balance 4,354 3,527
date, SEK 2,298 thousand had been paid before Jan.31, 2021.
Hemnet's customers mainly consist of property sellers where real estate
As of the balance sheet date, there were no accounts receivable in foreign cur- brokers act as agents. Furthermore, in addition to property sellers and real
rency. estate agents, customers also consist of advertisers and real estate
developers. Collateral for receivables is not normally held. There are no
The age analysis of accounts receivable is as follows: significant credit concentrations, the number of customers is significant and
geographically well spread. The payment terms normally are between 0-30

46 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

days depending on the counterparty and there is no significant credit risk As of Dec. 31, 2020, the share capital consists of 1,338,930,905 shares divided
concentration to individual counterparties. into ordinary shares and preference shares. The shares have been issued in
six series. Series A, B, C constitute ordinary shares and series D, E and F
The outstanding accounts receivable for the five largest customers are gross at constitute preference shares. Series A, D and F have a voting value of 10 votes/
SEK 2,977 thousand (SEK 3,601 thousand). share. Series B, C and E have a voting value of 1 vote/share. The preference
shares take precedence over the ordinary shares in terms of dividend and
Recognition of expected credit losses is made in accordance with IFRS 9, surplus in liquidation. The holders of preference shares are entitled to an
specified in internal regulations. The Group applies the simplified method of accumulated dividend of 7 percent per year of the calculated amount. The
accounting for expected credit losses on accounts receivable. This means that calculated amount refers to the sum paid for all shares in the relevant series of
expected loan losses are reserved for the remaining term, which is expected to issued preference shares plus the number of accrued dividends that have
be less than one year for all receivables. The Group's accounts receivables are been listed and which have not been paid or exchanged in the event of a
divided into two groups: property sellers and other customers. Customers liquidation. No shareholder has the right to call for a dividend from the
within each group are considered to have a similar risk profile, which is why company before a general meeting. There are also no repayment terms
credit risk is initially assessed collectively for all customers in each group. In attached to the preference shares. The cumulative pre-emptive rights of the
the case of individual major receivables that are more than 60 days overdue for preference shareholders as of Dec. 31, 2020 amounted to SEK 58,877
payment or where the credit risk is assessed materially, the credit provision for thousand (SEK 12,818 thousand).
these receivables is assessed per counterparty. Hemnet will write off a claim
when there is no longer any expectation of receiving payment and when active Other contributed capital consists of premiums for a new issue of SEK
measures to obtain payment have been completed. 1,243,564 thousand (SEK 1,242,155 thousand).

The Group applies a method based on historical loss share for both customer There is an incentive program for senior executives, which includes Series C
groups. The method is applied in combination with other known information shares and a shareholder program for employees, including warrants. See fur-
and forward-thinking factors, including information about individual ther information in Note G8.
customers and management's assessment of the impact of the business cycle.

Note G20 Financial risk management

Note G17 Other current receivables and financial instruments
Dec. 31, 2020 Dec. 31, 2019
by category
Settlement receivables 10,700 555 Financial risk factors
VAT recoverable - 6 Through its operations, the Group is exposed to a variety of financial risks:
Tax account 3,234 291 market risk (currency risk, interest rate risk and price risk), credit risk and
liquidity risk. The Group's overall risk management policy focuses on the
Other 26 178
unpredictability of the financial markets and strives to minimise potential
Total 13,960 1,031 adverse effects on the Group's financial results.
Settlement receivables refer to receivables from invoicing and payment
intermediaries used by Hemnet. In 2020, Hemnet has started offering property Risk management is handled by the Group's CFO. CFO provides monthly
sellers to pay for property listings via Klarna. The settlement receivable on information on the Group´s results, financial position and how the operations
Klarna amounts to SEK 6,992 thousand as of December 31, 2020, which was develop to the board and management of Hemnet. The Group has a finance
settled in its entirety in January 2021. policy established by the Parent Company's Board of Directors, which states
which financial risks the Group is exposed to and how these risks should be
limited. The finance operations should support the operational operations of the
Note G18 Prepaid expenses and accrued business and be of a non-speculative nature. Interest rate risk consists of the risk
that developments in the interest rate market will have negative effects on the
income company. Interest rate risk affects the Group, partly as current interest expenses
for loans and derivative instruments and partly as changes in market value of
derivative instruments. According to the company's finance policy, derivative
31/12/2020 31/12/2019
instruments may be used for the management of interest rate risk and currency
Accrued income 10,035 4,183 risk, but only on condition that this follows from other contractual commitments,
Prepaid marketing costs 3,415 14,000 such as may exist in, for example, credit financing agreements. The objective of
Prepaid costs, other 3,479 3,528 interest rate risk management is to achieve the desired stability in the Group's
overall cash flow. At the same time, it must be ensured that possible market value
Total 16,929 21,711
changes on the derivatives required do not pose unacceptable risks to
In the event the amounts are deemed to be significant, a reserve for expected shareholder equity and that requirements from credit institutions on levels of
credit losses is recognised for accrued income. No reserve has been recognised. interest rate hedging are met. Currency risk is low and thus not hedged. Credit
risk is achieved through effective monitoring of outstanding receivables.

Note G19 Equity Surplus liquidity must be managed with the overall goal of preserving capital
rather than generating financial income. In the first instance, surplus liquidity
should be used to repay debt. Surplus liquidity can be placed as an alternative to
Voting rights No. of shares Share capital amortisation of interest-bearing debt to meet known future financing needs.
Ordinary shares:
Series A 5,909,593,070 590,959,307 30,169,402 Market risks
Currency risks
Series B 106,517,850 106,517,850 5,437,904
The Group operates only marginally on an international basis and the cur-
Series C 16,720,658 16,720,658 853,616 rency risk is low. Currency risks arise when future business transactions are
Preference shares: expressed in a currency that is not the unit's functional currency. The Group
Series D 5,572,330,900 557,233,090 28,447,625 has little to no sales in foreign currency and purchases are made marginally in
EUR, USD and GBP. Due to the limited risk, the company does not, according
Series E 41,517,850 41,517,850 2,119,552
to the finance policy, hedge these flows, unless there are specific reasons to
Series F 259,821,500 25,982,150 1,326,430 do so, but the currency risk must primarily be managed operationally by stri-
As of December ving to sign agreements in SEK.
31, 2020 11,906,501,828 1,338,930,905 68,354,528

HEMNET GROUP AB | ANNUAL REPORT 2020 · 47

FINANCIAL STATEMENTS

Exposure consideration to the sellers, which arose in connection with the acquisition of
The Group's risk exposure in foreign currency at the end of the reporting Hemnet Sverige AB Group, has been amortised annually. In January 2020, the
period, expressed in thousand SEK, was the following: final payment was made. The debt relating to the deferred consideration and
contingent consideration was at an interest rate of 3.56 percent.

