VNV Global AB (publ)

Welcome to VNV Global's fourth quarter and 12 months 2024 report conference call. On the call today, we have Per Bulle, CEO, Dennis Mohamed, Investment Manager, and myself, Björn Fossilvers, CFO of VNV. As per usual, Per will start with a summary of the developments during the quarter, following by an overview of the more meaningful portfolio constituents. After that, we will open up for Q&A. And as a reminder, if you want to ask a question, please use the Q&A function here on the Zoom and we'll try to address it towards the end. With that, I'll hand over to Per. Please go ahead.

Thanks, Björn. So we'll kick off with this usual sort of, you've seen this in the report, NAVs up like a percent in dollar terms to US. $580 million, which in Swedish crowns is just under 49 Swedish crowns. That's up 10% in Swedish crowns. For the year, we're down like a bit over like 13%, just under 13%, which follows down like 5% the year before. And that's all sort of negative, but it sort of feels still like a consolidation period after that sort of monstrous drop in 2022 to start the Ukraine war and all of that. So consolidation period. And overall, I mean, we'll talk more about it as we go through the report here, but we really see that there's some good signs in the market pricing in our portfolio, but also elsewhere it gets done at a premium to NAV rather than a discount. and the companies are doing well. So although there's no dramatic sort of changes in the NAV as of this report, and still sort of in some consolidation period, it really feels like something's starting to happen. But as we've talked about at length, I think, and sorry for repeating ourselves, but over the course of this year, the focus has really been sort of to, one, get into a net cash state at our balance sheet and pay off the debt. We've sold stuff throughout the year. First sort of portfolio around Booksy and then Get yet to close, but we think we'll close in the first quarter this year. And then a smaller portfolio in these last quarters and bringing that to $148 million and And and we'll come back to that, you know, but that's very much been the focus. But now with with get moving into sort of its closing phase, then then we're really in that cash and then can start to to focus on. on not selling assets and paying down debt, but instead investing. And as we sort of talked about again and again, it's really with our stock trading where it is, there's nothing that sort of compares well to it. So that's out there. And the other big sort of... theme if you will during the course of 2024 is this trying to help the companies to get into profitability and and uh and um yeah the the direction of travel is is the right one although there's of course more work to be done so 81 is now a bit top positive with we have um we've we've sort of We've not broken out Voi now because Voi is actually EBIT positive. And then, of course, also EBIT are positive. But at the Voi level, we need to talk about EBIT because they depreciate these scooters. So 80% of the portfolio positive in this manner. and happy about the direction of travel, but not content because our ambition really is to sort of have one of our holdings and ideally several holdings get into that sort of profitable growth and profitable to the extent that cash also goes back to shareholders. The ambition is really to have one of our entities here develop into a dividend payer that can give us a stream of cash flow in good times and also in bad times, which decreases the volatility around the portfolio and can make you able to access liquidity also when times are tough. Now, I think we're starting to get through that consolidation phase, but nevertheless, really this direction of travel is, of course, very, very important. Yeah, balance sheet. Björn, do you want to run us through these next couple of slides and

Sure, happy to. Yeah, no, so quarter ended with, as Per mentioned, net asset value of just below 49 crowns per share or $4.44 per share, down 1% in dollar terms over quarter and up roughly 10% in SEC key. notably we closed the quarter with approximately 60 million dollars in cash and cash equivalents including small liquidity management investments and the debt now stands at 77 million dollars and it's the bond that we refinanced earlier this quarter if we move to the next slide I thought I'll just run through the main Developments during the quarter in terms of fair value change and getting from the start, blah, blah, car, large holding was down 9% during the quarter. The valuation is, as a reminder, derived from some of the parts valuation that we further refined during the year. The fair value change during the quarter is driven by a lower adjusted peer multiple, as well as a weak euro relative to the USD. By year-end, BlaBlaCar's position represents approximately 17.5 crowns per share, or 36% of the NRE. Moving down to Get, a flat valuation, as it's still being based on the ongoing transaction, which we now expect to close during the first quarter of 2025. Get represents roughly 7 crowns per share. And moving on to VOI, which is the largest uplift during the quarter, up 26% driven as we move the valuation from last transaction-based valuation based on the transaction in early 2024 to a forward-looking EBITDA-based model here at year-end. VOI now represents 8.5 pounds per share. And these three in aggregate represent roughly 33 crowns per share or just below 70% of the total NAV. Again, cash increased over the quarter to roughly $60 million. And with that short introduction to the movers of the P&L, I'll hand it back to Per to move through further down in the portfolio and then open up for Q&A.

