VEF AB (Publ)

Super. Thank you very much, and good morning, good afternoon all.

I welcome you today from Manila in the Philippines, where I'm on the road, seeing companies and looking at some of our investment companies in Dubai for the last couple of days. This is -- welcome to our Q4 '25 results presentation.

I do have Alexis Koumoudos, our CIO, with me on this call as per usual. And I'll spend the next -- we'll spend the next 15, 20 minutes just running through key highlights of the quarter and the year, given it is the end of year quarter and outlook for everything that we see at VEF and then happy to answer any questions that you have.

Moving on to Slide 2 in the presentation. It's an evolution of what we've been saying for most of the year.

Like the NAV does continue to trend higher. We're very happy.

It's a reflection, obviously, of everything in our NAV, which is our portfolio of companies and their performance. Q4 in itself was up a healthy 6.9% in dollar terms and over 22% for the full year, obviously less in SEK, given the SEK strength versus the dollar.

But the big driver in Q4 was Creditas, which we'll speak about and its latest fundraise, which came through quite nicely in Q4. But generally speaking, the NAV this year was a reflection of our portfolio, and it's really about a portfolio that the risk reward is much better than it was in the past.

We're majority at, give or take, breakeven and growth is very much back in focus. That's been reflected in our top names like Creditas, Konfio, and Juspay, which is humming along quite nicely at a very healthy clip.

The focus in the quarter, and obviously, it's a big part of our story is Creditas, and had a very big quarter in terms of, one, results, it's been coming. We talked about the transitionary period from hyper growth and burn to no growth in breakeven and now they're starting to put the foot back down on growth again, but more sustainable growth at this point in the cycle.

So through the quarters this year, we've seen them get towards 20% year-on-year credit growth, which is driving the income statement. We'll talk about that.

And that was key to see those results coming through quarter-on-quarter-on-quarter as we went through the year, and that's key for our value and our future. Also from the Creditas side, they had a number of standout events in the quarter.

We already mentioned or touched on the latest funding round, but also they closed the Andbank. They got a bank license in Brazil, which is key for the franchise value and their funding and also made a substantial higher at top level.

And then last point, the whole area of capital, capital management and capital allocation effect. We've, in 2025, very focused on strengthening the balance sheet, exits.

We'll talk about that in this presentation coming in, capital coming in, to pay down some debt, buy back some shares. And as a team and as a Board, we're sitting down and strategizing as we look into 2026, how we manage our capital for the best risk reward for our shareholders, both in the short term and to manage that discount to NAV, but also for the longer term in adding new portfolio companies, that's a broader discussion point.

Moving on to Slide 3. The key highlights and numbers I've touched upon, of the NAV in dollar terms, up 6.9% and 22.9% for the quarter and for the year, year-on-year.

And from a SEK point of view, a healthy quarter of 4.6%, not a lot of currency diversion and up 2.8% for the year. Share price obviously been weaker, flat year-on-year at the year-end and up 3.3% in the quarter.

And on Slide 5, this is a chart we show every quarter and what you're starting to see since year-end '24 is a gradual pickup in the NAV in dollar terms to now $434 million. As I say, this is -- there is a micro level of our portfolio companies, but then obviously, it feeds down from the macro level and the cycle level.

Venture capital, capital is in a better place. Capital is flowing.

Macro is in a better place. The companies that were invested in quality companies are starting to grow again, and that's feeding through to a growing NAV, which is key, obviously, for everything that we do here at VEF.

And Alexis is going to talk [indiscernible] provide slides around the NAV dilution over the year, and I'll come back on some key points before we open up for questions.

Thanks, Dave. Hi, everyone.

Yes, just looking at Slide 5, which highlights the valuation approach and key takeaways for the portfolio in the quarter. The main mover there is Creditas moved from mark-to-model in the previous quarter to this latest transaction priced at the $108 million Series G round that they closed in December, which resulted in a $33 million uplift to the NAV.

The rest of the top 3 names like Konfio and Juspay remained at mark-to-model and latest transaction, respectively, which results in the portfolio being valued on 69% at latest transaction and the remaining 31% of the portfolio being valued on a mark-to-model basis. And of those 31%, 90% plus of those mark-to-model valuations reflect multiples further down the P&L, i.e., like below just the revenue multiple.

Moving on to Slide 6. So on Slide 6, we just break down the NAV evolution in the quarter, and we show the breakdown of that and how it's attributed to different factors.

So the biggest part of NAV growth in the quarter is attributable to Creditas' round and the impact of that round on the valuation of the company. In the portion of the portfolio that's mark-to-market, you can see the slight positive portfolio growth was partly offset by the market pullback in the quarter.

