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Good day and thank you for standing by. Welcome to the VF2Q26 earnings 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 star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Nangle, CEO. Please go ahead.

Thank you very much. Good morning. Good afternoon, everybody. And welcome, as usual, to our results conference call, which follows the release of our 2Q results earlier today. On the call with myself, Dave Nangle, CEO. With me is Alexis Kamoudos. our CIO and partner since pretty much inception at BEF. I'll start and then Alexis will come in and I'll round up and then we'll open up happily for questions after about 15 minutes of presentation as per usual. Just to kick off on slide two, some of the key events of the quarter and we'll go through some of these in a bit more detail in the presentation itself. But, you know, the headline nab itself was broadly flat and quarter on quarter, albeit up 8% plus year on year. That's in dollar terms, slightly higher in SEC. From a NAV point of view, there's a lot of detail below that. Really, valuation multiples compressed in some of our key markets, but that was offset by the underlying performance, strong performance, robust from the portfolio itself, which continues to be in a good state of health. Specifically, credit tasks we always focus on in these events, given its size and importance to VF. Another strong quarter for credit tasks in Q1, 26, with the last official numbers out. with growth now in the company loan book top line exceeding 20% and compounding faster quarter and quarter and improving in efficiency gains as it goes and something I'll definitely double click on. And a lot of those efficiency gains are actually coming through from its engagement with AI and we spend a lot of time with our portfolio and its engagement AI and we're actually starting to see real benefits We use Creditas as a casebook example this quarter, both in the management letter, but also in this presentation to touch on some of the key aspects that Creditas is using and the positive implications that we're seeing, not in theory, but already for operational efficiency costs, but also on widening time and growth, which is key on both sides of the fence. From a personality point of view, we freshened up, strengthened our board. For a company now that's 11 years old, there's always going to be and turnover in the board at this juncture. And we're very happy to have Will Pruitt from Fidelity, formerly of Fidelity, and Torun Lidsson from Sinevik in Sweden, two very high profile individuals with deep expertise across a number of areas which are very important to VEF as a listed investment company in emerging markets fintech. And finally, you know, our strategy remains very much focused on long-term value creation and compounding growth in our portfolio. We spend a lot of time talking about our portfolio because it is everything. But around that, what we can control is the exits we've been delivering, how we put that capital to work to strengthen our balance sheet, paying down our debt and moving on to our shares which trade at a discount and we can buy them back and obviously create value for all as we go. And I'll double click on that. Moving on to slide three, just a couple of numbers. You know, quarter and quarter, you know, the headline itself made it feel like a quiet quarter, albeit a lot happening below the hood. Year on year, a bit more tenure to it on a dollar point of view from an NAV of 8.4% year on year and from a SEC per share of 11.6% year on year. From here, let's move over to Alexis. and I'll pass you on, Alexis, for slide five plus. You can get a bit more into actually what happened in the quarter from a financial nav key trend point of view.

Hi, everyone. Yeah, as we look at the portfolio in the second quarter this year, there's been no change in the splits on the quarter of 70% of the portfolio's value that lays the transaction and 30% marked the model. That is unchanged quarter on quarter. Our two largest holdings both carry the marks of very recent and insightful transactions. Credit Pass is held at its $108 million Series G and its $50 million Series D follow-on in January, priced at our secondary sale in that round. So both marks are unchanged quarter on quarter and both companies continue to deliver strongly post-raise We sent check both against traded comps every quarter and So today seventy percent of our now is anchored by third-party transactions closed within the last seven months within the mark to model book Confio was marked down around six percent in the quarter and This is purely a comp story. The listed LATAM fintech and financials names that drive our peer medians came under pressure. to the quarter. But underneath that, Confio continued to deliver in line with plan. So as in the first quarter, the markdown is a symptom of market moves rather than anything company-related. And encouragingly, the rest of the market model book moved higher on delivery. Solvacil, Abbey, Nebo were all marked up in the quarter with Abbey to stand up around 25% quarter on quarter as the business continues to compound at pace. And Dave will spend more time on Ab later in the presentation. Moving on to slide six, here we show our regular quarterly NAV evolution and the breakdown of the moving parts. The headline is this quarter has been a quiet or stable quarter. now bridge the nav at the end of the second quarter ended at four hundred six million dollars as they've mentioned down two and a half million dollars or point six percent in dollars and up eight point four percent year-on-year within the thirty percent of the holdings valued marked model the underlying portfolio performance added five million dollars and FX added for the three million dollars and with the Mexican Peso up 30% and the Rai up 1% against the dollar over the quarter. Against that, multiple compression across our traded comps took off $8 million. So delivery and currency largely absorbed the comp pressure. On the 70% of the holdings that were valued at the latest transaction, that was unchanged. And at the corporate level, cash, was reduced by $3 million, which is our ongoing OPEX and coupon payments in a quarter with no exit proceeds. And there was $1 million of positive translation effect on the bond. So net-net, the NAV is broadly flat on the quarter with robust underlying portfolio performance and FX tailwinds offsetting market volatility. Moving to slide seven. On this slide, we want to reiterate we continue to feel confident in the high-quality portfolio and its ability to compound from here. Over 90% of the portfolio has achieved self-sustaining cash flow profiles, and all of our top three holdings are there. We see the portfolio growing 20 to 30% over the next 12 months on a revenue basis and 30% on a gross profit basis with our large late stage top three holdings driving much of this. And Dave will talk a bit more about credit tasks, but credit tasks is that really strong proof point where we've had eight straight quarters of annual quarterly growth. and seeing, you know, record originations up 29% year-on-year. On fresh capital, our companies are well capitalized across the board. Credit House and Just Pay, the latest standout fundraisers. We remain encouraged by deal activity across our geographies and by our company's ability to keep attracting fresh capital at strong marks. which drives real value growth and creates liquidity options over time. With that, I'll hand back to Dave to go through a bit more detail on credit apps and Abbey.

