Vef Ab · OMXSTO:VEFAB
Vef Ab — Vostok Emerging Finance — Q1 2018 Earnings Presentation
35 slides from Vef Ab's earnings presentation, May 2018
Slide 1: 1Q18 Results Presentation
>EF Vostok Emerging Finarnee
Slide 2: 1Q18 financial highlights
1Q18 financial highlights ▪ Positive net result for 1Q18: ✓ 1Q18 was USD 13.01 mn and EPS was USD 0.02. ▪ The positive net result over the period is primarily driven by the share price development in Vostok Emerging Finance’s (“VEF” or the “Company”) only listed equity holding, Tinkoff Bank, and the
Slide 3: 1Q18: Income Statement
1Q18: Income Statement (USD thousands) Jan 1, 2018- Jan 1, 2017- Mar 31, 2018 Mar 31, 2017 Results from financial assets at fair value 14, 205 7,568 Dividend and coupon income 107 79 Total Operating Income 14,312 7,647 Operating expenses -1,321 -705 Operating result 12,991 6,942 Net financial items
Slide 4: 1Q18: Balance Sheet
1Q18: Balance Sheet (USD thousands) March 31, 2018 Dec 31, 2017 Tangible non-current assets 3 - Financial non-current assets 205,766 189,415 Current assets 6,921 9,977 Total assets 212,691 199,392 Equity 211,818 198,557 Other current liabilities 178 274 Accrued expenses 695 562 Total equity and liab
Slide 5: 1Q18 Event highlights
1Q18 Event highlights ▪ Investments/Divestments through the quarter: ✓ Sale of 810k Tinkoff GDRs, at a value of USD 16.72 mn in February 2018. ✓ FinanZero – On March 23, 2018 FinanZero closed a financing round whereby VEF took up its rights and invested an additional USD 0.9 mn. ▪ Events after the e
Slide 6: Portfolio
Portfolio Gross Invested March '18 Fair Investment Company Geography Business Type % Ownership Amount ($ mn) Value ($ mn) Date Russia Digital Bank 1.8% 19.1 71.4 2007 Brazil Personal Finance Management 10.8% 30.0 30.0 Oct-17 Brazil Secured Lending Platform 10.3% 25.0 25.0 Dec-17 1 Russia Payments &
Slide 7: Portfolio commentary
Portfolio commentary VEF Portfolio as at March 2018 NAV: USD 212.4mn • At the end of Q1, we had 11 holdings in the portfolio, plus cash and liquid Finja 1% assets. Magnetis 1% Cash / Liquid Nibo Assets 14% • TCS is our largest holding while there 2% FinanZero TCS Group is a clear divide between our
Slide 8: Portfolio Distribution (ex. cash)
Portfolio Distribution (ex. cash) (ex. TCS) Emerging Pakistan Emerging Pakistan Europe 1% Europe 1% 4% 6% Turkey 5% Russia 13% Turkey Africa 8% 7% Africa Russia 12% 47% Brazil 36% Brazil 60% >8
Slide 9: VEF share price and NAV/share evolution
VEF share price and NAV/share evolution NAV/Share Share Price 2,90 2,70 2,50 2,30 2,10 SEK 1,90 1,70 1,50 1,30 Rights issue 1,10 0,90 Date Latest Share NAV / Share Discount NAV (USD mn) Market Cap Market Cap Price (SEK) (SEK) (SEK mn) (USD mn) 30/04/2018 1.96 2.73 28.2% 208.1 1,296 149.4 >9 9
Slide 10: VEF shareholder structure
VEF shareholder structure Largest Shareholders Owner Holding, SDRs Holding, % Libra Fund 156,110,674 23.6% Fidelity FMR 66,149,599 10.0% Fidelity FIL 60,248,714 9.1% Swedbank Robur Funds 57,674,245 8.7% Wellington Management 33,736,296 5.1% Alecta Pension Insurance 33,500,000 5.1% Ruane Cunniff 33,0
Slide 11: Investing in leading fintech companies across emerging markets
“Investing in leading fintech companies across emerging markets” Within emerging and frontier markets, we focus on the more populous and scalable Geography markets, cross-referenced against competition for opportunities We target all lines of financial services inclusive of payments, remittances, mo
Slide 12: Where emerging markets meet fintech
