Frontier Digital Ventures Limited (FDV) Earnings Call Transcript & Summary

Hello, everyone. Thank you for standing by, and welcome to the Frontier Digital Ventures FY '22 Full Year Results Briefing. [Operator Instructions] I'd now like to hand the conference over to Shaun Di Gregorio, Founder and CEO. Please go ahead.

Good afternoon, everyone, and thanks for joining our full year results call. We posted the results this morning, along with this deck that I'll walk you through over the next 20 or 30 minutes. As many of you might know, we do release our quarterly update. And when we do that, we include most of the financial information for the preceding period, which, in this case, would have covered the full year. This is obviously a more complete and full report of the full year results. So we'll walk through those this morning. In terms of what we'll cover, we'll go through the statutory results, we'll have a look at some of the financials and more importantly, remind people of the strategy that underlies the business as well. So just to give people who might be newer to the story some background, our group is structured across 3 key geographies, being LATAM, Asia and MENA. LATAM is now the biggest business for us and is making up almost 60% of our revenue, includes 4 market-leading brands across LATAM, and I'll give you more information about how we're progressing in that part of the world shortly. Asia, as you can see, a basket of brands there. And also MENA, which is the smallest, but an important part of the group and one that we're doing a bit of work on at the moment. So you can see the relative share of revenue. You can see the relative share of the operating EBITDA. And one, I guess, a function of all of these brands is that we do focus on market leadership, which is critical when you're running an online classifieds business and obviously using that DNA or that market position to leverage the economic opportunity that exists across our markets. By way of categorization today, well, as I mentioned, we'll look at some of the statutory results. Going to the LATAM strategy. There's a lot happening for us in LATAM, which is exciting. We have a new management team there, and the business has got a really clear goal over the next couple of years. And it's probably the most evolved of our 3 geographies as well, update you on what's happening in Asia and MENA. And as I mentioned, we'll dive into the strategy, so you understand what it is we're doing to power some of the financial results. So when we look into Section 1, which is the statutory results, some key highlights, which we'll give more information about. We've actually had an improved EBITDA result, which has been great. All of the individual geographies have had an improved EBITDA result over the year. We continue to focus on sustainable growth and, of course, getting through to a maiden or our first statutory operating EBITDA profitability is a significant achievement for FDV. So just diving into the portfolio and statutory results a little more and some of the key highlights. So at an operating level, when we look at our 3 key geographies, we recorded a positive EBITDA at an operating level of AUD 6.5 million, and that was underlined by some significant improvements, as I mentioned, across all of the geographies. The portfolio EBITDA margin is something we're focused on continuing to grow, and we managed to do that. We've hit full year economic share revenue of AUD 82 million. Our bank balance or our balance sheet continues to be very healthy, and we're very, very focused on our operating cash flows in all 3 regions. As we finished the year, we're able to trade at an operating cash flow positive level, which is very significant. Needless to say, as 2022 unfolded, the world changed pretty quickly. We recognized that the world was changing also. And we certainly took some significant steps through the course of the year to ensure that our businesses were as efficient as they could possibly be while still focusing on top line growth. So it's a tricky balance to get right, but we feel that we've got a really good handle on making sure we continue to focus on growth while, of course, focusing on what is really important at the moment, which is cash and obviously, getting the businesses all to be profitable and certainly at a group level to see that EBITDA improvement. So 2022, I think if you could characterize it was an extremely busy year. It was a year that finished very differently to how it started in a macro sense. But I think we entered 2022 in a strong position. I think we finished it in an even stronger position given the operating performance of the companies we managed to achieve. Just when we look at that operating EBITDA level, so this is the sum of LATAM, Asia and MENA. You can see over time that we've gradually improved the portfolio EBITDA, which is, again, something we said we were focused on for some time. We've managed to continue that trajectory. With some standout performances, we saw a significant improvement in MENA at an EBITDA level and particularly in Avito. So just by way of example, when we acquired Avito a couple of years ago, in the preceding calendar year, it has lost, I think, close to AUD 3 million. That business became profitable in 2022. So some really good examples when you dive into the portfolio, but at a headline level, we managed to improve all of the regions we're in. Most of the businesses improved on an EBITDA basis. And of course, we still focused very strongly on top line growth. But one of the opportunities for companies at the moment, and they're really good companies. We'll find getting the mix right between top line growth and making sure that you are demonstrating that our business model works and you can deliver profitable businesses, so that continues to be a strong focus for us. And I think it was a very difficult needle to thread in the latter half of last year, but it puts us in a really strong position as we head into 2023. Just