So the holdings that are valued at mark-to-model had a relatively neutral impact in the quarter. Just on to Slide 7.

So -- in Slide 7, we show an aggregation of the NAV evolution over the year and how the different parts or the attribution to that over the quarter. So overall, in 2025, we saw a strong contribution to NAV growth from portfolio performance, the market performance through comp multiples and also strengthening non-USD currencies.

And importantly, we also converted $37 million of our appreciating NAV to cash, which shows up in that net $18 million positive cash position over the course of the year. So in aggregate, there was $81 million of positive NAV evolution.

As Dave mentioned, that was 23% year-on-year dollar NAV strengthening. And on a per share basis, that's 26% year-on-year once you factor in the buybacks that we did over the course of the year.

And then just on Slide 8, we use this slide to just reiterate our -- how we continue to feel confident in the strength of the portfolio, the fact that we have a portfolio that's growing 25% to 30% year-on-year on a self-sustaining basis. And Dave will -- a lot of that is driven by Creditas, and Dave will get into some of the details of that in the preceding slides.

But we're also feeling confident that there's been a change in the environment, far more fundraising activity in our markets. It's definitely heating up, and there's been a flight to quality, which has benefited our portfolio.

And we expect to see rounds like Creditas and Juspay to continue to take place and continue to benefit our portfolio and help us improve our liquidity and balance sheet. So handing back to you, Dave.

Super. Thanks, Alexis.

Look, I think from a portfolio point of view, as Alexis alluded to, what's key is that you invest in quality companies and you've got a through cycle performing portfolio. And that's what we're starting to prove out having gone through the boom years up until 2021, the VC winter of '22 and '23, where we reevaluate our portfolio and set a valuation mark lower and then the recovery and the growth that we're seeing in 2025.

So you get to -- you invest in these companies, you live with them through cycle, you see them in the up and the down cycles, and that's how you build longer-term value. So we're very happy with the overall portfolio where it is.

And we do have tailwinds from an ecosystem, VC capital flows, valuation point of view, all very helpful to what we do. Specific to us, obviously, is Creditas.

Creditas performs. It's a big part of VEF performing, as we all know.

And 12 months ago, these numbers weren't what they are and what you see today. And this is what we said the management was going to do, and they are delivering, and we expect that to continue into 2026 and beyond this year.

And what you have is an improving growth profile at a very managed risk-reward basis as they manage their cash flows on a neutral basis. And in Q4, we'll get to about 20% year-on-year loan growth.

Revenues are following that growth. And that's key for future value of Creditas as it looks to be, at some point in the future, a public company with real value needs to start growing again, that engine has really kicked in.

As impressive or as important is the -- what they're doing from an efficiency and cost point of view, enabling AI tools across the business, and you're starting to see that efficiency gains kicking in. So you're not just getting growth, we're getting more efficient growth, which is the future of this company and the industry as a whole.

Besides the numbers themselves, what is key for Creditas in Q4, all these things kind of came at the same time, but they've been work in progress for quite some time. One was obviously the announced Series G funding round, $108 million coming in, and we spoke about that in Q4.

The bank license itself was approved in Q4, and that's key, lower cost of funding, more availability of funding and a franchise uplift for the overall business and its optionality going forward. And in the top team, Ricardo Forcano came in from formerly a BBVA Group, top management.

It's the type of caliber of top management that the company is now attracting, not wasn't attracting, but it is on the front foot, and that's the kind of talent that comes with that. So it's kind of like an ABC trade.

So I think from all aspects of Creditas, we're very excited as we look at the company where it's positioned, the tailwinds that it has, capital position, economics, et cetera, as it goes into '26 and '27. And besides Creditas, I want to talk about cash exit capital.

What's key is we're always looking at our cash and capital position and our balance sheet strength, and then we're making -- looking to make logical decisions around that positioning. At the same time, we're very focused on the short term, more so in the past and now transitioning as we balance, obviously, short term is important, but start to look at the medium to long term for VEF and for all our shareholders.

From a cash position point of view, we had $15.9 million of cash and liquid assets at the end of Q4. And that's -- our balance sheet is stronger than it was in the past.

But what's key is we paid down half our bonds, but we still have $26.1 million of bonds outstanding. So we're in a negative net cash position, and those bonds are due at year-end '26.

So any kind of decisions that we make has that in mind. And that's a kind of a cash liquidity risk management overlay to everything we do.

