Grab Holdings Limited

Good day, ladies and gentlemen. Thank you for standing by. And welcome to Grab Holdings' fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press the star, then the one key on your touch-down telephone. If you require operator assistance, please press star, then zero. I would now like to turn the conference over to your speaker host, Vivian Tong, head of Head of U.S. Investor Relations.

Good day, everyone, and welcome to GRAB's fourth quarter 2021 earnings presentation. This is Vivian Tong, Head of U.S. Investor Relations at GRAB, and joining me today are Anthony Tan, Chief Executive Officer, Ming Ma, President, and Peter Owee, Chief Financial Officer. During the call today, Anthony will discuss our key business updates, and Peter will share detailed insights with you on our fourth quarter and full year 2021 financial results. Following prepared remarks, we'll open up the call to questions, where Anthony, Peter, and Ming will respond to Q&A. As a reminder before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These comments are based on our predictions and expectations of today. Actual events and results could differ materially due to a number of risks and uncertainties, including those mentioned in our form F1 registration statement and other filings with the SEC. The discussion today also contains operating metrics and non-IFRS financial measures. The comparable IFRS financial measures are included in this quarter's earnings materials. For more information and additional disclosures on recent business performance, please refer to our earnings press release and supplemental presentation for a detailed fourth quarter and fiscal year 2021 financial review, which can be found on our IR website. Should you have any questions after this presentation, please reach out to investor.relations at grab.com. And with that, I will turn the call over to Anthony to deliver opening remarks.

