Good day, and thank you for standing by. Welcome to the VEF 4Q 2024 earnings conference call and webcast. All participants will be in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please note that today's conference is being recorded. I will now turn the conference over to your speaker, David Nangle, CEO. Please go ahead.
Many thanks, Razia, and welcome all once again to our quarterly results conference call, this time for the fourth quarter of 2024. Going straight into the deck, it was a more eventful quarter than usual, and the highlights are key events in the quarter. First and foremost, it was around our NAV and our Q4 NAV. Weakness was driven by mainly Brazil macro and market aspects feeding into our valuation process, and we'll get into that in a bit deeper detail, obviously, in the presentation, but we ended the quarter and the year at a NAV of $353 million, down 26% quarter on quarter on a dollar term from then nearly 20% quarter on quarter in SEK. From a portfolio point of view, looking at the underlying companies, once again, still delivering.
The quarterly message is the same as last quarter, majority break-even, which is where we want them to be, and growth is back in focus. We saw those trends coming through in our key names in the portfolio through 2024, and that continued into Q4. We expect 35%-40% top-line growth, profit growth as we look into next year, so it's a nice risk-reward balanced portfolio at this stage. On a micro level, credit has always got focus given the size and shape in our portfolio. The Q3 results would have been reported to you, investors, back in November. They're the latest set of public figures we have, but trends are continuing into Q4 from what we saw throughout the year. In Q4, they delivered 17% quarter on quarter origination growth, nearly 50% year-on-year.
That origination growth is obviously driving everything else from a balance sheet into an income statement as we are profitable growth and reaccelerating that growth into 2025. I guess what's new is basically delivering on promises around exits. We've been talking a lot about this for a long time. It was a key focus goal for us, promised to the market. Now we've done two exits back to back with BlackBuck, the IPO in India. More recently, this week, we announced the exit of Gringo in a 100% cash deal. We'll get into both of them. That leads on to the last point, which is what these exits allow us to do. These exits obviously delivered at NAV plus-minus and with capital in. We just start to have a lot more flexibility and ability to put that capital to work.
What comes front and center to mind is obviously our balance sheet strengthening that by delivering and our own equity straight at a deep discount and the opportunities to nibble at that. From a numbers point of view, slide three, as I said, headline $353 million at year-end of a NAV from a SEK per share basis and a NAV SEK per share 3.73, 4.26 at the end of last year, mainly because of the Q4 moves. First three quarters of the year quite directionally positive. We had that macro Brazil overlay in Q4, which we'll get into. From a graphical point of view, on slide four, you see the step down in Q4 from what we had in September through to the $353 million in December.
Finally, just to lay it bare, which we're going to get into a lot more detail on our NAV in Q4 and the key components of that. What basically happened in Q4 and the basis for that is the stark divergence in how markets performed in the U.S. versus the rest of the world and our core markets within that, our Latin America. Obviously, quite robust from key markets, Nasdaq, S&P, and even fintech markets globally, which are heavily weighted towards developed markets, all having a very healthy Q4. ARKK and FINX indexed up 12% and 24% respectively. You pull that into a LatAm context in the fintech companies of which we benchmark valuations against mathematically. There was pullback in a lot of key LatAm fintech names.
You add that to currency, and you get the math feeding into the valuation process that we try and be true and fair to. But that's the basis for VEF is going to talk to. So Alexis, do you want to jump in at this point and get into more of the detail on that front, please?
Yeah. Thanks, Dave. Hi, everyone. I'm going to start talking you through some of the individual portfolio position moves and the forces driving them. This quarter, as Dave mentioned, last-time comps and a weak Brazilian real paired with a strong dollar had a large impact on our NAV evolution, and you'll see that as well later in the NAV bridge, but diving into the individual names, so Creditas saw a 44% decline quarter on quarter. As Dave mentioned, that was dominated by macro factors. The peer multiples saw a 30% contraction, specifically LatAm fintech peers in terms of their multiples, and the real depreciated 12% in the quarter. These two factors account for almost all of this move, this 44% move. Another name worth mentioning is TransferGo, where the valuation saw a 32% decline, reflecting the move to market model from the latest transaction.
