All right, welcome to VNV Global Q4 and 12-month report for 2023 conference call. On the call today, we have CEO Per Brilioth, our colleague Dennis Mohammad in the investment team, and myself, Björn von Sivers, CFO of the company. As per usual, we thought we start with a swift rundown of the latest development during the quarter, followed by a Q&A. And as a reminder, if you want to ask a question, please use the Zoom Q&A function, and we'll address that towards the end. With that, I leave it to Per to kick us off. Please, Per, go ahead.
Thank you. Thank you, Björn, and welcome everybody. I try to keep this brief because it's sort of an uneventful quarter. There's not that much news to talk about. That doesn't really mean that we've been just taking it very easy. So there's a lot of activity, but in terms of reporting and also sort of the swings of the NAV is not that dramatic.
For the quarter, we're down 6%, for the year, we're down 5%. Obviously, for the year, that hides a lot of stuff that's happened, which I, you know, which we've highlighted during the year. Obviously, Babylon, our dear old Babylon went to zero.
But as I try to pick up in this report, too, you know, some of the stuff that sort of I think everybody thought went to zero is still alive. One of them is Swvl. Those of you who've been with us for a while will remember Swvl. That was pretty chunky part of our portfolio, listed through SPAC, and then really had a horrible development in its listed world.
It's still listed, but has come out of a tough period, and it's now doing pretty well. So that's really coming back with a vengeance, and I really look forward to sort of together with you following that and for this year.
But, you know, this quarter, we're down 6%, and I say that it's sort of a flat quarter. Obviously, hate it when it's down, but when you invest for sort of 30%-40% per year, annually, every year for 10 years, sort of, you know, focusing on a quarter-by-quarter basis is something that we have to do because we're listed, but it's not really what we, in, you know, what this is about. I hope you won't find me, and I hope we haven't sort of, you know, pounded our chests or what everyone says in English when we're up 6% in one quarter. It's more the long term that we're here for.
But from quarter to quarter, as you all know, and Björn will take you through in much more detail, we value. I mean, most of our portfolio today is valued off the back of, you know, valuation models, and we pick up valuation multiples from the listed world, where we create peer groups.
And for this quarter, you know, the peer groups that we've had are inhibited by companies like Delivery Hero, Airbnb, and like, Delivery Hero has had a pretty rough quarter, and it's been down for company-specific reasons, that you know, next quarter could very well be up. So really, I mean, I guess the point I'm trying to make is that these sort of interest swing quarters is makes these valuation more arts than science.
Furthermore, if you flip to the next page, what's going on in our portfolio is that more and more of the portfolio is becoming EBITDA positive, which is, of course, very positive. This picture is one which we've sort of updated throughout the year, and which shows, of course, that our portfolio is becoming EBITDA positive. Of the top 10 companies, 2023 was the first year ever, which was EBITDA positive, if you just take our pro rata of those earnings at those companies. Two years ago, that same portfolio, with everything else kept the same, was like a negative 30-35%.
So really sort of a trend, not just growth in the sales of these companies, but more than that, these companies have been very active of taking out excess burn, excess cost, et cetera, and that this has helped.
I just wanna note that here you see that, we've grayed out Voi, because Voi is EBITDA just around the break-even point, for 2023. But really, at Voi is the one company and portfolio where we should really talk about EBIT, because as opposed to most other companies, I think all other companies in our portfolio, this company, Voi obviously owns and runs and depreciates these scooters.
So EBIT is the one that's sort of more equal to cash flow, whereas in company like BlaBlaCar, for example, EBITDA is equal to cash flow. And, yes, so 13% going to 12% here is just a factor of that. In this quarter, Voi has come down a little bit, as we wrote it down a little bit. And this is again, back of the peer group that we use for Voi, and nothing else. Voi is doing really well. But what this also means is that, in our portfolio, we've had—when the companies have been EBITDA negative, if we've been forced to sort of use a price to sales multiple.
Now that they're becoming EBITDA positive, they've become profitable, it will increasingly, going forward, be much more relevant to look at earnings multiples. But when you do that shift, you can get some stuff that moves around a little bit. Again, it's something to highlight that, quarter to quarter, you might see some movements as we start to use earnings multiples instead of sales multiples. But that's all very, very natural. Of course, the best is here, that we don't use valuation models, and that we rely instead on real large transactions in the portfolio.
