Vef Ab · OMXSTO:VEFAB
Vef Ab — Q4 2023 Earnings Presentation
26 slides from Vef Ab's earnings presentation, January 2024
Slide 1: Results Presentation 4Q23
Results Presentation 4Q23 The emerging market fintech investor
Slide 2: Key events of the quarter
Key events of the quarter 4Q23 NAV – strong close to the year, in line with public market drivers NAV ended the quarter at USD 442 mln, up 5% QoQ and 16% YoY. 4Q23 saw renewed momentum across financial markets on the back of improving macro and rates narratives, with robust local currency tailwinds
Slide 3: 4Q23 financial highlights
4Q23 financial highlights NAV Financial result • NAV of VEF’s portfolio as at YE23 increased to USD 442.2 mln. NAV per share has • Net result for 4Q23 was USD 19.4 mln (4Q22: USD -61.5 mln). increased by 16% to USD 0.42 per share during FY23. Earnings per share were USD 0.02 (4Q22: USD -0.06). • In
Slide 4: NAV Evolution
4 0 200 400 800 600 USD mln Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 NAV of USD 442 mln in 4Q23 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 NAV Evolution Mar-20 Jun-20 1Q20 Covid impact Sep-20 Capital raises: Dec-20 3Q21: USD 97 mln 4Q20: USD 58 mln Mar-21 1Q22 impa
Slide 5: Strong double-digit gains across 2023 buoyed by 4Q rally
Strong double-digit gains across 2023 buoyed by 4Q rally Resilient economic data, easing inflation and the prospect of lower rates drove a strong final quarter, with markets closing the year up strong double-digit. All performance figures in USD. Global Fintech Indexes Market Indexes ARKF -65% +93%
Slide 6: Evolution of our valuation marks in 4Q23
Evolution of our valuation marks in 4Q23 QoQ % YoY % YE23 % of Fair value USD (mln) 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 change change holdings Creditas 394.1 394.1 195.9 211.3 193.1 198.7 212.9 183.5 188.8 3% -2% 41.0% Konfiío 135.6 135.6 61.1 61.1 40.1 48.9 85.6 79.8 95.3 19% 138% 20.7% Ju
Slide 7: Valuation approach and key take-aways
Valuation approach and key take-aways 4Q fair value Change QoQ Valuation Company Comments / Last transaction details Portfolio valuation (USD mln) (USD mln) methodology 188.8 +5.3 MTM - • Total USD NAV ended the quarter at USD 442.2 mln, up USD 19.5 mln / 4.6% QoQ 95.3 +15.5 MTM - • The main drivers
Slide 8: Key NAV and portfolio performance metrics 4Q23
Key NAV and portfolio performance metrics 4Q23 NAV and portfolio fair value conservatively reflects the current environment through a robust valuation framework NAV significantly reset in 2022 to reflect the environment, now Majority of the holdings valued based on mark-to-model, with the 1 resuming
Slide 9: 4Q23 NAV Evolution
4Q23 NAV Evolution Evolution in NAV primarily driven by multiple expansion and Fx tailwinds across 4Q23, complemented by portfolio delivery 4Q23 NAV Bridge Key takeaways USD mln • Total USD NAV ended the quarter at USD 442.2 mln, up Holdings valued on MTM & calibration Holdings valued on latest trx
Slide 10: Creditas has moderated growth while accelerating its path to profitability
Creditas has moderated growth while accelerating its path to profitability 3Q23 update Summary overview Portfolio Under Management & New Originations Strong delivery driving clear path towards profitability BRL mln • Robust top-line growth: 3Q23 revenues reached BRL 482.3 mln, up +54% 16.3% YoY. Por
Slide 11: Delivered healthy 3Q23 numbers with continuously improving margins
Delivered healthy 3Q23 numbers with continuously improving margins Financial results Path to profitability & future outlook Creditas P&L (IFRS) With peak inflation and interest rates behind us, Creditas’ path to profitability will be driven by: BRL mln FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
Slide 12: India opportunity: several tailwinds underpin the India fintech growth story
India opportunity: several tailwinds underpin the India fintech growth story World’s fastest growing major economy with Rapid increase in digital banking penetration World-class digital public infrastructure Enabling regulatory environment world’s largest population and formalization Well-meshed and
Slide 13: VEF India portfolio