When that capital started to come in from the exits we did last year, the initial allocation was obvious, pay down some debt, start to buy back your shares. Now that we're net negative on cash, we balance that with how we look to more cash coming in and also thinking about the future and looking at pipeline and balancing all that into a broader strategy.

That's all a work in progress at this point in time. What I will say is the key to all of this and us having the tools or the ability to do more as in pay down more debt, and we do aim to go debt 0 by year-end.

That's one of our inherent goals. We do have options around rolling the debt, but the plan is to buy back more shares and then put capital to work in new pipeline companies, Key to that is capital in and key to that as exits.

We had a very -- off the back of promises to investors, we had a very healthy last 12 months in delivering exits, which are hard in our industry, and we delivered 3, as I said before, in India and in Brazil via IPO, via M&A and via secondary sale, the biggest and the most juicy of which was Juspay, about $37 million of gross proceeds came in, in the last 12 months. We look at the next 12 months, and we're fairly confident that we will see more exits.

We're working on the number. By no means is a VEF wind-down vehicle, but we're taking our opportunities to take capital off the table at NAV plus/minus in our companies to bring that money in, and that strengthens our balance sheet, puts us in a stronger position.

And with that capital in play, then we have the range of decisions to make and actions that we took like we did in 2025 around debt and -- around VEF debt and VEF equity. I think this whole ideology is just keeping the market updated on how we're thinking.

We haven't set anything in stone at this stage. As I say, a lot of it is around our capital strength with more capital strength, you can make more decisions and what's the priority.

There's more capital you have, you can prioritize different things for both short term and long term. But bolstering the capital position is key at VEF, bolstering our balance sheet.

We want to be a strong investment company with optionality of capital. We've paid down half our debt.

We would like to go debt-free by year-end. Narrowing the trade discount has not gone away as a concept.

We're all shareholders. We value our shares and narrowing that discount is a key part of anything we do.

We cross-reference that with our cash capital position versus our -- what money is due in the bond markets. And then we're starting to gradually overlay that with the future and the future growth of VEF because we look at our portfolio, we look at Creditas, Juspay, Konfio, we look at the past of Tinkoff, EasyGo.

We know we have the muscle to invest in best-in-class fintech companies. We know those companies compounded value, and we know we can realize that value for shareholders as we've seen with Tinkoff, EasyGo and more recently with Juspay.

So balancing that long term with the short term is all part of the strategy that we're doing at the moment, cross-reference with the capital position we find ourselves in today. And just to finish off, so the broader investment case, and this is very similar to last quarter.

We keep on saying it's about the portfolio. Any investment company is about its portfolio.

And I think we have proven through cycle that we have a quality portfolio that our investment radar is good and that names are now starting to break out then in terms of growth, profitable growth and they're raising fresh capital. So we're in a as comfortable and as positive position as we've been for a long time in terms of the quality of our portfolio.

And that's the basis for value creation and growth. Then you've got exits.

Exit markets are back, but it's hard work to exit. We're proving that we can exit our positions and we can exit them at the right price.

There's been no fire sales, nothing forced at the door, the right exits at the right time at the right price, strengthening our balance sheet. Then you've got questions around capital allocation.

And we look to win the near term as well as the long term and put that capital to work in the most value-added way. It was paying down some debt, it was buying back some shares.

And now while we're in a negative net cash position, we sit back, we strategize as and when the next capital comes in, how do we allocate that. And then we're debating the short term versus the long term because it's very logical given our track record of investing versus the very short-term obvious traded discount playbook of buying back your shares.

We get that. We're very cognizant of that.

And within the pipeline, we are flexing that muscle again. We are seeing best-in-class EM fintech companies around the world.

We are excited about names that we could potentially bring into our portfolio. We need to cross-reference that around, A, our capital position; and B, the opportunity to create value for everybody involved by our shares and obviously delevering our debt.

I will stop there. And operator, very happy to open the floor to questions at this stage.

And starting off with a question on the Creditas raise. If you could just walk us through maybe some of the details and how this has affected your ownership stake in terms of dilution?

Yes. I think last part first, from an ownership point of view, we broadly own what we did before.

But there was a lot of moving parts to that in that the round itself was led and underwritten by Ann Bank, who's a key investor in Creditas. And so the capital came in.

But there were a number of notes outstanding convertible notes of which we held from previous round back in '22 and '23. So they converted at a discount to the overall round price.

So net-net, we still own the same -- sorry, approximately 9% of Creditas. It didn't move that much given the mechanics and the math of the round.

And then from a valuation point of view, there was obviously the headline valuation, but we value Creditas at the convertible note, the discounted notes just to be conservative and in line with our most recent effective capital in.