Are you done with this slide? I think, I guess this just illustrates what you talked about, yeah, with some colors. Good, yeah, okay. So the portfolio is... It's something you'll have seen before. The change here is that Voi, on the back of this new mark, is a little bit higher than Get. And also in the portfolio, a company we may not have talked about before, but it's Flow Palta. They show up sort of in these top 10 at around a percent. And that's not because we bought or sold anything, but we... We've had them on two lines before, and they're really sort of the same company. Palta is the holding company for Flow. So Palta has a few different – it's like a little V&V, and they have different portfolio holdings, but the bulk of the portfolio is really Flow. So it's really the same thing. So Flow, as you'll remember, is the world's largest period tracker and digital – platform for women's health but with the base around the period tracker which we were very excited about and very happy that we owned at least a piece of it and it shows up now but anyway that's not a transaction it's just rebooking or sort of putting two things that are really the same thing into one line instead of two lines. We'll flick you through a couple of these different sort of portfolio holdings to give you an update. I think the background of BlaBlaCar, you all know. I think, I mean, as Bjorn said, it's marked down during this quarter, which is really sort of a... a reflection of that the political sort of volatility, for lack of a better word, in France is having some effect because they need a law to be passed to get their income stream around energy savings certificates to come back on. So for technical reasons, that law was taken out of service in the summer and then of course there's been a lack of a government to sort of process laws and then there was a government and then now there's new governments it's just taking time we expect it to come back at a slightly lower level than before but but still you know good sort of income stream for the company uh and the the uncertainty if you will around that is i think i think it's that's the best way to describe that the mark is coming off a bit um Apart from that, there's many, many positives around Blabacar. Staying on this energy saving certificate, point as we've spoken about before we it's now being launched it has launched in spain so which is very encouraging spain you know is still smaller in terms you know aggregate terms than france but um but but um but still sort of a meaningful contributor uh cash wise And I'd also say that for us financial analysts, I think it'll be very productive to sort of see these kind of income streams not being a single country sort of affair, but also in several countries to sort of make it into something that's more diversified and hence stable. I think... The good thing with this law being taken out of service and back on in France is that it's been, you could say that it's been taken out in the backyard and kicked around and now it's back in a more and more robust form. So we can... We can also sort of put a fuller value on it when we look at it as a sort of a sum of the parts or however you sort of would approach to sort of value of a car. So positive that Spain is coming on as well for multiple reasons. Other than that, the acquisition of the bus marketplace in Turkey was, of course, closed. And it's very positive that company is doing really, really well. It's big. It Biggest in Turkey, second biggest in the world. And after likely red bus in India. So these bus marketplaces in emerging markets and the fragmented nature of them really... gel well with the car business, the carpooling business. That's, of course, the core of BlaBlaCar. And Turkey is a very interesting emerging market, and it's big there. Speaking of India, where there is an equivalent to Obelette in Redbus, it's a market where the... operations of blah blah car really has taken off of late i mean they've been active in india as long as we've been around the company but it's been small and as with marketplaces you can't really force the growth on it it takes the growth will sort of have to go on on itself but india has sort of compounded well over these years now starting to become a a a big thing unmonetized so adding to a gmv level but um uh not not yet revenues or even less earnings but But getting to a very, very interesting size. What else on BlaBlaCar? Yeah, I mean, the company overall is doing well. I mean, packs, passengers, it's growing. That's a good sort of... pointer for GMV was growing by about 20, 25%. And then revenue moves around a little bit country per country. And these energy savings certificates in France are obviously sort of lowers revenue growth there. Uh, but we'll come back on at some point and, and then, uh, and then get them back on. But if you, if you look at GMV overall, some of it's monetized, some of it's not passengers driving GMV that you're looking at like 20, 25%. Um, Yeah, I think that's sort of a quick update on BlaBlaCar. Next out is Voi. Dennis, could you run us through Voi?