again, looking at margin, it's something we're focused on pretty acutely over time. We've got 11 of our 15 companies actually improved, which was a pretty good result given the trading conditions that we faced, but this is a chart that we continue to focus on and continuing that EBITDA journey is important for us. As I said, it's the challenge at the moment for a lot of companies and the really good companies will get it right is focusing on top line growth and making sure your strategy is really clear, making sure you can execute it and making sure you're doing it as efficiently as possible. So we're seeing our companies really focus on getting that balance right, and I think many of them certainly have. When you look at the EBITDA breakdown, just over 2022, as I said, there's some standout performances. And the good thing for us is that all of our regions improved, and all but most of our individual companies improved. And that was obviously, as I said at the outset, something we recognized early in 2022, whilst we're very much a growth company. You've got to be able to demonstrate that our strategy works. You've got to be able to demonstrate that our business model works. And doing that means you've got to run proper companies and proper companies are profitable, and that's what most of our companies have now achieved that goal. Certainly, all of our regions. And as I said, there were some standout performances through the back half of 2022, particularly. And I think all companies that were trading through that back half recognized it was a challenging period. But I think by way of example, Avito was a standout, as you can see from the results '21 into '22. So much focused on making sure that we're running really strong, profitable companies, much focus on making sure we continue to grow and getting that balance right is, as I said, a big challenge for most companies at the moment. When you look at just that top line growth, again, the charts sort of speak for themselves. You can see that COVID put a hand break on a lot of things, but we've recovered pretty strongly and have continued to grow into [ 2022 ]. It's interesting that when you look at the individual regions that we now have. So LATAM, for example, just on an economic share basis, which is the chart on the right-hand side, had revenues of sort of circa AUD 45 million. It's almost twice the size that the whole group was all but a couple of years ago. So if you look back to 2020, for example, our LATAM business alone is all but twice the size of the entire group. So we think we got a lot of things right during that COVID period. We think we've got a lot of things right as we're coming out of that COVID period and obviously entered a very different environment that preceded it. But if you get your settings right, if your strategy is right, you can continue to run really good businesses. And just proportionately looking at our individual regions, both LATAM and Asia, both significantly bigger than the entire FDV group was only sort of 18 months to 2 years ago. So really focused on sustainable growth. Sustainable growth, obviously means you want to be profitable. We think we're getting that mix pretty well right. When you look at the revenue breakdown, just to give you the understanding, there's a 100% view, which is getting closer and closer to our economic share view. Certainly, in LATAM, we own 100% of all of the companies there. So that mirrors the economic share view in Asia. We don't own 100% of all of the companies there, so the 100% view varies from the economic share view. And similarly, in MENA now, we own 100% of the companies now, so that mirrors the economic share. You saw over time, we hope to have kept those 2 views to mirror 1 another. But LATAM and MENA at 100%, pretty much like-for-like on a 100% basis and economic share view. Asia is the one that differentiates a little bit, but that's just to help people understand the best way to look at our performance in any given period. Just to understand our statutory results, and they're a little bit complicated just by way of how our group is structured. So we do go to some lengths to help readers understand. But at an operating statutory level, you can see our revenues, that's all of the consolidated companies. When you then consolidate up the equity accounted companies and you get a group operating EBITDA, which includes all of our costs. So at a group operating EBITDA level, you see our consolidated entities. You see our share of the equity accounted entities. You see all of our corporate or centralized costs. And for the first time, we've managed to achieve a positive EBITDA at that really important statutory level. So as a whole, a lot of stuff happens below the line. There's significant D&A charges at the moment, which relate to the amortization of assets that were purchased a couple of years ago, does slowly expire over the next 12 to 18 months. There's some calculations around some contingency payments which we have, which again are below the line and a bit of FX movement, which we're working to minimize over time. But the important line is 0, we [indiscernible] that group operating EBITDA, and as I said, for the first time, we've managed to now achieve a positive operating EBITDA. So that's all of our revenues, all of our costs and the best way to look at the statutory view. Obviously, when we look at the operating view, we're very focused on the company portfolio performance. But we're very clear about saying we want to get that portfolio performance closer to the statutory view and the statutory view obviously includes our central costs. And as I said, for the first time, we've now got a positive group operating EBITDA. So that was a significant achievement that's taken a lot of work over time, and we hope to continue to improve upon that over the next periods. When you look at our strategy, just to remind people of kind of how we get there, and this is pretty important. One of the most important geographies for us at