Dec. 31, 2020

Sensitivity
USD GBP EUR If interest rates on borrowing in Swedish krona in 2020 were 100 basis points
Cash and cash equivalents 625 53 546 higher/lower with all other variables constant, the calculated profit after tax
Accounts payable 272 - 61 for the financial year would have been SEK 5,453 thousand higher/lower, as an
effect of higher/lower interest costs for borrowing with variable interest rates.
Accrued income 3,627 - -
Credit risk
Dec. 31, 2019
Credit risk is managed at the Group level, with the exception of credit risk
USD GBP EUR regarding outstanding accounts receivable where analysis is done for each
Cash and cash equivalents 721 60 571 Group company. Credit risk arises through liquid funds and balances with
Accounts payable 379 - 253 banks, as well as credit exposures to customers. There is no high concentration
Accrued income 1,098 - - of credit risks, either through exposure to individual customers, specific
industries or regions. In cases where there is no independent credit
assessment for corporate customers, a risk assessment is made of the
Sensitivity customer's credit rating, taking into account the customer's financial position,
As shown in the table above, the Group is marginally exposed to changes in as well as past experience and other factors. Other long-term securities
the exchange rate for USD/SEK, GBP/SEK and EUR/SEK. holdings consist of long-term fixed income funds, which are considered low-
risk investments.
If the Swedish krona had weakened/strengthened by 10 percent in relation to
the USD with all other variables constant, the recalculated profit after tax/ Credit risk exposure and possible provision for expected loan losses are stated
effect on shareholder equity as of Dec. 31, 2020 would be SEK 399 thousand in Note G16 Accounts receivable, Note G18 Prepaid expenses and deferred
lower/higher, as a result of profits/losses on conversion of accrued income, income and Note G27 Cash and cash equivalents.
cash and cash equivalents and accounts payable in USD.
Liquidity risks
If the Swedish krona had weakened/strengthened by 10 percent relative to Cash flow forecasts are prepared by the Group's operating companies and
GBP with all other variables constant, the recalculated profit after tax/effect aggregated at the Group level. At the Group level, careful rolling forecasts for
on share- holder equity as of Dec. 31, 2020 would be SEK 5 thousand higher/ the Group's liquidity reserve are followed to ensure that the Group has
lower, largely as a result. of gains/losses on the conversion of cash and cash sufficient cash to meet the needs of its ongoing operations.
equivalents in GBP.
At Group level, surplus liquidity may be invested in interest-bearing
If the Swedish krona had weakened/strengthened by 10 percent relative to the settlement accounts or interest-bearing money market instruments,
EUR with all other variables constant, the recalculated profit after tax/effect depending on which instrument has the appropriate maturity or sufficient
on shareholder equity as of Dec.31, 2020 would be SEK 49 thousand higher/ liquidity to meet the space provided by the aforementioned forecasts.
lower, largely as a result of gains/losses on the conversion of cash and cash
equivalents and accounts payable in EUR. Credit facility
As of Dec. 31, 2020, the Group has a total credit facility of SEK 705 million, of
Amounts reported in the Group's statement of comprehensive income which SEK 16 million is unutilised.
During the year, the following currency-related amounts were reported in the
consolidated income statement: Variable interest rate on utilised credit: Stibor plus 1.75–3.50 percent,
depending on Net Leverage.
2020 2019
Fixed interest on unutilised credit: 0.75 percent
Net exchange rate gain (+)/- loss (-), included in
other operating income/other operating expenses -518 -22 Expires within one year (bank loan) SEK 10.3 million
Net exchange rate gains (+)/- currency (-), Expires after more than one year (bank loan) SEK 678.3 million
included in financial income/expenses -126 103
The credit facilities can be utilised at any time provided that the covenants in
the loan agreement are fulfilled. The following table analyses the Group's
Interest rate risk
financial liabilities broken down by the time remaining on the balance sheet
The Group's interest rate risk arises through long- and short-term borrowing.
date until the contractual maturity date. The amounts stated in the table are
Liabilities to credit institutions constitute a bank loan from Nordea that is
the contractual, undiscounted cash flows.
subject to variable interest rates and exposes the Group to interest rate risk
with respect to cash flow, which is partially neutralised by cash with variable
Management of capital
interest rates. The bank loan was renegotiated and extended during the year. The Group's goal regarding the capital structure is to ensure the Group's ability
The loan matures May 27, 2025 and runs at a variable interest rate equivalent to to maintain its operations, so that it can continue to generate return to share-
Stibor plus 1.75-3.50 percent per year, depending on the covenant Net holders and benefit other stakeholders and to maintain an optimal capital
Leverage. The fee for the undrawn part of the facility is 0.75 percent. The bank structure to keep costs down. Hemnets managed capital consists of equity.
loan has a revolving credit, which means that the Group has a loan facility that Changes in managed capital are stated in the Group´s consolidated statement of
makes it possible to use the unused credit at no extra cost. The Group has two changes in equity.
different covenants to relate to: net leverage and interest cover. Net leverage is
In order to maintain or adjust the capital structure, the Group may change the
calculated according to the formula net debt/consolidated EBITDA. Net debt
dividend paid to the shareholders, repay capital to the shareholders, issue new
refers to the loans with deductions for balances with the bank. Interest cover is shares or sell assets to reduce liabilities.
calculated according to the formula consolidated EBITDA/net financial
expenses. The Group assesses its capital requirements, among other things, on the basis
of the leverage ratio, which is the key figure for net debt/EBITDA and amounted
The Group's borrowing is only in Swedish kronor. It is possible to take out a loan to 2.2 (3.0) on Dec. 31, 2020. Net debt is calculated as total borrowing (including
in another currency. The Group has previously chosen to hedge cash flow the items Liabilities to credit institutions and Derivative instruments in the
regarding future interest payments as the loan terms required a certain hedging consolidated balance sheet) less cash and cash equivalents. The Group's goal is
to achieve a net debt / adjusted EBITDA ratio of less than 2.0.
during an initial stage. Hedging then took place by using a derivative in the form
of an interest rate cap. The loan terms no longer require any hedging and the
Group has chosen not to raise any new derivatives after the previous interest
rate cap expired in 2020. Debt regarding purchase price and contingent

48 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Maturity of financial liabilities

Between Total contractual
Less than 3 months Between Between More than undiscounted
As of December 31, 2020 3 months and 1 year 1 and 2 years 2 and 5 years 5 years cash flow Reported value
Financial liabilities
Liabilities to credit institutions 10.3 13.3 665.1 688.6 675.5
Contingent consideration -
Leasing liabilities 0.0 5.7 5.7 0.0 11.4 11.3
Accounts payable 10.3 10.3 10.3
Other current liabilities 10.9 10.9 10.9
21.1 16.0 19.0 665.1 0.0 721.2 707.9