Happy to. Thank you. Voi, as you all know, it's a leading... European marketability operator operates e-scooters, but also e-bikes across several, around 100 cities in Europe. If you go to the next slide pair, the big news envoy, which happened at the very beginning of Q4, but before we actually released our Q3 report, so we've already talked about it, is that they raised a bond agreement. First of its kind in the micro-mobility space, it's a 50 million euro bond, 6.75% spread over Euribor for year duration and part of a larger 125 million euro framework. This will This will enable the company to invest into growth CapEx for the first time in quite a few years. So we're very excited about that. And if we go to the next slide again, the other big news which came out yesterday is that they closed 2024 with positive adjusted EBIT for the first time in the company's history and also the first microability company in this space to do so. They grew revenues roughly 13% on an annual basis at Voi. That growth accelerated during the fourth quarter, which was up 33% versus fourth quarter of 2023. So growth accelerating during the year. They closed the year with roughly eight percentage points higher vehicle profit margin. The vehicle profit margin you could think of is a good proxy for gross margin in this industry, reaching 57%. So that's revenues less charging logistics and repair costs. So quite a big kind of movement there. This all resulted in roughly 17 million euros of adjusted EBITDA and around 100,000 euros of adjusted EBIT. Obviously, a big milestone. The company is now fully profitable. And what's very exciting is that this growth, that 13% isn't maybe super high growth if you look at our overall portfolio. But we are very certain this growth will accelerate now in 2025, given the proceeds from the bond. So as you can see on the far left graph here on this slide, the black line saying that the average fleet size has been roughly 93,000 vehicles will grow quite significantly. And as you can see, historically, that is a good proxy for revenue growth. So we're expecting the bond proceeds to really fuel growth at Voi. And in parallel with that, continue to see margin expansion. So a profitable year all the way to the last row, so to speak, in 2025. So it's on the back of this that we wrote up VOI. 26% took it from the last transaction, which was an early Q1 2024 event, to a model that looks at EV data. I think that's it on VoiceArt. One final thing, they continue to win tenders. They have the highest regulated market share in the industry still. They won tenders in France, Spain, Germany, and Sweden in Q4 as well. So that's also very encouraging to see that the moats are getting stronger and stronger as we go along.

Thanks, Dennis. Going on here then, GET, it's taken much longer than expected to get the antitrust in Israel to approve the acquisition of GET by Pango. Pango is one of several parking apps in the country, and GET, you know what it is. We have good reason to believe, though, and what we understand is that our expectation is that this will close in this first quarter. And there's been some, a lot of interaction with the, with the authorities around this of late, which we think is been very productive. And, and so, so, so, so, so when we talk next time, we think this will have closed in the meantime, the company is doing very well. And it's it's, It's growing. It's like $13 million or so of EBITDA last year, 2024. And big, big cash generation. So cash and cash equivalent. So at the balance sheet, it's like $60 plus million, no debt. So this is really sort of a solid company. And yeah, there's... We don't expect we'll own it for very long, but it's still good to see the company performing well. Next up is Newman. And Dennis, do you take us through Newman?

Happy to. So Newman is an online health clinic focusing on men's health. Historically, we focused a lot on issues such as verticals, such as erectile dysfunctions and hair loss. But now a lot of the growth and a lot of the revenues are coming from their weight loss vertical, which was launched about a year or two ago. They closed a very strong 2024, served more than 215,000 patients in the UK. They grew revenues more than 130% year over year. If you compare December of 2024 to December of 2023, it was 200% growth. So growth accelerating throughout the year there as well. And they are EBITDA profitable as well. A lot of this growth is obviously coming from GLP-1 related treatments. And we're seeing this growth continuing well into 2025 as well. And we expect quite significant growth also for 2025. alongside continued profitability on the EBITDA level. It's on the back of a strong 2024, continued growth in 2025, and strong peer multiple trading that we wrote up Newman this quarter. So we carry it now, our 17% stake at $45 million as per Q4. Great.