Super, thanks man. Yeah, there's a few topics I want to touch on before I wrap up and upload to any questions. First is portfolio on a micro level as opposed to a macro. and credit itself. We are very happy with credit at this point in its cycle, and we've been with the company for coming up to 10 years in a couple of years. But it's in the best operational health. We've seen it. One is the growth aspect of the story, and it comes through on slide eight. And it's just clear in the slides and the charts we see with the loan portfolio evolution, the revenue evolution. We were talking a lot about credit tasks reigniting growth back in early 2024 when it was theory. And what we've seen is quarter on quarter on quarter. We look at the year on year growth. It's gone from single digit to low double digit. And now we're north of 20 percent in Q1. And that goes for both the loan book and also the top line revenue. We're looking at Q2 numbers as we speak in-house. And I said the board of the credit tasks. and what we're seeing is that improving it again in Q2. So there'll be a significant of growth at credit tasks compounding again inside of our portfolio is happening and is very visible through the data that they are producing. As important, less well flagged or predicted was the operational efficiency, the cost evolution that we're seeing at credit tasks, which has been a real positive. A lot of this is AI driven, which I'll talk about in a second, We're seeing great operational leverage of credit at this point in its cycle as the top line of the business just grows at a pace much higher than the OPEX base. We're seeing CAC at all times low. Customer acquisition fell below 10% for the incremental loan for the first time ever in Q1 and falling. And a lot of that is down to the headcount evolution of the business. And I'll talk about that now. And this is AI. This is a thing that we didn't overly amplify when AI was coming through 12, 18, 24 months ago. We've waited, we've worked with the tools, we've worked with our companies until we were at a point where they're actually starting to make a difference from a real point of view, from a numbers point of view, from a business point of view. And now we're starting to highlight and show both some of those examples. And there's nothing better for us than showing through the prism of Creditas, our biggest company, and it's having a real impact on their business. Sergio joined Keith Rickman recently on a podcast. He's a board member of BNB, a sister company. And in that, he went through a lot and he talks a lot about this with the board at Creditas and the key shareholders. And what we've seen is that agents are now a big part of the business, working along with humans. The better humans are becoming more like air traffic controllers in the business. And AI tools and agents are coming through from customer acquisition, onboarding, communication, collections, into scoring. And what we're seeing then from a math, from an Excel, from a classic analytical point of view is that the employee count is falling. They were 4,000, remember, over 18 months ago. They're below 1,800 today. They're above 2,000 at the start of the year. So it's really starting to compound down. So at a time when we're getting our growth in the loan book coming through and it's improving in terms of pace, we're actually seeing a real operational leverage story as the AI tools and implementation of them are really hitting headcounts and operational expenses. To add to that, once you've got lower operating expenses, you can do better pricing, better cost to serve, and actually AI then enables a bigger TAM for Creditas to sell its products into. So I think we're still very early days on this with Creditas and many of our other companies, we've got many other examples to play out there, we're actually seeing tangible benefits in the credit tasks, you know, efficiency gains, increasing time and operation expenses, which just adds to that top line growth story where I was talking about on the previous slide. And also wanted to talk about something beyond the top three this quarter, because we do have a number of our companies coming through, albeit smaller in scale. So less impactful on NAV today, but can be more impactful on them tomorrow. And it's just a reminder. We'd like to remind the market that we, on average do pick winners to get into the portfolio. We do nurture them through to maturity and do create a lot of value for our shareholders over time. And Ab is one of those rising stars in our portfolio. And this is a seed investment. We don't generally go that early at BEF these days. And we're more in the growth stage when we do invest. But Ab was a seed investment at the company, a fintech company in Pakistan since expanded to the Middle East. But it really has scaled at pace and in a very disciplined manner. They've managed to balance organic growth, which is classic fintech, but game-changing M&A when they bought a microfinance bank and got regulated and licensed in Pakistan and also partnered to a similar degree in the Middle East. Middle East really is growing the expansion because Pakistan were quite a sizable entity, even after just five years. And what I think from a numbers point of view, it is exactly what we're trying to do. This is a company that's got now a $200 million loan book It's got $260 million of deposits, real banking, mainly in Pakistan, these numbers. $85 million of run rate revenues at the top line and $20 million plus of