VNV Global AB (publ) (VNV) Earnings Call Transcript & Summary

All right. Welcome, everyone, to VNV Global's Q3 Conference Call. I'm Per, CEO, and I'm joined by my colleagues, Bjorn and Dennis. We thought we'd go over the report and a few comments on the various sort of activities that we're at and then also some update on the portfolio companies. As most of you, I think, know, we'll sort of talk for a while and then we'll take questions and the questions are -- we handle by -- you put them into the Zoom function -- Zoom sort of question function, and we'll pick them up at the end and have a go at answering them. So with that, I think we kick off, and I hand it over to Bjorn to get us going.

Thank you, Per. Yes, I'll start with a few numbers here. So NAV in the quarter came in at $439 million or USD 3.43 per share, which is SEK 34.2 per share, down 2% in SEK over the quarter or roughly 5% in dollar terms during the quarter. If we go to the next slide, we can see that our total investment portfolio now amounts to sort of $469 million, of which $446 million is investments and $13.3 million cash and cash equivalents. In addition to that $13 million of cash and cash equivalent, we also have short-term investments showing up on the investment line of approximately $8 million. So all in all, liquidity as per the end of the third quarter is approximately $22 million. Borrowings similar to last quarter amounts to roughly $26.4 million, which is the remaining outstanding bond we have. We're still continuing to trade at a significant discount of approximately 60% given the September 30 NAV and sort of SEK 18.50 per share, which is the current trading as of today. If we go to the next slide, we can also quickly walk through sort of the main fair value drivers over the quarter before getting back to the specific portfolio companies. But sort of starting from the top, we have BlaBlaCar, which is valued at $115 million based on multiple, down roughly 5% during the quarter, primarily driven by lower peer multiples in this report, and as Dennis will come back to -- we exclude revenues from sort of operated bus wind down and BlaBlaCar Daily, which the company currently sold, and it's valued on the NTM forward-looking basis. Moving to the next company, Voi, also valued on the model-based valuation at $101 million for the stake, down roughly 4% during the quarter. Here, I think also Dennis will touch upon sort of a revised valuation approach where we have emphasized more weight on the Lime, which is now listed in the U.S. as sort of the closest peer in the listed universe. HousingAnywhere flat during the quarter valued at $39 million based on the transaction, which closed early this year. Similarly to Breadfast, also flat during the quarter valued at $30 million, also based on a transaction which closed during the first half of 2026. Next up is Numan, where we have sort of the largest relative valuation change and also in absolute terms, down 26% for the quarter or $9 million. This write-down is reflected still also based on the valuation model. And here, we have both sort of weaker peer multiples and also lower certainty in terms of the forward-looking outlook for the company, given some volatility in the U.K. market in the weight loss space. Finally, among the larger companies, we have Bokadirekt, which is continued to be valued on a model base and down roughly 7% during the quarter, primarily driven by weaker peer multiples. All in all, these 6 companies represent roughly SEK 26 per share in aggregate or roughly just below 80% of the NAV. Finally, sort of going back on the cash and cash equivalent position, as I mentioned, $30 million of cash and another $9 million on the sort of investment portfolio and short-term investments. And then as mentioned in the report, in the management report, we also have another $11 million in a way that we expect to hit our accounts during the fourth quarter coming from exits of NoTraffic and Ovoko. With that, I'll hand it back to Per and Dennis, who will start with the portfolio companies. Thanks.

