Grab Holdings Limited

Ladies and gentlemen, thank you for joining us today. My name is Michelle and I'll be your conference operator for this session. Welcome to GRAB's first quarter 2022 earnings presentation. After the speaker's remarks, there'll be a question and answer session. I'll now turn it over to Vivian Tong to start the call.

Good day, everyone, and welcome to GRAB's first quarter 2022 earnings presentation. I'm Vivian Tong, head of U.S. Investor Relations at Grab, and joining me today are Anthony Tan, Chief Executive Officer, Peter Owee, Chief Financial Officer, Ming Ma, President, and Alex Hungate, Chief Operating Officer. During the call today, Anthony will discuss our key business updates, and Peter will share details of our first quarter 2022 financial results. Following prepared remarks, we will open the call to questions where Anthony, Peter, Ming, and Alex will provide responses for the 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 as of today. Actual events and results could differ materially due to a number of risks and uncertainties, including those mentioned in our Form F-1 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 first quarter 2022 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 his opening remarks.

Thank you, everyone, for joining us today. I'm pleased to report a strong set of results in the first quarter. We outperformed our GMV and TPV guidance for deliveries, mobility and financial services segments, while improving our group level and delivery segment margins at the same time. Our results are testament to the resilience of Southeast Asia's economy. The region's governments have been more cautious in lifting COVID restrictions compared to other parts of the world. but in March saw a shift in some countries to a post-pandemic footing where travel restrictions and capacity limits eased significantly. We are optimistic that our business will continue to strengthen as more countries pivot to living with COVID-19. Looking ahead, we are laser-focused on meeting our profitability targets and growing sustainably. We have three main levers to achieve this. First, we're driving towards profitability through disciplined cost management. We've started optimizing our fixed cost base and our discipline of our capital by managing our spend closely. Second, we'll continue to focus on winning the hearts and minds of more users across Southeast Asia. We will leverage technology, partnerships, and our super app strategy to grow our user base in an efficient manner that leads to greater consumer engagement and retention. Lastly, we will continue to position our core segments for recovery and growth in order to capture the vast opportunities across our core segments. By doing this, we aim to build a resilient, future-proof business that delivers long-term value to our shareholders. With this backdrop, let us dive into our first quarter performance. In the first quarter, our mobility segment rebounded with GMV up 9% quarter-on-quarter despite the Omicron overhang in the first two months of the year. We saw signs of recovery coming out of the quarter as countries like Singapore, Indonesia and the Philippines loosened COVID-related travel restrictions in March. In a period of February to April, our mobility GMV increased 32%. Airport rides, which have higher margin and higher order values, rose to 6% of GMV, the highest level since the start of the pandemic. On the supply side, in the first quarter, we reached the highest number of active drivers since the second quarter of 2020. We increased our average monthly active drivers by 220,000 from the third quarter 2021 to the first quarter 2022. While these are positive indications that our efforts to restore driver supply are bearing fruit, our active driver base over March 2022, the majority of whom do both deliveries and mobility jobs, was 76% of the December 2019 level. This indicates an existing gap when it comes to meeting mobility demand that is rebounding sharply. I will take some time to address this gap in our driver supply. In 2021, COVID-19 variants from Delta to Omicron caused many countries across Southeast Asia to loosen and tighten restrictions in fits and sorts. This impacted our active driver supply as some drivers temporarily left capital cities during the lockdowns to return to their hometowns, while others moved on to odd jobs in other industries. In the fourth and first quarters, we've had to acquire more drivers to meet the increased demand rapidly coming back online. To rebuild our driver supply, we have three main strategies. First, we're running targeted campaigns in each market to reactivate dormant drivers. Second, we're widening our acquisition funnel and making it more efficient. For example, we have ramped up assisted onboarding in some countries to complement our self-serve model to increase driver conversions. Finally, we continuously innovate on our super app platform, so we are the best platform for drivers to earn an income. For example, we launched an enhanced shifts feature for Singapore drivers that led to higher driver earnings and productivity for them in selected zones, while meeting demand in supply crunch areas. We also launched cross-vertical batching in a few cities to allow our drivers to do back-to-back