Peer multiples for TransferGo contracted since the latest transaction in TransferGo that was priced at the end of 2023, and weaker FX over the period also contributed to this move. Another name worth diving into is Gringo, where we saw an 11% decline quarter on quarter in the market as we applied a calibration methodology to reflect the FX impact on the ongoing transaction, which was fixed at a Brazilian real price. Since the end of the fourth quarter, Gringo has entered into a definitive agreement to be acquired by Sem Parar, as Dave mentioned, and it's subject to customary closing, including antitrust approval. VEF will receive net proceeds of $15.2 million reflected there in that fourth quarter number. More details on this transaction will follow later in the presentation. On the positive front, the Juspay mark increased 6.5%.
This was despite a 6% decline in comps and 2% depreciation in rupee versus the dollar, all more than offset by the company performance and growth of around 20% quarter on quarter. Nibo saw a small increase of 2.6% quarter on quarter, reflecting stable comps in the SaaS space, including LatAm SaaS comps, and a 12% decline in the currency offset by company growth of around 16% quarter on quarter. Those were the key names that I wanted to highlight in that slide. Dave, moving on to slide seven. Just to highlight what the key moving parts are in terms of valuation methodology changes are in the quarter. As we mentioned, TransferGo moved to market model as we move towards the end of the 12-month window since the last transaction, and we reflect our new fair value there in this quarter.
Gringo moved to calibration methodology to reflect the FX move on the transaction, which occurred post the closing of the quarter. BlackBuck is now a public company and valued as such, and so the net impact of these changes is that the public or latest transaction marks account for 26% of the portfolio, down slightly from 27% in the previous quarter, and 74% of the portfolio, the remaining 74%, are valued on a market model basis, with over 90% of those incorporating multiples further down the income statement as we've implemented earlier in 2024. We continue to expect the shift from the market model to public and latest transaction. I guess the obvious catalyst being that Gringo is going to move to cash on the closing of the transaction, and further fundraisers would drive that shift as well. Moving on to slide eight.
Given the sharp move in Creditas's market model this quarter, we wanted to illustrate some of the components of the pronounced move, which were largely macro in nature. So in the fourth quarter, the market focused a lot on Brazil's fiscal situation and the weak balance sheet and lack of fiscal discipline, but also the dollar strengthened in the quarter. As a result, there were two big factors that impacted the move in Creditas. Here we show a basket of LatAm fintech share price moves in the quarter. As you can see, they moved 20%-30%. These are not the actual multiples. These are not the actual comps of Creditas, but indicative of a basket of names similar to the comps that we use for Creditas, and as I mentioned earlier in the call, the multiples of comps were actually down 30% quarter on quarter.
In addition, on the chart at the bottom of this page, you can see that the Brazilian real depreciated 12% in the quarter, which was more than it depreciated in the preceding three quarters. And so, as Dave mentioned, these two factors feed into our valuation methodology. So despite Creditas's ongoing underlying solid performance and delivering on their promise of accelerating growth from a profitable base, these two factors feed through to the 44% quarter on quarter contraction in our mark. On slide nine, I'm going to run through the bridge for the NAV evolution over the quarter as we do. As you can see, it was the change in multiples for comps and FX, which dominated the move, accounting for over $100 million of the quarter on quarter NAV move. Portfolio performance within the market model holdings remains resilient.
But we did also make some adjustments to business plans for the next 12 months given the shift in rates environment and wanting to remain conservative on our outlooks. And then the only other thing I would highlight on this fourth quarter bridge is this reflects $2 million that came in from BlackBuck in the latest transaction. And that offset our OpEx and coupon payments in the corporate cash bucket. So that's why those buckets look very flat quarter on quarter. Going on to slide 10 and just running through the 2024 NAV evolution and bridge, we decided in this quarter it would be nice to have a look back and sum up all of the quarterly NAV bridges over the course of 2024 to really reflect on what drove the change in our NAV year-on-year.
As you can see, portfolio performance represented $77 million of positive NAV growth, which equates to about 17% in the year. But this was offset by about $150 million of pullback from comp multiples in the year and also FX, predominantly Brazilian real and the Mexican peso. So we continue to believe in the strong portfolio performance, being able to drive shareholder value looking forward. But the 2024 headwinds from comps and FX of $150 million were particularly strong. Going on to slide 11, we just wanted to reiterate with this slide that we continue to feel confident in the portfolio's ability to drive shareholder value. Now, over 90% of the portfolio is break-even and growing self-sustainably, not dependent on fresh capital to grow and in control of its destiny. The portfolio's next 12-month revenue and gross profit growth will be 35% and 40% respectively on our forecasts today.