I don't know if you've noted, but in our portfolio, one of the larger holdings have moved from model to transaction. That's Booksy, where you've seen that. That's a change. So that's obviously on the back of that there was a large piece of the company that changed hands during the quarter. You look it up, and you'll see some details around that. We've used that pricing point as input for our model for our mark in our NAV.
So I think that's also a good tailwind, that a good sort of indication of that, you know, for one, that there's more transactions going on in our part of the world, in our part of the capital markets stuff, which is obviously a positive. So that's, we can sort of have transactions that make up our NAV rather than valuation models. And here is a data point also, where you see that there's a transaction in the name that is sort of, it, it was below NAV. Well, as you see in the figure, here, it's like 20% below the NAV of our valuation model at the end of September. But, but 20% below, not 70% below, where our stock's trading.
So as we increasingly start to get data points like that, I think, I think there'll be more comfort around our NAV. So that's a positive. What else? If we go to the next page, just as our work here is really cut out to get our balance sheet to be debt-free. We've spoken about that at large, I think, over the course of the last quarters, but as a reminder, we have cash on the balance sheet in Swedish kronor to pay down the bond, our bond that matures in June this year, 2024. And we've used some of that cash to also buy back that bond.
And then the second bond, which matures in pretty much a year's time, to repay that bond, we have to sell stuff in the portfolio. So that's really top on the to-do list around it at our end. And that we're encouraged. We see transactions in some of our portfolio names, which is a good data point, and we're hard at work with several different conversations around building a cash pile by exiting some stuff in our portfolio. But obviously, we're, it's, you know, we have always an eye on the pricing of this and won't sell stuff in our portfolio that has at any price.
This is, of course, that will be detrimental to our shareholder, of which us lot are very exposed. But that's high on the to-do list, and that's what we're active in. I just wanted to highlight also that it's a little difficult to sort of follow the movements of our debt. There's two factors at work here. The debt is fixed in Swedish krona, but we report in dollars, so when the dollar krona FX moves around, that impacts our debt.
So of late, or during this last quarter, the Swedish krona, for the first time in a long time, started strengthening versus the US dollar, and that's been somewhat taken back after the year end, after the quarter's end, but that sort of made the debt in dollar terms bigger. But then we've also bought back debt, which has made it smaller.
So those two factors are going on. And then over quarters, you could also have some. If we bought back some bonds, if they're in settlement period over the quarter, that's something to take into account also, if you try to follow sort of one piece of debt in one quarter and compare it to the debt at the end of the next quarter. So just being mindful of that.
Our net debt is to the order of $110 million, as of end of December. So I think that that's a figure that one can use if one wants to sort of build a rough and ready NAV model. I think that I'll stop there as an intro and leave it to Björn to sort of take you through some more details.
Thank you, Per. Could we move to the next slide directly, Dennis? I thought I start with some repetitions. NAV in dollars ended at $509 per share, down roughly 6% in the quarter. And as I mentioned, as the portfolio is predominantly denominated in dollars and euros, the negative movement in SEK was larger to the order of 13.5%.
If we move to the portfolio and the main drivers of the NAV unit quarter, BlaBlaCar, largest holding, down roughly 2%, driven by primarily a lower adjusted peer multiple. The BlaBlaCar position represents approximately SEK 21 per share or 41% of the NAV as per December 31, 2023.
Moving on to Gett, it's up 4% through the quarter, driven by slightly lower peer multiples as well, and also a lower risk adjustment following the general macro recovery in Israel during the quarter. For example, both stock, local stock exchange and currency has recovered since October 7. Of course, the situation in the region remains volatile, and we track it closely.
Gett represents approximately 7 SEK per share at the end of 2023. Number 3, Voi, is down 9% during the quarter, primarily driven by lower peer group multiples. Voi represents approximately 6 SEK per share at the end of 2023. In aggregate, these three largest holdings represent approximately 35 SEK per share or almost 70% of the NAV as of year-end.
And one other holding worth highlighting, as also Per mentioned was Booksy, which was moved to risk valuation based on the recent transaction over the quarter. It's down roughly 20% over the quarter, and is marked now on the basis of this recent transaction. As per year-end, cash and cash equivalents amounted to about $43 million, and an additional $3 million in liquidity management investments. Borrowings, again, amounted to gross borrowings to $152 million, of which $31 million or SEK 309 million is related to the 2021-2024 bond maturing this summer.