the moment is LATAM. That's probably the most evolved of our 3 regions. So it's the best way to get a look at how our strategy will unfold more generally. So in LATAM, we have 100% of the assets or the businesses, really critical. We've put in place recently, and I'll touch on [indiscernible], a really strong local management team. So our ambition was always to get from minorities into 100% and then really construct a business that could run itself, and we're a long way down that path now. It's a really strong 2022, and it's got a really strong strategy that is really based around its core classifieds businesses, but then augmenting those with the ability to help consumers through to the point of transaction. So there's a lot of excitement about this region for us. There's a lot of optimism about it, particularly with the new management team coming in. And there's a lot of ambition around what we think this could be. And remember that in 2022, LATAM for us was, in terms of revenues, was twice the size of the entire FDV business only about 18 months ago or 2 years ago. So much excitement about this part of world. Just to remind people of the businesses that are in it, InfoCasas, Fincaraiz, E24, Yapo. So all market leaders, all in markets that we've identified as good long-term opportunities and all with really strong classifieds DNA, but all with the ability to then augment that with the longer-term economic opportunity, which is helping consumers get past the search and discovery phase and get through to the transaction phase and that's what these businesses are very focused on. Just to touch on the management team that is now running FDV LATAM. So up until recently, if you consider the evolution of this region for us, it was finding businesses that we liked in markets that we like. It was finding operators that we like starting out as minorities. And then over time, as the business has started to grow and develop, we would buy 100% of them to the point where we signaled that, ideally, you want to then set this region free. And by setting it free, we mean appointing a team that can run it more effectively locally, then we are able to from Malaysia and for obvious reasons. So the CEO of FDV LATAM is Ricardo. He was running InfoCasas. Very successful business, made a ton of sense to have someone with his background, his record of success, to step in and run the region. And we've put together a relatively small centralized management team, which drew from Fincaraiz, the CFO; Martín Coulthurst; and Guillermo was the CTO of InfoCasas as well. So we have a relatively small but very effective centralized team that is now running day-to-day, the LATAM business. A very clear strategy, a very clear mandate, build out the classifieds leadership and ensure that you have clear market leadership, leveraging that to then go much closer to the transaction for consumers and sellers and a whole lot of work that goes around product, a whole lot of work that goes around traffic generation. Traffic obviously gives you leads. Leads ultimately become transactions. We've done a lot of restructuring work over Q4, which means making all of the businesses far more efficient than they previous were -- previously were, and obviously lower in costs at the same time. So the ambition was always to get to this point. Part of the benefit of getting to now is you can run a much leaner, much more efficient group as LATAM before, 4 businesses duplicating a lot of functions. We've now managed to streamline a lot of that, and by doing so, taking out a lot of the costs and now have a far more efficient structure wrapped around LATAM. So this was always where we wanted to get to. It was always a strategy and a structure that we laid out for investors. It was really pleasing to be able to put this in place last year, and we're seeing really positive results come out of having this structure in place. Obviously, from a cost perspective, but moreover, from a growth and value perspective. And they've got to be remitted with a really ambitious plan, which is to take the business through to an event in the future, whatever that might be. The team, they're very excited. So it's a much more dynamic structure we have around these LATAM businesses now with a really high-quality local management team running it. And the value of having a really strong local management team can't be understated. So we're really pleased where this has got us. And ultimately, having a structure like this in place will allow FDV at a corporate or holdco level to be much more leaner and efficient as well. So all about being efficient, all about having a really tight cost base, but then felt really focusing on the value that can be created in these businesses. If you look at just the profile of LATAM, I'll stop on this for a moment, you can see its growth over time. And you can see that it's quite biased toward the property vertical, which is a really high-value vertical. But more interestingly, when you look at the split of revenues, we now have a really significant chunk of the revenue starting to come from facilitating consumers being able to go past the search and discovery phase and actually be assisted to complete the transaction with the seller and be really clear. We've always been advocates of this strategy. We've always been a because of maintaining that really clear, strong leadership basis in a classified sense, but we've always been advocates of helping people transact. And that's very distinctly different from some of the models that have come and gone through the last couple of years, which have survived on free capital and crazy markets, which were out there advocating this idea of buying your house or buying your car and trying to flip it. We've never advocated that model, and I think the evidence in the market is now pretty clear as to why. What we have advocated in markets where there is low levels of trust is helping consumers get past the search and discovery phase and giving them certainty, giving