Between 3 Total contractual

As of December 31, 2019, SEK Less than months Between Between More than undiscounted
million 3 months and 1 year 1 and 2 years 2 and 5 years 5 years cash flow Reported value
Financial liabilities
Liabilities to credit institutions 10.3 10.3 678.3 698.9 682.2
Debt deferred consideration - - -
Contingent consideration 79.2 79.2 79.1
Leasing liabilities 0.0 3.4 0.2 0.1 3.7 3.6
Accounts payable 13.0 13.0 13.0
Other current liabilities 3.0 3.0 3.0
Derivatives
Interest rate cap . .
95.2 13.7 10.5 678.4 0.0 797.8 780.9

Fair value calculation The following table shows the Group's financial assets and liabilities measured
The table below shows financial instruments measured and reported at fair at fair value at Dec. 31, 2020.
value, based on how the classification in the fair value hierarchy was made.
Level 1 Level 2 Level 3 Total
The different levels are defined as follows:
Financial assets
(a) Level 1 financial instruments Assets valued at fair value
Listed prices (unadjusted) in active markets for identical assets or liabilities. through profit or loss
Interest bearing securities
(b) Level 2 financial instruments current (fixed income funds) 24,525 24,525
Observable data for the asset or liability other than quoted prices included in Total financial assets 24,525 - - 24,525
level 1, either directly (i.e., as price quotes) or indirectly (i.e., derived from
price quotes).
The following table shows the Group's financial assets and liabilities at fair
(c) Level 3 financial instruments value at Dec. 31, 2019.
In cases where one or more significant inputs are not based on observable
Level 1 Level 2 Level 3 Total
market information, the instrument concerned is classified under level 3.
Financial assets
Assets valued at fair value
through profit or loss
Interest bearing securities
current (fixed income funds) 24,132 24,132
Total financial assets 24,132 - - 24,132
Financial liabilities
Financial liabilities at fair
value through profit or loss
Derivative instruments
held for trading:
- Interest rate cap - -
Contingent consideration 79,129 79,129
Total financial liabilities - - 79,129 79,129

HEMNET GROUP AB | ANNUAL REPORT 2020 · 49

FINANCIAL STATEMENTS

Specific valuation techniques used to evaluate financial instruments include: Level 3 financial instruments
• Listed market prices are used for valuation of Interest-bearing securities, The table to the below shows the changes for Level 3 instruments.
current.
• The fair value of interest rate ceilings is calculated as the present value of Contingent consideration in correlation to acquisitions
estimated future cash flows based on observable yield curves.
• The fair value of contingent consideration is based on management's Dec. 31, 2020 Dec. 31, 2019
assessment of what is likely to be paid given the terms of the share transfer Opening balance 79,129 181,945
agreement upon the acquisition of Hemnet Sverige Group. Contingent consideration paid during the year -79,196 -105,883
Interest accrued over the total profit during the year 67 3,067
There were no transfers between levels during the year.
Closing balance - 79,129

Contingent consideration: The remaining part of the contingent consideration

was settled in January 2020.

Financial instruments by category

Financial assets at Financial assets reported

Assets as of Dec. 31, 2020 fair value through profit or loss at amortised cost Total
Assets in the balance sheet
Interest bearing securities, current 24,525 24,525
Accounts receivable and other receivables 44,394 44,394
Cash and cash equivalents 247,092 247,092
Total 24,525 291,486 316,011

Financial liabilities at Financial liabilities reported at

Liabilities as of Dec. 31, 2020 fair value through profit or loss amortised cost Total
Liabilities in the balance sheet
Liabilities to credit institutions 675,482 675,482
Other liabilities 22,115 22,115
Accounts payable 10,290 10,290
Accrued expenses 59,593 59,593
Total - 767,480 767,480

Financial assets at Financial assets reported at

Assets as of Dec. 31, 2019 fair value through profit or loss amortised cost Total
Assets in the balance sheet
Interest bearing securities 24,132 24,132
Accounts receivable and other receivables 31,482 31,482
Cash and cash equivalents 219,397 219,397
Total 24,132 250,879 275,011

Financial liabilities at Financial liabilities reported at

Liabilities as of Dec. 31, 2019 fair value through profit or loss amortised cost Total
Liabilities in the balance sheet
Liabilities to credit institutions 682,189 682,189
Contingent consideration 79,129 79,129
Derivatives 0 0
Other liabilities 73 73
Accounts payable 12,996 12,996
Accrued expenses 4,838 4,838
Total 79,129 700,096 779,225

Interest bearing securities are valued at fair value in level 1 in the fair value hierarchy. The fair value of current liabilities to credit institutions corresponds to their
carrying amount, as the discounting effect is not significant. The fair value of long-term liabilities to credit institutions is based on discounted cash flows (level
2) and amounts to SEK 678 million as of December 31, 2020. Contingent consideration is valued at fair value and is at level 3, which means that observable input
data for the debt is lacking and the fair value is instead based on management's assessment of what is likely to be paid given the terms of the share transfer
agreement. For other financial assets and liabilities, book value is an approximation of fair value, which is why these items are not divided into levels according
to the valuation hierarchy.

50 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Note G21 Liabilities to credit institutions Note G22 Other current liabilities
Dec. 31, 2020 Dec. 31, 2019 Dec. 31, 2020 Dec. 31, 2019
Long-term liabilities Contingent consideration - 79,129
Liabilities to credit institutions 678,375 688,625 VAT credit 4,229 2,815
Effective interest rate/settlement Personnel-related taxes 6,514 -
fee/renegotiation result -10,515 -14,225 Other items 112 181
667,860 674,400 Total 10,855 82,125
Short-term liabilities
Liabilities to credit institutions 10,250 10,250 See Note G20 Calculation of fair value for further description of the item con-
Effective interest rate/settlement tingent consideration.
fee/renegotiation result -2,628 -2,461
7,622 7,789
Total liabilities to credit institutions 675,482 682,189 Note G23 Accrued expenses and deferred
income
Liabilities to credit institutions
The Group's borrowing matures on May 27, 2025 and runs at a variable inte- Dec. 31, 2020 Dec. 31, 2019
rest rate with a margin spread of 1.75-3.50 percentage points against the Accrued personnel costs 14,124 8,755
reference interest rate, depending on the net leverage covenant.
Deferred income 8,228 12,878
The Group has two different covenants to relate to: net leverage and interest Accrued administration and
cover. Net leverage is calculated according to the formula net debt/consoli- commission compensation 40,003 44,718
dated EBITDA. Net debt refers to the loans with deductions for balances with Other accrued costs 6,562 4,084
the bank. Interest cover is calculated according to the formula consolidated Total 68,917 70,436
EBITDA/net financial liabilities.