And that's reflected in Creditas's public disclosures of accelerating growth and targeting 25%-30% profitable growth in 2025. The portfolio companies are well-capitalized and high-quality targets attracting fresh capital, examples of this being TransferGo, Konfio that raised, Solfácil, and now Gringo being acquired. And we expect to see more of the portfolio attract fresh capital in sizable fundraisers. Handing back to Dave quick, just to run through an update on Creditas in itself.
Yeah, thanks. Just moving from that valuation section to more of the micro-level portfolio. We respect, we understand the macro that we're exposed to, but very much the portfolio we look at on a micro basis to ask ourselves, are we in the right companies at this time? And all the way throughout 2024 and into Q4, our key companies have been performing and performing better from a strong base, raising capital, getting profitability, as Alexis said, and also now reigniting growth because we are a growth investor. We want our companies growing with profitable growth. Creditas is front and center in that they do report numbers every quarter. And we are getting back to that growth phase. And the bottom right-hand chart obviously shows that origination growth, picking up quarter on quarter, getting closer to that BRL 1 billion mark they were doing at the peak of the last cycle.
We're trending towards that as they've grown 17% quarter on quarter for two quarters in a row. That's feeding through to the portfolio, which will touch BRL 6 billion by year-end. And that obviously naturally feeds through to the revenues and all being done on a profitable base. Sergio has been very clear with his outlook for 2025. That has not changed. And so on a micro level, irrespective of what we're saying, we're not belittling what we're seeing on the macro on the valuation side. But on a micro level, we still feel very comfortable and confident in the portfolio we're exposed to. And obviously, Creditas is a big part of that.
Outside of Creditas, which is not focused on here, Konfio is seeing very similar trends in Mexico, but on the SME credit side, actually growing a little bit faster, a little bit ahead of Creditas, as I've mentioned before, and also cash flow positive. And then Juspay, the payments company we've talked about many times, obviously growing at a much healthier clip, north of 50% year-on-year, both in terms of volumes and in terms of top line, and once again, profitable. And Alexis, we're going to pass back to you to touch on some of our exits and our capital position before I wrap up.
Great. Thanks, Dave. Yeah, as we've mentioned a couple of times before in the past, 2024, we focused a lot on exits. And it's a slow process in private markets, but we're starting to see this pay off with both BlackBuck and Gringo exits. These will bring in $17.2 million of cash and another $5.2 million in the form of a listed asset, so $22.4 million in total. And there are still other efforts in the pipes on this front as we focus on strengthening our balance sheet and everything that brings with that. So on slide 13, just to dive a little bit into the IPO of BlackBuck, in November, BlackBuck successfully IPO'd on the National Stock Exchange of India.
It marked their first exit in the cycle, and we sold 40% of our stake, realizing $2 million, which was consistent with our strategic objective of realizing some exits and strengthening our balance sheet. Since the IPO, BlackBuck share price has performed well, growing 72% for year-end and 57% until Monday this week, with a market cap growing from about $580 million at IPO to $900 million today. The 60% position, which we retain, accounts for $5.2 million as at the end of the year, and it's subject to a six-month lockup, which will be expiring in May 2025, at which point we may consider further liquidity, weighing up our relative view on BlackBuck growth from that point versus strengthening our balance sheet, the level of our share price relative to NAV, and other opportunities for capital and shareholder value creation.
As a reminder, BlackBuck is the largest digital platform for truck operators in India, with one in three truckers using the app daily. We continue to be excited shareholders there, the core products being payments, telematics, the loads marketplace, and vehicle financing, for which we believe there's a very large opportunity still. Moving on to slide 14, which is the Gringo sale that we announced at the beginning of this week. As per the press release on Monday, Gringo has entered a definitive agreement to be acquired by Sem Parar. Gringo built a category-defining business serving over 20 million registered drivers in Brazil and really pioneered the business model, building one of the largest of its kind globally. We backed and support exiting when high-caliber teams feel it's the right time to take an offer. This was that moment.
