Kinnevik AB (STO:KINV.B)

CMD 2019

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Sep 19, 2019

Hi, everyone. Great to see so many of you here. My name is Torren. I'm Head of Communications at Kinnevik, and I'll be guiding you through the day. And before we start, I just have 2 slight changes to the program. We will hear from Naren at Homeo already at 15 minutes past 1, pushing our main speaker Lee down slightly 20 minutes, and I hope that's fine with everyone. And we'll also have a Q and A session right after we've heard from Georgi and Joakim. But we gathered all of you here today because we are passionate and excited about Kinnevik's future. And I hope that all of you in this room will feel that passion and energy as you hear from our management and from our companies. And there's no one better, I think, to start off that to present that strategy and our passion than Georgi, our CEO. So go ahead. Thank you, Torren. Hi, everyone again and welcome to Kinnevik's Capital Markets Day 2019. I'm so excited to see so many of you here and also of course via our webcast. The reason we're here is to talk about what Kinnevik is today and where we're headed. And our story is intact. We have reshaped and challenged industries for many years. And we were disruptors long before that buzzword was even invented. In the last few years, Kinnevik has also invested in a number of exciting growth companies and we think this is an excellent opportunity for you today to listen to some of these most exciting unlisted and recently listed companies. You'll hear from Livongo, Betterment, Pleo, Moniz, Global Fashion Group, Omeo and Crennial. These companies all represent a good mix of our focus sectors, geographies and of course stages of development. With that said, let's get going. I will start by presenting an overview of our strategic priorities over the coming years. And then Joakim, our CFO, will guide you through how these priorities translate into financials and how we report back our performance to you. And again, we are excited to have you here and I look forward to an interesting day. But before we start with that strategy, let me start by explaining the rationale of the 3 announcements we did earlier this week because I'm sure that you're sitting now and thinking what are they really up to. Firstly, on Monday night, we announced a smaller sell down in Zalando. We are proud owners of Zalando. And due to its success, since our first investments in 2010, it has grown into become the largest asset in our portfolio. And Zalando fits squarely with the strategy that we are presenting today. And our small sell down should solely be seen in the light of us wanting to keep up the ambition of investments in new and existing companies. Secondly, we announced on Tuesday that we will distribute our entire holding in Millicom to you, our shareholders. That's a value transfer of roughly SEK 19,000,000,000 or somewhat SEK 65 per Synovig share. We believe it's the right time for our shareholders to be able to be part directly in Millicom's future journey and the dividend that you will receive. Thirdly, with a higher share of companies investing heavily in growth and our ambition to maintain that activity going forward, we've also taken a decision to amend our shareholder remuneration policy. We will use the dividends that we receive in the future for Tele2 to reinvest them into the companies where we see strong traction and where we have conviction that they will create tomorrow's winners in their respective categories. Thereby, we will cease to pay ordinary dividends, but we, of course, keep up the ambition to return cash to our shareholders more in an ad hoc manner when we do successful exits. Now with those few days of this week covered, let's move on to speaking about our growth strategy. And we will go into the details of how we work and why we have such a conviction that this is the best way to create shareholder value. Kinnevik is a unique company. We combined a strong connection to our history and our heritage with a forward leaning bold philosophy. And it's on this foundation we have continued to develop and nurture our multidimensional platform that is taking us to where we are today and that will help us to grow Kinnevik also in the future. Our philosophy is simple and it resonates throughout our entire portfolio and it's also what guides us in our investment decisions. We believe that the power of technology makes life better. And this is something new. We've always been backing the challengers. Think of Tele2, how they revolutionized choice for the Swedish mobile consumer or how MPG enabled the suites who were used by the exciting choice of state owned television channel number 1 and state owned television channel number 2 to all of a sudden have access to an abundance of TV commercials. I'm not going into the quality of content here. I'm talking about the number of channels. And in more recent years, Zalando has been disrupting the fascial retail scene in Europe somewhat 10 years ago. And this is actually what Babylon is doing today within primary health care in the U. K. While expanding globally. And so is Betterment doing within the savings and investment market in the U. S. But we, of course, have more examples. All the companies here today, Global Fashion Group, Omeo, Pleo, Moniz and the others. They all have this in common. They're all making life better by empowering technology in order to empower and delight their customers. In the past years, the number of investment organizations claiming to be the best owners of beautiful unicorns and growth companies have literally exploded. But But when I decided to return to Kinnevik, it was very much based on this organization long standing and proven ability to partner up with the right founder to challenge the norm. We have a unique structure, combining what I would call the best of 2 worlds. Being a publicly traded investment company with entrepreneurial long term owners, we can make investments and drive value creation for the long term. However long, we'll still see a risk return opportunity that is very rewarding. And at the same time, we give our investors liquidity, strong corporate governance and transparency. I would say we are the opposite of a classic fund structure with short funding cycles and focus on quick gains. Genovig has permanent patient capital. We have full flexibility and low costs when we operate. And we can be there for the founders for the long term, so the founders can be there for their businesses, whether it's building a new business from scratch in Russia like Avito or continued expansion within healthcare as VillageMD and Livongo will do in the U. S. And we offer this, what I say, unique exposure to unlisted growth assets for you shareholders that you would otherwise only be able to access through a more traditional blue chip fund structure. Our companies and our founders, they know that we are here for the long term. History has showed that time and time again. And this approach allow us to have very deep partnerships with our companies on Board level, on CEO, founder level, but also across various competencies between the companies. We took a decision to gather a lot of these many of these companies early this spring when we hosted an event here in Stockholm. And we want them to understand what it's really about to be part of the Kinetic family. Let's now watch a movie, short film, where we've asked some of these founders what they see as key benefits to be part of the Shinnevik Group. It's always good to build relationships with other people trying to build businesses. When you're trying to build a company, there's a lot of similarities, whether you're trying to deliver groceries efficiently or you're trying to manage finances efficiently. One of the benefits with having Chinnomic as an investor is that you can share a lot of best practices, knowledge, network with is that you can share a lot of best practices, knowledge, network with the other portfolio companies. A lot of the challenges that you have as an entrepreneur, you think you're the only one who has those challenges. But then you talk to other people and it turns out everyone has the exact same issues everyone else has. You know, Shinnebec has a similar history of telecom and media, etcetera, disrupting old industries that historically most people would think is impossible. The disruption that this The disruption that this industry needs is a focus on a customer, not a focus on a bottom line. So these magical consumer experiences is what we're really trying to bring. Kinnevik has really created an ecosystem of founders, entrepreneurs, managers and portfolio companies that share a common set of values and use that as a basis to build very different businesses in very different parts of the world. I see not just in a sort of a high level discussion, but actually I think there are true potential partnerships that are in works. I think the most interesting is that we have companies that stay at very different stages. So we have companies that are, yeah, dollars 5,000,000,000 in revenues, some other companies have $5,000,000 in revenue, 50 people or 5,000 people. The Challenger DNA has been really important and pivotal for Genevieve. And I think that's something that we feel as well. Being a part of this group is being part of a family that shares this ambition, wanting to develop these companies and share the same kind of value. Chinnovico proved that they can attract amazing people, and I'm very honored to be in this group where you're getting all the this amazing kind of tailwind to be successful and it's just very clear. Let us now look at what we have delivered in terms of return to our shareholders. Going back 35 years, Kinnevik has really evolved in stages, but we have always focused to provide the consumers with more choice and we've almost been obsessed by challenging incumbents. Starting already in 1980s within our mobile and media companies. And then later on, simplified and changed our structured the beginning of the millennium to invest really, really big into new consumer companies, paving the phase for the new growth. With our recent investments, both in terms of the increasing number of companies, but also total capital deployed over the last 18 months, We're again reaccelerating this pivot towards more growth. And these companies will be very much those companies that you will see here today and listen to. For our shareholders, this has resulted in Kinnevik consistently beating the market over the long term and returned over 300 times in 35 years. For us, improving customer choice means disrupting sectors where incumbents take advantage of inefficiencies and underserved customer needs. Technology is great, but what we truly look for are the most talented, passionate founders and entrepreneurs that we can partner with in order to create the consumer businesses of tomorrow. We partner with these talented entrepreneurs within our focus sectors, e Commerce and Marketplaces, Health Care and Financial Services. Large sectors, all in the process of significant technological disruption. And we will continue to back these channel shares as they use technology to revolutionize their sectors. This is exactly what Livongo is doing in the U. S. When helping people with chronic diseases or what Kolonial is doing for online grocery shopping in Norway or of course, Omeo for travelers in Europe. Finally, we believe in both delivering shareholder and social value for the long term. And by building well governed companies, we can contribute positively to society at large. Let us now look closer at our portfolio composition and what's unite these companies. The consumer and the right to choose is at the heart of everything we do. That's why we have been focusing on these large sectors that play a very important role in our customers' lives. You can come in contact with our companies when you communicate within your family or your business. Of course, when you're buying your new wardrobe, when you're doing your online grocery shopping, when you're going to the doctor or even better preventing yourself from being sick in the 1st place or when you're going out on a trip with your family. All these companies are part of the household and the life we're living. But of course, to truly understand these customers, we also need to be mind that we should reflect the customer base. And although half of this customer base is female, it's not really represented in our investments, the decision making bodies in our investee companies and for that sake actually in Kinnevik and the industry at large. Therefore, we announced a comprehensive diversity and inclusion framework at the AGM in May this year. I truly believe that diversity and inclusion drives better decision making, attracts talent and ultimately creates stronger and better companies. As the industry at large, we are not good at this today and I'm not proud. This need change and that change can only come with high priorities from the top. We have clear targets, clear KPIs that we will follow-up. And these KPIs, I would say, are far more reaching than we typically see in the rest of the industry. Since we announced this framework, we've actively been working with this internally within Kinnevik and with our companies. And I look forward to present how far we have gotten here at the AGM next year 2020. This is a top priority for us. Later today, you will hear from many of our recently listed or unlisted assets. But before we go into that section, let me first just go through 2 of the cornerstone companies in our portfolio, namely Tele2 and Zalando. Both companies fit squarely with our investment philosophy and they're providing better choice for the consumer and they leverage on innovation and new technology. Following the merger with Com Hem, Tele2 has significantly strengthened its market position. And today, Tele2 is either number 1 or 2 in Sweden and the Baltics in mobile, broadband and digital TV. Tele2 has in the past year completed the merger with Com Hem in Sweden, with T Mobile in Netherlands, exited the Kazakhstan business and sold its Croatian business. And now with this reduced footprint, the majority of the revenue comes from Sweden, a mature and stable market where growth does not come easy. The financial target is to grow slightly more than the market in general to reduce the costs on the back of the upgraded synergy targets post the merger with Com Hem and to be disciplined and keep a low CapEx level in order to grow cash flow that can be distributed to its customers to its shareholders. And as you know, Kinnevik is the largest shareholder of Tele2 and we were big supporters of the merger with Com Hem. We actually facilitated that transaction by taking the decision to distribute our shares in MTG to our shareholders to get regulatory clearance. And even though we had high ambition and expectations with this merger, I must say that the Tele2 team has over delivered. We talk about impeccable execution. Not only have the synergy targets been increased, but they have executed faster than the original plan as well. And for us, Tele2 is a perfect fit in our portfolio. It's somewhat of a counterweight to the less mature companies and it provides us with a good yield, as I said earlier in the presentation, that we can reinvest into the companies that we believe could be the winners of tomorrow. Going to Zalando, our largest holding and I would call it the jewel in the growth portfolio continues to benefit from immense market opportunity 10 years after our first investment. Salango's management team has set out a clear new goal to be the starting point of fashion and to reach €20,000,000,000 of gross merchandise value by 2023, 2024. This is a bold vision. And to achieve this, Zalando aims to deepen its customer relationship by tailoring the offers in a different way to its most loyal customers. Zalando has also clarified how to expand the partner program. That is the platform that allows brands directly sell to their customers and also add services like Zalando Media Solutions and Zalando Fulfillment Solutions, 2 important components to drive profitability. In 2018, 250 brands were connected to this platform that amounted for about 10% of the GMV gross merchandise value. And now the bar has raised. Zalando says that 40% of the GMV will go through this platform in 2023, 2024. During 2019, the management and supervisory boards of Zalando were strengthened to support this bold vision. And we are, of course, very happy that our lead shareholder of Shinnevik, Kristina Stenbeck, is now the Chairman of the Supervisory Board in Zalando, a very good fit based on her knowledge about platforms from Spotify, earlier Zalando and other companies like Omeo in combination with a deep understanding of the fashion industry. We think this is a perfect setup for Kinnevik, for Zalando and for both companies' shareholders. And even after our recent sell down in Zalando, we are by far the largest owner of this company. And in the 21st century, we are not necessarily looking for control. We are looking to influence outcomes. And I would say with our 25% plus stake, we definitely are in that position. If you look back, Kinnevik has systematically reallocated capital from companies where we believe that our tenure as owner is over into more less mature growth assets. Examples in recent history includes the exit from Coarseness starting in 2012 in a 2 step process where money was deployed into companies like Zalando. Rocket is another example in 2017, where we had opportunity after the Axis to invest in a complete new sector being healthcare with relatively small tickets to start with in companies like Livongo and Babylon. With the distribution along this growth and maturity curve, as we see here, U. S. Shareholders can benefit from a unique system spanning from companies within the venture and growth businesses to more mature successful growth companies like Zalando to cash distributing companies, stable businesses like Tele2. Our view that this is a very good balance of young and more mature companies and provides you with an attractive risk reward profile. So what does this mean for our capital allocation framework over the next few years? Firstly, we will invest 2 thirds of our capital in follow on investments in proven and high performing companies in our portfolio to reach 15% to 25% ownership levels. And as I mentioned earlier in this presentation, we're not necessarily looking for control. We're looking to influence over outcomes and this should be in relation to the capital that we deploy. Secondly, we invest 1 third of our capital into new businesses to ensure that we keep infusing our system with fresh blood or to say it more blunt, continue to feed the cow. We will add 2 to 4 companies per year between 2020 2023 spread across our focus sectors, but with around 80% of the first run capital, 1st round capital being invested in more late stage businesses abroad. VillageMD is a good example of that, our latest announcement. And 20% of the First Capital invested in less mature businesses, venture like businesses in our home market, the Nordics such as Pleo for instance. And the reason why I qualify this statement with 1st round capital is that we expect many of the Nordic ventures to grow and to branch out internationally just like we see Plea doing now in U. K. And the rest of Europe. And of course, one day, we hope that they will be that clear growth portfolio jewel as Zalando is in the portfolio today. Thirdly, with our ambition to maintain a portfolio around 30 companies and that include also a number of smaller investments in the venture business, This means that we are aiming to exit just about so many companies that we add. We can't have too many companies and still be the active owners with a nimble team. And the lack of at scale exits over the recent years is mainly a function of our portfolio distributions. And as our young companies will develop over time, over the coming years, I am sure that we will demonstrate as successful exits as you have seen with Avito in 2015 and Lazada in 2016 2017. We will continue to monitor our companies when they reach the affliction point. We are handing over the baton makes sense not only from a financial perspective, but also from a commercial perspective. And to sum it up, we have 3 priorities going forward. 1, we will continue to evolve our portfolio towards a higher proportion of growth companies in our target sectors and markets. And our investments in MatHem and Kolonial in the Nordics or doubling down improving companies like Livongo and Babylon in the existing portfolio and adding new companies abroad like VillageMD are all good examples of something that resonates with that philosophy. 2, we will strengthen our portfolio balance across sectors, stages and time to liquidity in order to be able to provide you with these exits I'm referring to. And going back to that S curve, it means constantly moving capital if we need between the portfolio, but at the same time, since we have patient capital, always have the privilege to hold on to a company as long as we see a good risk return opportunity. 3, we will reallocate capital more dynamically in the future and exit a number of businesses at attractive terms as a relatively young portfolio matures. Part of this capital from the exits will be used to feed new investments and part of the capital will be paid out to you shareholders. Lastly, in this part of the presentation, I'm super excited a bit about this new Kinnevik. This is exactly the job I signed up for. And I'm convinced that we have this platform built by a team, a portfolio, but also a pipeline and we are ready to go and execute. Thank you very much. Thanks, Georgi. So translating that into returns, capital structure and shareholder remuneration. Joakim, our CFO. Please enlighten us. Perfect. Thank you, Toron. So when we talk about the portfolio balance that just mentioned, we think about that from 4 perspectives of 4 different parameters. And as you have seen, since this summer, we have already addressed a few of them including this week's announcements. It's not only the balance between public and private that we have been talking about quite a lot with all of you when we meet you, it's also between the sectors, geographies and the stages and tenures. But the last what we mean with the last one is exactly what Joergie mentioned that we want a more evenly distributed portfolio with a string of pearls rather than having a big overweight to a certain stage. Recent examples of these efforts are the 2 year buildup of our healthcare portfolio and the sell down in Zalando, which primarily addresses the sector balance and the proposal to spin the full ownership in Millicom, which primarily is addressing the geographies where our portfolio will be less exposed to geographies with low priority. The consequences of these initiatives will be that we need to rethink our financial targets, the funding strategy and also the way we present our performance to the markets. And if we start with our first financial target, the total shareholder return, as of today, we are committed to deliver you 12% to 15% return over a cycle. This target is built up by a bottom up approach whereby we look in our portfolio and look at each individual company, set individual targets, minimum return targets for each of them and then we accumulate and consolidate that to one total number for Kinnevik, which as of now is 12% to 15%. As you can see on this page, it is a somewhat simplified model because obviously there are other factors playing a role here when we do this. As an example, where the companies in our portfolio operate, which geographies they are in. But as you can see, the way the portfolio is built up today, we have individual return targets of 7% to 12% or around 10% for the more mature ones and then it spans up to 25% or above for the venture staged companies. The consequences of our initiatives is that you'd likely to see that we will move up words on our TSR target. And also it's fair to say that the announcements this week already has led us to be moving upwards in our existing scale. This is our target we are evaluating continuously and we will get back to you with more clarity when we take decisions on any changes. Moving over to our 2nd financial target relating to the shareholder remuneration, you have seen that we have taken a decision to change our dividend policy. You can read this new policy on this page, but what we are effectively saying is that we are moving away from regular cash payments, dividend payments to our shareholders to returning excess cash as a result of our investment activities. We believe that this new policy is more fit for purpose for the Kinnevik that we are transitioning into with a more growth focus. The rationale for making this change now is the distribution of Millicom, which is a distribution that corresponds to, as Jorgen said, around SEK65 per share or 8 times our dividend proposal or dividend payout of this year, which will make our shareholders whole for a period up to and including 2026. We would recommend all shareholders that do not sell their Millicom shares and reinvest into more Kinnevik shares to maintain their Millicom positions because that's an asset that as of now is yielding 5.4% as we show on this page. This change shall not be read as we are stopping to pay dividends, but it will be less regular. You can rest assured that we will remain very disciplined when it comes to our capital allocation and upon each liquidity event, we will carefully assess our liquidity needs and to make sure that we have an efficient capital structure going forward. A reasonable assumption is that we will target to stay within the range of plusminus10 percent net cash, net debt to our portfolio value. Finally, I also want to clarify that this changed dividend policy will not have any impact or change already decided dividend that we are paying out in November this year. When it comes to funding, we as a fully invested company are working within a capital reallocation strategy. And what does that mean? That means that we cannot only spend a lot of time looking for new exciting companies to invest in. We also need to spend a lot of time looking into our portfolio and at our existing companies to find capital to release for making those investments. For those of you who have been around for some time, you will remember that we more or less every 2nd year have had a large divestment or executed a large divestment, be it 2013 with below costness, 2015 with Avito, 17, Rocket and last week or this week Zalando. Going forward, you should expect us to be more dynamic on this capital reallocation activities and we will not only and solely rely on this big kind of momentum I mean, monumental capital releases. As you also can see on this page, we have been somewhat more predictable when it comes to the pace of investments on the green bars and that is something you should expect us to continue with going forward. Our capital structure target in the form of maintaining a lower leverage than 10% of our portfolio value will remain. That also means that we will continue to use debt in between capital releases to bridge the time between making an of Genevieve becoming more focused on