Grab Holdings Limited

Ladies and gentlemen, thank you for joining us today. My name is Adam, and I will be your conference operator for this session. Welcome to Grab's third quarter 2023 earnings results call. After the speaker's remarks, there will be a question and answer session. I will now turn it over to Douglas Yu to start the call.

Good day, everyone, and welcome to Grab's third quarter 2023 earnings call. I'm Douglas Yu, head of Asia investor relations at Grab, and joining me today are Anthony Tan, chief executive officer Alex Hungate, Chief Operating Officer, and Peter Owee, Chief Financial Officer. During the call today, Alex will discuss our operational highlights, followed by Peter, who will share details of our third quarter 2023 financial results, and Anthony will then discuss our strategic outlook. Following the prepared remarks, we will open the call to questions. 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 20F for the year ended December 31, 2022, and are filing to 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 RAD or DAN 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 third quarter 2023 financial review, which can be found on our IR website. And with that, I will turn the call over to Alex to deliver his remarks.

Thanks, Salga, and thanks for joining us today, everybody. I'm pleased to share that we reported a strong set of results this quarter. Grab has reported positive group-adjusted EBITDA for the first time. And while this is an important milestone, it represents just one step in our journey as a public company. At the same time, our top line continues to grow from strength to strength. Revenues are up 61% year on year and 8% quarter on quarter, while group MTUs hit another all-time high. Over the next few minutes, I will share the operational highlights across each of our segments and the underlying drivers of these results. So starting with deliveries, last quarter we reached an all-time high for deliveries GMV and mentioned that we expected to achieve sequential growth this quarter. In the third quarter, we not only continued to drive sequential GMV growth to another all-time quarterly high, but at the same time, we continued to improve profitability with deliveries adjusted EBITDA margins improving to 3.4%. all the while maintaining our leading category position across the region. Our ability to drive both top line and bottom line improvements while deepening the market penetration is a result of the following key initiatives. First, we've made progress on reducing our cost to serve to improve the affordability of our products and services for users while enhancing partner earnings. We've built a strong competitive moat by leveraging our scale, category leadership position and tech advantage to create the best-in-class experiences for our users and partners. For example, batched orders, which now account for over a third of deliveries orders, provided average delivery fees for users that were 8% lower than unbatched orders and resulted in 5% higher driver earnings per transit hour compared to unbatched orders. Improved allocation and navigation efficiencies among other factors also resulted in a corresponding reduction in driver wait times by 72% year-on-year and 47% quarter-on-quarter. Second, we continue to deepen user engagement through Grab Unlimited, our subscription program. Grab Unlimited subscribers continue to account for a third of deliveries GMV during the quarter and spend 4.2 times more on food deliveries than non-subscribers. We also saw frequency and retention uplifts among subscribers, with six-month retention of subscribers on the program continuing to be around two times higher than non-subscribers. We will continue to expand our suite of affordability features at different price points to appeal to more consumer segments, all without compromising on our service quality and reliability. Saver delivery is now available in all six of our core markets and in over 130 cities. In Malaysia and Singapore, where the services were first launched, the penetration of SEVA has now reached over one third of deliveries NTUs. We've shown that more affordable features not only benefit consumers, but also expand revenue streams for our merchant and driver partners who benefit from increased demand for our services. Looking ahead to the fourth quarter, we expect to drive another quarter of sequential deliveries GMV growth to achieve another quarterly record high. As we continue to strike a balance between growth and profitability, we expect segment margins in the fourth quarter to be consistent with those in the third quarter. Now moving on to mobility. Mobility GMV and revenue in the third quarter grew strongly year on year, while we maintained margins at 12% plus. Demand continues to be robust as we see quarter-on-quarter and year-on-year growth in mobility's MTUs. We are also encouraged by mobility transactions growing 37% year-on-year and 12% quarter-on-quarter, which gives us the confidence that our affordability-led strategies are paying off. Domestic demand continues to pick up across our markets, while international travel demand also continues to recover. Airport rides grew 9% year-on-year to reach 84% of pre-COVID levels. Our efforts to capture the rebound in tourism through traveler features that we launched earlier this year have started to bear fruit, with a number of rides booked through Alipay, WeChat, Kakao, Trip.com, and Booking.com growing 