It was a 100% all-cash offer from Sem Parar to acquire Gringo, and all existing investors will fully exit their Gringo position. Sem Parar are a leading tolling and vehicle services provider with a strong position in Brazil. The net proceeds from the transaction to VEF will be $15.2 million, which is 11% below last quarter's mark, largely because of the real depreciation over the course of negotiating the transaction, which was a fixed Brazilian real sale price. The net proceeds are equivalent to our initial invested amount in this instance. It's not the desired financial outcome from exiting a great business, but it's very aligned with our objective of strengthening the balance sheet by selectively trimming our or exiting positions at or around our NAV mark, thus opening opportunities for further shareholder value creation, given the large discounts in NAV that we trade at today.
We welcome the transaction and what it enables us to do. The transaction is subject to customary closing conditions, including approval from the Brazilian Antitrust Authority. It's expected to close with funds flowing in the coming months. With that, I'll hand back to Dave.
Cool. For the last two slides, just where this puts us in terms of capital position. Big focus on exits, net capital coming in, gets us from a year-end position of $12.8 million to a pro forma liquidity position of $33 million, assuming the cash inflow from the Gringo proceeds plus the BlackBuck public stake today. As of year-end, our bond balance was about $36 million, $35.8 million, translated into U.S. dollars, and so we're getting, on paper, close to that net debt neutral position. Exits were key for us this year. We're very happy to have delivered on two. We're very clear that we're not finished in this regard. We're focused on delivering more. It's been selective. It's been opportunistic. It's been the right deals, and always looking to do them at or around NAV to prove incrementally to the market that our NAV is true and fair and real.
And then obviously build a cash position to allow us to do the things that we want to do best with that capital. And even though we haven't yet got a formal capital allocation policy out there in the market, our logic and our communication is clear around what we will do with excess or extra capital coming in to strengthen the balance sheet. And two things which are front and center in our radar are our bonds, our debts, to pay down, deleverage the balance sheet from this debt that we will no longer need. And the other aspect, obviously, is around share buybacks. And the simple, most obvious, logical value creation we can do at this point in time, given where share price is, especially today, is to look at our shares in terms of buybacks.
Then incrementally, you start getting back to investing, which is the path that we're on. It's a staged process where you go from companies recovering, cash coming into companies, exiting companies, cash coming in, deleverage, buyback your shares, building pipeline, and investing in great companies again. Step by step, patient process. You can see it happening and playing out in everything we're doing. It just takes time. We say it, we action it, execute it. And over time, it is becoming a reality, which we're quite happy about. Then just to finish and summarize before we open up to questions. We are, at the bigger picture, we're not belittling the move in our NAV this quarter.
We understand the nature of that, but we always want to be true and fair to the market around our NAV and the moving forces which impact that NAV, which are macro and micro in nature. We always want to be real-time with that and never want to be legacy or stale with our NAV, hence the quarterly move and hence the inputs which explain behind that. We try and come out with a positive message because it's clear to us on a micro level, it is all about the portfolio. That's a portfolio that's quality in nature and proven to be so, profitable, growing and getting back to increasing growth and raising fresh capital. Alexis mentioned a number of companies last year, now this year, and that are raising fresh capital.
Once again, reaffirming our NAV mark, but also strengthening these companies and giving us selective opportunities to do secondary transactions. The exit is big. You can talk about exits, but exits are hard and to realize them at decent prices to reflect your NAV to get the cash in. We're now starting to do that. We're building a track record and a trend beyond just words with the market. And then what we can do with that capital is very clear and should be very clear to the market in terms of how that's a positive impact of delivering, buying back our shares, and moving back to pipeline investing and back on the front spot. So it's a staged step-by-step patient process for which we're getting there. Operator, I'll stop there, and we will open the floor to questions, please.
Thank you, sir. As a reminder to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Thank you. We are now going to proceed with our first question. The questions come from the line of Ermin Keric from Carnegie. Please ask your question. Your line is open.
Hi, David. Thanks for the presentation and for taking my question. So maybe if we start with the operational impact, it sounds like you're not too worried about what you've seen from macro so far. But could you still talk a little bit more about the risks here that you see? I mean, also previously, we did see Creditas see some margin compression when rates moved up. And I suppose we've done that. We've seen that again now. Do you see that risk again? And then if you could talk a little bit about year-to-date, what you've seen in terms of if you would do kind of a mark-to-market. I suppose the Brazilian real has, it looks like, it's troughed a little bit. And how you see kind of the peer benchmarks as well.