Yes. And thanks, Bjorn. And as a starting point, the portfolio illustrative sort of version of what Bjorn talked about portfolio is kind of similar to what you've been used to. And what should I say, at large, the portfolio is doing really well. I think as you can sense, certainly from Voi, come back to that, but also BlaBlaCar sort of really in a very good spot. And I think the only one is sort of Numan, come back to that, too, which where the overall sector due to some pricing hikes have had some -- a sort of -- it's in a wobbly patch, but we see that sort of maturing I think, rather soon. And then I think Numan in a really good position to sort of pick up again. But -- so at large, portfolio is doing better than for a very, very long time. And valuations, as Bjorn was on about, and I think maybe Dennis will touch upon, especially on Voi, it's more driven by peer multiples with different sort of dynamics at play. We -- yes, we trade at that sort of roughly 50% discount, which has been the norm for a while now. And we think about this a lot. We're putting it -- we're -- what's the expression, we're trying to sort of take advantage of the opportunity by buying back stock. And yes, to try to make use of the opportunity that this gives rise to. The portfolio is still very profitable. So the discount should not at least be driven by a fear that we -- that the portfolio of companies are consuming cash and needs to sort of -- and needs to fund themselves from its current sort of shareholder base. That's not the case. This portfolio has become profitable and remains profitable as this picture shows. That profitability has not come on the back of growth tailing off. Its growth is there. And at sort of the top level, this is the top 6 companies in the portfolio. Those companies have provided growth over these past years of like 27% at the top line and then, of course, much higher at the bottom line. And these -- interestingly, I think these top 6 companies generate to us $8.5 million of earnings, which is, of course, not earnings yet to the level where -- which is then transferred to us to dividends. But that is not far in the future. If these earnings would have been mature enough to also sort of be transferred as dividends, then of course, probably these top 6 companies, these kind of figures would basically pay for our entire OpEx and then leave room to buy back a lot of stock. So if you look beyond the 2026 year here, which is we're soon ending, we see growth continuing. And if you compare our market cap to what we see these top 6 companies generating as EBITDA to us, you're looking at us trading at like a P/E of 9 or price to EBITDA of around 9. So interesting, I think, and that's not counting the sort of large portfolio outside of these 6. As we spoke about for those of you who attended our CMD, we -- and of course, that we've talked about for a few quarters now, we've been -- we're really busy in sort of setting up a separate business unit, you could say, which essentially moves new investments into off the balance sheet of VNV Global. But with the shareholders of VNV Global set to benefit because these sort of off-balance sheet sort of vehicles and funds and what have you will be run by an affiliate and hence, sort of fees and profit share goes back to the VNV Global. So this effort is partly driven by a need or an ambition to sort of reduce the net OpEx of the company that we run, but also over time to sort of generate cash flow and profit share to us. And this, we think, is entirely possible because whilst we can't invest cash in any meaningful way, at least at the balance sheet because the cash we generate, Bjorn spoke about them, we've written about that we've sold stuff for about SEK 100 million, $11 million very recently. That cash is -- there's nothing better for us to do risk-reward wise than to buy back our own stock. We think from the NAV level, we'll be able to generate serious returns. And if you can buy that kind of potential with the sort of transparency and closeness that we have with these companies at half the price, then it's very difficult to find anything that compares to that. But at the same time, we do have -- we've been at it investing and we have a deal flow that we think is very attractive. So hence, sort of generating capacity to pick up on that deal flow but off the balance sheet with the sort of economics benefits that we just talked about. So we're hard at work on that. We're exploring opportunities around sort of vehicles around our existing holdings, the larger holdings, sort of all of them to capitalize on opportunity sets around those cap tables, shares, et cetera. We think we are Well, we're certainly large, and we think we have a very good handle on all these companies. So we're good to partner up with in sort of more single stock or sector sort of SPVs very much around our own portfolio. But we also have a very clear and a well-advanced ambition, I think, is the way to frame it, to also launch a proper fund. And the very natural sort of first fund for us to sort of launch would be going back to our emerging markets sort of historical sort of starting point and historical sort of performance, which is an area where if you sort of just take out what we've done in emerging markets of these past decades, we've generated -- we've invested about SEK 200 million and sold for about SEK 1 billion, and that sort of works out to be just shy of 40% annual return IRR and a 5x money on invested capital. So the -- it's only when you sort of dilute that with the current portfolio, which is more, of course, Western Europe, predominantly Western Europe. But as you can sense, we think that, that -- then you get to sort of a different IRR. But I think that also has a very high potential that we're on the cusp of sort of seeing sort of being revalued. So that will pick up, too. But the left part of this slide gives you the picture why we think there's a possibility for us to sort of raise money in a fund that focuses on emerging markets because the track record we have there is clear. And we also think that emerging markets, contrary to common opinions is that you can't sort of really do stuff in emerging markets because it's not possible to -- it's difficult to buy and it's even more difficult to sell. I think that's a common sort of perception. But in reality, there's a ton of capital markets activity going on in the sort of classical emerging markets. And we also have a very long experience of both getting involved sometimes at this earlier stage. The focus of this vehicle, this fund is actually not to get involved super early, but to only get involved in companies that are already profitable. And so, but we also have a long experience of selling emerging market companies in IPOs, selling them to strategics, but also selling them to other financial investors like we did with the real estate vertical that we used to own in the UAE, which we sold to General Atlantic. And why emerging markets? I think just to touch upon that, simply because a very large part of the growth for the next decade or two will come from emerging markets. And this is emerging market outside of China and India, which you probably won't see as our primary sort of hunting grounds. We're mostly active in countries outside of those two sort of mega geographies. But growth will be high. And at the same time, competition is low. Like as compared to the share of GDP in these countries, the VC funding that they attract it's very -- it's a fraction. So there's less competition. This means that there's less competition for the companies that are active there. There's also less competition in terms of providing of risk capital to them. And that the consequence of that is that the valuations are much more attractive. Anyway, so this is just a few of the thoughts that we have, which is the background to why we're working on to launch a vehicle like this, which will be -- which we hope to do in the very near future to be sort of done with all the regulatory work that needs to be prepared in order to launch this and market this and why we think it's -- that we're well positioned to do this and hence, also to have sort of to generate cost sharing and then cash flow generating to us but also significant upside in terms of profit share. So with that, I thought we'd go through the large portfolio holdings. Dennis, do you want to run through the first Top level of holdings?