growth companies with a higher proportion of unlisted companies, younger companies, we also believe that we need to be more transparent with our approach to value creation. As such, we are working on a refresh of our valuation guidelines as well as the disclosure principles. On the valuations, you have seen that we already from Q2 this year have updated our methodologies in accordance with IPEV guidelines and accounting standards. In short, this means that we are no longer using latest transaction value as a primary method for arriving to the fair values in our portfolio, but we will have a more regular monitoring of the valuation based on multiples and DCFs. When it comes to disclosures, we know that many of you are keen on us being more transparent with our company's performance and we will going forward seek to increase our disclosure level and try to find a balanced approach as our companies grow and mature. To wrap up this short section, I would like to show you 2 pages more on our investment activities the last years and also snapshot on our portfolio as it looks today. First, on this page, we have tried to illustrate how we have achieved what we have achieved over the last 5 years and what the outcome of our investment activities have been, including the addition of 16 new companies, which to date have delivered an unrealized IRR of more than 34%. We believe we have been able and will be able to find and be part of creating a number of winners in this portfolio. And the ambition going forward is to continue to support these companies as well as to find new companies that complement the ones we have. As you can see on this page, these companies are still very young in our portfolio, but we see great momentum for a number of them such as our healthcare companies Babylon and Livongo as well as some of the younger companies in portfolio based in the Nordics such as Clio and Kolonial and you will meet them later today. Finally, we wanted to bring you a quick overview of our portfolio as of today based on the high activity over summer and this week. As you can see on this page, if we start by taking our Q2 numbers and then add on the activities, we have invested $1,800,000,000 in Babylon, Livongo and VillageMD. We have received $1,100,000,000 of extra dividend from Tele2. We have sold shares in Zalando worth $5,900,000,000 and we have proposed a dividend in kind of all our Millicom shares worth around 18,000,000,000 dollars Pro form a that would mean that our portfolio, our NAV would be around $73,000,000,000 as of today and our leverage would be at below 1%. Consequently, and to summarize, we are in a very strong financial position and we have come far already in our transition and we are all very excited about the next steps for Kinnevik. Thanks. And as I said, we now have time for a couple of questions to Georgi and Joakim. And if you want to ask a question, there are microphones here in the room. And while we get that gathered, maybe I will start with the first question. And I think a lot of people in this room were a little bit surprised by the move on Zalando and Millicom given that we had announced a different plan in the summer. So why was why did we change plans, Georgi? That's a good question, Torin. Thank you. Do you hear me? I mean, first of all, just to zoom out a bit and say why did we take decision to kind of exit Millicom? That's the first thing. We just said that already in June, but let me recap. I mean, we've been owners of Millicom for almost 30 years and it's a great company. And in the last few years, they have strengthened their position significantly. Focus on Latin America, 4 strategic acquisitions last year to strengthen their footprint as a fixed mobile converged player in these nine countries, upgraded financial targets, regained growth on mobile and as before fixed and a very bright future for that company in order to produce better cash flow. We then decided that, as I said in the presentation, that our 10 years owner with this company was over. We don't add that much value going forward. That company doesn't add that too much value to be in our portfolio and therefore we can allow our shareholders to own shares directly. The initial plan, as you said, Torren, was to sell 1 third in this full market offering and distribute the rest. That was a bold decision that did not go as planned. And being bold as Kinnevik, we also need to assess when things doesn't really move ahead as envisioned. So we look for alternative ways of handling this asset. And the best way in our book was not to sell part of that stake to a price that is basically too low. We think the company's share price should be much higher than it is today. That's the blunt and real answer. If we then look at Zalando, we have seen a strong recovering in the share price for a strategy that we really believe in, but with a high exposure from one company in the portfolio and this idea of not necessarily looking for control, but rather to maximize the influence of the outcome, we thought that this was a much more responsible and prudent way to sell down a small stake in Zalando and at the same time not have the issue of being cornered of who would pay enough for 1 third in Millicom. It gave us the flexibility to distribute all of the shares in Millicom, which will, I think, will show in the share price going forward. But that's the maybe too long answer, but still an answer. Good. I saw we had some hands in the Derek? Thank you. Derek Albert here from ABG. Sorry if I'm misinterpreting something, but it is seen from one of your earlier slides that you're targeting a fifty-fifty ratio between public and private assets going forward. If that's so, on what time horizon are you aiming to achieve that? That's not an exact target. What we're saying is that we will move with this transition, but most probably not go beyond that. Because if we go beyond that, we think that we will have too much risk and too little stability in the portfolio. But we have no time horizon for that and it will be taken definitely some time. I mean just because of the sell down and distribution of Millicom, we haven't increased close to that kind of ambition. I understand. Thank you. Okay. Go ahead. It's Patricia Hedelis from Soneske Daugla. When looking at the share price development on GFG and Livongo, Have you had too high valuation on GFG and Livongo? Sorry, can you repeat that question? When you look on the share price development on the GFG and Livongo, I mean since the IPOs. I'm curious because you have had a high valuation before the IPO. And when you see to the development now, it hasn't been so good on the stock exchange. So I was wondering, so looking backwards, was it too high valuation? At the IPO you mean? Okay, I understand. Now I think that I mean these are 2 different companies and the share price have moved for different reasons I would say. If we start with Livongo, still our blended in price is around $12 We think this is a good deal for us. As we know, the IPO was a great success. It was oversubscribed by 25 times. The initial pricing was increased from the original range of 20% to 23% to 28% and still this oversubscription. So I think there was a huge demand. The company also in our view released a strong report, maybe not completely understood by the markets. And of course being a high value tech stock, very volatile in these markets things can change very fast. I can't comment further what the specific reasons are, but I can just say that we are very comfortable that this company will increase in value over time. And we think if we compare with the Zalando journey for instance that the majority of that value uplift actually happened post IPO and I'm sure that that will be the case also for Livongo even from the IPO range. For GFG, it's a different reason, which is quite complicated. I think it's a combination of recent IPOs with a similar kind of structure cap table and so forth and also the uncertainty of will they be able to become profitable in these quite highly competitive markets. Luckily, we have Christoph Barcewitz, one of the co CEOs here today and he will explain more and also maybe give you with a feeling that, wait a minute, there's a big disconnect between the operational KPIs and the share price today. So that would maybe answer that question as well. And just one last question then. Is there any risk that you will be a little bit too optimistic now in the new Cinevik with the assets in the future that I mean, you explained a little bit about your valuation, the cash flow model and so on because I think it's not transparent as it was before. So I'm just curious, is it a little bit risky that you're too optimistic in the future as well? I would say no. I mean, this is not the choice for us. So this is a methodology that is in line with guidelines and rules. So we need to comply with them to start with. I think just to bridge the book value to the public value of Livongo, what we did in Q2 was that we market up in Q2 to the IPO price, which was the only thing or only reasonable thing we could do. And obviously then we can't control what's happening in the public environment, right? So I would say no. The big difference between before and now in the valuation methodology is that we previously had used latest transaction value, been able to use that I should say for up to a year. It's been kind of static in our portfolio whilst the company obviously develops and moves up or even potentially down, hopefully not. So we will be more follow that development of the companies going forward and be a little bit more dynamic there. That's the main difference. I think we will have time for just one more question and then I will encourage you if you have further questions to grab Joakim and Jorgi also during the breaks. But go ahead with we have 2 questions here. Joakim, go ahead from DNB. Value is up some 4 times from your pretty conservative value. So it was the market is at the IPO price. But just if you could yes, Joakim Gudal from DNB Markets. Thank you. So if you could just further address your current target verticals address some 2 thirds of the household's consumptions. You mentioned that you want to have an even distributed portfolio going forward. So can you perhaps shed some color on other target verticals for you to address going forward? These are the focus sectors that we have and will keep. And I just want to underline that it's not about a complete even distribution among those sectors that we do one each every year. That doesn't it doesn't work that way. We are looking for the best founders, the best companies out there and then we invest. I think when we talk about some even distributions, it's more factors. It's geographies, it's sizes of companies, it's maturity, time to liquidity, etcetera. And that balance need to be monitored, So we can provide a more regular type of exits kind of process going forward. So we will not be that 1 in healthcare, 1 in financial services, 1 in e commerce, then we start over again. That will not be the case. We take the last question. Final question. Thank you. Ramil Korya from SAB Equity Research. Just two questions in one really on portfolio composition. I guess given your strategic repositioning here, there is some rationale for you to exit assets with emerging markets exposure. So shorter term, I guess, the churn in terms of new investments coming in and replacing old investments in terms of number of holdings that will hold shorter term. But say 3 years out, you will be forced to actually exit holdings, which are sort of aligned with the new strategic repositioning here. So how will you go about choosing the exit objects? And then secondly, just very briefly, how does Zalando constituting a very large share of your assets today sort of translate with the sort of specified with the slide we saw on how you want to divide things between mature growth and I think when it comes to focus on emerging markets, I mean, again, we have said earlier that our focus from new investments going forward will be mainly in Europe with a special focus for earlier ventures in the Nordics and U. S. And we have then with also the Millicom divestments changed a lot of that exposure. We have now below 10% of the portfolio actually in emerging markets. But this does not mean that we have to exit the companies we have today with an emerging focus. That's the benefit of being this long term patient capital investment company. We have the privilege to hold on to these assets as long as we see a good return risk opportunity. And my view is that the assets that we have today are definitely exitable, but right now they can return better capital to us and to our shareholders by keeping these assets. So over time, yes, we will pivot into our focus geographies, but we will not rush into something if we believe that a certain asset is undervalued. The second question, I would say we have done something when we sold down, but that was not the main reason. We definitely believe that Zalando is a fantastic company and we are true supporters of the strategy going forward. And I think that no one have been accused for having a large exposure into a fantastic company when things turns out well. I can just tell you an anecdote. When the share price was at EUR 22 I defended literally together with you, Akim and the rest of the management team, the decision to hold Zalando. I know unfortunately that many of the shareholders that own Kinnevik would maybe have not thought in that way during those times and could perhaps have sold up sold when the share price started to tick up again to 25%, 26%. But we knew that by ring fencing Zalando until the market actually understood the value of this strategy, we would not only be providing value creation for our shareholders, but also helping the company to execute on that journey. And that I think is something also what Chile can play an important role by being a 25% plus owner of such a fantastic company. Yes? Thanks. I think it's time to move on. So we will now take a deep dive into our focus sectors. And to help us with that, we have Chris Bischoff, who is heading our London office and has been also instrumental in driving a lot of the new investments, especially in the health care sector. And we have Andreas Bannstrom, who is Head of our Nordic activities when it comes to investments. And currently he also doubles as an Interim CEO of MatHem. Go ahead please. Good morning. As Georgi said, we're focused on 3 sectors that represent the majority of household spent. Today, in this session, we'd like to take you through a little bit more detail on those sectors and our strategies for exploiting the opportunities we see within them. We're organized as a team by sector and we believe a sector driven approach is the right strategy. Our sector approach allows us to go deep and build conviction around the sector and that we think is a differentiator, both against the Shinnevik of 5 years ago and against our peer set. I'm going to start with Healthcare, go through e commerce ex food, and then I'm going to hand over to Andreas, who's going to touch on food and finish up with Financial Services. Firstly, on healthcare, the 4 key points we'd like to make on this slide and that is firstly to say healthcare demand is increasing significantly and that's driven by an aging population, growing inequality gaps, need to address the growth in chronic diseases and a search for better life. As you'll see, 180,000,000 people now in America have 1 or more chronic conditions and the average age in the population in Europe is over 44 years. Secondly, the spend levels in healthcare are enormous and putting a huge financial burden on the system. Healthcare spend represents nearly 20% of GDP in the U. S. And over 10% of GDP in Europe. This spend despite the quantum is growing at faster than inflation. So it's becoming a significant issue for the electorate in many democracies. In the U. K. Healthcare spend was a key issue in the Brexit vote and it's the number one issue in the U. S. In the 2020 presidential elections. Thirdly, all that spend is not necessarily leading to better outcomes or indeed more efficiencies. Firstly, physicians are often compensated on the number of procedures they undertake rather than the quality of those procedures. Secondly, the administrative burden of healthcare is significant. In the U. S, administration costs represent 8% of total healthcare spending versus 2% in the U. K. Or in Sweden. And finally, healthcare is consistently ranked amongst the worst performing industries in the world in terms of consumer satisfaction. That perhaps wasn't an issue when the consumer was in pain, as we will see in this presentation the consumer is going to make more purchasing decisions going forward. So part of the problem is that healthcare hasn't been set up as a system for where we are today in 2019. The system was designed initially for the drug manufacturers, the payers and the providers, the patient wasn't at the center of the system. The drug manufacturers and the payers get a lot of blame, but actually the providers in the shape of hospitals should bear their share of blame too. Enormously expensive inpatient and acute care infrastructure has been built around the world that no longer is fit for purpose. That infrastructure costs an enormous amount of money. In the U. S, the average cost of a hospital stay per day is $6,000 and the 25th percentile is nearly $20,000 a day. So the moment you go into a hospital, it's very, very expensive. We want to take the healthcare system and put the consumer back in the center of the system, make her the key focus and really try and focus on preventative care and chronic care management. There are 4 key developments that lead us to be optimistic. Firstly, consumerism. The consumers whether they like it or not are going to have to make more decisions in healthcare. In America today, out of pocket consumer expenditure on healthcare is $350,000,000,000 a year. So more than $1,000 per person per year. That's on top of their insurance. So they are going to have to come in charge of the healthcare spend. And as they become in charge of their healthcare spend, so they are going to demand that payers and providers serve them better. And by serving them better, I mean, giving them better access, more convenience and more affordability. Secondly, technological change is significant in this sector. We are seeing the growth of new devices that allow remote and passive data monitoring. We are seeing standardization of APIs that allow interoperability. We have seen the use of machine learning that allows the analysis of vast data sets. Thirdly, payer reform is coming. We are seeing the largest health insurers in the U. S. Shift their populations to value based contracts. That is enormous opportunity to improve healthcare outcomes, but also to lower costs. Value based care and VillageMD, our latest investment is a really fascinating area. And if you haven't had the chance, I recommend that you listen to the podcast on our website with Andy Slavitt. Finally, those three changes are leading to provider innovation. Providers are looking at this and saying we need to create emerging access points. We need to provide access to full stack verticals and we need to introduce better care models. Whilst healthcare is complex, our investment approach is simple. We invest only in 3 areas of healthcare. 1, we want to broaden access 2, we want to improve the care experience. And 3, we want to improve the financial experience. And each one of our companies does 1 or more of those with the aim of delivering better outcomes at lower cost. We have diversification across stages, geographies, customers and business models. Babylon broadens access to care, Livongo and VillageMD improves the care experience and SEDAR improves financial billing in the healthcare system. In addition, each of these companies have several commonalities. Firstly, the entrepreneurs who built them all have experience in the healthcare system. So these are not naive people. Secondly, each uses rich often unique datasets to provide actionable insights for patients and customers. So during the course of the CMD today, members of Long Longo will test their blood over 100,000 times. And at Babylon, people will use their chatbot and virtual care over 8,000 times. This may seem a relatively small number for those in e commerce, but this is transformational in healthcare. Thirdly, each aligns their business model with their clients and delivers tangible ROI to those clients. Fourthly, consumer satisfaction is the best in their sector. So patients and consumers love these providers. And finally, they have attractive business models. They have fast growth, reoccurring revenue streams, high margins and each one of these businesses funded at least through 2021. When we look at healthcare in totality, we've been invested for 3.5 years. The current value of our positions is around $700,000,000 and we have around $300,000,000 invested. But $140,000,000 of that 300 has been invested in the last 2 months. So while the returns look attractive, we are very, very optimistic that they can be exceeded significantly from here. I can now touch on e commerce and marketplaces. And many of you will be much more familiar with the sector. I think the 4 points I would draw your attention to here. Firstly, this is the largest area of consumer spend representing nearly 1 third of total household expenditure. Secondly, online penetration really isn't that high. It's still only 14%. So there is significant headroom for further growth. Thirdly, the sectors that we are focused on, fashion, food, travel and classifieds are each enormous and represent over $1,000,000,000,000 of annual spend. Fourthly, this is a sector that is dynamic and moving very quickly. As an example, on demand services have grown exponentially as consumers, particularly millennials are looking for easier access to goods and services. Our segments will continue to benefit from the tailwinds of growing online penetration, but we are also seeing business model evolution and that provides an opportunity to build new revenues and increase profitability. By way of example, at Quikr, over 2 thirds of our revenues now come from transaction services rather than from serving simple advertising based solutions to consumers. We are getting the traffic from the advertising based classified model and we are monetizing that traffic through transactions. As you heard from Georgi, Zalando has transitioned its business from a first party platform or first party seller to a platform for partners. Our initial investments, online investments in e commerce focused on physical goods, buying and selling physical goods. When we look at it today, consumers are spending more of their time and their money on buying services and in particular buying experiences. So we have realigned our strategy and our investment focus to take account of this. As a first step in 2018, we invested in travel, a segment with high emotional resonance for consumers and high frequency of purchase, as well as relatively high online penetration in number of sectors. We continue to expect to broaden our focus. As examples, we see large opportunities in fitness and in housing, sectors that both have high transaction value, high frequency of use and high consumer engagement. In summary, e commerce remain a core pillar of our investment strategy for a number of reasons. It's a large sector. We're highly familiar with it and we think there is enormous opportunity to build great brands. But we will continue to look at different segments and see if we develop them. Our e commerce portfolio is diversified across sectors, geographies, business models and maturity profile, including a number of public assets. We are backing the leaders in fashion in Europe and Emerging Markets, classifieds in Emerging Markets, B2C and B2B travel and last mile logistics. You know a number of the companies on the left hand side of this page. So I would like to emphasize a little bit the companies on the right in the travel sector. Omeo is the leading European online booking platform, multimodal online booking platform. It has put together an extraordinary inventory on the supply side that provides a very different experience for consumers. Much of that inventory was not previously available online and you will hear later from the founder of that business. And then TravelPerk, which is the leading online corporate travel booking platform, which is bringing the consumer grade experience to corporate travel. And it's also helping finance managers assess spend of their employees. With that, I'll hand over to Andreas. Good morning, everybody. Nice to be here. I'm going to talk a little bit about Food and Financial Services. But I thought I'd first say, I've this joining Kinnevik 18 months ago was my first real job for about 20 years. I'd worked as an entrepreneur in technology driven businesses. I had raised capital from a whole host of different venture and growth funds. And it was by meeting Georgi and Christina, listening to the DNA and also to the story about what Kinnevik wants to become that made me so excited about joining this. So today is a landmark because now we can accelerate a lot of the things that have been on the table or have been discussed for 18 months. And I hope in the conversations that you will have outside of this room, but also in what you hear, that you will understand that Kinnevik really does think differently and act differently to entrepreneurs and industries in a way that very few others in my experience have done. So at Kinnevik, I manage 3 different areas. I look at venture investments in the Nordics. I look at financial services and I look at our newest category, which is food, something that everybody can relate to, something that everybody does every day. And it's an industry that's been controlled by incumbents for 50 years. Looks pretty similar in most European markets. Digital transformation has been extremely slow and we feel the time is ripe for something to happen here to have digital innovation in the food sector. It's a 3rd percent of discretionary spend, household spend. So it's a conversation that a family has every single week, every single month, how much food we're spending, where are we spending our food. Just to put that into perspective, in the Nordics, it's 4 times the size of the global music industry and that's just in the Nordics. So, the opportunity to actually build a meaningful business in each area is sorry, in each geography is pretty material. But at the same time, we in Sweden are early adopters. We are used to being at the cutting edge of how technology is adopted. But when it comes to online groceries, that's not the case. We lag considerably behind European and global peers. In the U. K, you have around 8% online groceries penetration and South Korea around 20%. That's a good thing we feel. We know that the trend is happening and we know that there's an opportunity for growth going forward. There's also a reason for this. The incumbents did a fair amount of investment in 2,000 ICA Ax Foods to try to create this behavior that they were seeing in other parts of the world. Unfortunately, it didn't work. We didn't have the right kind of digital penetration and mobile usage. But now with Martem 10 years ago pioneering this, we're starting see growth rates that are pretty impressive. So why do we like online groceries? There's been some skepticism. People think of it as a low cost business. We see different things that make us very excited. One of the first ones is how often the actual distribution of food happens. So, Martem is distributing and Colonial distributing about 20 to 30 times per annum. But if you look at mature markets, you're looking at 40 or 50 times. That means that every week or every other week, somebody is coming to your home and delivering food. That creates predictability. It builds a relationship. It demands attention. The home screen of your mobile phone is a holy place. Very few applications are allowed to be there. But in the future, if you're going in to fill your shopping list every single day or every single week, there's a good chance that that might be there. Last but not least, we're building a last mile logistics network into the home. We are being able to deliver that food predictably that we can actually leverage in the future with other services and other verticals. As you all know with e commerce, returns is an issue. Smaller basket sizes through mobile usage means lots of returns and food returns are not an issue. Last but not least, we're all trying to save time. Time is probably our biggest enemy as a family today. And specifically in the Nordics where you have such a high proportion of women in the workforce, convenience is king. We have done a fair amount of investments in distinct direct consumer brands. We think there's an opportunity when it comes to food specifically to invest into an ecosystem. You build up through the hub Colonial and Marthem, the online distribution, the logistics into the home. And from there on, you can actually start creating other verticals at almost no marginal extra cost. We started doing that and I'll explain a little bit more about it in the future. So if you went into a grocers or some of you may well have gone into a grocers in the '70s '80s and you look at it and go into a grocer today, the experience is not very different. It's not like you're going to see a massive transformation. The U. S, you're starting to see grocers become more of an experience. Having said that, people and how they think about food has changed dramatically in the last 10 years. People care about how food is grown, how it's packaged, how it's distributed, what wastage is being created. In the U. S, you have 25% of young people who actually identify themselves as vegetarians. Veganism is up 600% in the last 3 years. People care about the planet. They care about how food is created and something that every single brand needs to take very, very seriously. You are also seeing changes in consumer behavior. Again in the U. S, for the first time food bought out of the home is bigger than online grocers, sorry, is bigger than grocery, full stop. That means people are buying takeaway food, ready meals and meal kits in ways that have not happened before. That trend is moving here as well and lends an opportunity to grocers. 