Thank you for standing by, and welcome to the Frontier Digital Ventures HY22 results briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question via the phone, you will need to press the star key. Mr. Shaun Di Gregorio, CEO and Founder, please go ahead. Good morning. Just before I go on, how do I know how many and who are on the call? Sorry, Chester, how do I know how many and who are on the call? We currently have 51 standing by. Okay, great. They should be able to see my browser now. Welcome everyone to our half year results presentation. Glad you can join us. I'm gonna walk you through not a great number of slides, but what we think are the pertinent ones in terms of our results for the half year and some highlights that we'll talk to as well. With our quarterly, which came out at the end of July, it sort of was a preview of our half year anyway, so most of you who follow our company will have a sense of where we're at financially anyway. Certainly the half year gives us another opportunity to update people on our progress, some of the milestones, and to dig a little deeper into how we've achieved those milestones and I guess to look ahead as well. Certainly, in the current environment, things have been rapidly changing and our businesses have enjoyed the benefit of being quite agile, quite nimble. All of our portfolio companies are effectively locally run, so their ability to adjust and reflect the environments in which they operate is a feature of their businesses. We're able to adjust each of the settings in our businesses really rapidly as things change around us. As we've spoken about, through the course of this half year, our businesses have a couple of characteristics which we think are really important as we head into the rest of this year and next. That goes to things like market leadership, which we think is evermore critical at the moment. We're seeing it made more difficult for competitors with interest rates increasing and a bit of volatility in the market. To have market leadership incumbency is critically important. We have strong core businesses, which is essentially built around the classifieds model with an ability to help facilitate transactions as a value creating product or service to our clients above and beyond that. We've worked really hard to get our businesses to cash flow breakeven and into profitability, which we think gives them a really strong platform as we head into the next 18 months. As we walk through some of our key results, we talk about our company with three regions, which is LatAm, Asia and MENA. LatAm, of course, is all of the businesses we have across South America, so that extends from Panama right down to Chile. Asia, of course, is our second biggest region now and covers from as far west as Pakistan across to the Philippines. MENA, which is an interesting opportunity for us. It's really focused on a few key markets in North Africa, but a part of the world where we think that there is significantly more potential. You can see the relative revenue run rates based on the half year. Good progress in each of those key three geographic areas. Operationally, strategically, how we think about the business is very much anchored around these three key regions. Less than a year ago, we had a swath of companies right across our portfolio. We operationally always had a view that we wanted to get a geographic entity wrapped around each of those. It's very much how we think about the businesses day to day. It's very much a key to how we operate them day to day. You'll hear us talk more and more about LatAm, Asia and MENA versus just FDV. That's just repeating a bit of the narrative that we've introduced to FDV over the last sort of six months. When you look at our key highlights, some important milestones that we've been able to achieve in this first half year. First and foremost, and close to the heart of many investors, is our ability to get back to cash flow breakeven, which we did in Q2. If you look at the way we've operated our businesses historically, our ability to find new opportunities to acquire businesses, to improve their operational performance and then get our sum of the parts business back to cash flow breakeven is a feature of what we do, and I'll talk to that in a moment. Our portfolio continues to be profitable at a portfolio level. Again, something we've been very conscious of achieving, and most, if not all, of our businesses are basically at breakeven or profitability now. Our half year revenue was really strong. Keep in mind when we listed, I think our full year revenue when we listed was something less than $4 million. You know, we're now $42 million for the half year. Double that and add some for the full year, and you can get a sense of how much we've grown since we listed a few years ago. Just to touch on Asia for a moment, and we have 2 equity accounted businesses there. You know, when we talk about our cash flow breakeven, that actually excludes the businesses in Pakistan, which both are cash flow breakeven and for MENA significantly so. Add those equity accounted businesses back in, we're not only cash flow breakeven, we're cash flow positive. Good cash balance. As I mentioned, a feature of our businesses and what we like about them is we've got a really strong core classifieds in each business. What we've worked hard at over the years is really ensuring that those core businesses stay strong and that's the definition of market leadership, which is really