Yes. Thank you, Per. Starting off with BlaBlaCar. we write down VNV's stake in BlaBlaCar by 5% this quarter to $115 million for VNV's 13.8% stake with the write-down driven by lower peer multiples. And the company has performed above budget year-to-date on revenues and even more so on profitability. This over performance in part shows the countercyclical elements of the business as higher oil prices generate more supply and demand to their platform and in part shows and is a consequence of product improvements that the company has done over the past year. During the quarter, BlaBlaCar announced that they are selling their short distance carpool business in France, also called BlaBlaCar Daily, and the deal closed just after the period on October 1. The rationale behind selling Daily is essentially that Daily sat outside of BlaBlaCar's core marketplace DNA as it was built on a SaaS type business model, selling B2B and B2G to companies and public authorities, while also having a dependence on subsidies. Furthermore, as we announced in the second quarter, and BlaBlaCar is also winding down its operated bus segment. As a reminder, operated bus is a segment where BlaBlaCar has taken risk on supply utilization on the platform, and it has been a low gross margin business that has been unprofitable for them. The wind down of this segment is also progressing as planned and will be completed by year-end. With these two exit and shutdowns, 2027 will essentially be a year where BlaBlaCar is a pure marketplace business, resulting in a gross margin of around 90% up from around 50% last year and a very high EBITDA margin potential over time. At our Capital Markets Day in September, BlaBlaCar CEO, Nicolas Brusson, put a few numbers on this. So as you can see on the right-hand side of this slide, on a pro forma basis, excluding Operated bus and BlaBlaCar Daily, the company expects revenues of around EUR 205 million to EUR 215 million in 2026. This is up around 15% versus 2025. And EBITDA is expected at around EUR 40 million to EUR 45 million in 2026, which is nearly double that of last year at EUR 23 million, reflecting approximately 20% margin in 2026. Nicolas Brusson also -- so the CEO also shared a long-term EBITDA margin target for BlaBlaCar at 40% to 45%. The path there is essentially built on 3 levers. It's monetizing high-growth emerging market carpool, such in countries such as Brazil, India and Mexico, where Brazil is the first country to be monetized as we speak. It is growing high-margin verticals in existing markets such as accommodation in Turkey. And it's doing this while keeping strict OpEx discipline to reach these targets. We very much look forward to keeping you updated on the progress on all of these topics going forward. Moving over to the next slide and to Voi. We write down the value of VNV's stake in Voi by 4% this quarter to $101 million for VNV's 20.8% stake, driven by lower peer multiples. Since Voi's main competitor, Lime went public at the beginning of the third quarter, we have in this quarter, updated the valuation methodology of Voi and introduced Lime as the main constituent in the peer group we used to value Voi. The Lime multiple is adjusted for growth as Voi is growing significantly faster than Lime, which was evident in the second quarter report, which is the last report both companies have issued, where Lime grew 24% and Voi 47%, so roughly twice as fast. We then calibrate the model to put more emphasis on Lime specifically versus the broader mobility peers in the group in order to drive our free discount peer multiple. As a reminder, we always apply a discount from this pre-discount level. We -- that you can find in the notes package to the report. And this discount is geared to reflect, for instance, an illiquidity discount as our holdings are not public, differences in size, profitability and other factors. The pre-discount multiple applied on Voi's next 12-month adjusted EBITDA has moved from 11.1x in the second quarter report to 7.9x in this third quarter report. So despite an almost 30% lower pre-discount multiple, our Voi stake is only down 4% this quarter, which shows the strong underlying performance of the business, but also the leverage from these levels if and when Lime trades up. If we move to the next slide, on the note of Voi's very strong performance, the company last week on October 22, issued their third quarter 2026 report, which showed continued strong top line growth, growing revenues 53% year-over-year in Q3 with strong operating leverage evident in the 90% growth in adjusted EBITDA and the 132% growth in adjusted EBIT year-over-year. This is all achieved while generating record cash flows from operating activities, which increased to $33.4 million in the third quarter alone. And if we take a step back and look at Voi's performance across the past 2 years, the company has now reported 8 consecutive quarters of accelerated growth with a clear margin improvement in