3 days of normal food and you know what, I can't be bothered to cook food on Thursday Friday. So I'm going to get ready meals, an Indian and an Italian. Health, what we put in our body is important, but we don't know what we're putting in our body because we're just picking things from shelves and we're looking at the back of it and we're saying what's the content of this e something, I've got no idea. As long as it says eco on it, I'll buy it. The opportunity through this data to actually create filters around how your basket looks and gives you nudges to become more healthy individuals is enormous. Building a brand used to be about signing up Beyonce, putting billboards up and doing some info commercial. Today, it's not that easy. People will Google, they will do their research. Brands need to build relationships that are transparent and human where consumers are. Distribution models are changing. Uber Eats, Fedora, Instacart, online grocers and sustainability. One third of all food is wasted. It's one of the biggest impacts on our CO2 footprint. How are we going to handle this? We believe that by removing a network of 100 and 100 of stores and by using technology, we can actually reduce wastage considerably over time. So how have we done this? Step 1 is we've invested in the best businesses in the hub, Colonial and Martem. We have created the digital relationship with the customer and the last mile logistics network. From there, we have an opportunity to start building on verticals and on categories. We have already done this with Claes Auson, relationships with Colonial and MarteM are in place. You are buying your food, you add some batteries, some light bulbs, CHF 100 extra in the basket at almost no extra marginal costs. But we can do this with pet food, we can do it with pharmacies and we can do it with other services. We can also do it with recycling. As you are buying 5 or 6 different pairs of shoes for your children, 3 need to be returned. We can pick those up for you. So there are a lot of things that we can do with that distribution network to increase margins. Last but not least, we can actually launch brands. We could launch brands like NYX or Oatly or we could create our own brands that we launch or we create technological filters to nudge people to more healthy and sustainable lifestyle. There is an enormous amount of opportunities there. I meant to be following my cards, but I'm not really doing that, am I? Where are we? So, Martem, I'm going to do a case study on that. So we're not going to talk about that. Colonial, you're going to hear from somebody considerably better than me, the man himself will be talking. So quickly about Karma. Karma is a business that's trying to eradicate food wastage, which is a pretty hefty vision, something that appeals to Generation Z and should appeal to all of us. They create a network, a distribution ability for grocers and restaurants to sell food that are close to their sell by date, food that would otherwise be just thrown in the bin. You can quickly run to a shop after lunch, pick up food and save it. To date, they've saved 1,000,000 meals, started in Sweden and now in the U. K, they are launching in France. If you haven't tried that service, you should. It's incredible. Right. Financial Services. We always talk about large markets, but this one is really quite enormous. So I think we need to quantify it a little bit and I'm going to use my notes more on this. In each distinct sector, whether it's loans, savings, mortgages, neobanks, insurance, we're talking about $1,000,000,000,000 industries. And again, this industry has also struggled with disruption. It struggled for disruption in slightly different ways, however. Legislation, regulation, bureaucracy, interoperability problems, technology legacy systems, balance sheets, the need for capital. But what we saw with payments is that this market can be disrupted. And with the advent of high penetrations of mobile, with the opening up of banking PSD2 and APIs, we are seeing disruption starting. And it's being driven by the young. And these young individuals are expecting fair, they are expecting transparent, something that banks and financial services have typically been unwilling or unable to provide. Chris was mentioning that healthcare service providers in the U. S. Have low NPS. I think it was 12. They were talking about minus 2. So to be better is not difficult. And these companies are they're starting at the top of the funnel. Okay. So they're not trying to create the entire stack and the entire value chain. And hence, most financial institutions are not really seeing a massive value erosion. They're getting the top of the funnel. But none of these financial institutions became $1,000,000,000 or $1,000,000,000,000 industries in 10 years. They did it over generations. So this is painful over time and it's creating enormous value for consumers. We are looking at solving problems around the consumer lifecycle and we have pinpointed 5 areas where we think we can do this and we've invested in companies that solve these problems. Each industry in itself, as I said, is huge. Fee structures, legacy technology systems and regulation have slowed the speed of development. That is a massive advantage for the new technological breed. Young consumers who are used to Swish, Uber and Spotify can't relate in this new world. Options that speak to them and help them understand an industry that has inherently created complexity to extract value become painful and options that shine a light on fee structures and simplify their daily lives allow them to feel educated are prioritized. A number of similarities in these businesses from both a structural and operational perspective, I would just like to highlight some of them quickly. Not only are they looking at the top of the funnel, they are looking at early adopters. Early adopters are a little bit like hot bloggers or fashion icons. They bring with them a lot of other people. So by attracting those individuals and showing them an experience can be better, they ensure that they actually get a lot of word-of-mouth. They're also mobile first. They don't try to create they don't try to solve lots of problems. They try to solve one problem at a time. But as you will see with Betterment, Betterment solved one problem and grew AUMs to $20,000,000,000 Now with that customer base, they're moving into savings and credit cards and that is how they extract value. They look at transparency and they look at fee structures that you are used to. How do I bundle this fee structure, so the customer can understand what I am paying and what the value I am getting from that, because they are technology first, their technology businesses at their heart, they think about how to create efficiency through how they scale, which allows them to be cost efficient. That in combination with extremely low marketing costs allow them to have low prices. Last but not least, customer service. I think we're going to hear from Moniz later, but they have 24 it's probably not 20 fourseven, I'm probably lying now, but let's call it 20 fourseven. You can call them up and speak to an individual in the language of your choice. You try thinking about that from a financial services. Hello, you're number 27 in Q, he will be with you shortly. Customer services is at the heart of everything they do and they try to build it into the service throughout the journey. So, just quickly on our portfolio, these companies are actually looking at global trends. One enormous global trend is migration. People are moving from certain European countries to other. They are moving from Asia to Europe. And actually understanding who these individuals are is extremely complex. Take the U. K. For example. Friends who moved from Sweden who had gone to nice universities came to the U. K. And tried to set up a bank account. If they didn't have a gas bill, an electrical bill, an English driver's license, a job, a recommendation, they couldn't get a bank account. You imagine if you've just come from Bulgaria to the U. K. And you don't speak the language. Monies have solved that problem. Rather than taking months, it takes minutes to KYC that individual understand the risk profile and give them a bank account. If you look at Plio, another trend, most jobs are being created in small medium enterprises and we all know that expenses is a horrible thing to do. You bundle them into your little desk. At the end of 3 months, you start sticking things onto a piece of paper and you give it to somebody who gets really annoyed. Most companies who try to solve this problem from the CFO suite, okay, how from an accountant's perspective can I make this work better? Pleo did it differently. How do I make the experience enjoyable from an employee's perspective? Because if they use it and they do it every day, it's going to make life easier for the finance department. And interestingly, the NPS scores which are through the roof are higher with the finance department than they are with the employees. And last but not least, betterment. We talked about this, but they've grown AUMs to $20,000,000,000 in a 5 or 6 year time period and now they've just launched a savings account, which is I think the most popular savings account in the U. S. It's growing like crazy and now they have added credit cards. Savings, we are becoming a wealthier world. There's more disposable income. The idea of putting your money into a pension or a fund, most of us do it. We're not really sure why we're doing it. We put it with somebody who we think might be a little bit smarter. These guys have helped us understand that it can be transparent, educational and fun. Thank you very much. Thanks. Now Chris and Andreas will be with us also after lunch to go through a little bit under the hood of Kinnevik and how our investment processes work. And also do try and catch them during lunch if you want to ask them questions. But I think now we really want to hear from some of our companies. And we let me invite up on stage 3 of our exciting financial services companies. So we have Jeppe Rindom, who is the Founder and CEO of Pleo and we have John Stein, Founder and CEO of Betterment and last but not least, Norris Coppel, who is the Founder and CEO of Moniz. So very welcome to all of you. I think one of the things that actually unite these companies in addition to working in financial services and being owned by Kinnevik is that they have all been built from a real passionate point of view. You really have a passion for solving problems for your customers. And that, I think, is a very, very good starting point. If I can start with you, John, I think you have a tagline on your website, which says something like, the money that people have earned so hard, they should we should make the money work as hard for them as they worked making them. And tell us how does Betterment solve that problem and tell us about how you started Betterment and where you are? Great. Thanks for that. I was going to say our mission is not far off from the genetic goal of helping to use technology to help people live better lives. We say our mission is to empower people to do what's best with their money so they can live better, very similar. We at Betterment are smart money manager. We have recently added checking and savings to our existing investment and retirement services that we've provided for years. I started Betterment after years of working for some of the U. S. Largest banks and brokers and seeing again and again through my consulting work with them and product development and risk management and so on that they weren't thinking about the end customer when they were designing products. They weren't really designing novel ways to solve customer problems. And I saw that through technology, we would be able to rethink the services that provide that help customers reach their goals. And we started in the investing space. And today, we offer the average Betterment customer 38% more cash in retirement than if they were to manage their money on their own through traditional brokerage or investment products. How do we do that? It's this intelligence that we build into our platform. So customers come to Betterment, they tell us about their goals, they tell us what they need from us and rather than just say pitching them a bunch of mutual funds or letting them select stocks on their own, which is the traditional way that people invested, we create a portfolio specifically for that customer's goal and then we risk manage that over time, we tax manage it, it's on a glide path and that helps the customer to make the most of every dollar they invest. And we're now bringing that same intelligence to our customers' everyday cash, their short term needs, that everyday cash flow. We launched just a couple of months ago what is today the U. S. Highest yielding savings account with out any sort of limit on how much you can invest with us. It offers $1,000,000 of FDIC insurance as opposed to the traditional 250,000 So that's been enormously popular. We doubled our user growth, customer growth immediately upon launching it. We've seen incredible inflows of assets into that and that's continuing. We are seeing higher interestingly to us, even higher average deposits from initial customers coming in, higher net worth customers coming to us, which is also surprising. And at the same time, we launched that savings account, we have launched we announced our checking product. The checking product will have no ATM fees worldwide. It will be a fee free account. We will make money on that by charging by collecting interchange revenue when customers swipe to transact. And that is an interesting diversification for us as a company, but also allows us to bring together that everyday cash management helping customers to make the most of their everyday money, which is something they've been asking us to do for some time and bridging that into their longer term saving and investing goals. No one yet has done that integration really well and we think that our investment in advice and intelligence over the past several years best positions us to be that smart money manager, the smart money manager brand that serves the next generation of Americans. Thanks, John. And Jepper, I read an interview with you when you did your last funding round this spring and you said something about when you use Plio, we export the Nordic management style to the company that adopts the system. So how does that work? Yes. How does that work? Let me see if I can pitch it as well as Andreas did. So in Playa, we offer payment cards to businesses in a way that you would expect it to work in 2019. Our product caters for everything that needs to happen before a purchase and after a purchase. So before a purchase, how do you assign costs to all of your employees? How do you administer the rights of everyone? How do you set up the organization? Who should oversee whom? And then after the purchase, how do you collect the receipt? The problem we all know is is snapping an image of the receipt or even us on an online transaction picking up the receipt automatically in your inbox, creating the tags and the metadata around the transaction automatically, passing it on to the accounting system. And even if you are traveling, we reclaim the VAT in the different markets. Managers or leaders can see where money goes. They can follow the spend and have a good hygiene around the spending. So that's you could say that's the more functional part of our product. But and that makes us excited and proud. But I think what makes us more proud is more like the purpose space that we are in. And Gallup makes this survey every year about workspaces and it turns out globally that 80% of employees and businesses are disengaged or actively disengaged in their work globally, but also in the Nordics. So really that's super sad. There's so many unhappy workers out there. And in the report and also to us, it comes down to leadership. Leadership in businesses today are still very top down, very hierarchical. It's a designed leadership approach back from the industrialization where leadership was about taking creativity away people and making them super efficient on the assembly line. And that doesn't really work today because today innovation is huge. You need to absorb changes in the market innovation. And one of the reasons the key reasons why people are so disengaged is they feel not autonomous enough. They feel micromanaged. They feel controlled. And we're trying to tap into this purpose space and trying to do it differently, trying to allow for businesses trusting in their employees, inviting them into being a part of the purchasing process. Everyone can access company money in a controlled environment. We're taking away all these manual tasks and trying to optimize them so they can be more autonomous, more efficient in their work. And that's what makes this exciting. And when people start referring to the fact that they are now playing stuff instead of buying stuff, we know that we're kind of on to something. And that's kind of like where we take a strong stance as a product to do it differently. Thanks, Jurgen. Now Norris, over to you. And Andreas told your story a little bit in his introduction about you coming to the U. K. From Estonia and having a real problem getting proper banking services. And out of that frustration, you started Moniz. And yesterday, when some of you met Norris, you put out this big hairy goal of what was it, 100,000,000 customers within a couple of years? So that sounds great from our point of view. Why don't you tell us about Monis? Sure, sure. So before I start diving into Monis and why we exist and so on, I actually after founding Monisa, I bumped into a story that I find hugely inspirational and possibly also demonstrates what can be done when someone focuses on underserved segments. So in early 19 is on underserved segments. So in early 1900s, there was an Italian immigrant called A. P. Giannini in San Francisco, who was at the board of another bank and this bank refused to serve Italian immigrant farmers. And these people had no place to put their savings and there was no access to credit. So APG and Ene thought that why the hell is going on and decided to create a competing bank across the street. And the bank was called Bank of Italy at the time. And he was focusing on savings accounts and credits and was very focused on multilingual, sort of basically serving the customers in Italian, in Polish and so on languages and that was never been done before, completely unheard of. Business was booming and it became quite a national sensation. And by serving the underserved segment that nobody else was looking at, this bank is today known as Bank of America. And that bank was at a peak time the largest retail bank in the whole world. So I think that inspirational story is something that I close I keep very close to my heart to this day. And as was mentioned before, Money Stories pretty much has the same humble beginnings, let's call it that. So I came to the U. K. I was unable to open a simple bank account and I got that got me thinking that maybe there is something that can be done. And after some research, I found out that the blockage basically is not because of KYC or not because of the regulations or governments being a bit tricky. Actually, thanks to modern technology, it's possible to make banking truly global and truly accessible by anyone. So Moniz was founded in 2015 after a couple of years of heavy tech work in a garage, so to speak. We had to solve 2 problems. So first of all, how do you make KYC or customer identity checks rock solid and make anyone give anyone access to the financial services? And second, how do you build technology, banking technology that is solid and is scalable around the world? And what we are seeing is that for example in the U. K. And in European markets as well banking is actually or banks are typically built as very domestic institutions and they are built to serve the audience in those countries. Monis has completely the opposite approach. We have seen ourselves as a global player from day 1. We did start in the U. K. In a very humble way. It was just a simple current account with a card and payment access and so on. But ambitious ambition was also always much bigger. So today, we are 31 covering 31 countries in across Europe. We provide not just current accounts, retail banking facilities, payments, international remittance and so on. We also have introduced small business accounts. So we found out that small business owners where you have 1, 2, let's say, owners of the business running a small shop, they are also wildly underserved. And especially if owners are coming from international backgrounds, it would be very, very difficult to start up new business in a new country. So we're solving that problem as well. We started 3.5 years ago roughly, and we have been growing pretty fast. So today, we are actually much more closer to 1,500,000 users than 1,000,000. And that was also counting how quickly we are growing. So at peak moments and peak days, we're actually adding 11 people per minute to our platform at some moment. So it's pretty significant. And I can see also that user growth really has accelerated 2, 3 times in the past 12 months quite easily. And we actually with Kinnevik supports now and other investor supports as well, such as PayPal and so on, We are really aiming to accelerate this growth and I'm pushing for 5x, not 2x or 3x. So but please don't write it down. And as also was previously mentioned, so my team target is 100,000,000 users in about 5 years. Again, this is internal target and hopefully, we land anywhere near that area. Thanks, Norris. So growth is obviously the theme here and we have slightly different, I would say, strategies maybe. So Plio going multinational, whereas Betterment, I think, will stay focused maybe primarily on the U. S. But John, where do you see growth? Is it going to are you gaining market share? Or are you going into new markets? Or are you developing new products? How do you focus so that you know where to grab your growth? One of the things that we've seen over the long term is the strength of our referrals and our community of customers now about 500,000 customers in the U. S. We've seen that be our largest acquisition channel and even as we've scaled, it has scaled faster than the growth of the customer base. So today, we have referrals are in even higher percentage of our total acquisition. We have our lowest cost of acquiring a customer that we've had in 4 years. In fact, it's dropped each of the last 4 years sequentially, and yet we're acquiring more customers than ever before. So that's a testament to the power of the brand that we've built. And it's part of the reason that we are excited to add more products because our customers trust us, they trust our advice and they're excited to buy the next product from us or have the next product from us because they work well together and we already have their trust. Since Genevic invested, we've grown from about $4,000,000,000 in assets I think to now $20,000,000,000 We have at the same time increased our gross margin from something negative to something now above 70% in the core investing business. And that core business today is throwing off enough cash to cover not only the cost of serving those customers and the research and development that we put into it and the sales and marketing that we put into it, but it's allowing us to make these investments into new products. For instance, I've talked about the checking and savings, but we're also looking at our business to business channels as interesting growth opportunities. We have Betterment for Advisors, which is a platform for independent investment advisors to use our technology in a white labeled format for their clients. And perhaps our most exciting B2B channel is our 401, which we are scaling very quickly serving businesses where we sell one business, all the employees of that business then get Betterment accounts and that's a really interesting front door for us, particularly as we add more of these other account types to cross sell into those bases. We look at Fidelity