them a trusted environment in which they can continue to do much more past just the transaction. And just by way of example, to look into InfoCasas. So this gives you a bit of a profile as to one of the businesses and a lot of the reason why we selected Ricardo to run LATAM was because of the success in InfoCasas and clearly demonstrated the profile that underlies the classified space and the growth that they've managed to achieve really augmenting that base with transactions revenue. They've gone about it in a way that's been very tech-enabled. So this is the smart path and utilizing big data, which is a big touch phrase, but it's real and it works very good at segmenting leads, and this goes back to the idea of being very good market leadership, having really strong traffic to your site, but actually taking a lot of that traffic and turning it into high-value leads to sellers and using things like AI-empowered digital sales engines to help qualify those leads and point them to properties that your sellers have that are most likely to transact. So there's a whole a tech that's now overlapping this idea of helping consumers get through past search and discovery into transactions. And it's a template that we're trying to roll out now using the experience and the success of InfoCasas. And before our structure, as I've said in LATAM was for businesses that were doing your own thing, trying to learn from each other, and now it's a much more effective structure in being able to roll out the success we've had in InfoCasas or any of the other businesses for that matter via centralized team that is now guiding each of those businesses as a more efficient single operating entity into being able to execute against some of the things that have gone really well in the businesses in LATAM. In terms of where we want to get with this, we see the opportunity. We've made this very clear and very public. We want to get the business in LATAM, so this is just FDV LATAM from where it is today with this ambitious goal to get to sort of USD 100 million revenue. So we think that there's a clear path to get there based on just organic growth. We think that the markets right around the world, and certainly, LATAM have sort of been shaken out a little bit over the last 12 months. We think that, that could potentially lead to M&A opportunities over time, but we think that we're really well positioned to get there organically. We think we're really well positioned by way of having market-leading businesses that are profitable in good markets in this region. We think we're really well positioned to take advantage of some of the disruption that's happening around markets around us. And so it's all about getting you into the strongest possible position so you can execute against this plan over the next couple of years. And we're very -- we've sort of added ourselves in a sense and said, this is our ambition. This is our plan. We think we can build a really successful business. We've got a great foundation, and we've achieved a lot of the milestones that we set ourselves some time, and that's to get the more to 100%, get a really strong leadership team in place and then execute against the clear plan over the next couple of years to maximize the value that's sitting inside LATAM. Just to touch on Asia and MENA, we're conscious of time. Asia business, so has continued to grow. It's continued to be profitable, which is great. And you can see that it's probably a little more evolved on 2 fronts. One is that it's even more bent towards property with a smaller auto contribution, but it's evolved more rapidly towards helping consumers complete the transactions as well. So interestingly, it used to be, I guess, the area we spoke about the most. It's interesting over time that the work we've done in LATAM and what we've created in LATAM is now probably what we talk about more, and that's encouraging because it obviously spreads our revenue a little more in terms of derisking it and means that we're not relying on any 1 market. We've got really good spread across the 3 regions now, which is much more comforting. When we look at MENA, a big focus for us in 2022 was to improve the EBITDA picture in this part of the world. And keep in mind that all of our revenues have probably suffered just by virtue of FX movements. So they're a little healthier when you look in local currency. But when you convert and back our big focus in 2022 for MENA was to get it to be profitable. The biggest business there is Avito, and that's gone from a [ AUD 3 million ] loss when we acquired it through to now being profitable at a statutory level in 2022. So again, that was a really important milestone for us to achieve. It's been done largely off the back of leveraging the classifieds business in that region, which really says to me there's a lot of opportunity. Now we've got this on a much more sustainable level to be able to grow it and start to venture down the path of helping consumers complete transactions. So a lot of work being done, I guess, behind the scenes in MENA to get it to a sustainable position. And now the -- I guess the focus we doubled down on growth given that we've got very little or minimal contributions from transaction revenues today. So again, it's well set for the future. Just to remind people of the strategy, and this is an old slide, but one will repeat just to keep people understanding of it relevant. But our strategy has always been to look at early-stage opportunities, identify them by virtue of our focus on emerging markets, finding those that make sense and step 1 is always to ensure that you've got clear market leadership. That's a really important factor, and it continues to be when you're a market leader, you tend to have a lot of opportunities. The fundamental part of the business is to grow the classifieds business a lot of what we want to do in the future. And the future is about leveraging the classifieds business so we can get closer to the transaction over time. And