parallel. So the coral red bars that you see on the left-hand side of this slide shows the last 12 months net revenue growth at the end of each of the past 8 quarters, which has grown from 13% in the fourth quarter 2024 on an LTM basis to 47% in the past Q3 2026 report on an LTM basis. EBITDA margin or adjusted EBITDA margin has improved from 13% to 22% and adjusted EBIT margin from around breakeven to 9% during this period. This truly shows that the investments that the company has been doing in a larger and improved fleet in constantly improving their software stack for better operations and a better rider experience as well as their performance in mega cities, namely Paris and London, have truly been paying off. Going to the next slide and the final slide on Voi, which will be familiar to you all. The company has, as you can see, truly started reaching more significant scale with revenues now north of $240 million, adjusted EBITDA of $54 million and adjusted EBIT of $22 million in the last 12 months ending Q3 2026. As can be inferred from the left most graph on this slide, revenue growth is outpacing fleet growth, and this was also the case in the third quarter, where net revenue per vehicle and day was up 10% despite a 40% increase in active vehicles this quarter. This truly shows that demand is outpacing supply for Voi's services, which is great to see. And lastly, on Voi, the company, as we have previously announced, also in late September, signed a new EUR 150 million revolving credit facility with Danske Bank, Swedbank and DNB. And on October 19, used it or used part of it to redeem all of its EUR 90 million outstanding senior secured bonds. From the Nordic bond market to -- as moving from the Nordic bond market to bank financing gives Voi a more flexible and significantly more cost-efficient funding for continued fleet growth, and it truly shows how financially mature the business has become. This journey has been very impressive, and we believe Voi will soon be in a position to fund its annual growth CapEx entirely from its own cash flows as well, a true milestone for Voi. And we're very excited to keep you updated on this as we go forward. If we go to the next slide, moving over to HousingAnywhere, as we are carrying the company on the last transaction from early 2026, the valuation of HousingAnywhere is essentially flat during the quarter at $38.6 million for VNV's 26.2% stake. The company's new CEO, Antonio Intini, who took over the helm last year, presented at VNV's Capital Markets Day now in September and then revealed that HousingAnywhere Group has done around EUR 39 million of net revenue in the last 12 months ending July 2026 and EUR 5.6 million of adjusted EBITDA in the same period. The company is investing in a broad range of product improvements, building towards essentially being an AI-native rental platform to cater to the needs of both tenants and landlords. Antonio also revealed their new so-called worry-free booking proposition that offers tenants zero deposit and included guarantor and damage protection as well, while landlords get guaranteed rent and damage cover, basically extending HousingAnywhere's role from booking to the full tenancy. We very much look forward to following this development of this new exciting product is housing, and we'll keep you updated as we go. If we go to the next slide, the final one from me. So moving on to Numan. We write down the value of VNV's stake in Numan by 26% this quarter to $26.8 million for VNV's 13.5% stake, driven by a combination of lower peer multiples being the main driver, but also revised growth projections on a forward-looking basis. 2026 has been a reset year, I think it's fair to say, for Numan. That the U.K. weight loss market has been driven by price and heavy promotions, which has pushed up the cost of acquiring customers. And Numan's response this year has been to put unit economics ahead of volume during 2026. As I said, this quarter, we write down the value of Numan by or our stake by 26%. This is mainly driven by their -- we believe, most relevant peer, Hims & Hers multiple trading down around 20% in the quarter, but as said also due to revised growth projections. Even so we're still optimistic on the opportunity, the U.K. has the highest obesity rate in Western Europe, and Numan is one of the few scale fully integrated independent players there. Just looking at a few of the data points on the right-hand side of the slide, the total cost of excess weight for obesity in the U.K. is around $170 billion per year. All of that is not cash, but that's the total cost with losses in efficiency, et cetera, being counted in. And the out-of-pocket U.K. consumer spend on health, remember, Numan is entirely out-of-pocket spend platform is around $65 billion. This is a large market and Numan should be well placed to take share going forward as well. That's it from me on Numan, handing it over to Bjorn to continue with Breadfast and Bokadirekt.