as a big brand in that space in the U. S. Who's really built their business on 401 and the cross sell from the 401 into their other products, but hasn't maybe kept up with the latest technology. And so an interesting opportunity for growth there as well. Thanks. And Cleo, you are going multinational? We are. We're only 4 years into the journey. So there are so many opportunities for us. I think it starts with a very substantial market size. We target companies between 5,000 employees and the product is successful across any industry. So there is a lot to go for here. Currently most of the business is Denmark and the U. K. We recently launched Sweden. We launched Germany. We are now bringing on the 1st customer in Spain as well. So geography is certainly a growth lever. We're also strengthening the product. So from being a more like debit kind of prepaid experience, we are now moving into credit. And also like the sort of the value chain in the product adding now VAT reclaims where we take a cut of 25 percent and like other businesses to sort of bolt on. So, yes, there's quite a bit of opportunities for us still. And Norris, you are definitely already multinational. So how do you think about developing your sort of stack of products and where will is it growing geographies or is it now maybe focusing on the product development or where is your focus? So what we have found is really 3 all these three key drivers are really driving our growth as well. So in the early days where we were only in one market and we were addressing borderless generation and basically gig economy. This is massively increasing audience size at the moment. So the nature of work is changing and many more people are actually entering gig economy and many more people also are moving between countries to create a new life or they're moving for study or work and so on. So this is massively rapidly expanding market, which is where we our growth is coming from. Secondly, we are constantly looking to expand to new markets. So we recently expanded to across Europe basically, so 31 markets. And now what we have seen is that initially, our growth was mostly coming from the UK. Today, 2 thirds of growth is actually coming from Mainland Europe. I'm talking about markets such as Germany, France, Italy, Spain being our key markets. And we are seeing also that when we started today in a very humble way, just bank accounts and debit cards and so on, today, we have on top of SME Banking, we have added quite a few other things as well. So we see that aligned with our goal to replace a mainstream traditional bank completely. We are able to if we are able to provide credit, savings accounts, mortgages and all that people would expect from a mainstream bank, we are actually able to grow that way as well and attract more people and retain more people. As a side note, I would like to also say that we don't try to invent the wheel here. So instead of going and sort of turning against banks, for example, and saying everything is bad and new is good, we are actually actively finding new partnerships. And we find that by creating by scaling through partnerships with legacy banks and also new neobanks and fintechs, one can scale much faster and provide value not to only to our customers, but also legacy players and TOA sales as well. So I would say growth is coming from all three. Okay. Well, I mean, financial services industry is, of course, a massively regulated industry and compliance is a buzzword. I think all of you have seen the problems that Scandinavian banks have run into with their KYC process and what have you. So would you say with that sort of background, is compliance and regulation maybe a good thing because it prevents new players? Or is it hampering your growth? And I guess when Clio moves into full service card, you will end up with a lot of regulatory issues. How do you see that? I think it's a little bit of both actually. I think in the beginning it was very frustrating for us. We had this saying that we almost were like building 3 companies because we had to build a software company, we had to build a compliance company, we had to build a payment technologies company. And we had to make those investments. So I would say even KYB, so when you are a business exposed, it's more complicated than consumer because you need to understand ownership structures, you need to understand each individuals and sort of the controlling rights amongst them. So it was like super, super challenging and we saw a lot of friction in the first customer relationships in good flow and connect with the databases so that we could automate a lot of this. So it was certainly a challenge. And I would say now that it's sort of overcome, it's a little bit protective for us. We have a team dedicated for this product so that we can tackle the challenge in the same way in each new market. So now we can handle this. I would say it's still risk. I mean you don't open the newspaper today without seeing a new Nordic bank sort of exposed in this area. So it is certainly something that we need to take extremely serious and invest into. But I think we have the liberty of doing this from a data science and software mindset as opposed to hands and feeds that seems to be the mindset of the banks out there. So I think we're in good positions for these sort of challenges. From a license point of view, we work in Europe and we are licensed in Europe. So obviously that puts some strengths on us in terms of launching tomorrow in the U. S. But again, would we want to do that? I think it's something that we could overcome. It just it takes some lead time for us to go to new continents. John, you are facing the U. S. Regulators and you're also expanding into more banking like services maybe. How do you manage that? I've always thought that our regulatory relationships are a competitive advantage despite, of course, it's complicated to get approvals and there's some barrier to entry there. I think that we've been close with our regulators for many years and that has helped us to be on the right side of most things. So when we were we've been talking with the SEC and the Department of Labor about rules that are pro consumer and also help our business. And so that's exciting. As we go into new products, of course, we encounter new regulations, but I think the long term real competitive advantage that we have, if I think about what are the barriers to entry, it's not so much like the regulatory piece for us as it is the advice. The intelligence that we're building on top of our customers' accounts is really sophisticated and is hard for an upstart to copy. It's also hard for an incumbent to copy. So for instance, across all your different investment accounts today, your 401, Roth 401, IRA, Roth IRA taxable account and soon your HSA. We've just started a partnership with UnitedHealth, Optum Bank to offer HSAs and advice on those HSAs. Across all of these accounts, we can tax manage, we know the contribution limits, we tell you which to put money into, which to take it out of, We shield dividends in one where it's most tax efficient. We put the assets that are likely to appreciate long term in another. All of that sophistication is not done by the incumbents because each of those account types is a separate system, sometimes through an acquisition, sometimes developed at a different time and it's very hard for them to bring all of that together in a customer centric way. So we've really innovated around, say, retirement is a holistic view across all of your accounts and for all of your family, which is a very different way of how the industry approaches it and that technology provides us a great competitive advantage. Norris, tell us about regulating your 35 countries and your banking operations and how So as a starting point, so before we founded the business, I was thinking how is that how on earth can we truly be international? And how do we go through this regulatory hurdle and all the licensing and so on? So KYC and making sure that we are knowing enough about our customers becomes a cornerstone of this business. So we spent 2 years, as I said earlier, on figuring out how to bring KYC, customer identity checks into modern era. How can we take advantage of data that is all over all surrounding us, every one of us? There's a cloud of data that follows you wherever you go. How do we tap into that data? And how we can make sense of it in a way that regulators are happy we are not laundering any money or we are not basically enabling bad people the access to financial system. We spent some time, some money on it. And I would like to say also that because we were a young startup and we still are obviously, we had quite a lot to prove because there was no trust initially. So how do you build trust? You would just have to do 10 times better or 20 times better than pretty much everyone else. So that's where our early focus really went. And I think regulators that we're currently working with are really, really appreciating that fact. And KYC has not been an afterthought for us. It has been the cornerstone of this business. Thanks. We have some analysts out here who are dying to hear about when will profitability come and how do you feel about that. But let me frame it a little bit differently. But if you look in 5 years, John, and you think about creating a successful business, when are you happy? What's the success look like? And where do you see this going in 5 years? So in 5 years, I would like for Betterment to be public. I would hope we'd be on the other side of an IPO at that point. I would think about us as the smart money manager across everything from investments to checking savings, we're probably also adding some close in lending products and insurance, like life insurance, things that coordinate well and that you want to work with those core financial products in your life. And providing the intelligence across that through your employer into your personal accounts just feels like an immense opportunity. It feels like the I can't imagine that in my 2 daughters who are 35 today that by the time they are graduating from college that they would ever have to think about, am I putting this money into the right account? Am I saving enough right now? Am I on track to be happy later in life? They're not going to have to worry about those kinds of things because the intelligence that we're building today and already putting into market will help them to know that they're in line for a secure future to give them peace of mind and we're making that accessible to everyone. So that's what I'm excited about in 5 years. Norris, you already said 100,000,000 customers, but in addition to that? That's a number, but there is more to it. So what we also have what we really are working towards is what we have achieved today is microscopic compared to where we want to go. So we really want to be in the center of customers' financial lives. And the idea is to be a little bit in the background, so not in an intrusive way, but help customers to really grab control over their financial well-being. So as we know, money worries whether you're rich or poor, you still worry about money every day. And problems are, of course, different, but this is a main cause of stress and people being unhappy is money and to worry about it. So if monies were to be in the center of that financial universe of yours and secretly working in your pockets as an app and helping you to save money, putting a little bit money aside for a rainy day, informing you about how much you have accumulated and where is the next purchase supposed to come from. I think that's one of the things that we really want to achieve in a big way and we are kind of moving in that direction at the moment, although it's a little bit hard to see. And secondly, I also one thing that we have done in terms of current account opening speed and international KYC, we have done that. We were one of the first ones to do this in such a quick way and rapid way. But I think the next challenge also for me personally, which is very, very close to my heart, is that doing the same in credit as well. So credit is incredibly broken. So again, if you're moving between countries, your credit score and data about you doesn't move with you. So you typically have to start from scratch. And that I have spoken to billionaires who have exactly the same problem. So we're not talking about necessarily poor people here. So this is a next challenge for us and we are really trying to for example, John, you're coming from U. S, let's say you fly over to Stockholm and you decide to marry her and sorry, maybe you're a wrong comparison here, but you start the new life basically here. So but I bet on my hat that if you walk into any Swedish bank from day 1, they will not give you a credit card, no matter how hard you try or even if you promise to put in 50 ks on that account. So we are solving that problem as well. And I think for us, a big success would be if you're able to nail credit and make it universally accessible in the next 5 years as well. Okay. Thanks. Jep, I know, Clio, you closed the largest Series B funding in Denmark this spring, but I guess that's not the end goal. Where is how do you define success? So I would say in the beginning it was much about product market fit. So making sure that we had good satisfaction with our customers. We have a Net Promoter Score of 70 and that they didn't leave us. And today we lose less than 5% of our customers on an annual basis. So that was kind of like first challenge. Then secondly, figuring out how do we ensure that we have a good business model. And with business model, we look a lot at the payback. So if you add the cost of marketing, sales and verification and handling and so forth, when is the customer profitable? And today, a customer is profitable around 8, 9 months after they get started. So that's also fairly solid. So you could say now we are sort of focused more on how do we move from really strong growth in Denmark and the U. K. Into more like a European hyper growth. And like company profitability is really not a big focus of ours right now. I think it's like either you deliver hypergrowth or you deliver profitability. And right now we are focused on hypergrowth. And as long as we can continue that, I don't think profitability will be a goal by itself as long as the fundamentals are strong. Okay. I think we should finish up. But before we do that, I mean, Georgi talked about Kinnevik as an owner and we talked a little bit of compliance and he also talked about building sustainable businesses. And so one of the areas where we have a very tight dialogue with U. S. Car companies are, for instance, around our governance, risk and compliance framework and so on. But it would be interesting to hear from your point of view, Norris, what do you think about us as an owner? Is it what Georgi said? And where do you see the value coming from? For me, this is really, really clear. And I think it wasn't as clear early on when Sinevik decided to invest, but it became actually much stronger as this bond when I attended summer days, this summer Sinevik summer days. So basically it boils down to 2 things. We are ultimately a positive impact business and we are trying to generally have this positive impact on society and this is what aligns really well with Sinevix as well. And number 2 is a long term view. So I really would find it very difficult to work with VCs who have like maybe 3 year horizon and they want us to exit. So it may take another 5, 10 years to make this an insanely successful business before we decide to IPO, for example. John, what would you like to add? I think that says it well. I think we have appreciated, 1, the long term ism of the company that you talk about. 2, I think that I probably under appreciated early on was the GRC focus. We had never had an investor spend so much time understanding our compliance and culture and things as when Sinevit came in, But it has been transformative for us. I feel like we are such a much more mature and better company today than we've ever been. I think that has improved our regulatory stature. It's improved our actual fraud and compliance stature and it's improved our morale. I mean, we're seeing today the highest ever employee retention that we've ever had, which is odd for a company that continues to grow in scale. Usually you see things go the other way, but our team is happier and I think better positioned, thanks to some of the GRC work that we've done. I'll ask to add, Yafael. Yes. I mean, I completely echo the fund setup in the sense that we want the balance between like more short, mid sided funds and longer term funds. I think that creates a good dynamic in the cap table. So that was more like the hygiene, but I would say 80% of it has always been for us more like the personal chemistry with the people investing. And on one side, just knowing that they completely buy into the vision and knowing that they buy into the leadership team. And I think with in our case with Andreas and Georgi, I think what we valued a lot was sort of backgrounds from running companies and understanding you could say the challenge that you have as a founder and as in each stage of the businesses. And I think that's something that we both enjoyed in the investment process, but also like in the dynamics in the boardroom. So that meant a lot to us. Thanks. Now time is running up, but we have lunch coming up and I am sure that you have questions for John Norris and Jeppe. So do take the opportunity during lunch and then we'll try and reconvene here in about 45 minutes. Thanks to our speakers. So welcome back, everyone. I think we're ready to get going with our program. And first of all, we'll have Chris and Andreas back, this time taking us under the hood of the Kinnevik engine and going through in some detail our investment process from sourcing to how we work with our companies. Go ahead. Thank you, Sharon. So we have the graveyard shift after lunch to talk you through process. We'll do our best to enliven it and we'll use a couple of case studies later on to bring that to light. As we explained in this cross section, the investment strategy is critical to our approach to investing and we want to make sure you understand that we develop a thesis by sector. In this section, we want to ensure also that you understand how we invest and what we do after we invest. Again, here we believe we are differentiated both in the rigor of our processes and the support that we make available to our companies. But first, I wanted to remind you of our investment criteria. What do we look for when we invest before we talk about how we invest? At the baseline, there are 3 factors that are important to us. 1, we need to see a large market. 2, we need to see secular growth trends. 3, we need to see underserved consumers. Thereafter, we look at the companies and we say, who's getting product market fit and traction with customers? Who is got the right technology? Who's got the right leadership team, who's got the right diversity and values. And then finally, we layer on the economics. What are the unique economics of the business? Can we make money by investing? And is there investment opportunity? Then having done all that, we step back and say to ourselves, can we make a difference? Are we the right investor for this business? You can move page. When we look at a new investment, we actually have a well defined 3 stage process. And in each stage of the process, they clear checklists. At the first step, the senior sorry, the sector teams bring to the group their pipeline the most interesting opportunities that they have seen in the sector. The purpose of this committee is to take a look forward and get better visibility on what is coming to market and when. And the reason for this is the best companies when they come to market for new capital, they move very quickly. So it's a competitive advantage to know who's coming and when. We get that advantage through our network, through our portfolio companies, through our co investors, through our advisors and through a gamut of other sources. And we use that advantage to understand what's coming and how we think about the opportunity cost of looking at particular investment. We collect data and we use CRM tools to track over a 1,000 companies by sector, by stage, by geography. The opportunities that make the grade come to the investment committee of the company. We leverage this firm wide group and the combined experience and capabilities of people on the investment team, the management side, IR really across the whole of Shinnevik to understand the heritage of Shinnevik as well as the merits of a particular investment. We go through detailed materials that interest those investment criteria that I mentioned earlier. We have active debates. It's easy and some decisions are extremely tough, but we come out of that investment committee with a conviction about going forward and potentially making an offer in a business. The final investment committee process that we go to after the first is about follow-up questions and reviewing additional data that we have received post interacting the company with the firm intention to make an offer. At that stage, we really drill down into the economics of the business and in particular try to understand will this business grow enough to make a profit because the businesses we invest in although we have a tracker we can see a track record, we need to see them grow revenue in order to reach profitability and breakeven. Where possible, we also have the founder come in and present the Investment Committee. We know strategy is extremely important, but it's a necessary condition of success, but it's not the only condition of success. What really matters in the end of day is the quality of the founder, their drive, their leadership, their passion, their values and we back people we believe in. As you can see on this slide, our funnel is pretty broad at the top. So there is over 500 companies that we've evaluated in the last 12 months. We believe that breadth at the top helps with our selection process. We do pass however on most investment opportunities, but we do so at an early stage. So we don't let things linger. We like to say yes or no quite early. When a potential investment comes to an investment committee, we are serious and the hit rate goes from 1 in a 100 to 1 in 4. Post term sheet, we take on board the advice of other parties. We supplement our own team's work with due diligence by 3rd parties. We'll do work on commercial due diligence. We'll do work on financial, legal, GLC or sustainability, technology, really across the gamut of the business and trying to leverage that additional team around us to make sure that we fully understand the business. This is not a rubber stamping process. We do it for every investment by the way, whether it's a $5,000,000 investment or a $50,000,000 investment. It's not a rubber stamping process. It really allows us to create an investment plan post investment that we then follow through whether it be a 100 day plan, whether it be a 1 year plan. And that really is the basis that we then evaluate and monitor the company on going forward. The right company selection is obviously critical, but what you do post investment we think is key to maximizing potential value. We're not afraid to roll up our sleeves and really get our hands dirty should the situation require. We recognize that we're not in management, we're investors, but we will do more work if needed. And in the Nordics in particular, as Andreas will explain, we'll even take on operational restructuring responsibilities if we think the opportunity is attractive enough. Why are we active? Well, we are active because there's a lot of capital out there and capital in itself is not a differentiator anymore. So we have to do above and beyond that. We think that we're set up to be more active and proactive in terms of how we invest in the new Shinnevik. The new Shinnevik is going to make fewer investments. They're going to be larger investments. And that provides our team with the time and the incentive to really get involved and focus on adding value to the portfolio. We monitor company performance both monthly and by annually from a competitive perspective. Those monthly readouts give us an early warning as to what may be going well or what may be going less well in a portfolio company. And if needed, we can dig in and help should the company require. We also do biannual sector deep dives where we go in and try and think about the sector dynamics to really understand where the market is going. Whatever we do, we recognize that not every investment will turn out as we expect. And we, as Georgi said, are long term investors. The flip side of that, we will not follow our money in every company that we invest in. We do expect a certain level of performance. I will now hand over to Andreas. Thank you very much. So my first Capital Markets Day and I've been told that my GC will only breathe out after I've stopped speaking. So let's run through this relatively quickly. Chris and I are very complementary. And what I mean by that is not the little and large show. What I mean by that is that we have vastly different experiences. One of the reasons that I think anybody wants to work in a business is that they want to build something and they want to grow, they want to learn. And one of the things that I thought was really exciting about coming to Kinnevik was to actually work alongside Chris and his team. He is I don't know if you know, but he has run the technology practice at Goldman Sachs before he came to work on the investment side. And his rigor and understanding of core metrics and how to analyze themes and businesses is something that was very new to me. On my side, I have worked operationally. I've sort of worked with technology businesses hands on. And I think that the lenses, these two lenses when put over each other give us a great opportunity to evaluate and help businesses as we go along. I think another thing that we think is very important is that when you look at a business, whether we invest in it or if it's a business theme in case, we learn something and that something can be shared with our entire network. Jonathan spoke earlier about the fact that they had a sustainability no sorry, GRC committees brought into betterment already 2015 or 2016 and it was something that was very new. We're not doing this because we think it's something fun. We're doing it because we think it's important and we think that it adds value. Again, Matthias was in the U. S, he collected all the GCs from our different businesses, sat around the table for a couple of days to try to understand where network effects could be gained, what we could learn from each other, what we could share from each other and make sure that that practice in each business improved. The need for rigorous understanding of the business that you are getting involved in is obviously pretty apparent and expertise around M and A, fundraising also very apparent. Half of our team has actually worked operationally within businesses and that gives us an opportunity if needed at important inflection points to actually get roll our hands up sleeves up and actually get involved in the business. This