important to us. Also our ability to look for opportunities around helping more and more sellers and buyers do more around the transaction. Key for us is ensuring that the classified businesses stay really strong, and we think that that sort of sets us apart right at the moment. Many of our competitors, perhaps they're doing classifieds only, which is fine, but they probably lack the strategy to get growth and revenues from transactions. Some of our competitors out there, particularly in the last couple of years when capital was free, went straight to trying to do transactions, which we thought was always a bit of a folly. They're the businesses that are sort of struggling at the moment. We think that the core classified strength is really important. This is an important chart for us. It just talks to our journey a bit and how that's reflected in our cash flow. We normally start out and have a bunch of businesses we work really hard at improving. We get to a cash flow breakeven, and I guess we use that moment to go look for new opportunities, which we've done. You can see that pattern sort of repeating itself. We're now back to cash flow breakeven and this is just on a consolidated basis, so it excludes if you were to add in, you know, Zameen and PakWheels, which are two of our bigger businesses. We just happen to equity account for those. Both of those businesses are significantly cash flow positive. And if you were to add those in, of course, sum of the parts for us would at a corporate level, at an FDV level, obviously be cash flow positive. This is something we recognize as really important, something that we're very conscious of managing, and something that I think we've proven over the journey that we can deliver on and will continue to drive our business toward cash flow positive, which we think in the current environment makes a lot of sense. Certainly I think if you look back at just the evolution of our business, where we've invested in businesses at really early stages in a lot of instances, and they've generally required cash investment. As you can see from the charts, we're able to improve their operability. We've then looked at some new acquisitions we've made over the last sort of 18 months. Again, some of those have needed some cash to help operate them. Over the journey, we've managed to improve the operation of those businesses and now getting back to cash flow positive again. This is a significant milestone for the business. It's important in terms of our future as well, but one that we're pretty proud of and one we'll continue to focus on in the years to come. A big focus for us is, you know, getting to profitable growth and sustainable growth. We know that this milestone is a key step in helping FDV get there. When we look at the operation of the portfolio, again, we've managed to get a bunch of businesses, get them to breakeven. We obviously had COVID probably just halt that progress ever so slightly. We're now getting back into sort of consistent breakeven profitable at an EBITDA level. This is just the operation of the portfolio. What's important for us is we do passionately believe there is significant growth in these businesses to come, but we wanna do that at a sustainable basis. That's what we talk about internally is profitable, sustainable growth. That means making sure you're operating at around cash flow breakeven. You're continuing to achieve profitability at each of the portfolio companies. You're also still focused on the opportunities that are around us in emerging markets, particularly as these classified businesses do more and more around the transaction and broaden their market appeal to their buyers and their sellers. It's just getting the balance right between ensuring that we absolutely get to cash flow breakeven, which we've done, ensuring that we're able to operate the portfolio profitably, which we're able to, but still remaining pretty focused on what we think are the significant growth opportunities that are available to us in emerging markets and the value that we can create by pursuing those growth opportunities. We're really super aware of the fact our reputation over the years has been built on our ability to do what we say we're gonna do and be a trusted investor on behalf of our shareholders. That goes to this idea of sustainable, profitable growth. We are still a growth business, but we're able to demonstrate that we can do that by managing cash really well and obviously getting our portfolio companies through to breakeven and profitability. I think that's been a feature of how we think about this year and how we'll continue to think about future years. It's starting to see these businesses become profitable, but you know, being able to pursue growth opportunities within each of the markets at the same time. This is an important feature of how we operate. If you look through the portfolio, you can see that the EBITDA performance in the businesses, but for a few exceptions, has generally improved. You know, businesses like Avito. When we bought Avito the previous year, it had lost $3 million. We've reduced that loss significantly while we've improved the revenue profile. We're working really hard to get Yapo on track. We invested a bit in Yapo in the first half of the year. They released a new website. We wanted to promote that in the market. We relaunched their brand, and a whole range of things to get that business in much better shape to grow in the future. As