Thank you. So quickly on Breadfast, our quick commerce or online grocery business in Egypt continues to do very well with sort of the core business now. 62 fulfillment centers across Cairo serving sort of approximately 500,000 users per month. The company has also recently sort of launched new initiatives in the fintech vertical in terms of Breadfast Pay and also started with a niche food delivery vertical, which has also shown really nice early traction. Again, the company is flat during the quarter valued based on the transaction closed before summer. If we move to the next slide and a quick update on Bokadirekt, our SaaS beauty marketplace here in Sweden, also continues to do well. On the graphs here, you can see these figures they presented at our Capital Markets Day in September. So LTM July figures is roughly net revenue of SEK 220 million and adjusted cash EBITDA of close to SEK 60 million. We expect the company to sort of continue to grow top line in similar sort of growth rates, but also continue to increase profitability at a more accelerated rate. So and the company over the quarter is down slightly, primarily driven by peer multiples. With that, I think we're through these large, the top six companies, and I'll hand back to Per and also for the Q&A.

Yes.

We have received a few questions already. And as a reminder, use the function in Zoom to sort of, place your question. Maybe to start first question, we disclosed 2 sort of smaller exits in the management report, $11 million coming in, in Q4. How does sort of the exit pipeline, if any look beyond that can provide some color on that?

Sorry, I missed you. Repeat the question?

So the question is in addition to the sort of announced $11 million in exits coming in, in Q4, how does the sort of additional exit pipeline look like, if any, if you can provide some color on that.

Yes. No. I mean, there's bits and pieces sort of in a similar fashion to the two that we sold now. There's sort of -- there's bits and pieces out of that kind of large other chunk of the pie chart that are in the process. So there's one that's looking to IPO and there's one where there's a trade sale. And so it's sort of -- it's a little early to give numbers on those. But if you add them all up, yes, it could be sort of another 10, I think, realistically over the next sort of quarter or so. But it's a touch premature. And then there's stuff going on in some of these larger names and which is also early, but I think there will be some transactions in some of these larger names over the course of 2027, but nothing in this year of the larger ones. Of the other ones, maybe something that sort of gets sorted out to the tail end of this year, but probably also more realistic that it's something that happens sort of in the beginning of next year. So yes. So it's -- yes, difficult to sort of give any details until we get closer to that. We're very happy with the two that we sold. I mean -- so one of them actually proved to be a 10 bagger and the other one up a lot. But that's a good investment and good exits and obviously, another indication that the NAV holds. So I think that -- I hope that answers that question. Bjorn, do you want to run through?

Yes, sure. Yes. And then sort of just an additional comment on that sort of in aggregate, these 2 exits sort of was done at a slight premium to the last quarter NAV. And then as a follow-up with sort of this $11 million of inflows and potentially more later on, how do you rank as of today sort of share buybacks versus additional debt reduction and follow-on investments?