can be helpful. It's not something that we have to do or something that necessarily want to do, but it's an option. And again, having worked, I think I've had 13 different VC and growth funds sitting on my boards. The level of commitment and support that we are trying to build up in our process is something that I've not seen before. The nature of our capital being long term is potentially if we feel that continuing to invest in a story is prudent, something that gives a lot of confidence and security to a founder. Again, if you're running a business that is choppy and it goes up and down, the ability to have somebody who's pretty calm and leaning back and looks at the long term vision very encouraging. Sustainability, we have talked about this a little bit, but I think the fact of the matter is that businesses that work with a foundation that is intertwined into sustainability will perform better over time. It's the same as diversity. Businesses that have different viewpoints at the top will make better decisions over the long run. And this is something that we have taken seriously for some time. We look at it when we get involved with the business pre investment, but we also work with it on a continuous basis going forward as well. And as Bederman said, it's something that actually allows the business to mature. It allows to create stability along the culture of that business and can actually be an opportunity to actually increase and improve employee brand awareness and be a better way of being able to entice great talent to that business. So, Chris has given you a little bit of information about the funnel, how we work in a very systematic approach, the scope and the size of the funnel, what we look for. Hopefully, I've given you a little bit of color about how we're different, how we take this job extremely seriously. We don't invest in 10, 15 businesses a year. We invest in 2 to 4. The decisions we make are important and we take them we put a lot of time and effort into making those decisions as best we can. But we also thought it would be useful to have a look at what we do post investment. So we've given you a bit of color up to pre investment, but what do we do post investment? And we have 2 case studies for you. One which is Martem, which is a little bit more hands on. I've been working as an interim CEO there since April and Chris will talk around Livongo. But before we do that, here is a film around our food vision. It's massively motivating to invest in this sector. It's something that everybody can relate to. It's something that everybody does every single day. It's one of the largest industries in the Nordics with incumbents that have been around for 30, 40, 50 years. Nobody believed that MTG could lead a way in turning the media industry upside down. Nobody believed that Tele2 could redefine telecom services, but they did. So to build a business, a disruptor in this space is very energizing. Kinnevik has always been great at spotting consumer trends and understanding what consumers want and need. In the past 10 years, we've seen Zalando moving fashion from offline to online. Now we're taking on food, an even larger sector. It's huge. I mean, the groceries industry is around 4 times the size of the fashion industry. And as such, I think it's the largest piece of consumer wallet. Fashion is at about 10% online penetration. Groceries today for the Nordics is at 1.5%. We can already see through other geographies that the transition is happening. You've got South Korea, which is at 20% online penetration. In Europe, you've got the U. K, which is at 8%. The Nordics is way behind at only 1.5%. Consumer behavior is not a static thing. Obviously, in Norway, 5 years ago, you simply didn't have this service, but the demand was clearly there. Groganauto 10.0 is Norway's largest online grocery store. Our vision is to make the world's most efficient retail system. It's a new way of goods to flow through society. This is a new infrastructure. It's been going at an unprecedented rate, And I believe that a generation from now, this will be as natural as having a dishwasher in your house. When Kinnevik thinks about food, it's not just online grocers. It's an ecosystem. So there are different aspects of the ecosystem that are important, whether it's warehousing, waste management, automation, last mile logistics, different verticals. We want to find the best companies in all these different areas and support them and invest in them so that we can create the best service for the end consumer. The vision for Karma is to make us the 1st 0 food waste generation. Food waste is such a big problem that we actually encourage a lot of other platforms to make people aware that how big of a problem this is. It's a 1 third of all food that's produced is wasted at a $1,000,000,000,000 value each year. We saw that no one was really solving this globally. And we said, what if we can use our technical platform to actually solve this, to actually help the industry to sell this high quality still edible food to consumers. The way that we eat and how we eat has changed considerably. The way that we grow, how we package things, how we deliver things, we believe that we have an opportunity to drive that very important trend forward. Great. Always nice to hear your own voice like that. So I've covered the main themes around why we've got really excited about food. There's a couple of other things around Sweden, Nordics, but specifically Sweden that are quite interesting as well when you think about food. You have incumbents that are actually franchise models, which is quite a different way to run a business and adds a level of complexity. The other part is that you're working in a market that actually has relatively high gross margins. If you compare gross margins of food in the Nordics to Holland, the U. K, Belgium, you're talking around 30% higher. Low cost companies, Lidl's and Aldi's have typically struggled. I think that that is only temporary. Food or price of food needs to be static, so there will be more price pressure over time. But Sweden or the Nordics is also relatively small market internationally. So to get international players to come and compete here is going to take some time. Our first investment in food was Karma, but it was with our investment in Colonial that we started getting really excited because the problem has been how do you actually make money here. Being able to sell the groceries is one thing, getting consumers to purchase them, getting them delivered is another thing, but how do you create efficiency in that channel. And what Colonial showed us was with a relatively low CapEx model, we can generate similar or better UPHs, which is the efficiency of leading competitors around the globe. When we saw that in combination with this last mile logistics, we decided this was a really interesting play. And the next step was how do we do this in Sweden. In Sweden, there was one market leader, an independent started by a founder couple in 2010 who were passionate about making the food experience better. They have built a phenomenal platform, a brand positioning that was resonated with customers, But over the last 2 years, their growth rates have slowed, partly in part because they haven't developed their infrastructure to the way that maybe they should have done, but also because incumbents had seen the opportunity and pumped a lot of money into building their own competitive infrastructures. We expect to be able to add to Malterm's existing brand proposition and to tweak it and improve it over time. But we believe that the best way to do that is by leveraging technology to understand how each consumer is different, to be able to tailor the experience, to tailor the shop when I walk into a shop, if I'm a vegetarian, I should see no meats, Filters that don't need to be preset, but actually learn from my own behavior. We believe the technology and data are the answer to any of these things. That doesn't mean that we have to lose the touch and the feel of being a top level grocer. And just to put it in perspective, Colonial I think is 10 times or 20 times the size of a normal shop. So when they get in avocados or tomatoes or any other fresh goods, the speed at which these things come off the shelf means that the produce is just infinitely better than produce that you're picking up in your local store that could have been sitting there for 5 or 6 days. Just to put into perspective, we've done a lot of changes in the 4, 5 months that I've been there. We've added a number of people to the C Suite. The Chief Revenue Officer was the CEO of Vimbler. Our Chief Product Owner is from Spotify, Chief Technological Officer from Acast and our Head of Data is from Fishbrain. We've added 12 engineers and 2 product people and that's a beginning. We've also announced that Yuwan Naga Kans is joining us on the 1st December as CEO. He has a background in food, entrepreneurial, but I think he's run 2 entrepreneurial businesses that he sold and listed and he's also worked with demanding, which I don't know the English word for now. People demanding anyone, Staffing, thank you. And he's worked with staffing, so a great fit. We've also added 2 people to our Board that have direct competencies in areas that we think are of critical importance to the business now. That doesn't mean they're going to be of critical importance in 18 months' time. And we believe that the Board needs to be fluid to take into account our business changes. We have just started this journey. We are 5 months in and the signs are encouraging, but we look forward to how this business will develop in the next 5 to 10 years. Thank you very much. Livongo was quite a different opportunity from MatHem in the sense that we had the opportunity to look around the whole globe and look for the best company that we felt we could invest in chronic care. As I said earlier, I think chronic care is a clearly vast sector And so really the challenge for us was which is the right company to invest in and before that which is the right area of chronic care to focus on. After investigation, it became obvious that diabetes was the best fit. It's nearly epidemic in terms of its scale. It's a very high engagement condition and there's a lot of user generated data. Beyond that, there was a clear metric for defining how well or sick a person is. And so improving that metric can be demonstrated for ROI both to the pay and to the consumer. Within diabetes, Livongo stood head and shoulders above the competition, particularly when we looked at it in relation to 4 key challenges investing in healthcare. Those are first, the buyer is not the consumer typically. So even when the customer experience is great, the insurer can make that product not available to you. 2nd, most companies focus on point solutions rather than A through Z solutions and most payers want A through Z solutions. And so if you're a company and you don't increase product density over time, you're in real trouble. 3rd, new technology is great, but if it doesn't fit into the workflow of an existing provider, good luck to you in terms of scaling. And fourthly, ROI takes time typically to develop and so you'll never reach mass adoption without proving that. And if you can't prove it, then you're going to go nowhere. Livongo addressed each of these challenges. They had a world class B2B sales team as well as a product that consumers loved. The aspiration was from the start was to create a multi care platform, not just a single point solution. They were full stack provider across hardware, software and services and they didn't need to go through the existing workflow. Finally, they had several marquee clients who strongly validated their product. Beyond our initial investment, there were also 3 key areas where we felt we could add value. Firstly, taking our experience in consumer technology that we developed in telecoms, media, retail and applying that. We felt there was a real opportunity to increase the investment in data science and analytics in the company and provide that same level of customer service we know and love elsewhere in e commerce. Secondly, to encourage boldness in condition management and expansion in condition management and as Lee will talk about later, Livongo has expanded quite aggressively in terms of its product density. And thirdly, because we're international and Livongo is a U. S. Company, we could be the kind of eyes and ears, if you will, to the rest of the world and help them think through when to go abroad and which markets to go into. We did all those three things. And in addition, we supported the IPO a couple of months ago, in particular buying shares from a secondary seller. On the financial side, you'll see on the right, we think Livongo has performed exceptionally since we've invested and we're delighted by the IPO. However, we do think that the majority of our returns here will come post IPO. We feel somewhat like Zalando, Livongo has an opportunity to become a multibillion dollar business and we feel that from here the horizon could be one that leads to a company certainly the size of Zalando. Thanks, Chris. And we will hear from Lee Shapiro, CFO of Livongo in a minute. But I do think we have time for a couple of questions, if there are any, to Andreas and Chris on our have a question? Joakim, go ahead. Hi, Joakim. Have a question? You are Kim, go ahead. Oh, hang on, you'll get a microphone. Joakim Grenell from DNB Markets. So perhaps your view on, so to say, value crystallization in terms of the maturity of your investments. So you mentioned here that, okay, there's considerable value creation potential beyond IPO. But on aggregate, where would you say that you can create the most, so to say, value for your investee companies? So I think companies maybe I start and Andreas follows on. I think it is different at different times. Clearly, the restrictions on us look different in a public company than versus a private company. But the early conversations about Zalando at a later stage or Millicom, we will only invest in a company and continue to invest in company so long as we think we can provide value to that company and we think the risk adjusted turns are good. So I think in the early stage it's more on incubation. We do a little bit more of that in Sweden. We do venture in Sweden. Andres can talk about that. We don't do that internationally. Livongo is based in California and in Chicago. I can't fulfill the role of an interim executive that Andreas is fulfilling at and Marte. That's just not geographically possible. So the flip side there is, I spend more time, if you will, on really drilling down on finding those amazing entrepreneurs who we can back and that's more of the kind of DNA that I do and that also reflects my experience where Andres' experiences get in, get involved and grow the company by active participation. But I think growth stage investing, which is what we focus on primarily in the London office is about that company selection and then selectively supporting it, whether it be M and A, whether it be GLC, whether it be product expansion, whether it be recruiting executives in a slightly more hands off way than you would do in venture? I think that was a pretty good answer to the question. Yes. Thank you. Stefan, do we have a microphone for Stefan? He's here. Okay. I think you people can hear it. Go ahead. I will repeat it. In the Nordics and also where you see that market penetration will sort of end up in a more mature state, just to get better clarification on that? Am I allowed to answer this one? So margin structures are around and this is typically across groceries practices, around 40% gross margins from sold price to purchased price. And then you have Enrica that's probably generating somewhere in the region of 5%, 6%, 7% EBITDA. And that's in a sort of a physical store network. If you look at Ocado, they're working on 32%, 33% gross margins and they're making 1%, 2% EBITDA. But the CapEx investment is obviously dramatic. So free cash flow is very limited. If we look long term, rather than explicitly pointing out what we think the opportunity is, but the gross margins, if you can leverage the network, could be considerably higher. If we can find ways of creating supply chain efficiency at 1 fifteenth of the cost of infrastructure that other players have done, then we think that bottom line at scale at SEK10 billion in revenues, this business can be very profitable. The second question was segments? No, really should penetration where you benchmark against Korea 20%. Is that still expanding? Where do you see that this Yes. Korea is actually still expanding, so is the U. K. I mean, I think if you look at analysts' forecast, they think in 5 years' time, we should be close to 6% to 8%. So 3% to 4% doubling from where we are today. That sounds reasonable to me. And in the long term, I mean, it's just if you look at the people who are purchasing food online, it's not 45 to 50, 55 year olds, it's 25 to 35 year olds. And as they move up the generation, the people that come behind will also be purchasing food. So the transition is done over decades and generations. But ultimately, if you can get a better experience at a cheaper price saving time, you're going to do it. How long? How much time? I don't know. I think we need to go on, but you can also grab Andreas and Chris in the coffee break to ask further questions. And before we head to Livongo, I'm very happy to introduce Naren Schaumb, who is the CEO and Founder of Homeo. And yesterday, me and Naren, we actually went to meet the Vice Ministry of Industry here in Sweden because he wanted to talk about train, monopolies and ticketing solutions. And the Vice Minister was telling us that, yes, they're looking into if you could possibly do an investigation around international ticketing systems for rail companies. And Noreen looked at him somewhat surprised and said, well, I do that every day. I have that figured out. So I thought that was pretty cool. Tell us all about it, Naren. Thank you very much. Hi. Nice to meet you all. Thanks for having me. Very briefly, today's presentation is more on the vision. We're still early in what we can drive the market and not so much in the numbers. We're also a private company. So we also want to keep confidentiality. So I'll tell you the journey we're going to take all consumers towards the future of travel. Very quickly, most of you know this, mobility is a very large sector and it's growing and it's changing very fast. If you actually look at where the change is coming from, it's coming not from within the industry, but from people, players outside the industry. In general, there's a lot of capital that's gone into mobility. I'll spend little time focusing on that bike sharing, scooter sharing, ride hailing, car sharing, 1,000,000,000 of dollars of capital, tens of 1,000,000,000 of dollars capital going into mobility. And in general, it's driving an economy of experience, which is people look for convenience, less car ownership, urbanization and basically people compare these products to other industries like Amazon, like Netflix, like Spotify here, etcetera and how simple is it for me to press a button and a taxi standing outside the door. But when you look at that last segment there, long range mobility, all the names there are still large incumbents, still people who've been around for decades and that's where we focus on. 2 other shifts that are happening in the mobility as a whole. 1 is, there is a general trend towards at least in the younger millennials, Gen Z is people spend more money on experiences than owning physical goods. 65% of the younger generation save up money to go travel. So there is a natural shift in the macroeconomic world towards travel. And finally, especially in Sweden, as you know, sustainability is something that's growing exponentially. I was so surprised in the last 2 days to learn every conversations around, hey, can you share more data on how many people you enable to get out of flights onto trains and we have tons of data, we should probably publish that in Sweden first. But it's incredible how many people are willing actually to go to more efficient modes of transport. But it's surprisingly enough these efficient modes of transport, trains and buses also run at 50%, 60% capacity across Europe. So there's still huge efficiencies to be gained within these modes of transport. So a deeper look into long distance transport and where I started. So I'm originally from India, moved to the U. S. To study, fell upon this idea and then moved to Europe 7 years ago to start building this company. And I started with very simple questions like this. What's the best way to travel from Paris to Amsterdam, right? There's trains, buses, multiple rail companies, multiple bus companies, multiple airlines and actually door to door sometimes is almost the same on train and air when you take into consideration you got to go to the airport, check-in, fly and then take public transport on the other side. And most of Europe people ask these questions, what's the best way to travel from Florence to Rome? I probably need to add what's the most energy friendly or climate efficient way to travel from all of these locations. But when you keep going across Europe, Europe is a very dense network of transport. Trains and buses are running every part of every country, villages, towns, big cities connected, but no access to distribution. No one outside of Sweden knows SJ is actually a transport rail company in Sweden. No one has a clue of the brand name. And so this network is very fragmented across Europe with thousands of suppliers and very, very large volume of passengers across each of this market. In fact, European ground transport is €100,000,000,000 market. So it's very large just within Europe. When you step back, most consumers are asking the exact same questions globally, which is what's the best way to travel from Sao Paulo to Rio? Is it a flight? Is it a bus? What's the best way to go from Tokyo to Kyoto? Where do I buy my train ticket? Shenzhen to Hong Kong. So when you actually step back at the world of transport, I probably left out 10,000 plus logos here because no one has a clue how to actually stitch together this world of transport. No one has done it before other than the airline industry. So really what it comes down to was global, especially ground transport is not on a single distribution system. There is no Amadeus, which is a $30,000,000,000 business here in Europe that focuses on ground. It's happened in flights, it's happened in hotels, but there is no one else that focuses on ground transport. And what's even more interesting is it's not speaking the same language as the airline industry. Ticketing systems are completely different. They don't talk to each other. There's no station codes. Europe has 100,000 stations, 500 airports. So you're talking about fast density of data that no one no company has seen until now. So my vision, our vision as a company is very simple. 1st, bring the world of transport into a single distribution system. I thought if one company can do that, wow, that's a very big business. Global transport anywhere in the world, whether it's trains in Thailand, Southeast Asia, buses in Brazil, Chile, there is no one that has brought this data together. And once we bring this data, it's actually fairly easy because there is access to consumer, I can distribute it back to Expedia, Priceline, whoever else and then make money. So that was the first idea. But then I realized actually you know what, that idea is only half the solution. The other half of the solution is travel as an industry whole has not produced magical consumer experiences that you see in other industries I mentioned like Netflix, Spotify, Uber, Amazon, etcetera, where you press the button and Oasis made in Vietnam is shipped to you same day. And when you look at these magical consumer experiences, there are a few key elements that come out. One is, no one in travel has controlled data end to end between supply and demand. There's always layers. There's a GDS layer. There is online travel agencies. There's metasearch engines. So when you actually have to push through products, you're not able to do that because each layer has their own priorities, let's say. So that never happened in travel. 2nd is no one connects the modes of transport. Actually my flight from Berlin to here was a cab to the airport, a flight to Orlanda, Orlanda Express and actually a walk from Stockholm Central Station that's 4 legs of the journey. The last one is a walk very healthy. The other 3 booked separately 3 separate times, 3 separate transactions as if I told you, you watch the next new series on Netflix and I give you 3 episodes and the remaining 7 go find it on the Internet or DVD or wherever else you can, right? That's the story of travel. And every one of you in this room do this today. That's because the industry forces you to do this. There is no reason for you to not have these connected journeys. So the same consumer, everyone looks at travel and says, oh, very low frequency. Yes, it's low frequency if you only fly, but it's higher frequency if you connect the dots, right? 80% of all air consumers take a ground transport leg along with that. Maybe it's just a simple Heathrow Express, Gatwick Express, but they still do and it's still part of the same journey. So the second part of the vision really is how can one company connect all of these modes of transport, so that you can bridge in terms of consumer experiences, but you also provide innovation in terms of unified mobile ticketing, you can get better economics across connected modes of transport. And the last thing is a paradigm shift in consumer behavior. Most people who live outside of London search London all airports. What is London all airports in any website? Correct? And you have JFK, people post hashtag JFK, LHR, no one's going to JFK. They're going to Brooklyn or New York or they're going to Cambridge. So it's this ability for consumers to start doing natural search, I am going home, I am going to my town and we are still talking about simple consumer journeys, slightly more complex, one order of magnitude more complex. What's the best way to get from Stockholm to Pamplona in Spain? Google, what's the closest airport? Google, how do I get from Bilbao airport to Pamplona? Very simple. And it's still just one layer of complexity. When you start bridging this, most consumer journeys are very, very complex. So that's the 2 biggest things that we try to solve, sounds very simple, quite difficult actually. So we're 6 years old, how far have we come? We operate in 35 countries across Europe. We work directly with 800 plus rail and bus partnerships. These are very large state owned companies like SJ, SNCF, Deutsche Bahn, Renfaitre, Natalia all the way to the tiniest of buses, trains that run regional transport between Naples and Pompeii. So all of them are plugged in. So we are really the largest source of not just ground, but also unique inventory across and we also normalize that data along with air, so we can do end to end journeys. We bring it all in a very, very simple user experience. So it's all mobile ticketing. Fun fact, we are also the largest unified mobile ticket platform there is because we talk to all the underlying systems. So if we issue a QR code, it is cannibal in any underlying rail or bus company across Europe as long as they have mobile ticketing themselves. Scale, 6 years old, we are 27,000,000 monthly active users. We're actually 75% mobile. And another fun fact, majority of our users book same day next day. So we drive this comfort convenience on I can actually buy last minute and I can actually have the comfort that everything will work and I can still transact something similar to what we have seen on in other industries. It took us 6 years to cover Europe as Go Europe, shortcoming in my vision was the name. I thought it will take a decade to actually bring the thousands of European suppliers together and stitch it together. Actually we got it done in 6 years. We rebranded to Omeo, 4 letter word, beautiful simple name, works in every language around the world to actually expand. And so where are we taking this company next? We expand across 3 verticals, 3 axis. 1st, as we expand across modes of transport, I mentioned airport transit, very, very simple product for us to attach an airport transit to every flight ticket we sell, because we already sell the flight tickets. So skip the line, Gatwick, how many of you fly to Gatwick? There's 4, 5 kiosks for 200 people that land on the same flight all standing in line. So we can offer these very simple products in very big addressable markets. 