Vef Ab

good day and thank you for standing by welcome to the vef first quarter 2025 earnings conference call and webcast at this time all participants will be in listen-only mode after the speaker's presentation there will be a question and answer session to ask a question during the session you need to press star one and one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question please press star one and one again Please note that today's conference is being recorded. I would now like to turn the conference over to your first speaker, David Nangle, CEO. Please go ahead.

Yeah, thank you very much. And good morning, good afternoon, everybody. Thank you for joining us on our Q1 results conference call. As always, I'm joined by our CIO, Alexis Camudos, for this call. And what we'll do over the next 10 to 15 minutes is first focus on the results themselves, give you a highlight and update on that. And then the second part of the call, we'll focus more, we'll get more depth in the call on recent exits and capital allocation, which is the focus of the firm at the moment. The slides are available on our website and also I'll go through them on the webcast. Going on to slide number three, just giving you a key overview of the events of the quarter. I think in the NAV itself, we had a 1% move quarter on quarter in dollar NAV positive. And a number of moving parts as always, but generally it was strong underlying company performance and a tailwind of currencies versus the U.S. dollar, which met some headwinds on the multiple sides of equity markets to feed into our valuations. And from a portfolio point of view, it's a repetition of the message over the last few quarters. It really is all about a quality portfolio, the majority of which today is breakeven or cash flow positive, and growth is back in focus. And I kind of say that specifically when I'm thinking about our top three names, names like Creditas, Confio and JustPay were either returning to growth early this year, or back in the last year more specifically, or names like JustPay which had growth unabated through cycle. We are looking at next 12 month growth of key revenue lines and gross profit lines of 35 to 40% in 2025 year on year. Specifically credit assets, which is obviously our focus and biggest asset, in itself is re-accelerating growth. It started to pick up as we highlighted in the last few quarters and they themselves issued their quarterly releases. We saw origination growth year on year of 27%. Last year, second half weighted. And I guess if we look at 2025, the year has started strong. Managing has been quite clear. They're looking for 25% plus growth in key balance sheet lines that's in the loan book. And the start of the year has backed that up. So we're feeling very confident about that asset at this juncture. I think what's very important for us And for the market to know, it's really exits and capital allocation. That will be a lot of this presentation. Exits are in focus. They have been in focus for us for the last 18 months, but they're starting to come through to fruition, the latest of which is the biggest and the highest IRR. After $14.8 million, we took in a partial sale of JustPay just after quarter end, and we'll double-click on that shortly. And then the capital allocation aspect is Something that we've been looking to do is, one, strengthen your balance sheet from these exits, which justify your NAB, and then put that capital to work in logical capital allocation in terms of the short term, which is deliver our balance sheet and buy back our shares at what is a deep discount to NAV. And just key numbers, our NAV at the end of the quarter was $357 million. On a per share basis, people look at that in local currency, where we're listed in SEC, at 3.43. It was off quarter and quarter in SEC as the SEC moves against the dollar by about 9% versus the dollar now, which is up 1% quarter on quarter. You know, over time, our NAV has gone up and to the right, albeit with a bit of a ball, through cycle through 2021, and more recently at the back end of 2024. And before I hand over to Alexis on the valuation section, you know, in Q1, I'd say it was a volatile quarter for markets, and that's an understatement about what's happened since. But even though main indexes, NASDAQ, S&P, were down quarter and quarter, and also you had headwinds in the global FinTech indexes, you actually had some outperformance in certain key names and regions in Latin America and some FinTech names, which I saw a positive move quarter and quarter. So a lot of moving parts in the multiple aspects of our valuation process. But maybe it's better Alexis delves into all that. So I'll pass over to you, Alexis, for the next few slides.