you can see with most of the businesses, but for a few that we're investing in, we're really making good, solid progress in getting them through to profitability. That's again something that we've been very focused on over the last few years. Goes without saying, though, that we still see ourselves as a growth business, but we wanna be a growth business that can do so sustainably. That's probably another feature of this chart, which just goes back to our listing year and if you go back to 2016. You can see the number that I was referring to on the right side of the chart there, which is the economic share revenue. We're now up to, you know, almost 15 times that number or thereabout. Really good growth profile on a revenue side and now starting to focus on marrying that good, strong revenue growth profile with our ability to do it sustainably, to be cash flow positive and obviously to be profitable as well. All of these charts pointing in the direction we want them to point. We're really pleased with that outcome, but we also recognize there's significant opportunity for us ahead in the next couple of years. In terms of our statutory results, what we focus on is our group operating EBITDA. That's the best reflection of our financial performance. That captures what we account for in a controlled or a consolidated sense, and obviously then includes our share of the equity accounted businesses and gives you our group operating EBITDA. That maps now pretty close to our cash. No small coincidence that our cash flow is most closely mapped to this group operating EBITDA, and this includes all of our corporate costs, all of our costs across the company. Prima facie, we look at our portfolio, our performance. From a group perspective, we look at this group operating EBITDA number and gone from a loss of 3 to breakeven. We think that's a pretty good achievement half on half and you can expect us to continue that trend in the second half of the year, which will obviously make out the full year for us on a profitable basis. The non-cash items below the line are the ones that sort of skew our P&L. Some depreciation when we acquired E24 as an asset, so we're still in the process of depreciating that asset, and some accounting treatments of the intercompany loans and things like that. There's a whole lot of non-cash items that sit below the line, but the most indicative and important number for us is the group operating EBITDA margin, which captures the performance of the businesses and obviously all of our group costs. That's now basically breakeven. We think that's a pretty good achievement in the current environment. As I just mentioned, we'll continue to look at that trend in the second half of our calendar year and committed to being profitable in 2022. You know, that number's a pretty strong indicator of our ability to achieve that this year. Just from a portfolio perspective, as I mentioned, some of the really important components of our business, certainly in the past and even more so now and arguably even more important in the future, is our market positions. If you think about the performance of classifieds businesses, they're always really correlated strongly to the market position that the portal has or the brand has. That is ever more so in emerging markets where you don't tend to have as many competitors as you might in a developed country. You get a premium for market leadership in emerging markets. We also know that our ability to build out a really strong classifieds business as a profitable classifieds business correlates highly to your market position. That then gives you the platform to do more in each of the markets. By doing more, you know, that's providing more products and services to sellers and better search experience for buyers and that helps you then generate revenues, you know, in terms of facilitating transactions. All of our businesses are helping to facilitate transactions, which is a really important part of our growth. Even more now we're seeing competitors who have relied on free money over the last couple of years start to struggle. We think that for that stress, we've got a real opportunity in the market, and we're starting to see some of the competitors that came into the market over the last couple of years funded by VCs that had to do something with their money and try to execute business models that were probably marginal at best of times on the economics of them, really start to struggle. We think that the next 6, 12, 18 months is a really opportune time for market leaders to improve their market position even further. That goes to trust, it goes to their ability to, you know, introduce more products to their consumers and sellers. It also just goes to the fact that it's gonna get a lot harder for competitors over the next 18 months than it is for incumbents. Incumbents have got a real advantage in the markets at the moment as a lot of those competitors start to feel the stress of finding funding if they're not profitable or trying to execute a business model that might be marginal. That held up well over the past few years because funding was always available. What we know now is that funding is not available and the strength of being a market leader or being an incumbent of having a strong core business is gonna be ever more important over the next 18 or so months. Just to give you some headline numbers, and it's always interesting to look at these because you start to appreciate the size of