2nd is Ferris, when we went into it, we had no idea it's a $20,000,000,000 market. We already have majority of supply in the Mediterranean. So you will start seeing this product come out. 2nd axis in which we expand is geographies. We're going beyond Europe. North America, Latin America and Asia are the 3 biggest markets for ground transport. We are going to share more news by this year and more to come over. Remember that our way of expansion is not it's not the same product in every single market. We have to go market by market, license, contract with the largest state owned operators, buses, rebuild the entire inventory system so you can buy your ticket on your phone very simple, seat reservation, whatever other features, discount cards, etcetera. So it's the whole thing we have to build and then we launch, but there are network effects between these markets. And the last access that we expand in is our own products. It's very, very new. We started launching it this year. We do it in Spain. So about 5%, 6%, 7% of all our tickets sold in Spain are connected journeys. So we issue a single ticket between 2 different either 2 different rail or 2 different modes of transport. We're starting to do that. We're starting to offer look into unified mobile ticketing we spoke about and there's a whole slew of products that will come to the market that the market has never seen before mainly because no one historically owned all inventory to be able to create these products in the market the same way Amazon has done. For example, when you look at Amazon, you would never think somebody who buys a book would buy electronics and somebody who buys electronics would buy car washings solutions. They're completely different products, each vertical very low frequency. But when you start bringing those together and it takes a long time to bring these things together on a global basis, we see data that shows very clearly that these doors are all connected. Very proud of the team actually for the scale at which we operate. We have 376 people. We have 5 offices, Berlin being the largest, Prague, London, Karlsruhe and Beijing. We have quite a few Chinese customers. We operate in 19 languages, Chinese being one of them. We have Alipay, Tenpay and all that. So outbound tourism from China is big, so we went in there early. We are actually very proud of 2 other facts. 59 nationalities were really very international, but I think that's a factor of just Berlin being so international. But the second one, which is we're 38% women, that is not a factor of being in Berlin. That is very much a calculated thing that we have built over time and we have a lot of programs. And the last but not least factor that we are most proud of, Christina Stenbeck is on the Board and most of you worked with us. The reason I work with Shinuak, single largest driving force I have ever met in terms of pushing me to do beyond what I'm capable of every single day. And it's an absolute pleasure to work with you, Christina. So with that, thank you very much. Thank you, Naveen. I know you're rushing out of the door, but maybe I can just ask a final question because clearly growth is top of your mind. But what does success look like? Success for me is hopefully in a few years or the whole world of transport is in one product and we have managed to do that. And second is we have managed to shift consumer behavior out of airport to airport into more natural search. If these two things happen, the underlying metrics will follow. Fantastic. Thank you, Narayan. Thank you very much. We're now getting ready to welcome Lee Shapiro, who is the CFO of Livongo. But before we do that, we'll show you a short film about Livongo. It was a shock to me to find out that I had diabetes. When you find out you have a chronic illness, it's something that you can't get away from. People with chronic conditions aspire to live their life in the same way that those who don't have chronic conditions live their life. It's not where you're managing to feel great. You're just trying to manage to feel normal. I went to the doctor and he's like, well, if you don't change something in 5 years, things are going to start shutting down. Your body is going to die. I was diagnosed with type 1 diabetes when I was 12. I never heard of diabetes before. I had no idea what it was. The thing that actually made me the most scared in the whole process was watching my dad for the first time cry. I received a phone call. They told me that my son was diagnosed with type 1 diabetes. I knew what type 1 diabetes was. I knew it was bad. I knew there wasn't a cure for it. And he looked up at me and he said, Dad, can we fix this? And at the time, I took a deep breath and I did what probably most fathers or mothers would do, and I said, Yes, we can. And at that point, my life changed. My name is Glenn Tullman. I'm the Executive Chairman and Founder of Livongo. And we empower people with chronic conditions to live better and healthier lives. Thanks. And Lee, on your on our program, it says CFO, but I think that's massively understating your role with Livongo because you've been with the company as an investor and a board member from the very beginning. So we are extremely pleased and thankful that you traveled all this way to address our shareholders. Thank you so much, Thorens, and thank you for the opportunity to present to you. And also I want to just start out by thanking Sinevik for believing in us, for Christina taking a step forward and learning about the business and Chris and Georgie, looking at what it is that we're doing and thinking that we might be the Zalando of healthcare or the Omeo of transportation or Matam for food. But health is a challenge that we all face every day in our lives. And we're quite passionate about what we believe is the huge opportunity in front of us to add technology to solve these problems. So we are a public company. This is the fine print that we always have to disclose at the beginning of any public presentation, But we're fortunate that we were listed on NASDAQ a little over a month ago and are quite pleased to have the access to the public markets that we have today. What is Livongo? We are using technology to change health care. We believe that you can have a data driven experience that is used to provide you with personalized guidance to better manage your care. And we live in a day where the data is available, but making that actionable is not necessarily accessible to all of us. And the amount of time that you have with a medical professional is so limited that being able to provide you with the type of guidance is something that drives our mission, our mission to empower individuals with chronic conditions to live better and healthier lives. And because we're so focused on a member first experience, our members love us. And that is truly at the core of what it is that we do and guides the people at Livongo every day to do the things that are necessary to help our members succeed. And we'll talk a lot more about that during the course of this presentation. We are focused solely in the U. S. Today and our clients are self insured employers, health plans, pharmacy benefit managers and as Chris alluded to earlier, those who are at risk for the cost of care, but don't lose sight of the fact that we are driven by our members and the member experience. So what is it that we're thinking about for healthcare? When you look at what Google did for content or Facebook did for community or Spotify did for music, we believe that we can do the same thing for care. We're bringing an Internet moment, if you will, to health care and using the power of having technology wherever we go, a mobile first experience into the way in which we're able to interact with our members. And what we're trying to do is fit into their life flow, allowing them to have the ability to get the questions answered that they need answered at the time they have those questions as opposed to trying to get them to change their behavior in different ways. Chronic conditions unfortunately is one of the largest problems in the world that we face today. Just in the U. S. Alone, almost half the population have a chronic condition and 40% have more than 1. Individuals with diabetes, 70% of them also have hypertension. And so when you start looking at the fact that we are at a place today as societies where we're living longer, but we're also living with chronic conditions. 90% of the healthcare spend in the U. S. Relates to chronic conditions and that's $3,700,000,000,000 of spend that's associated with both healthcare spend and productivity loss that's due to chronic conditions. At Livongo, we believe that the way in which we address this is by serving our members 1 by 1 in that individualized way. And we've had spectacular growth to date Just in the first half of twenty nineteen, we've now exceeded 190,000 members, up from 114,000 at the end of the year. But I want to bring that back to the point I was making earlier about this being a data driven experience. We believe we have the largest database of real time finger prick blood glucose readings anywhere in the world. And we are using those insights in terms of better understanding how and when our members need care and what we can do to help them avoid either hyperglycemic or hypoglycemic events, which can cause great health challenges and a lot of cost to those who are at risk for the cost of care. And so we're using that data to help drive our experience and I'll talk about our applied health signals approach that is pulling information about you from your environment as well as from the modalities that you use, using something we call our AI, AI engine to power behavior change related to health. In the first half of twenty nineteen, we've already exceeded our revenue for all of 2018 and that's driven by our member growth. So now I'd like to touch a little bit about what we're doing and how it's different. And to describe that, you have to understand that when you're an individual who has a chronic condition, you might see a provider a few times a year if you're compliant, maybe once if you're not very compliant and a typical office visit at least in the United States is now limited to something like 10 minutes with a provider. So 99.9% of the time, you're living on your own managing these chronic conditions. And you don't have the ability or the capabilities to understand the things that aren't necessarily happening to you. And if it's 2 o'clock in the morning and you need to reach a healthcare professional, who do you turn to? You're not necessarily going to be able to reach anyone. And so on the left hand side of this slide, the experience today is for an individual with diabetes, you're on your own managing, you're alone managing your condition most of the time. You have a glucose meter not much larger than this clicker. And what it's doing is as you're pricking your finger and you're inserting a test strip into the device, it's giving you a reading. But you don't necessarily know how to interpret that reading and what to do about it. And it's stored typically in a dumb device, meaning that's not connected anywhere. The data is not going anyplace. And so you might bring that box with you to your doctor when you go see them for a visit and they might be looking at months of data and talking to you about trends and things that have occurred way in the past. And so imagine if you were in a position where you had a guardian angel who is working with you anytime you were measuring your blood sugar or if you have hypertension, your blood pressure or if you're an individual who has weight management challenges, anytime you're stepping on a scale and being able to provide you with guidance at the time that you're getting those results and giving you coaching in a way that you're looking for it, coming over your phone, coming directly on the device, the smart connected glucometer, coming across your scale and being in a position to now help you at the time you're thinking about your health to take the steps that are necessary. And if you're not active at that point in time, what if you could click a button to speak to a coach anytime you need to 20 fourseven or be in a position to schedule time with someone who might help you and guide you better with regard to that. Chris mentioned earlier this closed loop experience and the Livongo journey provides all of those elements to our members. Our AI engine powers our approach. What we're doing is we're gathering data from the meter, from the scale, from your blood pressure cuff, as well as from data that we're receiving from our clients, those who are paying for the cost of the solution. So that may be claims data or other information about an individual's health experiences. We're looking at their demographic information. What age are you? Where do you live? Your zip code tells you a lot about your health status. And we're using that to come up with information that we aggregate and then we apply that in terms of giving you insights to your own experience about your health journey. And we do that through a smartwatch or through your phone or on your PC and we're providing information into electronic health records where it can be used by providers to better guide their patients based on what information we were delivering at the time they had a health event. As we get that information back, what we're doing is we're utilizing it in a way that allows us to iterate and provide better guidance as we go forward. And so our learning engine based on that database that I described earlier that was just blood glucose readings. But think about the trillions of data points that we have in our engine today that are learning and providing new ways for us to interact with our members. What that does is it leads to true behavior change. And we've done studies where we just nudge individuals towards differences in behavior. For example, measure your blood pressure 3 times a week and do it before you have breakfast. And 40% of those individuals that we gave that guidance to change their behavior, which is a massive amount of change in the healthcare environment and very different from what's experienced even when you're given advice by a physician on things you need to do to change. And so what we do is we believe that these various abilities that we have to change are leading to real outcome differences for our members and therefore reducing the cost of delivery of care. The member journey we have is a very Apple like experience and Apple didn't copy us. But what we do is we provide a box to a member that comes with a smart connected meter or blood pressure cuff and they open it and it's ready to use in their day to day management of their condition. And by meeting members where they are, we allow them to customize the way in which they interact with us. Do they want a message on their phone? Do they only want to receive messages on the device? Is it something where they want to arrange for personalized coaching? And so we then deliver our health nudges and our members are feeling better in control of their condition. They're empowered to make a difference in their own lives and that allows them to have better health outcomes. So what does that lead to? And these are really the 3 key pillars of what it is that we're doing. 1, our members love the experience. We have a net promoter score, which is an industry standard way of measuring experiences. And just to give you some comparisons, a typical health plan has a negative net promoter score. A pharmacy benefit manager has negative to low single digits. So we are at a level of some great consumer companies in terms of delivering a fantastic experience for those we serve. Because they like what they're doing, we're leading to better health outcomes. We're lowering blood glucose levels. The systolic blood pressure changes that we're engaging our members in is the equivalent of them starting on a new medication without necessarily taking a new medication. Depression and anxiety scale scores are lowered by over 55%, because we're enabling those members to do things differently and to get the guidance that they need. And when you're doing that delivering better outcomes that leads to savings close to $2,000 per member per year And as shown in the study that we did with a large Fortune 500 company in the U. S, they had a 5 times return on investment with Livongo in the 1st year of using our solution with those individuals who were enrolled into our program. And so what we're seeing is this combination of member satisfaction, reduced cost of delivery of care, which leads to better outcomes for the member and better financial outcomes for the clients that we serve and that's fueling some of the growth that we've had in the marketplace. Now when we do this, it's been a journey that we started on at the end of 2013 when 7Wire Ventures, the fund that I co founded with Glenn Tullman, who you saw in the video, made the first investment into Livongo. But we needed to build out an ecosystem in terms of going after what is a very fragmented market in the United States for how health care is paid for. We started by contracting directly with self insured employers And we have direct relationships with clients. But that led us to start working with a number of influencers. Sometimes we call them interferers, but they're influencers in the way in which healthcare is paid for in the United States. And so those are some of the consultants that exist. Some of the names that you may know like Mercer or Aon Hewitt that are advising self insured employers on delivery of care. And we were selected by many of those organizations as a leading innovation to work with their employees to drive savings. And that brought us then to the health insurers who were administering many of the health plans for those organizations. And so as they started to sell on a national scale, they took our solution and they started to resell it. And now with the 2 largest pharmacy benefit managers in the U. S, CVS Health and Express Scripts, which is owned by Cigna. We are go to market partners for them and embedded in their diabetes management and other chronic condition management programs, which has led us to now increase the level of participation that we have in the market. I don't want to underemphasize the complexity of navigating this very diverse ecosystem. And we're fortunate we have a team that sold into these markets before and has dealt with those complexities and brought relationships to bear and being able to do so. In every situation though, even if we're selling indirectly, Livongo always has a direct relationship with the member. So that trust, that relationship that we've built allows us to drive the outcomes that we're seeing. And so that's part of the way in which we're able to convince these very complex partners that we have that are serving tens of millions of individuals with their health insurance or pharmacy needs, but to entrust us to be the one who's working with the member at the ground level, if you will. So today, we have at the end of the first half of the year, 720 clients, 193,000 members, but we added 307 new client relationships just in the first half of twenty nineteen alone and that led us to add 79,000 members almost as many as we had just exiting the year of 2018. So the growth is pretty significant and rapid in terms of what it is that we've been able to accomplish. The typical journey for a client is that the way in which we sell, we will start working with them at a given point in the year we can sell all year long. We're not limited to a benefit cycle that in the U. S. Typically starts in January. Many of our clients that are self insured are able to start working with us earlier than that. And so it takes us on average 6 months to sell a client and then we start an enrollment process. We use the AI engine to understand information about how best to reach a member and enroll them. To give you some perspective, a typical health benefit that's provided by an insurer or self insured employer gets enrollment in the single digits in terms of percentage. We across our book of business have enrolled 34% of those members who are eligible for our program because of the value that we are delivering to the member. We have at the client level 96% of those who had the opportunity to renew with us in 2018 did so and we lost a few by merger and we gained a few by merger. We have at the client level over 90% member retention rate and what we're also proud of is that at a client level, we have 114 percent dollar based net expansion, which means that our revenue is growing with the client because we're continually enrolling new members into the solution that they bought. I also want to make sure that I note here that that's just related to our diabetes offering. We launched hypertension at the end of last year and so this doesn't include some of the new products that we offer into the market. In terms of our total addressable market, just in the U. S. Alone and just relating to individuals with diabetes and individuals with hypertension, it's a $47,000,000,000 market opportunity. And unfortunately, what we're seeing in the U. S. Is that that market is growing. There's an additional 500,000 individuals each year who are diagnosed with diabetes. That's both Type 1 and Type 2. And so we haven't even yet caught up with the growth rate in the market based on the just under 200,000 members that we serve. So it leaves us a relatively long tail and why we're confident that the company has great growth potential in the years to come. In terms of the organic drivers of our business, there are really three areas that we look at. First is product intensity. So as I mentioned to you, 34% across the book of business from 2018 of those individuals eligible for our solutions have enrolled with Livongo. But when we look at those clients who have used our best practices and where we've optimized enrollment, we're at 47% just under 50% of those who are eligible for our solution. So we believe that we have opportunities to grow just with the current clients that we have by a significant percentage by continuing to enroll. We get data from those clients on a regular basis. And as our AI, AI engine is learning more about ways to optimize the interactions that we have through the testing that we do in terms of the types of messaging that we put out to enroll and retain members, we see opportunities to grow there. Secondly, product density. I mentioned that we just launched hypertension and we've seen very good uptake with our clients who had bought our diabetes solution to buy our hypertension offering as well. And we added in the Q1 of this year through an acquisition of a company called MyStrength behavioral health offerings that we sell also through health plans as well as to our clients who are using our diabetes and now hypertension offerings. So improving our product density or share of wallet with clients is another way we grow. And last but not least, we still have room to go. We only had for example 20% of the Fortune 500 as clients. We have room to grow with other insurers and we see work with the governmental insurance. Half of those insured in the United States are insured by Medicare and Medicaid programs. And we've launched and become an approved provider for Medicare. And we believe that more and more individuals will be taking on a managed Medicare, managed Medicaid program and we see growth opportunity as well. So that provides us with 3 very strong ways in which we see the business expanding. Our competitive moat at Livongo is based on mastering the complexity of the market that we serve, continuing to deliver great results for our clients, growing the base of solutions that we provide to serve individuals with chronic care and a demonstrated ability to work with really large clients to show them that we're able to scale with them in ways that they need a partner to scale. And Livongo has built out a platform that allows us to serve many more hundreds of thousands of members than we're serving today. And we believe that the infrastructure that we put in place is now capable of serving many millions of members. So I'd like to just focus for a moment on some of the financial highlights that we shared with the market in our Q2 earnings call just a couple of weeks ago. Our revenue year over year from 2017 to 2018 grew 122%, but yet the first half of twenty nineteen over the first half of twenty eighteen, we had 156 percent growth. We have already done more revenue in the first half of twenty nineteen than we did in all of 2018. Part of that is based on the way in which our business model works and it is a virtuous business model that our clients appreciate. They are only paying us per participant per month. Those of you who have studied the way in which health benefits are provided in the United States, many offerings have been population based. And so health plans or employers those at risk for the cost of care were paying vendors based on a low rate across a whole population. We believe it's important for us to align our interests with those of the clients we serve and so they only pay us for those who are using our solution. And because of that, we see a tremendous amount of recurring revenue. This subscription model gives us great degree of predictability into the revenue that we're able to deliver. Our margins today are in the high 60s, low 70s. We see as being our potential longer term And that's based on this closed loop system that we provide in terms of device, coaching, member experience, all the data and analytics that we're delivering as well as the customer service that we're delivering to our clients. And we see opportunities as I discussed previously to continue to expand our offerings. So when you look at the type of growth that we've had, you can see on the right hand side of this slide what