Grab Holdings Limited

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

Hello, everyone, and welcome to GRAB's second 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, and Alex Hungate, Chief Operating Officer. During the call today, Anthony will discuss our key business updates, and Peter will share details of our second quarter 2022 financial results. Following prepared remarks, we will open the call to questions where Anthony, Peter, and Alex will provide responses for the Q&A. As a reminder, today's discussion contains forward-looking statements about the company's future business and financial performance. These statements are based on our beliefs and expectations as of today. Actual events and results could differ materially due to a number of risks and uncertainties, including macroeconomic, industry, business, regulatory, and other risks, which are described in our Form F1 registration statement and other filings with the SEC. We do not undertake any obligation to update any forward-looking statements. The discussion today also contains non-IFRS financial measures, which should be considered together with, rather than as substitutes for, IFRS financial measures. A reconciliation of non-IFRS to IFRS financial measures is 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 second 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 strong second quarter results underpinned by a robust rebound in our mobility segment, an increased focus on cost management, and a reduction of our incentive spend. For the second half, we're focused on accelerating our path to profitability. This means we will focus on increasing high quality GMB transactions on our platform so that over time it will continue to lead to higher revenue, better margins and an improved profitability profile for all of our segments. We'll do this by continuing to innovate our products to increase engagement on our platform and reduce our cost to serve. As we ride out the remaining months of this year, there are a number of key call-outs that are consistent with our overall execution strategy. First, we will focus on increasing high-quality GMV transactions. This will come with a trade-off of slower GMV growth. Thus, we are lowering our GMV growth forecast for the year. second we will be pulling forward our core food deliveries and our overall delivery segment break-even timelines by one quarter and two quarters respectively third we're also narrowing our 2022 revenue guidance range to the upper end of the previously announced range we expect quarter and quarter improvements in our group level adjusted EBITDA and fourth as we have demonstrated over the past two quarters we can grow sustainably. In the second quarter, we reduced our incentive spend as a percentage of GMV, delivered record revenues, and strengthened our category leadership across our key verticals in Southeast Asia. We also took action to exit some lines of businesses that do not lead to long-term and sustainable growth. As the macroeconomic situation continues to remain uncertain, we are committed to streamlining our business on the cost front adjusting our services to meet changing consumer preferences and continuing to be good stewards of capital. Our team is committed to growing sustainably and accelerating our path to profitability. I'll now give an overview of our performance before turning it over to Peter who will give details of our outlook and financials. In the second quarter, our mobility business saw strong recovery. as Southeast Asia opened up and lifted most travel and movement restrictions. We anticipate mobility demand to rebound further in the second half. We also expect fulfillment rates, a measure of how well we match demand and supply on our platform, to continue to trend higher. In terms of mobility supply, we anticipate further stabilization as average driver-partner online hour earnings continue to increase as demand recovers. In the second quarter, for example, average driver earnings per online hour was up by 12% quarter-on-quarter and 31% year-over-year. On the product side, we continued to make several improvements to reduce our cost to serve and increase partner productivity. For example, we expanded a zone scheduling feature from Singapore to more countries in the quarter. This feature allows drivers to focus on trips within selected zones, allowing us to better match demand in supply crunch areas. As of June, scheduled drivers completed an average of 44% more trips per online hour compared to non-scheduled drivers. We also improved average passenger wait times for rides in July to near 2020 levels. This indicates we are getting better and matching demand and supply on our platform, despite our mobility supply lagging pre-COVID levels. While we have made progress in getting our mobility business closer to pre-COVID levels, there's still much work to be done to give our consumers and driver partners a better experience. So we will continue to innovate with product enhancements, introduce new affordable services, and onboard more drivers to help us get there. Let's now shift to our deliveries business. We saw strong revenue growth tripling compared to the same period a year ago and an improvement of our segment adjusted EBITDA margins from previous quarters. This was driven by reduction in total incentives as a percentage of GMB and contributions from Jaya Grocer. We did experience a softening in food delivery