It was originally a nominal amount of SEK 500 million, but as you can know from the report, we had both in Q3 and Q4, bought back and canceled part of that bond. In addition to that first bond, of course, we have the SEK 1,200 million bond or $120 million, that matures in January 2025. So adding this up, the net debt amounts to approximately $110 million or 8 SEK per share. I, I think I'll, I'll stop there, with the main, portfolio, constituents. I'm happy to go into other companies during the Q&A, but with that, I hand back to you, Per, if you want to add something before we, we kick off the Q&A. You are on mute still.
Apologies. I was saying nothing intelligent, but I don't know. I think you know, if we go to page 6, then it's the portfolio slide. Yeah, this is where I usually sort of stop, and we can use this as a basis for Q&A, because there's no, you know, again uneventful quarter in terms of things moving around on an aggregate level, some movement here and there, but there's nothing, there's nothing large, there's no large developments over the quarter. So I think, yeah, let's move to Q&A. You wanna kick us off?
Yeah, yeah, yeah. I'll kick it off. I've received some questions here, and to start with the first one, we can, I think, Per, maybe you best answer this one on you know, funding need in the existing portfolio. So how much collective funding is needed by the companies that are represented in that other equity investments before they reach break even? Is the question, so related to the other part of the portfolio, essentially.
Yeah. Yeah. It's difficult to put down an exact number. When in our liquidity planning, we have to the order of $5 million in the aggregated portfolio that we're which we plan to invest, which we think is the interest of our shareholders to sort of do. And we put aside that cash to be able to perform, to execute accordingly. So in that other part, it's there's you know, the same kind of activity going on as in the larger parts. There's been a cutting on burn.
There's been, yeah, so, you know, there's a lot of those companies have raised money, and are in no large. You know, there's no sort of immediate, sort of big cash burn, certainly not for us. There's been the odd sort of holding where, which has raised money, and we passed, because we felt that the valuations were acceptable to be diluted at.
And there's some very small ones that have also sort of, you know, really, you know, basically sort of restructured and gone to, not quite gone to zero, but where we have been diluted, because we haven't felt it was. And yeah, because there's no point in putting in more money. But that's all taken into account in terms of when we build our NAV.
So anyway, long-winded answer to that, we don't. There may be the odd sort of company there that will raise money, but it's, we don't foresee that that's gonna be a drag on our cash position over the near term, over this year, really. And that's a mix between the companies being well-funded and some of them raising money, and we don't think it's worth putting money in. Those are very, very small holdings, and some where we feel that the dilution is acceptable. Yeah.
Thank you. Another question on potential funding inflow. As you write in the report, you're well advanced on several potential transactions. Could you provide some color around if this includes the top end of the portfolio or also the smaller names?
Yeah, no, it's a mix. We have a couple of conversations that both involve some larger names, not the top, top names, or the top names. But otherwise, there's interest across the portfolio, really. And obviously, there's been some speculation in local press around a transaction in Gett.
That newspaper article was done before the war started before October seventh. But I think we've said for some time that Gett is sort of in a, over time, in a natural exit phase for us, and hence, that would be one which with ability around that part of the world, we expect there to be renewed interest in that company. But it's across the portfolio, really.
Thank you. And then another question here on Numan. Interpreting the valuation and multiples you're using, it seems that Numan's growth has accelerated. Can you please comment? And I think from what we write in the report, growth has increased at Numan, and they're performing really well, and especially around this vertical of weight loss.
And here, Numan sells. What part of the product is around this GLP-1 agonists that Novo Nordisk. Novo Nordisk has been in the news for very effective treatment for weight loss. So that's the main driver of their growth acceleration. Another question here around funding. If you cannot sell companies, have you built the ability to extend the debt?
Yeah, I'd, I'd say plan A is to do some exits in the portfolio and retire the debt, and I'm fairly optimistic around that. But I think, maybe one shouldn't say plan B, but obviously something that can be, well, call it plan B, is to roll the debt, which our brother, sister, cousin company, VEF, very recently, they decided to to roll their debt in the autumn, I believe it was. That debt was maturing a little bit later than us, but so they but they, they decided to roll their debt, for another three years. So I think that's a good pointer, to that. That's entirely possible.
Thank you. And then there's another question here on Gett and their performance in this volatile environment. And maybe just to clarify, in the portfolio, we do note that here in the end of Q4, on the activity basis, they were up at about, like, 80% of the run rate they had prior to October seventh. We also note that despite this volatile Q4, came in ahead of budget for the full year.