our growth has looked like quarter over quarter. And again, that's principally driven by the diabetes offering and has a very small contribution from weight management and behavioral health, which we just acquired in the Q1 of this year. As to our long term operating model, we believe that we can have gross margins in the low 70s that 72% to 74% range and we can continue to drive efficiencies in terms of our operating costs. We see that we can move from where we sit today with regard to a negative operating margin into a positive operating margin of 20%. And we started to demonstrate that as noted on our Q2 earnings call with regard to improvements that we've made already year to date in our operating margins. So what excites me about Livongo is that we have a significant trajectory for long term growth. I've already described our opportunities in product intensity, product density and also adding new clients. But there are other ways in which we'll continue to grow as well. We believe that the platform we have today can continue to serve individuals with other chronic conditions. And so we look at ways internally as we did with our hypertension offering to develop solutions in Livongo Labs that we can bring to our clients. And because of the data that we're collecting from our clients as well as from our members, we understand where those needs are. And so we now have a series of targeted offerings that we'll be able to bring to market. For those that we don't feel we're well suited to build internally, our business development team is looking for partners in the market whose offerings we might be able to sell through the trusted relationships that we've built with our clients or companies that we can acquire as we grow the business. And lastly, we see that there is a massive opportunity for us in international markets. Unfortunately, in just the next few years, there'll be more individuals in China and India with diabetes than there are people in the United States. And so what we're finding is that the way in which we can now translate these offerings and we work in different languages with our members today to be able to work in other markets is a longer term objective for what it is that we can deliver. Our team is built for scale. Our CEO, Zane Burke was previously a longtime member of the leadership team that grew Cerner Corporation that already is a global business in the medical space. My partner and longtime business associate, Glenn Tullman, who is our Executive Chairman has served on a number of other boards and is very active with a number of growth companies. Doctor. Jennifer Schneider, who is the mastermind of our Applied Health Signals platform is someone who had worked at other public companies in the past and has helped us grow the business. But what I'd also like to highlight is that our team comes from a vast array of other companies both with Silicon Valley as well as healthcare experience. Our Chief Technology Officer, Dave Engberg was one of the earliest members of Evernote and grew that to a business that serves over 150,000,000 users today. So when we talk to him about security and scalability, he looks at where we are today and laughs and says we haven't even scratched the surface of what our platform can deliver. And Anmol Madan, who came to us after founding a company that is in the behavioral health space and is a highly regarded data scientist in the U. S. And so we have almost as many individuals now on our data science team as we do coding at Livongo. And we believe that that's going to be another way in which the solutions that we offer can continue to deliver value. Last but not least is the Livongo team itself. We're passionate about what we do for individuals with chronic conditions. One third of our team members have diabetes or another chronic condition and another third have family members who do and the balance are just as passionate about the mission. What you see here is a picture of a team that rode for the Juvenile Diabetes Research Foundation to help find a cure for juvenile diabetes. And we as a team raised more than any other team in the history of the ride. And so we think that what we do is something that we bring every day, the passion that we feel for our members to the work we do at Livongo. So I'd like to thank you again for the opportunity to present to you and also thank you so much for your investment in our exciting company. Thanks Lee. And I think we will have time for a couple of questions. And when we get the microphone sorted and so on, let me start with the first question. Now you talked about international expansion. What would be the main hurdles? Would it be the different health system? Because I guess the treatment or the systems would work equally all over the world. What would be the difficult areas to penetrate if you want to go? No. Thank you. Thank you for the question. And so actually today Livongo works all over the world. Our United States Department of State is a client of ours. And so we work on the ground in countries all over the world today. So I think that the challenges with regard to international expansion is making sure that we're able to deliver that personalized member experience in the way that we do it in the U. S. Today. We're very familiar with GDPR, the data standards that exist in Europe. California has now adopted similar standards, but we will need to stand up data centers and other servicing technologies to be able to support our members here. In addition to work with some of the single payer systems, government systems where healthcare is delivered. We're fortunate in my prior life at another public company Allscripts. I managed our international operations. We had, for example, 60% of all healthcare in Singapore running on our platform. We operate in Australia. We operate in the UK and the EU. And so we have some relationships that we can bring to bear there, but we're not quite ready with all the opportunity that we're having in front of us in the U. S, we're not quite ready to launch into international markets. Thanks. Do we have any questions from Lee from the audience? Not once. Yes, go ahead Joakim. Thank you. So Joakim Gran from the NMB Markets. So you obviously have a long runway for growth ahead, but being sold as such a health benefit, would you say that what's the most important growth driver going forward? Is it the commercial end market or perhaps Medicare? So with regard to what our growth can be in terms of thinking about the markets that we serve, we do see really meaningful opportunities in terms of continuing to penetrate with the large employers who we serve through some of the channel partners that we work with and that is near term. We are also starting to make early progress in government markets. As I mentioned, half of health care is paid for in the United States by government sponsored programs. And we believe that there's a number of programs like Medicare and Medicaid, programs that are provided by unions to retirees that we're just starting to make inroads in, but we see great growth potential from there. We do not sell direct to consumer today because consumers don't pay a lot of out of pocket dollars for healthcare that's been increasing. But I believe that also down the road there are going to be opportunities for us to work with individuals directly. And we're hoping to leverage some of the great knowledge and experience that Shinnevik has in consumer markets to help guide us on that journey. Thank you, Lee. And just one final question then. So just to get a feel of the sort of stickiness of the business model, What is the churn so to say that you're experiencing and how has that developed over the past couple of years? Thank you. So imagine you're an individual with diabetes. You receive either through your pharmacy or maybe it arrives at your home from your pharmacy benefit manager, a glucometer. You may go to a pharmacy and you may choose 1 on your own and pay a little bit out of pocket for it. And every month you're given an allocation of test strips to use to prick your finger, put a droplet of blood on and then test. And when you run out of those test strips, you have to come out of pocket sometimes paying $25 to $50 to buy more test strips. What do most consumers do? When they run out of strips, they stop testing. And so the way that we change the model and the benefit for the member is because we have a connected device, we know every time you test, we know every time you're measuring your blood pressure. And so what we're able to do is we send you at no cost additional test strips because we want the data. And so we've turned that model on its head. And because of that and because the focus that we have on members, we have very high member retention. As I noted in the slides, at a client level, we have over 90% retention of our members. And just to clarify that, individuals will leave employers. We have a number of large employers in the U. S. Who are clients. And so 75% of the reason why a member might churn is because they've lost eligibility. They've either left an employer voluntarily or involuntarily. So the balance of that and I think we reported a rate that was just under 2% for the quarter in Q2. The reason why it's so low is because at a client level when someone leaves an employer, there's a new employee who fills their seat that also has a propensity to have chronic condition and we're able to continue to recruit. And so that seat is filled by someone who becomes a Livongo member. So again, on average around 2% a month, but if you ignore the 75% of that that's due to a change in employment, our rate is somewhere around 6% a year in terms of churn. Thank you. And Lee, so Livongo went public in July and it seems I used to be the same height as Chris Bischoff, but since going public It's a tiring process. It seems quite an early stage in your growth trajectory to go public. Why did you choose to do that at this point? So going public is a great opportunity for any company to be able to access a new base of investors and to have the ability to raise capital in a very liquid and dynamic market and we're quite privileged to have the opportunity to do so. I've served as an officer of other public companies and on the boards of 2 other public companies currently. And so there's great advantage in doing so. It was also I think a very meaningful branding event for Livongo. The clients that we work with, the Fortune 500 companies, some of the flags that you've seen that we work with Delta Airlines, Boeing, Pepsi, Target, they like working with companies that have transparency with regard to what it is that they're sharing with regard to their financial results and to be able to look at us and see that we have the strength to be a partner for them for the long term. And so it gave us the capabilities to now be able to raise a meaningful amount of capital just under $400,000,000 to fuel our growth as well as to be able to better establish the brand in the mind of our clients. Lee, thank you so much for presenting to us. Thank you. Thank you. Let's take a 20 minute coffee break and then convene back again. So last leg of a long day. I'm very happy to present to you my former colleague, Christoph Barsiewicz, who used to be an Investment Director with us at Kinnevik, but then we threw him out into the real world and he is now the Co CEO of Global Fashion Group. Christoph, over to you. Great. Thank you, Torren, and thanks everyone for still being here. I'm excited to be here. Good afternoon. As Torren said, I am Co CEO of Global Fashion Group. I have moved from Kinnevik to GFG at the beginning of 2018, but I've been involved with Global Fashion Group through my prior role at Kinnevik for over 5 years. So I know the business fairly well and didn't just get to know it over the last 18 months. Over the next 20 minutes, I plan to present an overview of our business, our financial track record, together with an update of our first half twenty nineteen performance and the outlook for the full year. We started our business in Brazil in 2011. Over the past 8 years, we have built GFG into the leading online fashion and lifestyle destination in Asia Pacific, in Latin America and in the Commonwealth of Independent States. Our reach is extensive. 2,000,000,000 visits to our apps and sites over the last 12 months and brand awareness of over 80% in our markets. In the last year, we served more than 12,000,000 customers who placed over 31,000,000 orders and generated €1,600,000,000 in net merchandise value. Our 12,000,000 customers represent just 1% of the 1,000,000,000 consumers that live in our end markets. We want to connect all of those consumers to the 10,000 brands we work with. Our vision is to be the number one fashion and lifestyle destination in all our markets. Being number 1 is really important. Our scale enables us to attract the leading fashion brands globally and to offer a wide selection with an outstanding customer experience, powered by technology and operations. We have 4 consumer brands in our regions, the iconic in Australia, Zalora in Southeast Asia, Da Fichi in Latin America and La Moda in CIS. Let me now introduce you to our business in a bit more detail. Our track record of strong growth and improving profitability is underpinned by 4 key drivers. 1st, we have a leading position in all our markets and we are firmly focused on entrenching that position as our markets grow. 2nd, we offer our customers an inspiring and seamless experience right the way through from discovery to delivery. 3rd, we're a strategic partner of choice to our brands. Many brands wants to access our markets because of the high rates of growth, but they need a partner to help them manage the operational complexity and we offer a flexible business model to do just that. And last but not least, the physical and technology infrastructure we operate is highly scalable, but also flexible, so that it can be customized for diverse local markets. I'll talk about each of these drivers in turn, starting with our leading market position. Fashion and Lifestyle is a €320,000,000,000 market in our end markets. That is roughly 2 thirds the size of Europe or the U. S. But importantly, these markets are growing at 7%, more than double the rate in Europe or the U. S. Fashion e commerce in our markets is still in its infancy. It's about 10 years behind Europe and the U. S, with penetration of just 6%. Just think about it for a second. You go back 10 years, 2,008, 2,009, very few people in Europe, here in Sweden, in Germany, in the UK, were shopping fashion online in any regular way. Our markets are at that stage today. So it's not a question of if, but when penetration grows. When history repeats itself in our markets, we could go from the 6% to anywhere between 15% 40% that these more advanced markets are seeing today. We've been able to achieve our market leading position because we offer both an inspiring and a seamless customer experience. This all starts with our assortment. We began the business with just 2 categories, apparel and shoes. Today, we don't only offer these 2 categories, but we also offer accessories, sports and kids products. Nevertheless, there are still a lot of categories we have not rolled out in all our markets. So there's plenty of future potential. For example, beauty is €1,000,000,000 opportunity, which we have only started to roll out in some markets, for example, in CIS. Determining the right assortment goes back to what our customers feel inspired by. This is basically about providing the best combination of global and local brands. We then complement this with our own brands, both to offer entry price point products, but also to cover gaps in our assortment. For example, in Malaysia and Indonesia, we have pioneered our own modest wear offering given the significant share of the population that is Muslim. To give you an idea of the width of our assortment, we offer more than 10,000 amazing brands from around the globe. This includes 78% of the top 50 global brands. We only work with the brands directly, not through unauthorized resellers or gray market importers. The brands we offer range from affordable fast fashion brands like River Island or Pull and Bear or Aldo, all the way up to premium brands like Michael Kors, Rag and Bone or Armani. A big part of the inspiration also comes from offering high fashion brands. They might not always be what the customer places in her basket, but they certainly attract a lot of interest and traffic. Increasingly, our customers mix and match. They wear a €40 dress together with €400 sunglasses. So you have to carry a really wide range. As I said earlier, we build strong relationships with our brands and customize our approach through fully flexible business models. And we have 3 business models today. We started in 2011 with the retail model. In this model, GFG owns a product, controls the price and benefits from the high margin of fashion. This is still the primary model. 81 percent of our NMV and half our SKUs came from retail in the first half of this year. To grow our assortment, we launched our 2nd business model, Marketplace in 2014. This allows us to list products without having to buy it upfront. The ownership of the product and the inventory risk remains with the brand. Marketplace is a good way for us to trial new brands and products or to manage long tail items. We also have exceptionally strong e commerce capabilities and we're starting to leverage these by offering brands capabilities they don't have themselves, such as fulfillment, digital marketing and data analytics. And that's the 3rd business model that is more nascent. These services accounted for less than 2% of revenue last year, but they are growing fast and they serve to strengthen our brand relationships. We now provide fulfillment services to over 25 global brands, which is more than double the level last year. I want to move on to talk about our operational platform. Our mobile app is a dominant platform for traffic, customer engagement and net merchandise value. Nearly half of our NMV was generated on the app in the first half of this year, a 7 percentage point increase versus last year. The app is core to our strategy. It's growing in share, it has higher conversion than our web and mobile sites and reduces the friction for the customer. Since 2011, we've built a highly scalable operational platform that provides a real competitive advantage, as it is fashion centric, tech focused and tailored to each of our end markets. Let me take you through the 6 components of the value chain. 1st, sourcing. We operate the entire supply chain ourselves, from brand showrooms to our own fulfillment centers. 2nd, eProduction. Our 9 studios produce over 17,000 images per day, enabling us to upload over 26,000 new products every single week. 3rd, in fulfillment, we operate 10 fashion centric fulfillment centers located close to our customers to enable fast and low cost delivery. We leverage automation in these centers where the scale is significant and labor costs are high. Our fulfillment centers in Sydney and Moscow are the most advanced when it comes to automation. We're also building a new large scale automated fulfillment center in Brazil, which is going live next year. The 4th component, payment. We offer 35 different payment methods, including cash on delivery, credit cards, mobile wallets and installments. The 5th component, delivery. We use couriers, pickup points and lockers to deliver over 90,000 orders every day. Most orders are delivered by 3rd parties in Asia Pacific and Latin America. But in CIS, we deliver 86% of orders across all of those markets by our own fleet. And finally, customer service. We have 1500 customer service employees and last year they handled 9,000,000 emails, chats and calls in 11 languages. Operational excellence is a strong differentiator for GFG. We stand out from local competition as we are more advanced and technology enabled. But we also stand out from global cross border is to win customers early as they begin their shift to shopping online by offering them an unparalleled assortment, by engaging them with highly personalized content and by delivering an outstanding shopping experience, fast, easy and efficient. All of this results in a market leading Net Promoter Score of 80%. I'll now turn to our financial performance. We earn virtually no revenues in our reporting currency, the euro. So our results are impacted by currency movements. I will focus on constant currency growth rates today. It's also worth noting that 70% of the products are bought in local currency and nearly all our staff, over 98% are based in local markets, which means that we have a natural hedge for over 85% of our cost base. So let me talk you through our results for the last 3 years. Net merchandise value has increased by over 20% per year since 2016, with growth accelerating to 22.5% in 2018, mainly as a result of our marketplace business model. Marketplace share has grown from 0 in 2014 when we launched to 15% last year. Net merchandise value represents the checkout value of our customers, including VAT, shipping fees and is net of all our returns. So it's a figure our customers have actually paid for in total. The number of orders we delivered grew to 28,200,000 last year. We have been able to maintain a profitable average order value of more than €50 At this level, we cover all our product, fulfillment and marketing costs, delivering a profit contribution for the average order. Our active customer base grew 14% to 11,200,000 in 2018 and average order frequency increased to 2.5 times a year. As a result, NMV per active customer grew 8% to reach €130 Increasing frequency and earning a bigger share of the customers' fashion spend is a key opportunity going forward. This chart compares our customer acquisition costs for our 2017 customer cohort with their customer lifetime value. You can see that within 6 months, we have paid back 80% of the acquisition costs and within a year more than 100%. All of our regions delivered a payback within 12 months. This chart shows that we have established unit profitability and are on a clear path to overall profitability, as we continue to grow. We start on the left with $1,500,000,000 Nmv, which translates to $1,200,000,000 of IFRS revenues after adjusting for sales taxes and marketplace sales. In 2018, our take rate for marketplace has been 31%. After the cost of the product, our gross profit margin is 39% or €450,000,000 last year. We're profitable after marketing costs and generate a profit contribution of 6.1%. We are scaling this unit profitability as we continue to grow. Tech and admin costs of $159,000,000 are largely fixed. We then add back depreciation and amortization to get to adjusted EBITDA of $50,000,000 a loss of $50,000,000 which is 4.3% negative. Over the last 3 years, we have demonstrated the ability to balance strong top line growth and steady margin improvement. NMV growth in 2018 was mainly driven by the strong growth of Marketplace. Revenue has grown 19% a year on average since 20 16. This lagged a little bit behind NMV growth last year due to the increasing share of Marketplace, where we only record the commission in our revenue. Over the last 3 years, our adjusted EBITDA margin increased by over 10 percentage points. We broke even in Latin America and Australia in 2018, which together represent over half our revenues. Turning now to take a quick look at regional performance. Our active customer base is growing in all our regions, with the fastest growth in Asia Pacific. The three regions are similar size in terms of NMV and revenue. NMV has been growing faster than the active customer base, driven by the increasing order frequencies. And gross profit is also roughly even across the 3 regions. The gross margins are highest in Latin America and CIS, given the relative maturity of those regions versus Southeast Asia in our Asia Pacific segment. Turning now to our first half results of 2019. Our strong performance continued with all the key trends unchanged. Our active customer base grew by 1,500,000 year on year or 15%. These customers continue to shop more frequently, driving strong order growth of 26%. NMV per active customer grew healthily at 7.1%. And as a result, NMV grew over 22%. Gross margin was just under 40%, slightly down from last year. Last year, we received a significant one off payment from one of our suppliers in the 2nd quarter. Nonetheless, our adjusted EBITDA margin moved forwards just under 1 percentage point to a loss of 4.8%. So we continue to make progress on our path to profitability. Turning to the outlook for the full year. We expect NMV to grow between 20% 23% in constant currency terms, reaching somewhere between €1,700,000,000 €1,800,000,000 this year. We anticipate revenue will be above €1,300,000,000 and we expect a further improvement in adjusted EBITDA margin. We're planning CapEx of about €80,000,000 for the year. So to sum it up, we have a large market opportunity as fashion and lifestyle spending moves online in our markets. We have built an inspiring and seamless shopping experience connecting 10,000 brands to a 1000000000 consumers in our markets. And quite importantly, we have a proven track record of strong top line growth and we've achieved EBITDA breakeven in half of our business and continue to improve profitability every year. Thank you very much. We have time for 1 or 2 questions to Christophe, if we have any. I will go ahead, Johan from Danske Bank. I think you can speak up and if Yes. So we haven't given any specific guidance around that. I think what we've said is we're focusing on a clear path to breakeven for all of our regions. We have obviously achieved that in Latin America and in Australia already back in 2018. So there's certainly not the expectation that we're going back on that. The next region to get to breakeven is certainly CIS, where we're not that far away from that milestone. And then Southeast Asia for us is really an investment region. It's very, very early days. It's a complex region. Our business is still fairly small and so we're expecting a couple of years of losses in that region to continue, but probably also with the most significant growth. So taking that all together means that we think we're going to certainly still be negative this year, but make progress relative to the minus 4% margin that we had last year. And then I think for next year, it's a bit early to give a more specific target, but certainly the expectation should be that we're gradually stepping forward and the overall group breakeven is certainly something that is an important priority for us while we continue to also focus on growth given that we're so early in the market. So we had €315,000,000 of cash for the end of the second quarter, including the proceeds from our IPO. And we feel pretty well capitalized when it comes to that amount of capital. I think as you can see from the guidance, we're investing on the CapEx side in significant amounts, but I would say in a very disciplined way. And so we believe we're fully funded to execute on our current plans. Obviously, to the degree we change our plans around additional business models, additional opportunities or additional end markets, that may change. But I think the core business plan that we're executing were funded for. Derek? Thank you. So I'm just wondering here what's really holding back growth. I mean 18% to 19 revenue growth is fantastic in some sense, but you have this, as you mentioned, large addressable markets. You're clearly a younger company than Zalando. You would think that growth rates should even be higher? Yes. I agree. So we'd love to see faster growth. I think what we believe is that in a lot of our markets, we're still before that inflection point of mass adoption of e commerce in general and in particular in this category. To give you one example, in Brazil, a market which has seen some e commerce activity for probably 2 decades and we've been there for nearly 9 years now, apparel penetration in online is still just 1%. There's 2 fundamental reasons for that in Brazil. 