demand toward the second half of Q2, impacted by dining out as economies reopened. Looking ahead for the year, we expect dino trends to continue to soften food delivery demand and for our focus on high-quality GMB transactions to spur our path to profitability but moderate our rate of GMB growth. Our long-term thesis on our options within the delivery space has not changed. We continue to be focused on building a rich and diversified deliveries ecosystem anchored on product innovation and delighting our consumers. This approach allows us to drive segment profitability while growing our category leadership position in the region. In the quarter, there were a number of initiatives we took to reduce our cost to serve and improve consumer and partner experiences. We ramped up a feature to reduce the wait times of driver partners at food merchants when they pick up food. By reducing their wait times, they can increase the number of deliveries they make per hour, thereby boosting their productivity and reducing our cost to serve. In July, for example, we estimate that this feature together with other platform innovations saved drivers 12 million minutes compared to February. On a consumer end, we expanded our pilot subscription program called Grab Unlimited to five of our major markets. Grab Unlimited is an ecosystem subscription plan that aims to bring greater value to our consumers while building brand loyalty. Early results from our Grab Unlimited pilots indicate that subscribers are more sticky on our platform and they order more frequently. We also rolled out features that focus on affordability to give price-conscious consumers more options. For example, we launched differentiated delivery time windows in some markets to allow users to choose delivery times that have lower fees. We did this because at certain off-peak periods, we have an oversupply of drivers. So by doing this, we have more demand because consumers enjoy lower fees and drivers get more jobs with much lower or no incentives from us. As a result of these innovations, we improved platform efficiency and drivers' earnings potential. We have a number of batch orders rising by 71% in the quarter compared to Q2 2021. Looking ahead, we will continue to focus on growing our third-party marketplace and integrating Jaya Grocer into GrabMart in Malaysia to scale our delivery segment profitably. Our Jaya Grocer integration is going well. As of July, we onboarded all Jaya stores on the GrabMart, and in June, a Jaya grocery store became one of the top performing GrabMart merchants in all of Malaysia. This achievement gives us confidence that our approach to embed technology solutions and experiment with online to offline fresh grocery experiences will benefit Jaya and our consumers. Moving on to financial services. In the second quarter, we continue to optimize our business by focusing on on-platform growth to reduce our cost base and drive more sustainable growth. On digital payments, we'll reduce our spend on consumer incentives while reducing costs associated with off-platform use cases. We also seek options to offer more lending and insurance products to grab ecosystem participants whom we have built a deep relationship with. For example, in lending, we saw strong growth in our ecosystem loan book over the past few quarters. In the second quarter, total loan dispersals were up nearly three times year on year, while NPL ratios have kept steady and are still at low single-digit ranges. We're big believers that financial services can enable our super app flywheel to spin faster. we've seen over the quarters that GrabPay users have higher levels of retention rates, spending, and cross-segment usage compared to cash users. In the second quarter, one-year retention rates for GrabPay users were 1.5 times higher than cash users, while driver partners with loans exhibited higher satisfaction with our platform than those without. We will share more details on our financial services strategy in our upcoming Invest Today and how it ties with our digital banks. On a Digibank front, we're on track to publicly launch a Singapore GXS bank in the fourth quarter of this year. Lastly, I want to go over our enterprise segment. In the second quarter, our enterprise revenue rose 30% year over year, driven by gains in our advertising business. The bedrock of our enterprise segment is our focus on out serving our merchants and other players within our ecosystem. Through Grab Ads, we make merchants more discoverable, thus helping them grow their business. This also provides our users with delightful embedded ad experiences that shape their buying behavior. We will also invest in developing our own advertising platform to give businesses of all sizes access to data-driven insights to help them create, shape and launch impactful advertising campaigns. In the second quarter, we also announced the launch of GrabMaps as an enterprise solution. We developed GrabMaps as a cost-efficient way to address the need for hyper-local mapping solutions in the region. We plan to further expand GrabMaps as a B2B solution to help other organizations with their location intelligence needs. By focusing on all these strategies, we are confident we can meet the challenges ahead. We'll continue to grow our revenue sustainably, improve our margin profile, and accelerate our path to profitability. I'll now turn the call over to Peter to deliver a review of the financials.