Where emerging markets meet fintech Consumer Offline SaaS OTHER PAYMENTS CREDIT SME Online Wealth Management P2P Mobile Digital Banks Credit Scoring Remittances Equity Crowdfunding Comparison Websites Qualified Leads Insurance >12
Slide 13: Board of Directors, Management, Investment team/IR
Ranjan Tandon Lars O Grönstedt Voria Fattahi Board Member Per Brillioth Chairman of the Board Milena Ivanova Board Member Experience: Experience: Experience: • Founder and Board Member • Chairman and MD of Board Member • Investment Director Chairman, Libra Experience: Handelsbanken Experience: at Vo
Slide 14: The Portfolio
The Portfolio >14 14
Slide 15: Portfolio
Portfolio Gross Invested March '18 Fair Investment Company Geography Business Type % Ownership Amount ($ mn) Value ($ mn) Date Russia Digital Bank 1.8% 19.1 71.4 2007 Brazil Personal Finance Management 10.8% 30.0 30.0 Oct-17 Brazil Secured Lending Platform 10.3% 25.0 25.0 Dec-17 1 Russia Payments &
Slide 16: Six reasons why Brazil is a great fintech market
Six reasons why Brazil is a great fintech market: 1. Scale – with over 200mn inhabitants, Brazil is one of the world’s largest economies, and the kind of scalable emerging market we like to invest in. 2. Online – Brazil is one of the most ‘online’ markets in the world with high smartphone and intern
Slide 17: Tinkoff Bank
Tinkoff Bank • Business Type: Digital Banking Recent highlights Key • Founded: 2006 Year of investment: 2007 Facts • Ownership Stake: 1.6% • # of current account customers passed 2.8m during 4Q17 • Key region: • ROAE at 52.8% for 2017 A market still dominated by old world financial 1 institutions, b
Slide 18: Tinkoff Bank Returns and Performance
Tinkoff Bank • Business Type: Digital Banking Key • Founded: 2006 Year of investment: 2007 Facts • Ownership Stake: 1.6% Return on assets • Key region: Returns and Performance Net income (RUB bn) 8,9% 10,1% Profit at RUB 6.4bn in 4Q17 8,7% 8,6% 8,9% 7,1% 7,7% 19,0 2016 2017 4Q'16 1Q'17 2Q'17 3Q'17 4
Slide 19: Tinkoff Bank - value coming through in new business lines
Tinkoff Bank - value coming through in new business lines Current Accounts SME Mortgages Investments >19 19
Slide 20: Tinkoff Bank First 2018 Interim Dividend Announcement and Guidance
Tinkoff Bank First 2018 Interim Dividend Announcement • In line with the Group’s dividend policy, the Board of Directors on 9 March 2018 approved a first interim gross dividend for 2018 of USD 0.31 per share/GDR (with each GDR representing one share), with a total dividend payment of around USD 56.6
Slide 21: Balancing Tinkoff as a core holding versus liquidity position
Tinkoff Bank Balancing Tinkoff as a core holding versus liquidity position Key reasons we continue to hold • Best fintech asset in Russia, core business on the up and we see as many separate fintech companies coming through there as we do in numerous fintech companies elsewhere. • New business: real
Slide 22: GuiaBolso
GuiaBolso • Type: Personal Finance Management Current and future segments Key • Founded: 2012 Year of investment: 2017 Facts • Ownership Stake: 10.9% 64.5% • Key region: Personal finance manager with the mission of 1 transforming the financial well being of Brazilians. The Credit Karma of Brazil. Le
Slide 23: Creditas
Creditas • Type: Consumer Lending Current and future segments Key • Founded: 2012 Year of investment: 2017 Facts • Ownership Stake: 10.2% 64.5% • Key region: Creditas is a leading digital-first secured lending 1 platform with the mission of reducing the Brazilian consumer debt burden. Secured lendin
Slide 24: REVO