That's very clear. And then a question on Juspay, which you saw putting out some numbers a few months ago.

And just any updates on how they're tracking along? What should we expect for 2026?

Should we see some moderating momentum? Or is this going to continue to compound in the same way?

Yes. Alexis, do you want to grab that?

Yes, Juspay continues to execute well. So I think in -- for the calendar year of 2025, the company grew around 40% top line.

We are forecasting the company expects to grow like at a similar pace this year. I think the big variables within that are as they -- last year was about planting seeds in international markets, and this year is about seeing those seeds like really thrive and start to contribute to the top line.

So I think some of the variability about them being able to deliver 40% or maybe more will come from their success internationally. And so far, we're feeling pretty strong.

There are some large signed contracts, which can be quite juicy and fruitful. But yes, I'd say 40% to 50% top line growth for '26 similar to '25.

Yes, Linus, what you have is, you've got the -- the top 3, you've got names like Creditas and Konfio that are coming back into their own and starting to compound back into that 20% plus growth zone. And they can easily go to 30% given the markets are in the TAM.

But Juspay has been compounding at a healthy clip through that cycle. So -- and we do expect a healthy year again next year.

I appreciate that. And then my final question was just double-clicking on this near-term capital allocation.

How we should interpret those comments on balancing? I mean, should we think some new smaller exit before buybacks are resumed at scale?

Or is this something you'll be starting in the near term?

Yes. No, look, it's a very fair question, and we're not ignorant to the share price.

And we -- what I'd say to you is we're making no firm statement today, and that's not hiding behind anything, but it's very clear that we need to manage our capital position given what we need to outlay at least on paper from a debt point of view by year-end. And that was a very cognizant management and Board decision when we stopped the buyback as in let's get the balance sheet to a more comfortable position for everybody involved.

We are comfortable on line of sight of exits. We would like to see those exits coming in.

Nothing is guaranteed. But as they do and the capital position strengthens and you go net cash positive, then you have the decision tree, whether you keep the capital to pay down your debt.

Is that the most important thing in an ever-changing environment, that may be more important than buybacks. And then you cross-reference that with the clear IRR that you have in buying back your own shares as well as the indication to the market, which is very positive.

And then you start to cross-reference that with the long-term value when you see some awesome fintech companies like the ones we've invested in the past that we could potentially add to the portfolio. Now we're trying to get all our ducks in a row.

And we're being -- I think we're being maybe overly transparent and communicative with the market about how we're thinking as opposed to just finishing our thinking and putting all down on paper. But I think that we respect the market enough to share as we go.

I think we've always done the right thing for long-term value for shareholders. We can't control the share price.

That's very clear. But I think to your point, Linus, I think more capital in gives us more comfort to do more across all areas of capital deployment.

Firstly, on geopolitical situation in South America following like the U.S. operation in Venezuela, have you seen any impact on your business or any increased risk that you foresee going forward after this development?

Interesting. Not really in the specific context in a global context, clearly, there's a lot of moving parts geopolitically and U.S.

is at the forefront of a lot of them. And these are unpredictable.

We wouldn't expect anything to happen in any of our investment countries in Latin America or elsewhere similar to what happened in Venezuela. I think it was a very specific case in point.

And obviously, we like the event. We like the outcome of the event, but the event itself and the nature of it was tricky, let's say the least.

But no, I think from the landscape in Latin America, the markets that we look at Brazil and Mexico haven't been touched really by that. And we talk to a lot of global investors who invest in emerging markets in LatAm.

And even to other markets like Colombia, Chile, et cetera, we haven't really seen any impact. I think there's a very specific excitement around the potential for Venezuela off the back of what happened.

But it's a country with many possible -- lots of potential and many possible future scenarios. So I think removing bad leadership is only the start, but then the pathway, there's a lot to work on there.

But no, we've seen no negative outcomes or volatility or risk to any of our countries. This is all within the domain with a very fluid, noisy global geopolitical kind of environment, much more than it was in the past.

Yes. And then I think like most of the questions was answered by Linus question, but maybe if you can share any operational update on Konfio and how their banking license application is going.

Yes, that's fair. It's been overweight Creditas communication in Q4.

And obviously, Juspay Alexis spoke about Konfio did very similar results to what Creditas did in terms of top line growth, loan growth and top line growth in the 20% bracket, albeit it wasn't the upcurve that Creditas had quarter-on-quarter through the year. It was more sustained through the year.