1 is the sizes are not properly standardized even within the same brand and so trying on the product is absolutely critical to the customer experience, but trying on only works when returning is very, very easy. But because of the logistics infrastructure in Brazil, we have been able to solve the outbound delivery, but we haven't solved the returns, which is why return rates are very low, but also why we believe growth is relatively low. And so it's some of those types of challenges and we have similar challenges in other markets that we believe are holding this back. What we do see is that some markets are growing much, much faster. So for example, some smaller markets like Indonesia or Colombia, we're seeing dramatically faster growth than the group average. But then some other markets like for example Brazil, where we've built a meaningful business, but there's still certainly some structural holdbacks in the market that we're trying to solve. Thanks. Well, thank you, Christophe. Great. Thank you, everyone. So the last company that we are proud to present to you is the Norwegian answer to MatHem, I. E, Kolonial. And I think the finding Kolonial was the reason that we got so confident that there was something interesting to do in the food sector. So Karl, CEO and Founder of Kolonial, very happy to have you here. Thank you. Yes, I'm also very grateful and excited to be here. I think when you found a company, you dream about staying being on a stage like this at some point. We're also very impressed with Kinnevik's ability to spot trends and deep trends early. I remember our meeting almost a year ago, a little bit more than a year ago. And I believe I had an e mail in my mailbox by the time I landed back in Oslo, and it was clear that you had thought about a lot of these things already before we came. And we certainly share a vision for the food space. So hopefully, I can shed some light on why we believe there is such a major opportunity, both for customer value creation and shareholder value creation. So our vision is to give our customers freedom and flow in their everyday lives. And what we mean by this is that instead of spending time in the grocery store, which 80% of Norwegians dislike, we simply take care of that side of your daily logistics. So we bring you beautiful fresh products and inspiring meals, but effortlessly. So you don't spend any time more than you absolutely have to in ordering our groceries. So we started a few years after both MatHemir in Sweden, also Nemli in Denmark, we began scaling up in 2015 and we've had a quite significant growth since then by roughly 10x in the 1st couple of years. As you see from this graph, it definitely did flatten out somewhat in 2018. This was very important. It was a year where we focused on operations, and I will get back to that and why that has been a very, very important part of our future growth. So I should also mention that we are now back. We haven't gone out with our numbers for 2019 yet, but we are back to the growth rates that we, let's say, are used to. We should typically be at around 30% to 40% growth year on year, and we see that on a weekly basis now when compared to last year. So we are the clear market leader in Norway. This has some pros and some cons. We currently have about 75% of the free picking online grocery. That means not meal kits included. There's a meal kit market of about NOK 500,000,000 in addition to this. But we've had a pretty solid position from the beginning. That doesn't mean that we haven't had competition. We were actually challenged by another pure player that left the market a year ago. So it's a tough market. They were a well funded startup with about almost NOK300 1,000,000 in investments. But it also shows that I think this market is more brutal than, let's say, traditional retail in the sense that if you are slightly worse on a lot of parameters, you don't get slightly less customers, you end up getting almost none. And that was basically what happened. But we so we've merged through that phase. And right now, our current main competitor is an incumbent, which is Muni, which is one of the more high end supermarkets. And they're currently doing this by picking in store, and they haven't sort of fully committed to growing the online grocery market. They're also the largest incumbent player, which means they have more concerns around, say, cannibalization and so on than what we do. But this is, of course, beneficial to be the market leader, but that means that we also have to grow the market by ourselves whereas if we were more players like we see in Britain when you're starting to reach 8 plus percent market share, That typically comes when the incumbents also push the supply side. So we aren't necessarily opposed to more competition. It could also help us grow the market. But it's worth mentioning that Norway, a fairly small country, 5,000,000 people, but still we have a NOK 200,000,000,000 market, roughly €20,000,000,000 which says something about the size of grocery and how important it is in people's lives and what a massive opportunity this is. We're currently at roughly 1% market share, so we should at least be at British levels within some years. And it's worth noting that the British market is also growing. So who knows where this would eventually land. That's a huge growth opportunity. So our P and Ls. We haven't presented many numbers in general to the market. We've had a pretty small select group of investors. So I'm sure that you're used to seeing P and Ls with actual numbers on them. I'm sorry that mine is basically written in crayons, but at least hopefully I'll get a point across. So starting at the top, we have our gross profit. Of course, gross profits generally in groceries are fairly slim. Ours are slightly below our peers mainly because we are fairly aggressively priced. So we krono. No typically has around 3% to 4% higher prices than the discounters. And we have decided to stay at that level because we believe it's sustainable and because we want the fuel growth. On our spoilage, it's on world class levels. Andreas mentioned it earlier. But our warehouse roughly turns over about 20x or more than an average supermarket, which means that the rotation is incredibly high. So we're actually down to 0.3% in most weeks, and most of that can also be limited eliminated. On variable fulfillment costs, which is probably my main point today, we're doing very well, and I'll get back to that a little bit more in detail. Distribution costs also, basically on top of the class and then finally transaction fees are in line with peers. So basically, our contribution margin is considerably positive. And that is why this business I would say that profitability is inevitable at this point. I think when Kinnevik invested, it's worth noting that we were at very different numbers from what we have. Well, no numbers here, but what we are where we are today. And you basically have to believe that we both had to improve on our gross margins, we had to improve our fulfillment cost and we had to grow. And the point now is that now we only need to grow. After the contribution margin, of course, you have the marketing spend. It's quite oversized due to growth. It's obviously somewhere between a variable cost and a fixed cost. Part of it is needed to maintain, but most of our marketing now is on growth. And still after that oversized marketing costs, we're still solidly positive. And then you have the fixed costs, basically the warehouse operation and technology and G and A. The operations cost, fixed operations cost is also a bit of a question whether you should count that as fixed or variable. Of course, there is a bit of a step change once you reach the maximum capacity of a warehouse, then you need to build another one. But at scale, the fixed operations cost on warehouse is fairly limited. So basically, for the last couple of years, we have made a big effort in improving our efficiency. We have to build scale first. It's very But once But once we got to a fairly solid level on revenue, say roughly EUR 100,000,000 or so, then you have enough to start building a more efficient operation. And that's what we did. We did that in the beginning of 2018. And the benefit for Kunal, which sets us apart from a lot of other companies in our sector, is that we have always owned the entire chain, the technology end to end. So basically, the whole front side, the customer facing parts of the business, but also the warehouse management system and the distribution system. And typically, if you look at other online grocery players and pure players around Europe, you will find that most of them have outsourced something, either whether it's their warehouse or their distribution, most on the customer facing side. But this has made us able to adapt fairly quickly and also fundamentally change system when we saw that we needed to do that. And this has led us to somewhat of a breakthrough last year, where we basically in the last couple of years doubled our productivity. And a major driver of that was that we went over to a semi automated model, but at a much, much lower CapEx than you would typically see in other e commerce and other online e commerce players. So we have variable costs that are in line with the absolute best in the world, but our CapEx investments for this is roughly onetwelve of what you would need to build that type of efficiency with other systems. And that is a major step change because it's of course, it gives you much better return on capital, but it also allows you to make smaller warehouses that are efficient at lower scale, which again means you can make more of them, which will again reduce distribution costs and also give you a better product to customer with faster delivery. So this is basically what happened during this fall, and this was after Sinek Vitje invested, and I believe Sinek made a good bet that panned out. So taking a step back, we believe that we are changing the value chain for groceries. And one thing is whether we can be profitable or not, but where are we compared to the physical grocery stores. And we see here, I think When you look at supermarkets, they have a fairly large range on cost. They can be fairly efficient, let's say, a Lidl, a hard discounter to more an upscale supermarket or corner stores that tend to have higher costs as a percentage of the revenue. And so that means that the range here is fairly large. You would say that's typically between 20% 38% cost in a sort of traditional supermarket chain. What's interesting about online groceries is that I think everyone has sort of caught on that our last mile is, of course, an additional cost that the physical stores don't have. But I think what a lot of people don't realize is that upstream, we have quite a lot of savings. So one is that typical physical grocery store will have a production and they'll have transport to a central hub, which will redistribute those items into the store. Whereas when you have 20 or 30 or 40 supermarkets worth of revenue in a single location, much more of your items will come directly. So we source from producers, but also even directly from farms. And listen to that, you have some possibilities of going upstream. Like in bakery, we actually bake our own bread, which is something that in a normal store typically if you come at the end of the day, the bread will be either sold out or they will have massive waste or both, which is usually the case. Whereas we basically have 0 waste on bread and every piece of bread is always available. And then, of course, you then you can enter into and take some of the margins from that part of the chain as well. There's quite a lot of savings upstream and in the distribution to the warehouse. On the picking side, with the by the way, I forgot to explain what UPH are. UPH is units per hour. And this is basically a variable cost metric, 1 to 1 with your variable fulfillment costs. It basically means you take all the items that you picture in a week and you divide it by all the hours in the warehouse. That way, whether it's restock, whether it's picking, whether it's terminal work and whether you move processes around won't matter. You will still get one number at the end, and that number is comparable across countries as well. So you don't have to take into account labor, wages and price levels and so on. And I'm not going to say exactly where we are on this line, but you can see that we're somewhere north of 100 and roughly twice as efficient as we used to be. So back to this point. When you have fulfillment centers with pretty high UPH, you also see that there is quite a bit quite a substantial saving in the fulfillment cost when you compare to the store. So basically, your upstream and your warehouse costs are lower, and that offsets most, if not all, of the distribution costs. And at scale, we believe it's perfectly possible to be at, let's say, lead levels end to end. And the reason why that's quite a disruption is that, of course, then you end up with a massive amount of customer value that the customer doesn't have to pay for. So at the end of this, we typically save our customers around an hour for every order. Our orders are quite large. Typically, our customers buy for a week at a time, meaning that this year, we'll save our customers well over 1,000,000 hours that we give them in free time. But the other thing is that our quality levels tend to be significantly higher because the rotation is so high. The same thing goes for marginal products where that used to be a trade off more items and even pretty marginal items without that necessarily pushing cost. All these basically selection and quality being key drivers in the normal retail setting. Right now, for fruits and vegetables, out of 500 order lines delivered, we typically get the complaint on one of them. Yes. Finally, this has been presented previously today. We as I mentioned, there was a bit of a meeting of minds when we first met because obviously we believe that once you have a profitable online grocery base, you can build on more categories. And we have done that in several areas. We have moved into pet foods and basically verticals that are quite adjacent to grocery, but we also just started our cooperation with Klasourceon the same way as Malte Amazon in Sweden. And basically, you add the gross margin of those products directly to your bottom line. There's almost 0 additional marginal cost of handling those items. Also, it's worth noting that as e commerce go, I don't think there's any hotter forge than groceries to build an efficient or forge an efficient e commerce business. So our picking costs are and have to be very, very much lower than almost any other industry. So when you add other verticals into this mix, you get a pretty compelling business case. I think that's what I wanted to say. I'm open for a couple of questions. Good, good. Maybe I can let me start with the first one and then hand it over to you. So you say that you can do world class picking efficiency or efficiency at a fraction of the cost. And how is that possible? Well, that's a good question. You always once you have these type of breakthroughs, I think you typically ask yourself why haven't anyone done this before. I don't have a really good answer to that. But what we are basically talking about is using conveyors, but very in a smart way. So it's a software driven system, but it's not goods to man, which has been kind of the model, the go to model for most of e commerce. The problem with goods to man is typically that in order to produce volumes that you see in online grocery where basket size are typically 40 to 45 items per basket, a goods demand system just can't give you the output that you need unless you make enormous investments in basically robots or shuttles. Or if you think of an out of store type of system, the small robots that drive on top of the cube, you just need such a massive amount of them because they need to feed the pickers with so many items so quickly that the CapEx becomes basically blows out of proportion. So we have found a different way of solving that. Ramil, go ahead. Thank you. Ramil Kogia, Baikou to Research. So first off, going to the graph with the UPH. And if I understood that correctly, you're envisaging a scenario where that's going to increase moving on. But you're also saying that you've seen sort of the inflection point in terms of CapEx and automation and the infrastructure is in place. So how are you going to drive UPH going forward? From a sort of a lean operations point of view, there's still tons of waste in that process. And I think any type of automation system still has a lot of potential to be tweaked within the frames. On top of that, we have we still see opportunities in automating other parts of the chain. We do it in the terminal. I believe you saw some robots that were stacking in the background. What we have we see this rather as an opportunity to automate it in each individual part of the process rather than taking sort of a cube or a very holistic massive automated stores and retrieval type of philosophy. And then there are still areas where we see that with pretty low CapEx, you can automate individual processes further and you can optimize within the processes that are already semi automated today. Thank you. And just a brief follow-up on that. You're saying that you're basically saying that you're best in class. And to my understanding, you're comparing yourself to some of the offline players moving towards sort of online. But if you would compare yourself to Ocado, for instance, how do you compare in that aspect? No, I did compare myself to Ocado. Got you. Thank you. Do we have any more? Yes, Lena Stobbe, Kanyagi. The process itself is actually quite manual and compared to the other platforms that we've seen, they scale quite nicely on a global level and this requires a lot of investment to scale. Could you maybe say something about what share of other verticals you have in your net merchandise value today and where you see that going in the next 5 years, just so we understand where do you go from manual to get some leverage? Yes. So far, Klas Orson was a new project that we launched 2 weeks ago. We're still talking single digit percentages on that vertical and that was about 200 SKUs from Claus Oresund. So that's still early days and that's being scaled up. It depends whether you categorize things like pet food as groceries or other verticals. But we're still talking, let's say, 95% plus is groceries. We've just began our vertical journey. And it's important for us to win groceries first. And I think that's also something to keep in mind. I don't think we will roll out new verticals at sort of breakneck speed. I think we need to be able to integrate them over time and never lose sight that we are primarily a grocery company. I think if you're seen as, let's say, that the customers get a perception even though it's not reality, but they get a perception that you're worse on groceries simply because you have other categories, then you're in trouble. So you have to integrate this over time. So where do you see profitability in 5 years' time? I'm not going to give an absolute number, but it will be less than 5 years, I can tell you that. But long term margins for you, where would they be? Also not sharing the margins, then I would have shown the full P and L. Okay. Well, go ahead. Thank you. Liz Miliades, Bank of America. Would you be able to comment on the threat of Amazon or other sort of larger players that have scale and how you react to that? Thank you. That's a good question. I think Amazon is probably on a global scale the main competitor. I also didn't mention that given this breakthrough, we feel we've earned the right to compete internationally. So we will start looking at new markets. And eventually, we will meet Amazon in some of them, I'm sure. The Nordics seem to be fairly far down on the Amazon priorities list. And I believe that even if they build a warehouse in Sweden, food will probably be quite a bit of waste. So we would probably be able to build up groceries in the Nordics and these parts of Europe before Amazon moves into that market. But for sure, that is the, I think, the main competitor. And it's interesting how Amazon basically started with a fairly small category and kind of worked their way in into larger and larger categories and eventually started to cover everything and for a long time except groceries. And now they've also added groceries in several large European cities and American cities. It doesn't seem like they have entirely cracked that model quite yet. It's also not particularly well known exactly how they do their fulfillment. So I think but that's definitely someone to watch very closely. But I would say that if you can win on groceries, then the frequency is so high that I would prefer to win on groceries and move into other categories than be strong in other categories and weak in grocery. Stefan, sorry. I think you can speak up. Sorry. Please do it in English. It is a technology that's proprietary. So it's definitely a possibility. I'm not sure that it would be the best way for us to capitalize on it. We are primarily an end to end player. Being basically a software and hardware provider is quite a different ballgame. So we are unsure whether we want to go that route. Primarily, we're looking more at greenfield rather than selling our technology. Let's take the final question from Stefan from Pareto. The Norwegian market, yes. Yes. It's actually less than 1%. We'll pass we'll clear SEK 1,000,000,000 by a bit of margin this year. And then our target is roughly 30% in thereabouts from thereon on. Sounds correct. I'll try to give you a bit of an answer and be sufficiently obtuse. But I did show you that, that sort of legal cost base is around 20%. That clearly means that I believe that you can, at the very least, put distribution and fulfillment in even some of the upstream costs in those numbers. At maturity, well, I can give you someone else's numbers. Ocado, that was mentioned, I believe they are sort of a 2%, 3% marketing. We are considerably more than that to grow, yes. Thanks, Karl. Thank you. And you can catch Karl afterwards as well, I think. So with that, we are getting ready to conclude. And Georgi, I'll hand over to you to do that. Thank you, Torren. Yes, I said this morning that's going to be an exciting day, interesting day. I hope you feel that it has been so. We have been listened to Andreas and Chris that have shown how we work at Kinnevik with new investments and existing investments. And we, of course, have heard a lot of these entrepreneurs present their fantastic companies. And I just want to underline that this is a select of our companies. We have more in our portfolio and of course in the pipeline. But what I think is pretty obvious that all these companies and founders, they are trying to solve pain points by changing the complete value chain within an industry. No matter if it's travel, healthcare or going back to the financial services panel we had here, they are building completely customer centric solutions and they use technology to solve the pain points that are very, very difficult for incumbents to solve. So all these underserved customer needs is basically a huge potential for these customers. And I think that also is the kind of red thread throughout our entire portfolio and actually our history and why we're here. Before we finish up and have a session outside where you're able to ask me and the team and of course the founders more questions, I would like to go back to 2 slides from this morning to again reiterate some of the points I made regarding the new Kinetic. So firstly, we say that we will invest about 2 thirds of our capital into follow on investments. In companies where we see strong traction, when we have conviction that they will become the winners, the category killers within their sectors. One good example is when we doubled down in Livongo. It's a very impressive company and I'm sure that they will grow very, very far from where they are and create value for Kinetic and our shareholders. We will add about 2 to 4 new companies per year and 80% of what we call the 1st run capital will go into companies that are a bit more mature internationally, such as VillageMD is an example that we added just recently. 20% of the capital will go into new businesses of more venture style in the Nordics, our home market. And we are aiming in all our businesses to get an ownership level about 15% to 25%. It's not an exact number, but it's basically to influence outcome rather than aiming for control. The portfolios as such will include about 30 companies. And again, it's going back to Kinnevik being an effective low cost operation. We want to have a nimble organization and yet being active owners. So we can't have too many companies in the portfolio. That means that we need to do an exit when we're adding a company. So we're going to prune our portfolio a bit more actively going forward than what we have done in the past. And there have been times when Kinnevik had a portfolio of 60, 70 companies. That's something that we definitely would like to avoid in the future. And we're going to invest in our focus sectors to more or less evenly distribute the capital also across stages of maturity and geographies in order to get this balanced portfolio. So our three priorities then, continue to evolve our portfolio towards a higher proportion of growth companies, to strengthen this portfolio across stages, geographies and maturity and time to liquidity and to reallocate capital more dynamically. We will create exits over the coming years when our companies are more mature that we see today in our younger portfolio. And when we do so, we will take part of that capital to again reinvest in new companies to infuse the system with new blood, but we will also distribute capital to the shareholders. So these are the three things that we will focus on now the coming years and I'm sure that we will create a lot of value in the new Kinnevik. Thank you very much for coming here today. Thank you everyone that has been watching on the webcast. And last but not least, I just want to say that I really enjoyed looking at your creative P and L, Carl, maybe something that we can say, slightly better than competition, slightly world's bang on target, world class. I'm just joking. I think it was a good slide. It shows that we can actually create profitability also in the online groceries. Thank you very much.