VNV Global AB (FRA:82K) Q4 2024 Earnings Call Highlights: Strong Portfolio Growth Amidst Market ...

GuruFocus.com
31 Jan
  • Net Asset Value (NAV): SEK49 per share or $4.44 per share, down 1% in dollar terms for the quarter, up 10% in SEK.
  • Cash and Cash Equivalents: Approximately $60 million at the end of the quarter.
  • Debt: $77 million, primarily from a refinanced bond.
  • Portfolio Valuation Changes: Blah Blah Car down 9%, Void up 26%.
  • Void Revenue Growth: 13% annual growth, 33% growth in Q4 2024 compared to Q4 2023.
  • Void Adjusted EBITDA: Approximately 17 million, with a positive adjusted EBIT for the first time.
  • Newman Revenue Growth: Over 130% year-over-year, with 200% growth from December 2023 to December 2024.
  • Newman Patient Count: Served more than 215,000 patients in the UK in 2024.
  • Brantu Monthly Orders: Close to 1 million orders delivered monthly to over 300,000 active users.
  • Overall Portfolio Revenue Growth Outlook for 2025: Expected 25% revenue growth with increasing profit margins.
  • Warning! GuruFocus has detected 1 Warning Sign with FRA:82K.

Release Date: January 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • VNV Global AB (FRA:82K) reported a 10% increase in Swedish crowns for the year, indicating positive currency effects.
  • The company has successfully moved into a net cash state, reducing its debt to $77 million.
  • Void, a major portfolio company, achieved a 26% uplift in valuation due to a shift to a forward-looking EBITA-based model.
  • Newman, another portfolio company, reported over 130% revenue growth year-over-year and is profitable.
  • VNV Global AB (FRA:82K) anticipates a 25% revenue growth for its portfolio in 2025, with higher profit margins expected.

Negative Points

  • The overall net asset value per share decreased by 1% in dollar terms during the quarter.
  • Blah Blah Car, a significant holding, experienced a 9% decrease in valuation due to political volatility in France affecting income streams.
  • The acquisition of Get by Pango is delayed due to antitrust approval issues in Israel.
  • The company's debt, although reduced, still stands at $77 million.
  • The regulatory environment for Void remains challenging, with ongoing tender processes in various cities.

Q & A Highlights

Q: If and when mature companies like Roy or Blah Blah Car IPO, what will VNV Global's stance be regarding retaining shares in the public market? A: Per Brilioth, Managing Director, explained that VNV Global does not have a strict policy against holding listed investments. The decision to retain shares post-IPO depends on the return profile and VNV's ability to add value as an active owner. Historically, VNV has sometimes distributed shares to its shareholders or sold them over time. They also consider buying back their own stock if it trades at a discount.

Q: Could you provide additional insights into Blah Blah Car's performance outside the volatility around energy certificates? A: Per Brilioth noted that in mature European markets like France, Blah Blah Car experiences stable but flat growth, akin to a mature classified business. Emerging markets such as India, Brazil, and Mexico are showing strong growth, although they are early in monetization. The bus marketplace segment, particularly in emerging markets, is performing well.

Q: What is the latest take on the regulatory environment for Voi, and how does its roadmap for tenders in 2025 look? A: Dennis Mohammad, Investment Manager, stated that the trend of cities across Europe moving towards tenders continues, which benefits operators by reducing competition and allowing for profitable operations. Voi plans to expand its fleet in existing markets and enter new cities, particularly in Eastern and Southern Europe, while maintaining a strong presence in the Nordics, DACH region, and the UK.

Q: Could you provide some color on the $10 million of aggregate proceeds highlighted after the end of the period in the last Q3 report? A: Bjoern Von Sivers, CFO, confirmed that the exits occurred above NAV, contributing to a pro forma cash position of around $20 million at the end of Q3. However, due to FX movements and SEK-denominated debt, the cash position was $16 million at year-end.

Q: How is VNV Global's portfolio expected to perform in 2025? A: Per Brilioth mentioned that the portfolio is expected to achieve 25% revenue growth, with significant improvements in profit margins leading to higher earnings growth. The focus remains on helping portfolio companies achieve profitability and potentially become dividend payers.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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