The Group has fulfilled the loan terms for the entire financial year Jan. 1 - Dec.
31, 2020.

For liabilities to credit institutions, collateral has been provided, see Note G26.

Reported value Fair value

Dec. 31, 2020 Dec. 31, 2020
Loans from credit
institutions 675,482 688,625

Note G24 Changes in liabilities belonging to the financing operations

Non-cash flow items
Accrual
Unpaid interest of financing Change in leasing
Jan. 1, 2020 Cash inflow Cash outflow expenses costs commitments Dec. 31, 2020
Liabilities to credit institutions 682,189 -10,250 3,543 675,482
Contingent consideration 79,129 -76,474 -2,655 0
Leasing liabilities 3,657 -6,990 14,593 11,260
Total 764,975 0 -93,714 -2,655 3,543 14,593 686,742

Non-cash flow items

Accrual
Unpaid interest of financing Change in leasing
Jan. 1, 2019 Cash inflow Cash outflow expenses costs commitments Dec. 31, 2019
Liabilities to credit institutions 440,640 285,724 -44,125 -51 682,189
Deferred consideration 181,945 -180,279 -1,665 -
Contingent consideration 181,945 -101,151 -1,665 79,129
Leasing liabilities - -5,979 9,637 3,657
Total 804,530 285,724 -331,534 -3,331 -51 9,637 764,975

HEMNET GROUP AB | ANNUAL REPORT 2020 · 51

FINANCIAL STATEMENTS

Note G25 Cash and cash equivalents limited company and to change the company name to Hemnet Group AB (publ).

No other events have occurred after the end of the financial year that have had
Dec. 31, 2020 Dec. 31, 2019 any significant impact on the business or assessments and assumptions used
Bank balances 247,092 219,397 in the preparation of the annual report.
247,092 219,397

For bank balances, all counterparties have a credit rating of at least AA- (S&P). Reconciliation of alternative
In cases where the amounts are not considered insignificant, a reserve for
expected credit losses for these financial instruments is recognised according
performance measures
to the general method, according to the rating-based method. No reserve for
expected credit losses has been recognised. Below are calculations to derive the alternative performance measures used
in the report. See definitions for more information.

Note G26 Pledged assets 2020 2019 2018

Operating margin
Dec. 31, 2020 Dec. 31, 2019 Operating profit 110,516 98,695 73,278
Net assets in subsidiaries 1,108,550 1,037,907 Net sales 544,079 444,394 373,084
Trademarks 241,190 241,190 Operating margin, % 20.3% 22.2% 19.6%
1,349,740 1,279,097

Pledged assets relate to debt to credit institutions, and the loan from Nordea. EBITDA margin
The loan is conditional upon the company meeting certain covenants. See Operating profit 110,516 98,695 73,278
also notes G20 and G21. Net assets in subsidiaries refer to Hemnet AB, Hem- Depreciation -77,447 -73,202 -64,793
net Sverige AB and Hemnet Holding III AB.
EBITDA 187,963 171,897 138,071
Net sales 544,079 444,394 373,084
Note G27 Related party transactions EBITDA margin, % 34.5% 38.7% 37.0%

Related parties are owners, all subsidiaries within the Group and senior
Adjusted EBITDA margin
executives in the Group and their affiliates. Goods and services are bought
and sold to related parties on normal commercial terms on a commercial EBITDA 187,963 171,897 138,071
basis. Within the Group, goods and services are priced in accordance with Advertising revenue -4,298 - -
established internal pricing policies based on the arm's length principle. Marketing costs 13,384 - -
Consultant costs 5,061 - -
For information on remuneration to the board of directors and senior
Adjusted EBITDA 202,110 171,897 138,071
executives, see Note G8. Sarah Wu, who is part of the management team as of
September 2020 has, since she has not been employed by Hemnet, invoiced a Net sales 544,079 444,394 373,084
consulting fee of SEK 720 thousand during the months she has been part of Adjusted EBITDA margin, % 37.1% 38.7% 37.0%
the management team 2020.
Net debt
See also the ownership structure section in the Directors' Report.
Non-current interest-
In March 2020, 165,000 C shares were issued to senior executive within the bearing liabilities 673,547 674,663 613,463
incentive program for senior executives. During the fourth quarter, 716,520 Current interest-bearing liabilities 13,195 90,314 191,971
shares were redeemed from a former senior executive and 937,578 C shares Cash and cash equivalents,
were issued to four senior executives. The issue price and redemption price including interest bearing
were in all cases SEK 3.70 per share. securities, current 271,617 243,529 334,089
Net debt 415,125 521,448 471,345
Hemnet transferred SEK 12,500 thousand in 2019 to Mäklarsamfundet for
marketing activities that Mäklarsamfundet would administer in 2020. In 2020,
Net debt/EBITDA
marketing activities were carried out and expensed to the value of SEK 9,085
thousand, while SEK 3,415 thousand remains as prepaid costs for remaining Net debt 415 125 521 448 471 345
activities that will be carried out in 2021. I In addition to the above, marketing EBITDA 187 963 171 897 138 071
campaigns have also been administered via Hemnet's own platform, which Net debt/EBITDA, times 2.2 3.0 3.4
has resulted in both revenues and costs amounting to SEK 4,298 thousand.

Equity/Asset ratio
Note G28 Events after the reporting period Equity 1,349,619 1,280,450 1,388,247
Balance sheet total 2,373,309 2,398,711 2,539,030
In the beginning of 2021, Hemnet communicated an upcoming revised model Equity/Asset ratio, % 56.9% 53.4% 54.7%
for administration and commission compensation to the brokerage industry.
Hemnet’s compensation model, until the introduction of the revised model, is
based partly on a compensation to real estate agencies for the work performed Debt/Equity ratio
in relation to administration and intermediation carried out, and, for affiliated Interest-bearing liabilities 686,742 764,977 805,434
real estate agencies, a commission compensation for the sale of the Equity 1,349,619 1,280,450 1,388,247
company’s additional services for home sellers. The new revised model has the
Debt/Equity ratio, times 0.5 0.6 0.6
same components, but the compensation levels for each part have been
adjusted to give the commission compensation a greater weight. This change
will take effect on March 1, 2021. Hemnet’s assessment is that this change can ARPL (Average revenue per listing)
have a positive impact on sales of listings related additional services and thus Net sales 544,079 444,394 373,084
on the company’s profit margins.
Deduct revenue not
arising from listings -210,954 -182,794 -170,139
At an extraordinary general meeting on March 1, 2021, it was decided to perform a
Revenue from listings 333,125 261,600 202,945
reverse share split, whereby 15 existing shares in each of all the company’s share
classes (series A, B, C, D, E, F) were merged into 1 share. At the EGM it was further Number of listings 189,305 185,031 188,012
resolved to change corporate category for the Parent company from private to public ARPL, SEK 1,760 1,414 1,079

52 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Definitions
Key ratios Definition
Alternative performance measures Alternative performance measures (APMs) are financial measures of historical or future earnings trend, financial position
or cash flow that are not defined in the applicable accounting regulations (IFRS). Alternative performance measures
are used by Hemnet when it is relevant to follow up and describe Hemnet's financial situation and to provide additional
useful information to the users of the financial reports. These metrics are not directly comparable to similar performance
measures presented by other companies. Alternative performance measures are marked with * in the definition list.