the businesses that have been built and the opportunity that exists in these markets and what we're starting to build towards. I guess just some really big numbers, you know, in any given period of time. So I won't stop on them, but you know, when you're talking sessions in the hundreds of millions and leads in the tens of millions, we see an extraordinary opportunity to continue to generate value in these businesses. We think that we're much closer to the beginning than the end. You know, where we've got to already is, which is good, strong growth profile, now doing it on a cash flow, sort of sustainable basis, getting to profitability. We think that we've done a lot of hard work to get our businesses to now and starting to see them scale up and really make the most of their market leadership, their incumbency in markets where there's, you know, significant audiences that are, you know, searching and discovering houses and cars online and continuing to wanna not only search and discover, but continuing to wanna do more of the transaction online. If we look at the transaction momentum as well, this just strips out property and cars in our portals. You can see that the momentum just continues to build. This will ebb and flow a little bit just as markets ebb and flow and we figure out the models in different markets. We're really starting to see some strong growth in houses and cars, and we know that if you get that right, it's a wonderful way to add value and revenues and profit to your core business. As I've said sort of a few times already, really important that the core businesses remain strong and profitable. That's what gives you the ability to go do more in the markets. You do that if you're a market leader. You do that if your consumers trust you. You do that if your sellers have a dependency on you. The other feature we're starting to see at the moment as the markets get more interesting is that sellers become more dependent on these platforms. If you think about people out there trying to sell houses and cars, if they see that there's fewer buyers in the market because maybe the cost of money's gone up, interest rates are a bit higher, they've got to double down on their ability to sell their product. They've got to try harder. Which means that they defer to the channels that deliver for them. The primary channel that car dealers and property agents and developers have is the market-leading portals in their respective markets. In years past, whether I was at REA or iProperty or involved in iCar, whenever the market's got a bit harder, we found that sellers depended on us more, and we're starting to see that trend occur as well. If you think about all of the factors you wanna have in place as we move forward over the next 18-24 months, it's being a market leader, it's being a strong number one, it's being cash flow positive, it's being profitable, and it's operating in markets where you've got high trust from consumers, but you've got an increased dependence from your sellers as they've got to work a bit harder to sell their houses and cars. Our strategy is really, really clear. You know, we've observed over time a shift in consumer behavior that arguably accelerated through COVID, but not to anyone's great surprise. You know, we have this portfolio of companies now designated in three key geographic areas, which are now more than ever highly active as intermediary in these markets for all of the reasons I've just mentioned. We know that there's a ton of value to be created by making sure we have the core classifieds business profitable and then adding transaction revenues over time, which will underpin cash flow positive and profitability and the value in these businesses. We also know that that opportunity remains really, really significant. I think I'd add to that, you know, as the volatility we're seeing in markets, many of those macro factors play to the advantage of a market-leading incumbent, who has trust for consumers and has dependency from sellers. We've seen that play out, whether I was at REA back in 2007, 2008, 2009, or iProperty in 2013, 2014. All of these factors we've seen before, and we see the opportunity that exists in these environments. We're pretty excited about the next sort of 18 months. I think about how that plays out for our companies and what that might mean, you know, in terms of liquidity events or monetization, because we always get asked this question. If you think about sort of bottom left to top right on this slide, it's a very clear path that these businesses follow, and we tend to invest in a lot of them when they're in the bottom left-hand corner. We work really hard to walk them through the stages of their evolution and the value that can be created as they start to evolve their businesses. You can see some really good examples of businesses that are following that curve in our portfolio, and you could plot all of our portfolio along that curve at varying points. We know that, as I said, we're probably closer to the beginning than the end, but we're starting to see some graduates of this program, if you like. We know there's a main story. People are now much more aware of the InfoCasas story. We're seeing other businesses like Avito and Fincaraíz in different parts of the world start to progress along this curve as well. We recognize also that, you know, there's the ability to create value around these entities. That's a big reason why we went down the geographic path with