that's all about helping consumers get past search and discover and then leverage the economics of the transaction, which is what classifieds businesses fundamentally provide for anyway, but they tend to get stuck and only being able to make revenues from classifieds. So again, the model is really clear for us. When we look at just what that means, I guess, when you double-click on this evolution of classifieds into transactions, you can see the traditional model, which is very straightforward. It's about a whole lot of content. It's about a good U.S. It's about connecting buyers to sellers. And typically, a lot of that will end up then moving offline. What the transaction-based marketplaces do is to keep consumers in your environment, keep them engaging with the sellers and try and keep them on your website for longer, which enables you to do more for them. It not only obviously unlocks opportunities at the point of the transaction but it unlocks opportunities from search and discovery through to the transaction, and that can mean in the context of property portal, it's about financing, it's about inspections with car portals, it's about warranties, it's about insurance. So these are often turn to the ancillary revenue opportunities, but it's important to note that you don't just leapfrog from search and discover through to helping someone complete a transaction. There are a lot of opportunities on the pathway to the transaction, which portals and businesses like ours seek to benefit from. And that's a really important part of the long-term strategy. Just to understand this evolution. It's not a swap from classifieds to transactions. It's very much an evolution of that model that is occurring, and we seek to leverage that over time. Why do you want to do that? Well, if you look at the economics of it, it's pretty clear. When you look at the classified revenue on a per lead basis for example. And then you can look at the transactions revenue at the point of the transaction, the economics of the opportunity is really, really compelling. And that's about taking a lead which once would have left your environment and simply following it through and watching it to convert to the transaction. So our strategy is really clear. I guess the compelling reason why is evident to us and that's something we'll continue to communicate to our investors over time. And this slide is one that we always include because people always ask us. So moving from left to right, from top to bottom -- from bottom to top, rather, is a really simple way of understanding the overall strategy going from classifieds into a marketplace, helping transactions occur. And then, of course, being an intermediatory over time for transactions in a classified sense. And then the monetization opportunities are becoming much clearer. We know that EMPG, which is the parent company and other shareholders of MENA are progressing toward an IPO. And we've made it clear that we think FDV LATAM could do something similar. So we're starting to see those monetization opportunities become much clearer. And more importantly, I guess, the pathway to those monetization opportunity is becoming much clearer as well. It's not something that we sit around and think about every minute of every day, but it's importantly you have a long-term view of how you're going to create value. And we're starting to see much more of this start to become more tangibly real, and something that businesses can more realistically work toward than perhaps they have done in the past. So 2022 was a really busy year. It was a year that changed a lot through the course of it, but we think we kept a really good handle on what was important, the important drivers, and we finished the year really strongly. As we look toward 2023, and our priorities remain pretty clear and pretty straightforward for that matter. It's continuing to make sure that the companies are operating in the most efficient way possible, continue to ensure that, that means growing revenues but doing it in a way that is sustainable and sustainable businesses make profits, and that's what we're increasingly focused on ensuring our businesses do. So growth, absolutely, efficiency, absolutely more than ever. And that means you've got proper businesses and property businesses, of course, make money. Growing the operating metrics, this is critical because it's all of the work that goes on in the background. It's all of the work that typically goes on day to day in order to make sure you can have sustainable and high-quality companies. And of course, you then always, in the back of your mind, and as I alluded to on the previous slide, thinking about the value that you're creating and how you can achieve that over time. And as I said, it's interesting that just FDV LATAM today is almost twice as much revenue as our group had only 2 years ago. So we think that we're getting the first box right, which is continuing to drive growth and profitability. You can see that by the results. What people probably don't see is a lot of the work that goes on, which is the -- growing the operating metrics, and that's the day-to-day, that's the grind that goes on in each business, but it's super important because if you get the operating metrics right, the financials tend to look after themselves. And of course, the opportunity to think revenue creation [indiscernible] is sort of a third piece of LATAM -- those priorities for 2023. In the rest of the deck, there's a whole bunch of additional information, which I won't go through, but I'll leave people to go through at their leisure, but it just goes to some of the background, a little bit of a register, a bit more history, a bit more history over time. And again, it helps people understand our statutory accounts. And of course, is valuable as people want to just double-click on some of the underlying information that's included in the deck. So, [ Katrina ], I'll click back to the beginning. And if we want to then questions, can we do so now?