Onwards to Housing Anywhere. Not so much to report about there. The company is performing sort of as per expectation and Takes a long time to build sort of these marketplaces, but the opportunity is large. And there's just not that much sort of new that's happened since we spoke last time. So we'll press on here and go to Breadfast. And Bjorn, could you walk us through the update on Breadfast?

Yeah, no, as a reminder, Breadfest is Egypt's leading online grocery brand and quick commerce business. They deliver groceries under 60 minutes from 39 different locations. And here, I mean, the company continues to have very strong momentum. They have 6,000 SKUs and deliver now close to 1 million orders on a monthly basis to over 300,000 active users. We own 9% of the company and value it on the basis of the transaction that happened mid last year. I think companies doing well, Egyptian macro a little bit more stable, and also the vast majority of these 39 different fulfillment points are completely profitable. So very exciting prospects here in our view. So that's the short update on Breadfast. And then also BokaDirect, as a reminder, the leading beauty booking company Marketplace and SaaS service for the beauty industry in Sweden, 13K merchants, 2 million monthly users. Strong market position, very, very dominant. The last year, mid last year, onboarded a new, very experienced CEO, Niklas Grave, who's run Hitta previously, to come in to drive further growth and profitability and especially accelerated growth. We own 50% of the company and value it based on EV revenue, multiple model. Over to you, Sarah.

Great. I think that sort of concludes the stuff that we wanted sort of to introduce to you. What I forgot to say on the overall sort of portfolio, when we look ahead, we wrote about this in the report, but just to mention it here too, when we look ahead to 2025, we see sort of the... The bulk of the portfolio, the larger holdings here, getting the portfolio to 25% revenue growth. But we really see margins. profit margins increasing. So at sort of an earnings level, much, much higher growth than that. So good outlook over the year that we're now in. So with that, I thought we'd sort of organize ourselves to take any questions that you may have. Bjorn, do you want to walk us through how that works again?

Yeah, sure. As a reminder, there is this Q&A function on the Zoom where you can type in your questions. Or if you want to also raise this hand, I will try to give you, open up your mic. But I mean, we have some questions here to start. The first maybe for Per question, if and when Roy or BlaBla or any other of the more mature companies IPO, what will VNV's general stance be? Do you retain the shares in the public market or do you strictly avoid holding listed investments?

Yeah, we don't have a strict thing that we can never hold listed things. There's one aspect to it is that since we are listed and all of you guys who can own our stock are also able to own listed stocks, it's sort of... less of a point for us to have listed portfolio holdings because you can invest into that yourself. In the past, we have done different things when our portfolio holdings have gone public. Sometimes we've sort of given them out on a pirata basis, and sometimes we've sort of held on to them and then sold them over time. I think for that angle, in that perspective, which I think is sort of relevant for also for when some of our existing portfolio holdings go public in the future, we sort of take an approach that if the sort of return profile of the holding is sort of similar to what we're looking for, which is sort of, well, really sort of 25%-ish IRRs is what we're expecting, or that's when we get paid in our sort of stock option-like programs. If that's present and also that we can sort of still play a role in the company that we, if the situation has been, which is sort of typical, that we've been present at the company for a long time and can be sort of a more active and value-adding owner to the company, we may stick around. But of course, you've seen us over these past decade, we've been very active in buying back our own stock and we can't really stay away from our own stock when the trade's at a discount. So if you can sell stuff at NAV and buy at a discount, that's obviously something that's important. that's very attractive and we've been known to do that so that that's also something um and finally we really we really think it's good for our type of companies to have portfolio holdings that that mature to the that that yeah that grow and mature to the level where they pay dividend to us so um we we we And if such a company, Voi, for example, becomes a dividend payer and lists and we think there's an upside and we're sort of obviously been very close to the company since day zero, that may be one that we keep and then hold on to it and take the dividends and sort of reduce the volatility around our portfolio through that dividend stream. And a long winding answer. I hope it gives you some help there. Thank you.