LatAm, Asia, and MENA. We think that putting a little boundary around each of the geographies, we're effectively creating three mini, you know, FDVs where, you know, the revenues in any one of those three geographies is in the smallest one, which is MENA, already double the revenue we had as a total when we listed. Our smallest geography is twice the size of FDV was, you know, when we listed. We think there's a lot of value in each of those key geographies. The key drivers of the value are our ability to walk these businesses through that or up that strategic curve. We know that when we get there, the opportunity for liquidity, the opportunity for shareholder returns, the opportunity for creating value around those entities is really obvious to us. We don't sit around and think about that last box on the right side there. We see those as outcomes if you get everything on the left side right, and that's what we're most focused on. The bunch of information in the back of this deck, which people who have, I guess, followed our business will be familiar with. I won't stop on that. At this point, Chester or whoever's controlling the call, I'm happy to sort of stop and take any questions if there are any forthcoming. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you wish to ask a question via the webcast, please type it into the Ask a Question box and click Submit. Your first question comes from Richard Coles from Morgans. Please go ahead. Thanks, Shaun, and congratulations on the result. Just wondering, I know a sort of target level for portfolio revenue this year was, you're sorta talking maybe around the $100 million mark. It would sort of require obviously a solid second half performance, but just your sort of comfort with that broad level or how do you see the sort of the rest of the year developing after your first half? Yeah, look, I mean, the $100 was sort of our big audacious goal. I think we'll go close. I think it's fair to say we've. You know, very early this year when we saw conditions changing, we did take a much more aggressive focus on getting to cash flow breakeven and profitability. We're probably okay to have a slightly more moderate growth rate if we can ensure that what underpins our business, which is sustainable cash position and profitability, are on track. Arguably, we've worked hard to probably bring those two things forward. We're probably okay to, you know, whether it's something in the 90s or 100, I think we're okay on that front. We're really keen to ensure that there are really solid drivers of the business, which is making sure we have a sustainable cash position and making sure that our businesses are paying for themselves whilst remaining pretty focused on growth. You know, whether it's 90, 95 or 100, you know, I'm not gonna tell you the number, but what I can tell you is that the things that will drive the business, that underpin that growth, we think are stronger now than they were when we started out this year, and probably we probably brought that strength forward a number of months in order to make sure that our business remains absolutely rock solid over the next 18 months. We're just trying to balance those things, which I think a lot of companies are trying to do at the moment. We're trying to achieve both, which is continue to focus on revenue growth, but making sure that what underpins or underwrites the business with cash flow and profitability are there as well. Just a second one, Shaun. You've obviously, sort of seen some really good leverage come through Zameen, sort of doing EBITDA margins there of sort of 18%-19% the last two halves. Just wondering, is there anything that, you know, near term that will slow that business, you know, seeing that EBITDA margin expand more materially here, given it's at scale, or is there any investment we need to be thinking about just given how strong the recent margins were? But are we gonna flat line where we are for a while, or do you expect you to take the next steps, towards, you know, becoming a more mature business without any obstacles of note? Look, one theme that we have internally is continued improvement and doing better than your last quarter or half. To that end, our ambition for Zameen is that it follows that idea as well. People have been asking me about, you know, Zameen Pakistan for almost 10 years now, and everyone keeps expecting something negative to happen and good things continue to come out of both businesses. They're really robust businesses. They've been in the market a long time. They're really dominant, particularly Zameen. We'd expect it to continue its trajectory, and feel pretty confident it'll do so. Thanks very much, Shaun. Thank you. Your next question comes via the webcast from Roger Coleman, who asks: On the 10666 transactions, could you describe the gross revenues per transaction between auto and real estate and the margins on transactions, and the characteristics of the commission charged for a transaction and the cost of the service leading to the net EBITDA margin on a transaction? Are these transactions potentially material in future years? Well, how long we got? I can start with the last. I'll finish at the end and say yes, that it will absolutely be a material part of the business over the journey. The path to transacting vehicles is varied depending on where you are. In some markets, it's a focus on new cars. In some markets, it's focused on used cars. That's sort of determined somewhat by what's