EBITDA. So this is the company from inception, us backing a founder in key scale emerging markets, mainly in digital banking. We're starting with one product. earned wage access into SME lending, and it's become a much broader financial product platform. I'll also have an interview with the founder of that company, Amir Ansari, on our website. We did that recently, and we're very excited about where Ab is going, and I'd say watch this space. There's a lot more to come from this company in terms of size, shape, compounding, and value, and it can become one of those ones that are breaking out from the general part of the portfolio into the top three to start making Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab Ab ideally by year end. If not, we will be directionally positive as in reducing our debt. And we've done that since we kind of peaked at a $50 million debt ticket. And we brought that down half already and more to go as we deliver exits. The exits are coming. We did one in Q1, nothing in Q2, but we're very confident there will be more coming in the coming quarters or next 18 months. A very focused on a number of opportunities on that front. Always looking to take the best opportunity at the right time at the right price. There's no pressure on us to do the wrong thing. So reducing our debt with this capital allocation ideology is key. And then it's very hard for us to look beyond our shares, which I'll talk about with trades at a deep discount, and that's the highest IRR opportunity that we see with excess capital as we start to get beyond the debt hurdle which is in front of us. So directionally positive strengthening our balance sheet, logical capital allocation, and that's key to driving future value for VF and our shareholders. A couple more slides. One is I wanted to bring back up the share price and the discounted NAV just to remind the market, our shareholders, of which we are some, that we have not forgotten. We're very focused on this. We are not happy with this. We talk a very strong game about what is happening under the hood at VF and that's our portfolio, the trends, the exits we're delivering, the compounding growth. That's all good in its pocket. At the same time, we have to be very cognizant of the share price and where it's at. It's something we're not happy about. We believe we have a playbook of delivery and that delivery of the playbook with a performing portfolio and the right use of excess capital as it comes back in capital allocation from debt into equity is the right way and tools to close that discount and improve the share price over time. So it's kind of hand in hand approach of the portfolio. And then the right use of capital allocation over time fixes this in the right makes it directionally positive as it was in the past. And before I close up, I'm very happy to talk about our new board members. And this is something we have been working on for a while. We want to surround ourselves and have the right people in the room for long term value creation. We want to have the right people helping us in fintech investing and questioning us in corporate governance, capital allocation. Will Pruitt joined the board recently. Will is a phenomenal individual, very experienced, ex-fidelity for EM, emerging markets, financials, but also for Latin America. He's on the board of the four listed Latin American fintech companies. He's very much in the wheelhouse of what we do day to day. He's more on the public side, historically, we're on the private side, but he's got great experience and great insight, and we can talk to him a lot when he's hit the ground running. Also, Torun, who joined us, ex-Genevic, what we like about her is the fact that she's been through cycle with Chinovic up down volatility. She has seen everything from the inside of a investment company riding high, gone through headwinds, and she just brings a lot of honest insight to us and our story around, you know, just lessons learned and what happened where and the implications of different decisions and movements. So two fresh additions, fresh mindsets, fresh energy to the board. And we had our first board meeting with them after the AGM. in May and it was a very positive event. I'm very happy to have them on board. So just to close off, I think that our message in the market continues to be one. We're very happy with everything that's under the hood at VF. There's a lot of controllables and we believe we're controlling them well. A lot of the focus is the portfolio, which, you know, self-sustaining cash flow profiles are not needing those cash that did maybe in the past. Growing now starts to compound at a faster pace. Credit has is a great case in point. and attractive enough to be raising fresh capital from the market, which is great for us to see in new marks and capital in. The exits, they don't happen every quarter, but we've proven out with a number of exits over the last 18 months and clear guidance for more over the next 18 months. And then you kind of look at capital allocation and what we've done with that. We're very clear we want to be rid of our debt and we're very clear that our shares trade at a discount that makes them too enticing not to be buying with excess capital. So it's happy to see the portfolio compounding in value feeding through to NAV, and then very focused on the controllables around capital, capital in, and capital allocation to add value as we go. Operator, I will stop there, and we can open the floor to Q&A for Monabee, please.