And we expect continued earnings growth for 2024 to give a short highlight on Gett in that aspect. What else do we have questions here? There's a question on Voi, Dennis, around tenders and outlook, and also, so a question on, you know, the depreciation of the scooters. Maybe you could provide some color on both of those.
Yeah, sure. Happy to. So with regards to tenders, I think, let me scroll to that question. I think there's a question on the tender pipeline for 2024. The largest tender so far that we are aware of is actually Oslo, which Voi has already won. So that's actually good news coming into 2024. Oslo is the most profitable e-scooter market globally, or is believed to be.
And that was announced at the beginning of January. And Voi has won that tender. In terms of other tenders, all tenders are not announced until when we look at the pipeline, we have, for instance, Berlin, we have Barcelona, as two examples, that are big cities, but they are not confirmed yet. We believe they will go up for tenders, but it is not 100% confirmed that they will go into tendering during 2024.
But that is where, kind of, those are probably the two biggest ones outside of Oslo, so to speak, that Voi has up for grabs during the year. As together with a long tail of smaller cities, of course, as well. I think the second question is around the depreciation rate. I assume the question here is roughly what share of revenues, so basically the difference between EBITDA and EBIT.
And I think you're looking at... So the question, what depreciation rate is used for the Voi valuation? And obviously, we don't- since we value Voi on the back of a sales multiple, we don't look at EBIT. EBIT is still negative, but it's in the order of, call it 10%-20%, probably around 15% a year, like, like 2024. This will decrease over time, that is believed, but that's roughly where we are, this year.
Good. There's some follow-up questions on Booksy and the transaction, and happening there, and, and how we looked at that. Per, maybe you can follow up on that.
Yeah. So, you know, all these companies have different shareholder agreements, which sort of govern what who you know if you know how if you can sort of tag along to a transaction or stuff like that. And in the case of Booksy, we you know that is that it's limited, what you can do if someone finds a buyer for their stock. You can always buy, but we're not in a position to buy right now, as you understand. But we note with good you know it's noted that Booksy is doing really well as a company, and has good growth, both in sales and earnings.
It's EBITDA positive, and that, of course, attracts interest. And one transaction has happened, and the shareholder agreement hasn't sort of doesn't automatically allow you to sort of sell alongside, you know, people. But but it's, I think it's a good pointer, nevertheless, of interest in that company.
Potential final question, as you note in the management report, normalized cost basis is, will come down by some 25%, following the cost rationalizations and reorganizations we've done. Could you provide some more color on that?
Yeah. On a cash basis, you know, our run rate is now something like $6.5 million. And that can go up and down a little bit, and depending on, you know, on stuff, variable. But it's to that, that's, that, I think that's a good sort of cash figure to sort of have in the back of your mind when you try to analyze how much this company costs in relation to NAV, et cetera. So around $6.5 million. Which is down since we've had a series of colleagues that have departed. And so now we're a tighter team, and at a reduced sort of cost level.
Thank you.
Good-
I-
Yeah.
Yeah.
Does that conclude the que-
You're ahead of the question, so I don't know. Does that conclude the questions, or do we have...? Is there some final ones that we should address that we haven't addressed?
I'm looking here, and I think we've addressed most of them. So I'd say we do conclude now, and if we missed a question or two, please reach out, and we can take it offline, and happy to help. So Per, please,
Thank you. Thank you, Björn. We'll conclude here, and thank you so much for joining in. And as Björn said, please reach out if there's anything we haven't covered or that you feel that we haven't elaborated on. We're very happy to help, if you reach out directly. And otherwise, happy New Year, and looking forward to 2024.
Lots of activity in our space, which I think will be beneficial for this portfolio and us as shareholders here. So, I'm very excited about this year. But we'll talk to you all when our next report is out, which is when? First you'll see us producing annual report. Those accounts won't be much different or at all different from the ones you see now. There'll be some more notes, as per the usual sort of, standard. That's out in April, Björn?
The annual report is out on February sixteenth. So we're-
February sixteenth. Man, you're fast.
Quick on that.
Yeah.
And, and, uh-
That's it.
The quarterly report for the Q1 of 2024 is out on April 23.
So that's the Q1 of 2024. Apologies. Yeah. Annual report quite soon, and then, Q1 report out in April, and then we have our AGM in May. So I think that's the... That's all the housekeeping stuff. We'll end on that note. Thank you, everybody, and speak to you in April, if not before.
Thank you.
Bye. Thank you.