going on around us. No one thought that two years ago that used cars would go up in price. In a lot of our markets, used cars have gone up in price because they've not been able to get imports. That part of the market is becoming pretty valuable. We've always had a view that your market strength in cars is determined by your ability to own the used car market because that's where all the volume is. A lot of the value in the car market is in the new car market because that's where a lot of the spending is from manufacturers. Our strategy has been to make sure we've got a really good used car business because that gives you your ecosystem, it gives you large volume of users, it gives you a large volume of sellers. To overlay into that, the new car opportunity. It, in our view, has always been a bit easier to tinker with transactions in new cars because you're dealing with a more generic product at a price point with professional sellers. That's what businesses like AutoDeal have focused on. It's what other businesses like, you know, PakWheels have tinkered with. Evermore so we're, you know, the last few years have been fascinating because it's kind of turned it on its head a bit where there's been no new cars in a lot of markets. The used car market's become more important. The models that are available there, you can allow your private sellers to auction their car, their used car to a dealer network. Dealer network's number one issue is supply, so that's been an interesting way to have people who are coming to your website with a car to sell while they look for another one to be able to auction it effectively via dealer network. There's certainly the chaperone model. There's the iBuyer model, where you go out and buy people's cars. We don't do that. The margins vary, but we certainly think that'll be an important part of the mix in auto, in the years to come. In property, a little bit different again, where, you know, the transaction model's been more about new property. And again, for the similar reasons as it is in auto, you're dealing with a generic product where you might have a set of apartments. You're doing it at a price point. You're doing it with professional sellers. That's always been the sweet spot in property. Similarly with cars, you've built your ability to roll that model out by having really strong second-hand house or secondary market business. That's all the suburban real estate agents. That's the millions of people a month who come to look at existing housing. The model, again, similar, is always about trying to do stuff up to the transaction, and in some cases the entire transaction. Similarly with auto, when we talk about transactions, we're not simply saying we must control the end transaction. What we're saying is there's a whole lot you can do up to the transaction, and in some cases, you can do the last bit of the transaction. The margins are generally pretty good, depending on where you are. The market size is enormous. We see it as a really significant part of the value that these property portals can create. Their core businesses, which are classifieds, are profitable. They then have the ability to leverage that trust they've built in their different operating markets to go work with, you know, primarily property developers and in some markets, the secondary markets on getting more out of the transaction. Yeah, absolutely, it's gonna be an important part of the future mix and the unit economics for houses or cars when you go beyond classifieds and into transactions, continue to get better because the ability to figure it out continues to evolve. That means identifying a part of the market which you can operate in profitably. For example, the guys at InfoCasas, they have a really good classifieds business. They started to help some of their property developer customers with transactions of new properties. They zeroed in on a particular type of property that works well for them, and it's typically apartment blocks. They're 5-8 levels in height. They have, you know, 30-40 apartments. They're somewhere between, you know, 800-1,500 sq ft in size. They're two bedroom, they're one bathroom, and they're within a decent radius of the city and transport. They work with a limited number of developers who do projects just like that. That's their sweet spot where they can absolutely help that developer sell those apartments more rapidly. Obviously, at greater, better price, ideally, and faster than they otherwise would. That's the part of the market they go after. when you figure out the part of the market that works for you figure out the unit economics of it, and you go after it really hard. The ability for that to add value to your businesses is enormous over time. That's a really deep question, Roger. I hope that gives you a substantive enough answer given the platform which we're doing it on. Thank you. There are no further questions at this time. I'll now hand back for closing remarks. Once again, just like to thank everyone for dialing in. We're pretty pleased with the half year. We've worked really hard to get there, and we think that we've built the right platform to see us through the next sort of 18-24 months in a really strong position. Cash flow breakeven, profitability, market-leading businesses. We know we're in a really strong spot, so we're pretty excited about the next 18-24 months and look forward to talking to everyone again soon. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.