Yeah. No, it's super clear. Hey, Ermin. How are you doing? Look, I think from a market point of view, we're looking at India, Mexico, and most notably Brazil. Brazil, we've got the macro implications, the currency, and peer valuations feed into our companies. And then the question is around the fundamentals of those companies that operate in a market like Brazil, which is going through, let's call it yet another wobble. This happens every 18 months, maybe. We live through something like this in Brazil. It's par for the course. That's not me being blasé, but it comes in territory. And yet we still see companies being built through cycle that are used to it. What we've seen so far with Creditas is no change to plan for 2025, and we've been back and forth with the company.
Trends have been good within the company, obviously vigilant on all the moving parts that are going on. What we saw last time in the last cycle where the gross margins did collapse to 12% from that kind of steady state 45% was when interest rates moved from 2% to 14% quite quickly. It was not so much the move in itself, but it was the pace of the move and the size of the move, which made the extrapolation of the margin pressure so quickly. It's obviously come back since, but that was a painful period for the company and well documented. This has been an interest rate period where it's gone from base rates 14% down to about 11% and are now back at 12.5% and rising. It's been moving gradually both ways in a range.
And the repricing, like most of the book, one-third of the book is basically price fixed versus floating. So it's constantly being repriced to reflect this. So nothing like what happened last time. What we may see on the way upward rates is some short-term margin compression, but minor. And then as rates peak and come back down, it'll go the other way. But too early to say in the cycle, but that would be the extent of where we see this. Obviously, we'll be vigilant with Brazil because it's emerging markets. So things are where they are. Can they get worse before they get better? Clearly, we need to be vigilant of that. Kind of affect macro, credit growth, credit quality. We've seen cycles like this in all of our markets before, but we're not seeing anything like that yet.
What I say to your second point, it's an interesting one. Even though we do quarterly NAV marks, we can do daily, monthly, weekly. As we said, we sat this morning talking about our NAV at this point in time. The real is up 4% year-to-date. Nubank, you're up, I think it's 4%-8% year-to-date. Does that mean our Creditas position is 10% higher today? It'll be something different at month end. What I say to the market is we understand the volatility inherent in our NAV, especially when we're valuing some of our companies, and the biggest one on a market model basis versus last round. It's a lot easier when these companies are raising capital on a regular basis. It sets them up for a period of a static-ish valuation mark.
But we like to be true and fair, and we like it to be dynamic, and we like it to be real-time and real. But that obviously changes quarter to quarter. But year-to-date, the trends which feed into that, let's say Creditas-specific valuation are net positive.
That's very helpful. Just maybe one follow-up on it. So I think in Q3, when you gave your outlook for how you think the portfolio will grow and the gross profit growth, that was 40% and 60% on revenue and gross profit. And now it's 35% and 40%. So where have you done those revisions? Or is it just one more quarter or a little bit more mature? Or is it different weighting of the portfolio now than Q3? Just to understand.
No, super vigilant. It's a bit of both. But Alexis, do you want to chime in on that? Is that what you were just looking at?
Yeah. Yeah, sure. Thanks for the question, Ermin. Yeah. As our portfolio companies mature, a lot of our large portfolio companies now are at more mature gross margin profiles. So you can see in the public disclosures from Creditas they're at 40%-44% gross margins. And once that level of gross margin is reached at a credit business, the gross profit is more likely to grow in line with revenues. And even at a company like Juspay, we've said that they've reached 90% gross margins. And so because of larger portfolio companies, their gross margins have reached kind of a more mature state, the two numbers will converge. Does that answer your question?
For sure. Thank you.
Yeah.
Yeah, absolutely. Thank you.
Thank you. Once again, as a reminder, if you have a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one on your telephone for any questions. Thank you. We have no further questions at this time. I'll now hand back to you for closing remarks.
Yes. Thank you very much, Operator. Thank you for everybody for dialing in. I do actually believe that some people had difficulty dialing in to this call. So we'll make sure a recording is sent out to everybody who wants to listen to it after the fact and will be available for calls and questions as we always are. But thank you for your support and for following us through what's been an eventful quarter. We look forward to better NAV marks in 2025 and building on the exits and looking at what to do with those capital as we move through 2025. So thank you very much for your time today and look forward to seeing you next quarter.
This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.