Number of employees The total number of employees at the close of the period end.

ARPL (Average revenue per listing)* Average revenue per listing, calculated as revenue from home sellers published listings including related add-on
products during the period, in relation to the number of published listings during the period.
It is a measure that shows the Company’s earning capacity per published listing.

EBITDA (earnings before interest, taxes, Operating profit plus depreciation and amortization of tangible and intangible assets.
depreciation and amortization)* The measure enables comparison of profitability over time, regardless of amortization and depreciation of
intangible and tangible fixed assets as well as independent of taxes and the Company’s financing structure.

EBITDA margin* EBITDA in relation to net sales.

The measure reflects the business’s operating profitability before amortization and
depreciation of intangible and tangible fixed assets. The measure is an important component,
together with net sales growth, to follow the Company’s value creation.

Financial items net* Financial income less financial expenses. Measure the company's financial activities.

Adjusted EBITDA* EBITDA plus items affecting comparability.

This measure enables comparison of profitability over time, regardless of amortization and depreciation of
intangible and tangible fixed assets as well as independent of taxes and the Company’s financing structure. The
measure is also adjusted for the impact of items affecting comparability to increase comparability over time.

Adjusted EBITDA margin* Adjusted EBITDA in relation to net sales.

The measure reflects the business’s operating profitability before amortization and depreciation
of intangible and tangible fixed assets. The measure is an important component, together
with net sales growth, to follow the Company’s value creation. The measure is also adjusted
for the impact of items affecting comparability to increase comparability over time.

Items affecting comparability* Items affecting comparability include revenue and expenses that do not arise regularly in the operating activities.
A separate disclosure of items affecting comparability clarifies the development of the underlying business.

Average number of full-time employees The average number of employees during the period, defined as equivalent full-time positions.

Net debt* Interest-bearing liabilities less cash and cash equivalents and current interest-bearing securities.
Net debt is a measure used to follow the development of debt and the size of the refinancing
need. Since cash and cash equivalents can be used to pay off debt at short notice, net
debt is used instead of gross debt as a measure of the total loan financing.

Net debt/EBITDA* Interest-bearing liabilities less cash and cash equivalents and current interest-bearing securities as
of the balance sheet date in relation to operating profit increased by amortization and write-downs of
intangible and tangible assets (EBITDA) for the last twelve months. The measure is a debt ration that shows
how many years it would take to pay off the Company’s debt, provided that its net debt and EBITDA are
constant and without taking into account the cash flows regarding interest, taxes and investments.

Operating margin* Operating profit/loss in relation to net sales.

The measure reflects the operational profitability of the business. The measure is an important
component, together with net sales growth, to follow the Company’s value creation.

Operating profit/loss* Total revenue less total operating expenses.

The measure indicates the Company’s operation profit/loss before financing and
taxes and is used to measure the profit generated by operating activities.

Debt/Equity ratio* Interest bearing liabilities less cash and cash equivalents and current interest-bearing securities in relation to equity.
The measure shows the relation between the Company’s two forms of financing. The measure
shows how large a share the debt financing has in relation to the owners’ invested capital. The
measure reflects the financial strength, but also the leverage effect of the debt. A higher leverage
ratio means a higher financial risk and a higher financial leverage on invested capital.

Equity/Assets ratio* Equity in relation to total assets.

The measure reflects the Company’s financial position. A high equity ratio provides a readiness to be able to handle
periods of weak economic growth. At the same time, a higher equity ratio creates a lower financial leverage.

Profit margin* Net profit in relation to net sales.

The measure indicates the Company’s profit after financing and taxes and is
used to measure the profit generated by operating activities.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 53

FINANCIAL STATEMENTS

Parent Company income statement

Amount in thousand SEK Note 2020 2019
Net sales 6 7,081 -
Total 7,081 -

Other external expenses -8,243 -1,404

Personnel costs 2 -7,186 -
Total operating expenses -15,429 -1,404
Operating profit/loss -8,348 -1,404
Interest expenses -1 -
Allocations - Group contributions received 6 8,343 2,761
Profit before tax -5 1,356
Income tax - -
Net income (loss) -5 1,356

Parent Company statement of

comprehensive income
Amount in thousand SEK Note 2020 2019
Net income (loss) -5 1,356
Other comprehensive income - -
Total comprehensive income for the period -5 1,356

Parent Company balance sheet

Amount in thousand SEK Note Dec. 31, 2020 Dec. 31, 2019
ASSETS
Non-current assets
Participations in Group companies 3 1,141,560 1,141,560
Non-current receivables Group companies 4 217,750 217,750
Total non-current assets 1,359,310 1,359,310
Current assets
Current receivables from Group companies 4 11,204 2,761
Other receivables 1,030 -
Prepaid expenses and accrued income 1,400 -
Cash and cash equivalents 4,701 1,211
Total current assets 18,335 3,972
TOTAL ASSETS 1,377,645 1,363,282
EQUITY AND LIABILITIES
Equity 5
Restricted equity
Share capital 68,354 68,335
Total restricted equity 68,354 68,335
Unrestricted equity
Share premium reserve 1,245,110 1,243,701
Retained earnings -124,630 -125,986
Comprehensive income for the year -5 1,356
Total unrestricted equity 1,120,475 1,119,071
Total equity 1,188,829 1,187,406
Non-current liabilities
Non-current liabilities to Group companies 4 175,050 175,050
Total non-current liabilities 175,050 175,050
Current liabilities
Accounts payable 2,213 -
Current liabilities to Group companies 4 6,304 615
Other liabilities 1,094 -
Accrued expenses and deferred income 4,155 211
Total current liabilities 13,766 825
TOTAL EQUITY AND LIABILITIES 1,377,645 1,363,282