Thanks, Dave. Hi, everyone. I'll start by just running through the most important valuation drivers in the quarter. Focusing on top three names, so for Creditaf, it continues to be valued on a mark-to-model basis and appreciated 6% quarter-on-quarter. This was driven by company performance and recovery in the Brazilian REI, which was partially offset by mixed comp performance, and that alludes to the market performance I was just speaking about. In JustPay, this is valued in line with our recently announced secondary transaction as part of the $60 million Series D that they raised within a tight range of last quarter's valuation. And Confeo continues to be valued at the August 2024 fundraise valuation. the first quarter of 25, these top three holdings now represent 83% of the value of our portfolio. In the quarter with JustPay, Confeo, Solfacil, and Blackbuck all having recent transactions or being public companies now, and the exit of Gringo, 49% of the portfolio is now valued at latest transactions. up from 26% in the fourth quarter. Moving on to slide eight and our NAV evolution, the bridge that we normally present. So over the quarter, the NAV progressed just over 1%, as Dave mentioned, or about $4 million. In the mark-to-model side of the portfolio, the change is driven predominantly by portfolio performance. appreciation of portfolio currencies versus the the us dollar and this is partially offset by compression in comp multiples and market performance on the latest transaction portion of the portfolio there were no real changes other than the exit in gringo which fell in the first quarter and that moving from this portion of the portfolio into the corporate cash side And that was slightly offset by OPEX and coupons on corporate cash. The effects that you see at the end in the corporate section is merely the translation impact of the strengthening SEC on our outstanding bonds. Moving on to slide nine now and just running through some of the portfolio highlights. Some of this Dave has mentioned, but we continue to feel very strong and confident about the portfolio's ability to drive shareholder value. More than 90% of the portfolio continues to operate at breakeven, reaching a self-sustaining rate of growth, and are not dependent on fresh cash to grow. They are now in control of their destiny. The portfolio on a next 12 month basis is growing at 35% and 40% revenues and gross profit respectively. And the portfolio continues, the portfolio companies continue to be well capitalized and high quality targets of attracting fresh capital, examples of which are now included in the top two of our three names. JustPay and Confeo, and Gringo that was acquired in the quarter. Now moving to slide 10, as Dave mentioned, we're going to talk a little more about exits and the progress that we've made. I wanted to take the opportunity to update you on our objective of opportunistically realizing cash at or around NAS to strengthen our balance sheet and validate the NAS on which we've made substantial progress this quarter. Exits are happening, and we'll also present our fresh capital position and the plans for that. So just on slide 11, here we present the three exits that we've had over the last six months. We've delivered $32 million of exits of gross proceeds, two of which occurred in the first quarter, representing $30 million. The first of which was the BlackBuck IPO, where we realized $2 million and we continue to hold $4.6 million in a listed share. In January this year, Corpay acquired our Brazilian asset Gringo, in which we realized $15.2 million. And last week, we completed the secondary transaction as part of JustPay Series D, realizing $14.8 million in gross proceeds. The $32 million that were realized across these three exits represent a range of outcomes, but all of them were within a tight range of the pre-transaction NAV marks, which is an important point, and Dave will elaborate on that later. The sold shares and realized cash also represented 1.4 times cash-on-cash returns and 11% gross IRR over the three-year period. weighted investment period. And if we include the unrealized gains from these positions, i.e., Black Buck and JustPay's remaining stakes, these three investments represent 2.3 times multiple on invested capital and 25% IRR, in which has been a difficult vintage for the industry. These three exits represent the first of three of this cycle and are the result of the work we've been doing over the last 12 to 18 months. we continue to work towards opportunistically taking cash in at around our NAV marks with the objective of balancing, strengthening our capital position and validating our NAV without selling the crown jewels. And I think this is an important endeavor specifically today when we trade a steep discount on NAV. Just elaborating a little more on JustPay and the Series D round in which we took Some shares off on slide 12. Last week, we announced selling $14.8 million stake in the JustPay transaction. JustPay was our first investment in India in March 2020 when we led their Series B. Since then, they've been a standout performer in our portfolio. And as a result, we invested a further $8.1 million across two tranches in their Series C. This round marks a great step in supporting JustPay's global expansion efforts and their investment in pushing the boundaries of AI, which are both yielding very promising results. Vimal, Sheetal, and the entire JustPay team have been real pioneers of digital payments, becoming meaningful contributors to the Indian payments ecosystem. Today, JustPay powers over $450 billion of annualized TPV. representing over 30 million transactions a day. And they serve some of the largest merchants, banks, tech apps, and networks in India. The business is known for its strong technology offering reflected in best-in-class customer satisfaction and retention metrics. And this has contributed to its uniquely high combination of scale, growth, and significant profitability. And this transaction has allowed us to realize a sizable gain at highly attractive returns while maintaining a 7.8% stake in the company. We're excited to continue our journey with JustPay. We believe they've got a very bright future. And just to run through the metrics, the secondary transaction valuation represent a four times cash-in-cash return and 37% IRR, putting it in the same category as best benchmark exits in ThinkOff and EasyCo, and a great example of the investment opportunity that's present for us in EN FinTech and which Vess is uniquely positioned to capture. Dave, handing back to you.