[Operator Instructions] Our first question for today, "What does success look like in 2023 at the FDV LATAM region? And how are you thinking about monetization pathways in MENA now that you're essentially at [indiscernible]?

Yes. So FDV LATAM as -- I guess it has a bit of a 3-year plan in a sense. And 2022 was about getting the settings right. It was about getting the team in place. It was about getting the efficiency level right. We did a ton of work, particularly in the second half of the year on that. So 2023 is about execution of the plan. The plan is to grow the region. It's to grow it profitably and to grow cash flow positively. So that's the first piece. The second piece is to continue to make sure that we leverage the IP or the expertise that's been accumulated in those 4 businesses individually, particular success that's come out of InfoCasas. And this is something we've spoken about historically. It's now something we've put structure in place that enables us to do it. So the second piece is to take the learnings, particularly from InfoCasas and the success they've had and push those into the other businesses. So that's the second part of the equation. The third part is really a function of the first 2, which is to run really strong businesses, really efficient businesses and market-leading businesses. And I guess, we look for opportunities to grow. And we think that given what's happening in the world, we're very patient, but we're very observant of potential for M&A. We think that that's another way that we can grow LATAM in 2023, but get the 3 fundamental sort of boxes that we're focused on in LATAM. With MENA, again, a lot of the heavy lifting done. We've now sort of refashioned it a little bit in terms of what's there. We've got Avito, which was critical to get from a loss making to be profitable. And that's -- Avito has existed for, I think, 10 to 12 years. It's never been profitable until now. So until we got our hands on it, it had never been profitable, and we've achieved that milestone. So that's a significant piece of work that was undertaken through 2022. So in terms of '23, when you get to that milestone, you want to make sure that it's sustainable, number one, and that's what we're doing in 2023, and we'll continue to look to really build out in MENA, which its revenue is almost wholly from its classified base. We think that there's opportunities to now -- given you've got the businesses much better set, to now say, well, how can we go further with consumers and sellers around opening up revenue opportunities around the transaction as well because that's what those businesses fundamentally do. And of course, we'll keep one eye out for the potential for M&A. But I think in MENA, it's about sustaining what we achieved in 2022 and starting to shift to the revenue mix, which is much -- which is dominated by its classifieds revenue, which is great. But we really think that there's opportunities, number one, to grow the classifieds piece. And number two, to start to do and think about how we can do more around transactions given we have a fundamentally much stronger base in MENA than we've had before.

Thank you, Shaun. Our next question relates to contingent consideration. "Could you please provide an update on the timing and options at [indiscernible]?"

So I think it's -- if I'm not wrong, and I have to defer to our CFO, who's on the call, that it's due in sort of May, around that time. And that -- the amount of the consideration is still -- that will be a subject of audit, which is underway and ongoing and a way in which you can pay that, we've got a really healthy balance sheet. And so fundamentally, that's the first thing you look to. All of our businesses in all of our regions are now cash flow positive. So that was -- that's an important milestone when you think about contingent liabilities. And of course, we know that there's lots of movement around the shape of our portfolio as well. So it's a little off in terms of timing -- in terms of it being due around May. The volume of that consideration is still being determined. We have a really healthy balance sheet and our businesses at an operating level of reach cash flow positive. So we think we're really well positioned to meet that consideration.

Thank you, Shaun. Our next question is, "What specific new countries or markets do you think look the most interesting investment?