54 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Parent Company statement of

changes in equity
Restricted equity Unrestricted equity
Total
Share premium Retained Profit shareholder
Share capital reserve earnings for the year equity
Amount in thousand SEK (Note P5) (Note P5) (Note P5) (Note P5) (Note P5)
Opening balance as of Jan. 1, 2019 68,335 1,292,155 - -1,008 1,359,482
Transfer of previous year's results -1,008 1,008 0
Net income (loss) 1,356 1,356
Other comprehensive income - -
Total comprehensive income for the period 1,356 1,356
Transactions with owners
Dividends -124,978 -124,978
Rights issue -1,408 -48,592 -50,000
Bonus issue 1,408 -1,408 -
New share issue (shareholder program warrants) * 1,895 1,895
Issue costs -349 -349
Total transactions with the company's owners - -48,454 -124,978 - -173,432
Closing balance as of Dec. 31, 2019 68,335 1,243,701 -125,986 1,356 1,187,406

Opening balance as of Jan. 1, 2020 68,335 1,243,701 -125,986 1,356 1,187,406

Transfer of previous year's results 1,356 -1,356 -
Net income (loss) -5 -5
Other comprehensive income - -
Total comprehensive income for the period -5 -5
Transactions with owners
Redemption -37 -2,614 -2,651
New share issues 56 4,023 4,079
Total transactions with the company's owners 19 1,409 - - 1,428
Closing balance as of Dec. 31, 2020 68,354 1,245,110 -124,630 -5 1,188,829

Parent Company statement of cash flows

Amount in thousand SEK 2020 2019
Cash flow from operating activities
Operating profit /loss -8,348 -1,404
Interest received - -
Interest paid -1 -
Paid income tax - -
Cash flow from operating activities before changes in working capital -8,349 -1,404

Cash flow from changes in working capital

Change in current receivables -2,530 -
Change in current liabilities 12,941 274
Total changes in working capital 10,411 274
Cash flow from operating activities 2,062 -1,130

Cash flow from financing activities

Loans from Group companies - 175,000
Loans to Group companies - -
Rights issue 4,079 1,546
Share redemption -2,651 -50,000
Dividend paid to Parent Company owners - -124,978
Cash flow from financing activities 1,428 1,568
Cash flow for the year 3,490 437

Cash and cash equivalents at beginning of the year 1,211 774

Cash and cash equivalents at year-end 4,701 1,211

HEMNET GROUP AB | ANNUAL REPORT 2020 · 55

FINANCIAL STATEMENTS

Note P1 Parent Company based method for calculating expected credit losses on intra-group
receivables, see the Group's accounting principles, Impairment of financial
accounting principles instruments. Based on the Parent Company's judgment, taking into account
known information and forward-thinking factors, including business plans
and forecasts, expected credit losses are not considered to be significant and
Basis for the preparation of the reports
therefore no provision has been recognised.
The annual report for the parent company, Hemnet Group AB, has been pre-
pared in accordance with the Swedish Annual Accounts Act (ÅRL) and RFR 2
The Parent Company's assets and receivables have been assessed to be in
Accounting for Legal Entities. The RFR 2 states that, in financial reports, the
Stage 1, that is, there has been no significant increase in credit risk.
Parent Company must apply International Financial Reporting Standards
(IFRS) as adopted by the EU, to the extent this is possible within the frame- work
Leases
of the ÅRL and the Pension Obligations Vesting Act, as well as the relationship
There are no leasing agreements in the Parent Company.
between accounting and taxation. The recommendation specifies the
exceptions and additions required in relation to IFRS.
Group contributions
Group contributions received and submitted are reported as a year-end
Accordingly, the Parent Company applies the principles presented in Note G1 of
allocation.
the consolidated financial statements, with the exceptions set out below. There
were no changed accounting principles for the Parent Company in 2020.

The preparation of reports in accordance with RFR 2 requires the use of some
Not P2 Personnel costs
important estimates for accounting purposes. Furthermore, management is
required to make certain judgement calls when applying the Parent Company’s
2020 2019
accounting principles. The areas that comprise a high degree of judgement,
which are complex or such areas where assumptions and estimates are of Salaries and Social Salaries and Social
material importance for the annual report, are stated in Note G2 of the remuneration costs remuneration costs
consolidated financial statements. Parent company
Senior executives
For information on financial risks, see Note G20 to the consolidated financial (including profit-sharing) 4,982 (-) 2,176 - -
statements. Of which, pension costs 508 - -
Other employees - -
Presentation formats
The income statement and balance sheet follow the format of the Swedish Of which, pension costs - -
Annual Accounts Act. The report on changes in equity also follows the Group's Total 4,982 2,176 - -
format, but must contain the columns specified in the Annual Accounts Act. Of which, pension costs 508 - -
Furthermore, this means a difference in terms, compared to the consolidated
accounts, mainly regarding financial income and expenses and equity. Senior executives refer to the CEO.

Participations in group companies Average number of employees

Shares in subsidiaries are recognised at acquisition value minus any write-
2020 2019
downs. The acquisition value includes acquisition-related costs and any
contingent consideration. When there is an indication that participations in Average Average
subsidiaries have decreased in value, the recoverable amount is calculated. If number of Number of number of Number of
employees women employees women
this is lower than the carrying amount, a write-down is made. Write-downs
are reported in the item "Profit from participations in Group companies". No Parent company
write-down requirement for shares in Group companies has been identified Sweden 1 1 - -
for the financial year. Total 1 1 - -

Financial instruments
Due to the relationship between accounting and taxation, the rules on
financial instruments in accordance with IFRS 9 in the Parent Company are
not applied as a legal entity, rather the Parent Company applies these in
accordance with the Annual Accounts Act value method. In the Parent Note P3 Participations in
Company, therefore, financial fixed assets are valued at cost and financial
current assets in accordance with the lowest value principle, applying Group companies
impairment losses for expected credit losses in accordance with IFRS 9 for
assets that are debt instruments, see the Group's accounting principles,
Dec. 31, 2020 Dec. 31, 2019
Impairment of financial instruments. Impairment losses for other financial
assets are based on market values. Derivative instruments with negative fair Opening balance 1,141,560 1,141,560
value are reported at this value. Change for the year - -
Closing balance 1,141,560 1,141,560
The Parent Company applies the general method, according to the rating-

The Parent Company holds shares in the following subsidiaries:

Reported value
Name Corp. reg. no Location Share capital/% Number of shares Dec. 31, 2020
Hemnet Holding AB 559088–4457 Stockholm 100 50,000 1,141,560

Indirect ownership in subsidiaries included in the Group:

Name Corp. reg. no Location Share capital/% Number of shares

Hemnet Holding II AB 559088–4465 Stockholm 100 50,000
Hemnet Holding III AB 559088–4473 Stockholm 100 1,000
Hemnet Sverige AB 556536–0202 Stockholm 100 10,000
Hemnet AB 556260–0089 Stockholm 100 10,000