VEF India portfolio Key verticals in which we have invested Evolution of our investments in India Payments Cumulative capital invested in India since 2020 USD mln Scale market: Largest population, one of the largest banked populations Fintech adoption accelerating: High smartphone penetration, digit
Slide 14: Juspay – leading mobile payments platform for online merchants in India
Juspay – leading mobile payments platform for online merchants in India Key stats Product suite $100 bln+ ~5x Payments orchestration platform Payments authentication UPI in a box Annualised TPV TPV growth in last 3 ✓ India’s leading ✓ Payment ✓ Highly reliable years payment browser UPI stack for orc
Slide 15: Magnetis and JUMO leave the portfolio – key learnings and take-aways
Magnetis and JUMO leave the portfolio ̶ key learnings and take-aways What happened What happened • Asset management industry has thin unit economics, reliant on scale to succeed. • Delivered scale but did not manage to ramp-up unit economics (over-share with Magnetis struggled to find scalable GTM c
Slide 16: Early stages of a new cycle, presenting attractive multi-year investment opportunity
Early stages of a new cycle, presenting attractive multi-year investment opportunity Consistent, through-cycle capital deficiency for later stage rounds across global emerging markets – pronounced vacuum in VEF’s sweet spot opening opportunity to deploy capital through various increasingly attractiv
Slide 17: Share price, NAV/share and the premium/discount
Share price, NAV/share and the premium/discount NAV/share & share price development Premium/(Discount) to NAV 7 60% 6 40% 5 20% 4 0% 3 -20% 2 -40% 1 -60% 0 -80% jun-20 jun-16 jun-17 jun-18 jun-19 jun-21 jun-22 jun-23 sep-20 sep-16 sep-17 sep-18 sep-19 sep-21 sep-22 sep-23 mar-16 mar-17 mar-18 mar-19
Slide 18: Closing the discount to NAV
Closing the discount to NAV The discount to NAV averaged 57% through 4Q23. We have several ongoing initiatives aimed at addressing the discount: VEF initiative Details Anticipated effects • On the front foot marketing our story globally • Our key portfolio companies have been busy speaking to invest
Slide 19: Capital position – comfort with controllables
Capital position – comfort with controllables Solid cash position to cover coupon payments and opex Expected cashflows to YE24 USD mln • SEK 400 mln outstanding -USD 9 mln vs 3Q23 report VEF • Frame of SEK 1,000 mln given partial reduction in size sustainability 21.6 of outstanding debt bond • Inter
Slide 20: VEF investment case and outlook
VEF investment case and outlook NAV tailwinds in place 2023 16% growth in NAV (USD 60.4 mln) benefitting from strong macro and market level performance. At a portfolio level, growth remains robust and forecasts are bottoming out – in many cases we are starting to revise up estimates again. Optimisti
Slide 21: Appendix
Appendix
Slide 22: 4Q23 income statement
4Q23 income statement 22 a ee a Result from financial assets at fair value through profit or loss -369,936 26,582 -56,184 ‘Coupon income - 410 - 17 Other income 18 193 = 14 Administrative and operating expenses 7116 -7,404 -2,052 1,277 Operating result 67,297 -376,737 24,530 -57,330 Financial income
Slide 23: 4Q23 balance sheet
4Q23 balance sheet 23 NON-CURRENT ASSETS ‘Tangible non-current assets Proparty, plant and equipment 10 156 ‘Total tangible non-current assets 100 186 Financial non-currentassets Financial assets at fair value through profit or loss Equity financial assets 460,020 380,600 Liquid financial assets 3.89
Slide 24: VEF portfolio summary
VEF portfolio summary Invested amount YE23 fair value Company Country Segment Investment date Ownership % (USD mln) (USD mln) Creditas Brazil Asset focused ecosystem Dec-17 8.7% 108.4 188.8 Konfio Mexico Diversified FS for Mexican SMEs Jun-18 10.3% 56.5 95.3 Juspay India Mobile payments platform Apr
Slide 25: Portfolio distribution by geography
Portfolio distribution by geography Liquidity Liquidity placements Emerging placements Pakistan 1% Europe 1% Emerging Europe 6% 6% India South Asia 19% 20% Brazil 52% Latin Mexico America 21% 73% 25
Slide 26: Thank you
Thank you The emerging market fintech investor