REVO • Type: Merchant payments / consumer credit Key Merchant Partners Key • Founded: 2012 Year of investment: 2015 Facts • Ownership Stake: 25% 64.5% • Key region: Works with Russia’s on and offline merchants at 1 POS to increase conversion and basket size. Focus on small ticket categories with $10
Slide 25: REVO metrics
REVO Metrics March 2015 March 2016 March 2017 March 2018 No. of active stores 546 1,941 1,633 3,663 No. of installments granted 15,522 51,756 47,916 50,115 Avg. installment plan (Rub) 3,541 4,225 5,142 5,693 Avg. duration of installment plan (months) 4.6 4.7 4.6 4.4 Connected stores, # Monthly insta
Slide 26: JUMO
JUMO • Type: Mobile Money Marketplace Key • Founded: 2013 Year of investment: 2015 Facts • Ownership Stake: 7.6% • Key region: FINANCIAL SERVICE PROVIDERS Largest-scale, low-cost, financial services platform JUMO 1 BARC LETH OM TAMR for emerging markets. Capital Focus on key mobile money markets of
Slide 27: Iyzico
Iyzico • Type: Payment Processor Key Merchant Partners Key • Founded: 2012 Year of investment: 2017 Facts • Ownership Stake: 20.1% • Key region: Leading Turkish payment solution provider for 1 online retailers. Has over 17k live merchants and 315k seller 2 accounts under marketplaces. Turkey is Euro
Slide 28: TransferGo
TransferGo • Type: Cross Border Remittances Key • Founded: 2012 Year of investment: 2016 Global Remittance Volumes ($bn) Facts • Ownership Stake: 9.8% $800,00 • Key region: $700,00 Low-cost cross-border remittance provider 1 focusing on Western to Eastern Europe. $600,00 $268,00 Targeting blue-colla
Slide 29: TransferGo metrics
TransferGo Metrics March 2018 March 2017 March 2016 No. of active users* 92,943 54,001 32,522 Money flow (GBP mn) 37.2 21.3 9.8 Avg. ticket size (GBP) 352 349 269 Active Users*, # Monthly Money Flow, GBP mn 105000 35 95000 30 85000 75000 25 65000 55000 20 45000 15 35000 25000 10 15000 5 Nov'17 Jan'1
Slide 30: Nibo
Nibo • Type: Accounting SaaS Key • Founded: 2012 Year of investment: 2017 SMBs Accountants Facts • Ownership Stake: 15.5% • Key region: 3 General Ledger Nibo for Accounting Leading Brazilian accounting SaaS provider for ERP accountants software 1 SMBs and accountants. Has over 14k paying SMBs servic
Slide 31: Magnetis
Magnetis • Type: Digital investment advisor Key • Founded: 2012 Year of investment: 2017 Facts • Ownership Stake: 16.9% • Key region: Leading Brazilian digital investment advisor, 1 offering automated investment portfolios tailored to clients requirements. Large addressable market of US$720 bn (reta
Slide 32: FinanZero
FinanZero • Type: Consumer Loan Marketplace Business model - online broker of consumer loans Key • Founded: 2016 Year of investment: 2016 Facts • Ownership Stake: 23.7% • Key region: 1 2 Pioneering marketplace for consumer loans in Applications from Highest quality 1 applicants, based on Brazil. cus
Slide 33: Finja
Finja • Type: Mobile payments and loans marketplace Key • Founded: 2012 Year of investment: 2017 Facts • Ownership Stake: 20.4% • Key region: Pakistan, a scale emerging market, running behind 1 India in fintech evolution, but catching up. Finja, leading mobile wallet play in Pakistan, with 2 both a
Slide 34: Outlook and Guidance
Outlook and Guidance >34 34
Slide 35: Opportunities and outlook for 2018
Opportunities and outlook for 2018 Strong portfolio of 11 holdings diversified across multiple scale … geographies and lines of financial services. Of note - Tinkoff big win for us. Seen significant mark-up in Revo and … FinanZero. GuiaBolso/Creditas are recent landmark transactions. EMEA and Latin
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