56 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Note P4 Receivables and liabilities of Note P8 Appropriation of profits

group companies The following earnings are available to the Annual General Meeting:
Share premium reserve 1,245,109,654
Dec. 31, 2020 Dec. 31, 2019
Retained earnings -124,629,692
Long-term receivables
Profit/loss for the year -5,507
Hemnet Holding AB 217,750 217,750
1,120,474,455
217,750 217,750
Current receivables The Board proposes that the accumulated earnings
Hemnet Holding AB 11,104 2,761 available for disposition be carried forward, SEK 1,120,474,455
Hemnet Holding II AB 100 -
11,204 2,761
Non-current liabilities
Hemnet Holding AB 175,050 175,050
175,050 175,050
Current liabilities
Hemnet AB 6,288 138
Hemnet Holding AB 16 477
6,304 615

Note P5 Equity
The share capital consists of 1,338,930,905 (1,338,544,847) shares with a
quotient value of SEK 0.051 (0.051). See also information in note G19.

Note P6 Related party transactions

Related parties are owners, all subsidiaries within the Group and senior
executives in the Group and their affiliates. Goods and services are bought
and sold to related parties on normal commercial terms on a commercial
basis. Within the Group, goods and services are priced in accordance with
established internal pricing policies based on the arm's length principle.

There are short-term and long-term deposits and borrowings between the
Parent Company and the subsidiaries. Since 2020, the Group’s CEO is
employed by the Parent Company, whereby invoicing to subsidiaries takes
place for company management services. The subsidiaries invoice the Parent
Company for costs that pertain to the Parent Company Board or CEO. Of
reported net sales, SEK 7,081 (-) thousand refers to internal invoicing to
Hemnet AB. Of external costs, SEK 1,633 (-) thousand refers to internal
invoicing from Hemnet AB. Group contribution received SEK 8,343 (2,761)
thousand has been provided by Hemnet Holding AB.

Note P7 Events after

the reporting period
At an extraordinary general meeting on March 1, 2021, it was decided to
perform a reverse share split, whereby 15 existing shares in each of all the
company’s share classes (series A, B, C, D, E, F) were merged into 1 share. At
the EGM it was further resolved to change corporate category for the Parent
company from private to public limited company and to change the company
name to Hemnet Group AB (publ).

No other events have occurred after the end of the financial year that have had
any significant impact on the business or assessments and assumptions
used in the preparation of the annual report.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 57

FINANCIAL STATEMENTS

Signatures

The board of directors and the CEO ensure that the annual accounts have annual report and consolidated accounts provide a true and fair view of the
been prepared in accordance with generally accepted accounting principles Parent Company's and Group's position and earnings. The Directors' Report
in Sweden and the consolidated accounts have been prepared in accordance for the Parent Company and the Group, provides a true and fair view of the
with International Financial Reporting Standards (IFRS) referred to in development of the Parent Company's and Group's operations, position and
Regulation (EC) No 1606/2002 of the European Parliament and of the Council results and describes significant risks and uncertainties that the Parent
of July 19, 2002 on the application of international accounting standards. The Company and the companies included in the Group are facing.

The consolidated income statement and balance sheet of the Group and Parent Company will be submitted to the Annual General Meeting on April 9, 2021 for adoption.

Stockholm, March 22, 2021

Håkan Erixon Cecilia Beck-Friis

Chairman of the Board CEO

Anders Edmark Kerstin Lindberg Göransson Christopher Caulkin

Board Member Board Member Board Member

Håkan Hellström Nick McKittrick

Board Member Board Member

Pierre Siri Tracey Fellows

Board Member Board Member

Our auditor's report has been submitted

on the day stated in our electronic signature
Ernst & Young AB

Anna Svanberg
Authorised Public Accountant

58 · HEMNET GROUP AB | ANNUAL REPORT 2020

 FINANCIAL STATEMENTS

Audit report
To the general meeting of the shareholders of Hemnet Group AB, corporate identity number 559088-4440

Report on the annual accounts and consolidated accounts disclose, as applicable, matters related to going concern and using the going
Opinions concern basis of accounting. The going concern basis of accounting is
We have audited the annual accounts and consolidated accounts of Hemnet however not applied if the Board of Directors and the Managing Director
Group AB for the financial year 2020. The annual accounts and consolidated intend to liquidate the company, to cease operations, or has no realistic
accounts of the company are included on pages 28-58 in this document. alternative but to do so.