Well, again, we -- it's probably no 1 individual country. What we do have, when we look at our regions are a set of countries that we tend to follow and have followed for a long time. So I would say in LATAM, we're probably reasonably well covered in terms of markets we want to be in. I think in LATAM, for us, we've always said that we don't really want to be in Brazil, we don't really want to be in Argentina and we don't want to be in Mexico. They're the 3 markets that are the most difficult. What we have done is probably chosen markets where you can be a clear leader and the evidence is now obvious in our financials and what leadership means. And we're focused on markets where the competition is less, and less competition means it's far cheaper to operate. So I think in LATAM, we're fairly well covered. In MENA, it's probably more interesting. And our big focus, as I said, is being getting the existing businesses right out. Our geographic footprint is relatively modest. And there are some significant markets in that region we will monitor through the course of this year. I think Asia is probably the interesting one where we've been very selective at the markets we're in and for good reason. But what we are seeing in Asia is businesses that perhaps weren't as fundamentally strong or had fundamentally good strategies, business strategies. And if you were wobbly going into 2022, you're probably highly stressed now. And we think that there will be stress to businesses in Asia over the course of 2023. Where they will be? Well, I can't predict that, but there are some substantial markets in Asia. And you just can't have so many businesses doing the same thing, as is the case today, where many of them are trying to do models that fundamentally don't work. And a lot of the models that don't work are where portals -- car portals or property portals, say they're going to buy your car from you or buy your house from you and then try and flip it in a 28-day period. So I'm referred to is the iBuyer model. They are the businesses that are mostly stressed. Why? Because that model fundamentally doesn't really work. It's not scalable, and it's not sustainable. And we've seen evidence of that in developed markets where large portals have flipped to that model. And we've seen it's just not sustainable. So we've seen it. We're seeing people walk away from that model. And what that's left is a fair bit of carnage in businesses that were trying to do that. And they're everywhere. They're in LATAM. They're in Asia, they're in MENA. So we'll see what happens over the course of 2023. But I think we've been on the record of saying that there's never a model that we thought was a good idea, and those that were pursuing it probably found out the hard way, which is sad for them, but it might be good for us because amongst all of that record, there could be some good opportunities. But I guess we'll have to wait and see.

"Could you please provide an update on Zameen, the operating environment in Pakistan [indiscernible]?"

Yes. So the first thing is, if you read the news, you know that Pakistan had some economic difficulties over the last few months. That's clear for everyone to see. What they are in the process of doing is negotiating an IMF loan. And it's interesting that I was just doing some research, and I think there's 195 countries officially in the world, more than 100 of them have had IMF loan. So I think when you hear that headline, it obviously is quite shocking when you hear your IMF loan. But when you look beneath the covers, it's quite amazing the number of countries that have been down that path. So generally, IMF loans come with a whole lot of conditions, and those conditions are generally geared at around economic discipline and putting in place, whether it's policies, tax rises, spending cuts, whatever it might be, IMF loans always come with conditions. And those conditions often are to the absolute long-term benefit of the economy in the country. So, yes, Pakistan is going through a bit of a rough patch at the moment. Typically, that will not last forever. And we'll see how far and how close they get to finalizing that IMF loan. And once that's in place, you hope that stability occurs as a consequence of it. And again, I guess we take a very long-term view. So we're obviously monitoring that situation really closely. In terms of EMPG progressing to their IPO, they are continuing on that process and continuing on that preparation. Preparing for an IPO is not a trivial, short or easy undertaking. So there's a lot of work that goes into it. And they are absolutely continuing on that path. So I think their view is that it will take a while for them to get ready, and if it does -- and in that time, that the situation in Pakistan will probably stabilize and hopefully improve, but it's still very much their ambition.

Thank you very much. That's all the time we have for Q&A today. I'll hand back to Shaun for closing remarks.

Yes. Firstly, thanks, [ Katrina ], for moderating. Thanks, everyone, for dialing in. Many of the people who've been on the call, I'll probably speak to from time to time anyway. So do feel free to reach out directly at any time. Always happy to -- always give time for our investors. I would just remind people of the hard work that went into FDV in 2022 that the ability we've now got on an EBITDA and a growth basis to hit into 2023. Our ability to build good strong market-leading businesses and have a really clear strategy around where we wanted to go and to be ever be doing the important things our cash balance, cash flow positive, EBITDA improvements while really making sure we put a really strong platform in for the next -- not only 2023 but -- and beyond. I think 1 feature of our business is that we're very aware of the -- any moment in time, and we're able to pivot and move really quickly, and we've demonstrated that over the last couple of years, but we are very focused on building long-term value and you can't lose sight of that. So we think we've always had an ability to get that mix right. We'll continue to focus on that. And that's a bit of a feature of our company. So again, thanks, everyone, for tuning in. Thanks again, [ Katrina ].