It is a bank that can do a lot faster growth and Creditas can be the same given the TAM that their environment in. So an easy do 30% growth plus as we look into 2026.

I don't think it will start off that way. I think it will -- Q4 is generally faster than Q1, so it really picks up.

Margins are holding steady and tight. They're cash flow positive, have a strong cash position.

And on the bank license, we'll see. It's one where they're position that we said it before, I think as a Konfio is planning life without a bank license, albeit we know the benefits of a bank license.

So very clear that it's in line to get one. Just when you're talking about regulators and timing, it's always a risk.

The upside is clear. Like Creditas getting its bank license in terms of funding costs and franchise value.

But we're comfortable it will get the banking license. We just wouldn't like to put a time on it because we've been there before with regulators and bank licenses and these things just take time.

But the good thing in Mexico is we have seen bank licenses being handed out. So it's something that is and has happened.

So it's not like it never happens.

And I have 2 questions. The first one is about -- that I can read in your report that you underline that you want to make new investments.

And I wonder how you're going to finance them considering that you also want to reduce the debt and perhaps also buy back shares. My second question is if you intend to try to reduce the discount to net asset values as it's 50% right now.

Tobias, thank you very much for the questions. And I think our sharing around our direction of travel has been bigger picture and broad as opposed to specific.

And we didn't mean to mislead our investor base in what we're doing. We are an investment company.

We are working pipeline. We are very keen to get best-in-class fintech companies around emerging markets into our portfolio.

It's been part of our muscle and our job for the last 10 years. So when I say we've been building that muscle again, we've been out there looking for these best-in-class companies.

And that's part of our job. At the same time, when we looked last year and the year before, it was a very clear priority around strengthening balance sheet, getting capital in, putting capital to work where it was most clearly needed, delevering, paying back the debt, and that's there still as a goal for this year.

There are 25 million plus/minus to go. And clearly, to buy back shares is part of the IRR given where VEF shares currently trade.

What we did was we paused effectively in Q4 of last year around the buyback and touching the debt for now because of our cash position going lower than our debt that was due at year-end. And we wanted to continue to strengthen our balance sheet.

It's a general top-down statement where we are looking to transition to going -- to getting VEF back on the front foot investing. The debt still is very much there.

It has to be paid. It will be paid.

Our shares do trade at a deep discount to NAV. And there's many ways of delivering, closing that discount to NAV, and we have been working, focusing on communication, Investor Relations.

We bought back some shares last year, transparency for our bigger companies, exiting our positions at NAV plus/minus to prove that our NAV is real. We continue to work that mandate.

So there's many ways of attempting to -- we don't control the share price, but attempting to decrease that discount to NAV. And it's in our interest as much as all shareholders' interest to have that discount lower if even nonexistent.

That is part of our short-term, medium-term goal. We stopped doing everything for now until we get the capital in, and we're just strategizing around these things.

And there will be a priority depending on how much capital we get in, what pipeline companies we see, the IRRs in those pipeline companies versus IRR and our shares versus buying back the debt. So I think it's all just there.

I think our track record last year was buying back shares and paying down debt. We're just talking about the 3 different aspects and saying we're ready to go on all.

But with $15 million of cash and $25 million of debt, we just paused, took a moment, strategy discussing and we're going to -- we're really focused on the exits because with more cash, we can do more things. So it's -- that's on balance sheet.

We're also looking at potentially doing off-balance sheet structures. We can use our investment muscle, our ability to find, underwrite, get allocations, best-in-class fintech, but do it off balance sheet by potentially SPVs.

So it doesn't have to be A, on balance sheet. It can be B, off balance sheet, which doesn't touch VEF, but can benefit VEF in terms of fees, carry and different ways.

So we're just looking at all of this. We're discussing it internally.

We're positioning ourselves. Maybe we're opening too much to the market, but I'd like to share as we go.

And I'd like to listen to the market and the market speaks very clearly, we take all that on board and we try and make the right decisions as we go.

Yes. Thank you.

Look, thank you, everybody, for following us, for the interest in our story and our stock. We have people coming in asking questions by e-mail.

And otherwise, we will come back to you for sure. We're very happy with where we're at in terms of our portfolio.

That's key. You can't do anything with a strong portfolio.

We're very happy where we are in terms of cash generation and delivering exits. If not every investment company that's in a position like us being able to do this, it puts us in a strong position.

And then we're very clear and maybe overly leaning in around our thought process around what we do on capital allocation as we look forward. Watch this space.

We'll be more clear as we go forward as capital comes in, but we're listening to the market as well as trying to make the right decisions for VEF, both short term as well as long term. But thank you.