Another question on BlaBla here. Could you provide some additional color on BlaBlaCar's performance outside this volatility around the energy certificates? How has the core business been doing?

Yeah, so the mature markets of Europe, like France, it's not high growth. It's sort of flattish growth, but very stable and earnings-wise. It's sort of like a very mature classified. In Sweden, we have Hemnet here. It doesn't grow much, but the market doesn't grow, but the company's profitability may grow and sort of, you know, very high bearish trend, that sort of thing. So that, I think, would be a fair description of Europe overall. Obviously, Spain is growing a lot now and energy certificates is being sort of introduced and that also has a marketing effect and that's exciting. But overall, sort of the mature markets growing less but profitable and then you got the emerging markets which are just killing it in terms of growth i really you know like we met i talked about india before this brazil mexico that are that are that are showing strong growth uh and um but are are yet to be monetized or very very early in the monetization so doesn't really show up on the on the revenue side of things but but that's that strong growth is is uh is very encouraging because it also gets you to a size state where monetization becomes a very low-hanging fruit, so important. And then on the bus side of things, yeah, the emerging market ones, Obilette essentially is doing very well.

Thank you. And then perhaps a question on VOI. For Dennis, what's our latest take on the current regulatory environment? Have there been any new developments as of late? And how does VOI work? roadmap for tenders in 2025 look? Do they need to win new markets or can they deploy more scooters in their existing markets? A bit more color on that fleet development.

We're happy to. On the first question on the regulatory environment, I think the trend that we've seen for the past couple of years is continuing, which is more and more cities across Europe going for tenders. This is very good for the users. It's very good for the cities and it's good for the operators because you get fewer players. The ones that are serious are the ones that have a chance at winning. You get less competition as an operator. And for the users, it's obviously better because you don't need to have 10 apps just to ride e-scooters in a given city. So each operator also gets to more of a critical scale in order to be able to operate profitably. So we're seeing that trend continuing. We're seeing quite a few cities going for retenders. So cities such as Oslo, I think, is going for their third or fourth retender this year. And the good news there is that we're seeing that the tender duration, the duration of the contracts are actually getting longer. We saw it in France, in Le Havre, for instance, which I believe was a four-year contract that Voi won in the last quarter. So a general trend of more cities tendering and that the contracts are getting longer, which is good. In terms of growth or fleet allocation for 2025 and onwards, given that the competitive landscape has kind of weakened with some shakeout. We saw the DOT tier deal about a year ago. And with companies such as Bird going out of business in Europe, et cetera, we are seeing more space, more white space in existing markets. So that would be one source. But from the 100 cities they are in today, I'm certain that the VoIP management team I know they have identified at least 100 or maybe even 200 more cities in Europe that they want to enter. Some of them are in existing countries that they're already operating in. And some of them are Eastern Europe, getting stronger in Southern Europe and some regions in Central Europe as well. Today, the stronghold is really in the Dutch region, the Nordics and the UK and Ireland, I would say. So there's quite a lot of land to grab still for Voi. So a combination of both is probably the short answer.

Thank you. And then I have another question here. Could you add some color on the $10 million of aggregate proceeds you highlighted after the end of the period in the last Q3 report? Did that take place after or around NAV? So those exits all happened in the long tail. On aggregate, they got exited above NAV? And we also noted in the last report that our pro forma cash would be at around $20 million at the end of Q3, including this cash. The main reason why it's not closer to 20 here at the year end, it's in fact 16, is the big movements in FX given the fact that our debt is SEK denominated. We bought SEK for those additional proceeds and that's why we ended up with $60 million in cash at year end. And with that, I think we have... gone through all of the questions for now. Unless there's anyone popping up in the next few seconds, I'll hand over to Per again to finish off the call.

Great. Well, you know where to find us. So please just reach out if there's anything that we haven't covered that you want to talk about. The door is open or we'll answer the phone or the email. But thanks for participating. And we'll speak to you all. Well, there'll be an annual report out soon. before we speak again, because we'll do this exercise again for the Q1, which is going to be exciting. So thank you.