In our opinion, the annual accounts have been prepared in accordance with Auditor’s responsibility
the Annual Accounts Act and present fairly, in all material respects, the Our objectives are to obtain reasonable assurance about whether the annual
financial position of the parent company as of 31 December 2020 and its accounts and consolidated accounts as a whole are free from material
financial performance and cash flow for the year then ended in accordance misstatement, whether due to fraud or error, and to issue an auditor’s report
with the Annual Accounts Act. The consolidated accounts have been that includes our opinions. Reasonable assurance is a high level of
prepared in accordance with the Annual Accounts Act and present fairly, in all assurance, but is not a guarantee that an audit conducted in accordance with
material respects, the financial position of the group as of 31 December 2020 ISAs and generally accepted auditing standards in Sweden will always detect
and their financial performance and cash flow for the year then ended in a material misstatement when it exists. Misstatements can arise from fraud
accordance with International Financial Reporting Standards (IFRS), as or error and are considered material if, individually or in the aggregate, they
adopted by the EU, and the Annual Accounts Act. The statutory could reasonably be expected to influence the economic decisions of users
administration report is consistent with the other parts of the annual taken on the basis of these annual accounts and consolidated accounts.
accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exercise professional judgment
We therefore recommend that the general meeting of shareholders adopts and maintain professional skepticism throughout the audit. We also:
the income statement and balance sheet for the parent company and the
• Identify and assess the risks of material misstatement of the annual
group.
accounts and consolidated accounts, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit
Basis for Opinions
evidence that is sufficient and appropriate to provide a basis for our
We conducted our audit in accordance with International Standards on
opinions. The risk of not detecting a material misstatement resulting from
Auditing (ISA) and generally accepted auditing standards in Sweden. Our
fraud is higher than for one resulting from error, as fraud may involve
responsibilities under those standards are further described in the Auditor’s
collusion, forgery, intentional omissions, misrepresentations, or the
Responsibilities section. We are independent of the parent company and the
override of internal control.
group in accordance with professional ethics for accountants in Sweden and
have otherwise fulfilled our ethical responsibilities in accordance with these • Obtain an understanding of the company’s internal control relevant to our
requirements. audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
We believe that the audit evidence we have obtained is sufficient and effectiveness of the company’s internal control.
appropriate to provide a basis for our opinions.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
Other Information than the annual accounts and consolidated accounts
the Board of Directors [and the Managing Director].
This document also contains other information than the annual accounts and
consolidated accounts and is found on pages 1-27. The Board of Directors • Conclude on the appropriateness of the Board of Directors’ [and the
and the Managing Director are responsible for this other information. Managing Director’s] use of the going concern basis of accounting in
Our opinion on the annual accounts and consolidated accounts does not preparing the annual accounts and consolidated accounts. We also draw a
cover this other information and we do not express any form of assurance conclusion, based on the audit evidence obtained, as to whether any
conclusion regarding this other information. material uncertainty exists related to events or conditions that may cast
significant doubt on the company’s and the group’s ability to continue as a
In connection with our audit of the annual accounts and consolidated going concern. If we conclude that a material uncertainty exists, we are
accounts, our responsibility is to read the information identified above and required to draw attention in our auditor’s report to the related disclosures in
consider whether the information is materially inconsistent with the annual the annual accounts and consolidated accounts or, if such disclosures are
accounts and consolidated accounts. In this procedure we also take into inadequate, to modify our opinion about the annual accounts and
account our knowledge otherwise obtained in the audit and assess whether consolidated accounts. Our conclusions are based on the audit evidence
the information otherwise appears to be materially misstated. obtained up to the date of our auditor’s report. However, future events or
conditions may cause a company and a group to cease to continue as a
If we, based on the work performed concerning this information, conclude going concern.
that there is a material misstatement of this other information, we are
• Evaluate the overall presentation, structure and content of the annual
required to report that fact. We have nothing to report in this regard.
accounts and consolidated accounts, including the disclosures, and
whether the annual accounts and consolidated accounts represent the
Responsibilities of the Board of Directors and the Managing Director
underlying transactions and events in a manner that achieves fair
The Board of Directors and the Managing Director are responsible for the
presentation.
preparation of the annual accounts and consolidated accounts and that they
give a fair presentation in accordance with the Annual Accounts Act and, • Obtain sufficient and appropriate audit evidence regarding the financial
concerning the consolidated accounts, in accordance with IFRS as adopted information of the entities or business activities within the group to
by the EU. The Board of Directors and the Managing Director are also express an opinion on the consolidated accounts. We are responsible for
responsible for such internal control as they determine is necessary to enable the direction, supervision and performance of the group audit. We remain
the preparation of annual accounts and consolidated accounts that are free solely responsible for our opinions.
from material misstatement, whether due to fraud or error.
We must inform the Board of Directors of, among other matters, the planned
In preparing the annual accounts and consolidated accounts, The Board of scope and timing of the audit. We must also inform of significant audit
Directors and the Managing Director are responsible for the assessment of findings during our audit, including any significant deficiencies in internal
the company’s and the group’s ability to continue as a going concern. They control that we identified.

HEMNET GROUP AB | ANNUAL REPORT 2020 · 59

FINANCIAL STATEMENTS

Report on other legal and regulatory requirements opinion about discharge from liability, is to obtain audit evidence to assess
Opinions with a reasonable degree of assurance whether any member of the Board of
In addition to our audit of the annual accounts and consolidated accounts, we Directors or the Managing Director in any material respect:
have also audited the administration of the Board of Directors and the
• has undertaken any action or been guilty of any omission which can give
Managing Director of Hemnet Group AB for the financial year 2020 and the
rise to liability to the company, or
proposed appropriations of the company’s profit or loss.
• in any other way has acted in contravention of the Companies Act, the
We recommend to the general meeting of shareholders that the profit be Annual Accounts Act or the Articles of Association.
appropriated in accordance with the proposal in the statutory administration
report and that the members of the Board of Directors and the Managing Our objective concerning the audit of the proposed appropriations of the
Director be discharged from liability for the financial year. company’s profit or loss, and thereby our opinion about this, is to assess with
reasonable degree of assurance whether the proposal is in accordance with
Basis for Opinions the Companies Act.
We conducted the audit in accordance with generally accepted auditing
standards in Sweden. Our responsibilities under those standards are further Reasonable assurance is a high level of assurance, but is not a guarantee that
described in the Auditor’s Responsibilities section. We are independent of the an audit conducted in accordance with generally accepted auditing
parent company and the group in accordance with professional ethics for standards in Sweden will always detect actions or omissions that can give
accountants in Sweden and have otherwise fulfilled our ethical rise to liability to the company, or that the proposed appropriations of the
responsibilities in accordance with these requirements. company’s profit or loss are not in accordance with the Companies Act.

We believe that the audit evidence we have obtained is sufficient and As part of an audit in accordance with generally accepted auditing
appropriate to provide a basis for our opinions. standards in Sweden, we exercise professional judgment and maintain
professional skepticism throughout the audit. The examination of the
Responsibilities of the Board of Directors and the Managing Director administration and the proposed appropriations of the company’s profit or
The Board of Directors is responsible for the proposal for appropriations of loss is based primarily on the audit of the accounts. Additional audit
the company’s profit or loss. At the proposal of a dividend, this includes an procedures performed are based on our professional judgment with starting
assessment of whether the dividend is justifiable considering the point in risk and materiality. This means that we focus the examination on
requirements which the company's and the group’s type of operations, size such actions, areas and relationships that are material for the operations
and risks place on the size of the parent company's and the group’s equity, and where deviations and violations would have particular importance for
consolidation requirements, liquidity and position in general. the company’s situation. We examine and test decisions undertaken,
support for decisions, actions taken and other circumstances that are
The Board of Directors is responsible for the company’s organization and the relevant to our opinion concerning discharge from liability. As a basis for
administration of the company’s affairs. This includes among other things our opinion on the Board of Directors’ proposed appropriations of the
continuous assessment of the company’s and the group’s financial situation company’s profit or loss we examined whether the proposal is in
and ensuring that the company's organization is designed so that the accordance with the Companies Act.
accounting, management of assets and the company’s financial affairs
otherwise are controlled in a reassuring manner. The Managing Director shall Stockholm on the day stated in our electronic signature
manage the ongoing administration according to the Board of Directors’ Ernst & Young AB
guidelines and instructions and among other matters take measures that are
necessary to fulfill the company’s accounting in accordance with law and
handle the management of assets in a reassuring manner.

Auditor’s responsibility Anna Svanberg

Our objective concerning the audit of the administration, and thereby our Authorized Public Accountant

60 · HEMNET GROUP AB | ANNUAL REPORT 2020

 HEMNE T I SAMARBE TE MED ALINDER DESIGN
FINANCIAL STATEMENTS

HEMNET GROUP AB | ANNUAL REPORT 2020 · 61

Klarabergsgatan 60 · 111 21 Stockholm