Thank you so much for joining our first ever earnings call as a public company. We had our best year yet in 2021, And I'm so proud of Grabbers and what we've been able to accomplish. Thank you to all our Grabbers around the globe in all their contribution in driving Southeast Asia forward. I also want to express our deep appreciation to our driver and merchant partners who continue to deliver day in and day out. Before diving into the details of our performance for this year, I'd like to spend a moment on the Grab story. Hoi Ling and I co-founded Grab in 2012 with a mission, and that mission is to drive Southeast Asia forward by creating economic empowerment for everyone. And since then, we've evolved into a single, everyday, everything super app that is enabling millions of people each day to order food, groceries, hail a ride, pay for a purchase, and access financial services like lending, insurance, and more, all in one app. And we're just getting started. Entering 2022, we continue to be intensely focused on our three key priorities. Firstly, we'll focus on winning the hearts and minds of more users across the region by introducing the benefits of the Super App to more users by being hyper-local in how we serve the region and by delivering even better user experiences and better service levels. This will further solidify our category leadership in Southeast Asia. Secondly, we'll continue to invest into the growth of our key business segments. We're addressing massive market opportunities and see tremendous headroom for growth in our user base and option to drive greater wallet share from our existing users. And third and final, we will continue to reduce our cost to serve. We want to be the most capital efficient provider in the market. And this is where our super app product strategy provides us with this advantage. With this backdrop, let us dive into the results for the year. We had another record year for Grab, with tremendous year-over-year growth that saw us achieve a total GMV of $16.1 billion, exceeding our GMV guidance for the year. We also delivered against our adjusted EBITDA guidance as we continued to progress on our path to profitability. This was in spite of a difficult COVID environment where lockdowns were markedly harsher in Southeast Asia in 2021. GMB grew 26% year-over-year in the fourth quarter to $4.5 billion. As of the fourth quarter, our MTUs are at their highest point since COVID lockdowns began. Our data also shows that in 2021, our users are spending 31% more on our platform compared to the year before. These results bear testament to the resilience and the growing relevance of the Super App and the effectiveness of our Super App product strategy. It demonstrates our ability to grow even in an uncertain environment. On mobility, while we're not completely out of the COVID woods yet, we're progressing strongly towards full recovery. We saw fourth quarter mobility GMV up by 45% quarter-on-quarter. We're also seeing mobility GMV in the first two months of the year growing modestly year-on-year as well. consumers are eager to be out and about again, and we've observed greater nuance in how governments are responding to Omicron compared to the previous infection waves. Countries like Malaysia and Singapore have gradually loosened restrictions in spite of rising cases. And while countries like Indonesia and the Philippines have reintroduced tighter restrictions in the first two months of the year, We're more optimistic about our recovery than we were in 2021. And we are investing to position our supply base strongly to capture the demand rebound ahead. Turning to deliveries, it is clear to us that deliveries are becoming more and more integral to everyday life. Even through waves of loosening restrictions, our deliveries business has continued to perform strongly. user base grow, users are ordering more frequently and they're spending more per order. Average order values have gone up by 41% in 2021 compared to 2019 before the onset of COVID. On the whole, GMV for our deliveries business expanded by 56% year over year in 2021. For financial services, we continue to see strong momentum. The fourth quarter was another record quarter for us, and our total payments volume for 2021 was $12.1 billion, a 37% increase year-over-year. We're seeing good growth in products like Buy Now, Pay Later, with fourth quarter TPVs being 5x higher than the year before. I'm also excited about our Digibank opportunities. The Grab Singtel Digibank joint venture is getting ready to launch this year. We're awaiting results on our Digibank license application in Malaysia, which the regulator has stated they expect to announce within March. We also recently acquired a 16.26% stake in Bank Pharma in Indonesia, which we intend to use as a launchpad for our Indonesia Digibanking ambitions. A quick point on enterprise and new initiatives. We continue to expand our existing advertising and mapping offerings. while still a small and very young segment, the growth prospects are very exciting, and we will continue to sharpen our value prepositions with the expanding partner and client base that we are progressively building. In our advertising business, for example, we have tripled the number of merchants on our ads platform between the fourth quarter of 2020 and the fourth quarter of 2021. I want to point out that the fourth quarter was a quarter of reinvestments for Grab and we expect some of this to continue into the first and second quarter. There are three drivers for this. First, we're preemptively investing to recalibrate driver supply to capture the strong recovery in mobility demand. Similar to what was observed in other parts of the world, our driver supply base moderated down amid lower mobility demand in the third quarter. We're investing to pull drivers back, even as we continue to find ways to increase their productivity on our platform. Not only are we seeing our driver pool grow, their utilization rates went up by 19% year over year in the fourth quarter, and their average earnings per hour grew by 16%. Second, we're strategically investing to maintain According to Euromonitor, we remain the number one category leader across our core verticals in 2021. We're 3.9 times larger than the next largest competitor in ride hailing, 2.1 times larger in online food delivery, and 1.3 times larger in payments. The growth of optioning in Southeast Asia is tremendous across our verticals, and we're not the only ones who recognize this. Players in some markets have at times increased their promotion spend significantly. We will continue to invest as appropriate to maintain our lead. And while we have a fortress balance sheet to support this, we aim to do it in a efficient, judicious and disciplined manner. As the category leader, we continue to lead in capital efficiency across the categories in which we operate. Let me share two quick examples. In Singapore, we retained a comfortable lead in category share for mobility, while spending an estimated four times less on promotions per ride in the fourth quarter compared to one of our competitors. This represents a 4-to-1 advantage in capital efficiency that Grab has. In food deliveries, despite competition, we maintain category leadership in the region while driving greater efficiencies from our incentive spend across our core markets. For example, on a per-order basis, across competitive markets such as Indonesia, Malaysia, Thailand and that our GMV to cost ratios are 25% to almost 100% more efficient than competitor averages. This demonstrates that our platform and Super App product strategy affords us greater efficiencies in our incentive spend, not only because of advantages from our Super App flywheel, but also because of consumer loyalty and preference towards Grab. Year on year, we are seeing the number of cross-vertical users grow. Users who use more than two or more Grab services have now reached 56% of our user base, up from 49% a year ago. Their retention rates are higher and they're spending more on our platform. This in turn drives higher customer lifetime value and greater efficiency in incentive spend. Third, we continue to invest into tech infrastructure and talent to support the pursuit of our long-term growth opportunities. We're scaling up our cloud infrastructure, investing more in mapping out Southeast Asia in AI analytics and in our ads platform. With all these investments, I want to emphasize that we don't expect these levels of investments to persist in the long run. With Southeast Asia still in the early stages of online adoption across our key categories, we see significant headroom for TAM to increase. We're confident that the investments we are making are important, foundational, and ones that we expect will pave the way for sustainable future growth. I do also want to underscore that we continue to be laser-focused on our path to profitability. Mobility continues to deliver best-in-class segment adjusted EBITDA margins, and across all our segments, we've seen our adjusted EBITDA margins improve year over year. Peter will share more on our margins and how we are thinking about the medium to long term. Looking ahead, I expect 2022 to be another watershed year for Graham, and for a few reasons. First, we're aiming to launch our very first DG Bank in Singapore this year. Second, we will continue to pursue large opportunities in deliveries across both offline and online demand for prepared meals and groceries. So when our consumers are hungry for anything, whether it's a restaurant meal, a home-cooked dinner, or just something to snack on, we want Grab to instinctively come top of mind for them. Third, we'll continue to focus on the recovery of mobility. This is where we have a proven track record with nine quarters of segment-adjusted EBITDA profitability to date. As we march towards profitability, mobility will continue serving as a solid foundation for our other verticals and focus areas. I have deep conviction in our super app product strategy as our right to win. and we'll continue to aim for the best product experience for our consumers in the market. It is key to how we drive loyalty to our platform while reducing our cost to serve. We continue to stay true to our mission of driving economic empowerment across all of Southeast Asia and remain steadfast in executing our strategy. I'll now turn the call over to Peter for a review of the financials.