jobs across different verticals, improving their earnings by reducing idle time. In the first quarter, average driver earnings per hour increased by around 9% year-on-year while utilization rates improved. Of course, reduction in driver idle time also helps improve our overall cost to serve. Looking ahead, we are focused on rebuilding our driver base to capture the strong mobility demand recovery. We expect the mobility supply to stabilise in the second half of the year with driver incentives as a percentage of GMB tapering in that period. Separately, we are closely monitoring the impact of fuel inflation on our drivers' earnings. We will continue to look for ways to support them through surcharges, fuel discounts and fare adjustments to mitigate its impact on our driver supply. Moving on to deliveries, deliveries continue to register another quarter of strong GMV and revenue growth on the back of food and grocery strength as well as contributions from Jaya Grocer. We managed to grow both our top line and improve our unit economics quarter on quarter. This gives us confidence in our sustainable growth strategy for deliveries. In the first quarter, we focused on forging strong partnerships with local merchants to give users more reasons to transact with Grab. We believe this helps us form a natural mode while improving user retention on our deliveries platform. Over the first quarter, the number of active merchants rose 34% year-on-year, while average earnings per active merchant increased 9% year-on-year. For groceries, we began to integrate Jaya Grocer Stores onto our groceries marketplace in Malaysia. We plan for the integration to be fully completed in the second half of the year. Meanwhile, GrabPay has been integrated in all Jaya Grocer stores in the quarter. In the first quarter, Jaya Grocer became the largest GrabPay merchant in the country by TPV, all within a super quick two-month period post-acquisition. Looking ahead, we are focused on improving our unit economics at a faster clip by tapering our incentives and driving organic growth. We will do this by ensuring users have the best product experience and the widest merchant selection on Grab. We also plan to sustainably grow our deliveries business in under-penetrated outer cities and towns in five of our eight markets to meet strong customer demand in those areas. For financial services, we continue to see strong momentum in payments, and we made great progress in lending. In the quarter, TPV of our Buy Now, Pay Later product grew five times between Q1 2021 and Q1 2022. Overall loans disbursed, which includes buy now, pay later loans, grew three times in the same period. We achieved this while keeping our NPL ratio steady at low single digits. Looking ahead, we plan to expand the buy now, pay later product into more markets and deepen lending penetration within our ecosystem. This will allow us to grow financial services to meet the needs of an underserved market while growing sustainably. In the quarter, OVO continued to execute on its open ecosystem strategy. OVO did so by forging new large partnerships, including one with a global short-form video sharing app and launching its first recurring payment partnership with a global subscription streaming service. Finally, I'm also excited about our digital bank optionaries. Our digital banking joint venture with Singtel, also known as GXS Bank, and a consortium of partners were selected to receive a full digital bank license in Malaysia in April. There were 29 total applicants and three full bank licenses were granted. We were one of the three that passed the high bar set by Malaysia's central bank. We are tremendously grateful for this opportunity to serve Malaysians, where one and two are currently considered underbanked or unbanked. Winning the Malaysia Digital Bank License allows us to create a regional digital bank footprint in a cost-efficient manner. We plan to leverage the same technology stack for our digital banks in Singapore and Malaysia and our Indonesia bank investment in order to sustainably scale access to financial services across the region. We also aim to launch the Singapore Digital Bank currently in an internal pilot in the second half of the year. A quick point on enterprise and new initiatives. GMV and revenues grew strongly year over year driven by advertising contributions. In a quarter, our Grab Ads advertiser base jumped seven times compared to the same period a year ago as we continue to onboard Grab merchants onto our self-serve ads platform to provide them search and display advertising options for them to grow their sales in our app. This is another example of our super app strategy in motion. Aside from being a super app for consumers, we are also a super app for merchants where we cross-sell services to them and create a virtuous cycle that also benefits our merchant partners and allows them to perform well. When they perform well, so do we, and through Grab Ads, we give them the tools to grow their businesses. To conclude, we'll continue to double down on our super app strategy with a laser focus on growing sustainably so we can win many more hearts in Southeast Asia and drive toward our profitability targets. I'll now turn the call over to Peter to deliver a review of the financials.