61% quarter-on-quarter. Overall, mobility GMV is now at 91% of pre-COVID levels. When we compare mobility MTUs between third quarter 2023 and the same period in 2019, the majority of our core markets have surpassed those levels already. Our efforts to improve driver supply to meet the growing demand continues to gain traction. During the third quarter, monthly active driver supply grew 9% year on year, with supply levels now at 87% of pre-COVID. Following our agreement to acquire 100% of the shares in TransCab in July, the acquisition remains under review in Singapore. We believe that the proposed acquisition is a win-win situation for consumers and drivers in Singapore. For TransCab taxi drivers, Grab will continue to preserve their flexibility to earn through Grab or other ride-hailing platforms, as well as to conduct street-hail while investing in tech solutions to serve them better. And for our passengers, by boosting the number of drivers on our platform and helping them to operate more efficiently, we can also improve how quickly and reliably we find a ride for our passengers whenever they need one. Additionally, we continue to enhance the affordability of our services through greater efficiencies while improving driver earnings on our platform. The relaunch of Moovit, our two-wheel mobility offering in the Philippines, has gained meaningful traction driving mobility MTUs and transactions growth in that market by 18% and 28% quarter on quarter respectively. Our efforts to enhance driver efficiency by leveraging our technology continue to bear fruit. Surge mobility rides further reduced by 243 basis points year on year and 111 basis points quarter on quarter. Driver earnings per transit hour continue to increase by 8% year on year and quarterly retention rates of our active driver partners remained healthy at 90%. We expect sequential growth for mobility heading into the year end as we drive demand from travelers and local commuters. We maintain our expectations for mobility to exit 2023 around pre-COVID GMV levels while we maintain segment adjusted EBITDA margins at a similar level as the third quarter. Next onto financial services, revenues more than doubled year on year and grew 24% quarter on quarter as we scaled up our ecosystem payments and lending business. Total loan disbursements year to date grew 52% year on year to around $1 billion. And we ended the quarter with 275 million of loans outstanding, supported by a continued pickup in ecosystem lending from GrabFin and new Flexi loan volumes from GXS Bank in Singapore, while NPL ratios continue to be stable at low single digits. Customer deposits in GXS, our Singapore Digibank, continue to track upwards quarter on quarter, reaching $362 million, following the increase of the maximum deposit amount per account from $5,000 to $75,000 Singapore dollars in July. Segment adjusted EBITDA losses narrowed year on year and quarter on the back of cost savings in GrabFin. We continue to see strong ecosystem uplifts from our payments and lending business, with users from GrabPay spending four times more and having 1.5 times higher retention rates than cash users. Our driver partners who take on a loan with us also recorded 1.5 times higher retention compared to drivers without a loan. I also want to provide some operational updates on our upcoming Digibank launches, which remain on track for this year. In September, our Malaysian Digibank, GX Bank, received approvals by the regulators in Malaysia to commence operations. And last month, Kakao Bank, South Korea's leading digital bank, also announced that it invested in a 10% stake in Superbank, our Indonesian bank affiliate. We're excited about this strategic partnership. Kakao Bank ranks first in terms of loans and deposit amongst the Korean digital banks and has 21.7 million customers and 17.4 million monthly active users, higher than any other bank in South Korea. We look forward to leveraging Kakao Bank's domestically proven competitiveness in digital finance and platform expertise to boost Superbank's proposition and drive digital banking innovation in Indonesia. Finally, on our enterprise and new initiative segments. Year-on-year, revenues nearly doubled, while segment-adjusted EBITDA almost tripled as we continue to drive adoption of our advertising self-service platform amongst our merchant partners while improving monetization. During the quarter, we saw the total number of active advertisers joining our self-service platform grow by 83% year-on-year, which highlights the value that our ads platform brings to our merchant partners. We also saw average advertising spend from merchants on our self-service platform increase 44% here, while return on ad spend has also stabilized at healthy levels. Looking ahead, we remain focused on deepening merchant engagement with our advertising services and driving value uplift for our merchant partners and other top brands. We are also confident that we will be able to push advertising revenues above 1% of Deliveroo's GMV in the medium term. Now, as we look to the remainder of 2023 and into 2024, we remain optimistic that we can sustain the growth trajectory of our mobility and deliveries businesses as we drive affordability by leveraging the scale of our leading category position. We also see ample opportunities to drive ecosystem uplifts through our advertising and financial services offerings to better serve our users and partners. And with that, let me turn the call over to Peter. Thanks, Alex.