Thank you. Once again, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Our first question comes from the line of Stefan Knutson from Red Eye. Please go ahead. Your line is open.

Hello, Dave and Alexis. Thank you for taking my questions. First off, it's regarding the exit progress, sort of. I mean you talk a lot about about the credit us and the impressive AI development that they've had at the same time. We've seen some let them fintech having a hard time in the public market. So my question is really regarding how flexible you can be with the bond refinancing coming up. If you can sort of wait to do exits to get a better price or yes, can you talk about that development please?

Yeah, hey Stefan, I think you've touched on a few different aspects there. I think Creditas on a micro level is doing very well. We're very transparent. They're very transparent. Numbers are coming through and the information is being shared both from a growth top line and operational efficiency AI. So very happy to sing when we're winning with Creditas and it's in a very good place. You did allude to Latin America. A lot of our markets and markets in general do blow hot and cold on a quarterly half-year basis. Last year, 2025 was very strong for Latin America. Latin American equities. They compounded a very healthy clip. Year to date, they've been less positive, while U.S. markets have been rallying hard. Last time, markets with some of the peers to the likes of Creditus and Compio have come off highs. That said, we have a tailwind of the currency, so there's many moving parts and evaluation, but we're very happy the true cycle. Once we've got the right companies, we will be able to exit them at the right point in the cycle, and we try not to get too caught up in markets up, markets down in any given quarter in our markets, the same with currencies as tends to happen. And then bringing all that back to exits, what if they credit us is one of our companies. We have more than 10. Um, we have a number of work streams around exits to get cash in. And so credit has obviously is a big one. There's a longer term playbook on credit tasks where the founder is very clear and he plans to IPO and that business is definitely going in that direction. We're working with him towards that today. but we're hoping in the next couple of years. Outside of that, there's always potential for secondary shares and sales, the right price, right opportunity. But these things go across the portfolio. As you've seen with JustPay, we did some top slicing twice in the last 12 to 18 months. And we've done M&A and IPOs under their name. So it's not just all about credit tasks. And I want to say from a bond point of view, I think we're $400 million of NAV, $25 million of debt. not to be blasé, but I think we're in a comfortable debt leverage position. And direction of travel, what we've told our board and shareholders is we want it to be constantly down and ideally gone. And that will be a function, obviously, of delivering exits and what we can do. But we believe we can. Outside of that, you've other tools beyond, you know, simple bond, you've got revolving credit facilities, et cetera, where you can bring down the actually exposed number of debts by using other tools at your disposal from a capital markets point of view. So we have a goal in mind. We have a lot of moving parts in that, but direction of travel is lower debt, irrespective of the quantum of exits that we get in the next two or three quarters.

Very good. And secondly, on Confio, was the NAV write-down mainly multiple driven or does the business face any challenges of late?

No, it's multiples to allude to your first question. It was multiples on the headwind. It was FX and company performance on the tailwind. But the multiples were the bigger force this quarter. So it's always an interesting one. It's a moment in time. It's at the date at the end of the quarter that you do your calculation for your NAV. And if the FX skews one way or multiples skew the other, the only the lowest beta part of it is actually your company forecasts and everything else can skew and spike one way or the other. So it's almost, we think we know the NAV is coming into quarter end and then numbers can move left and right, but Q2 was heavy in terms of last time multiples and that fed through to Compio. Okay. Thank you very much.

Thank you. There are no further questions at this time. So I'll hand the call back to David for closing remarks.

Super. Thank you very much. Everybody, thank you very much for your time and for your interest and for following us, as always. I think we're quite clear with our message. We are happy but working hard on everything that's under the hood at BEF. There's a lot to be happy with in terms of the portfolio, the nature of compounding value, and what we're looking to do on the exit front and capital allocation. As management, as shareholders, we are not happy with the share price, but we believe we've got the strategy in place with everything I said on the portfolio and capital allocation to put that right in accordance with time. But thank you very much for your time and interest again today, and we'll see you again next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.