Hello, all, and thank you for joining us today. My name is Lydia, and I'll be your conference operator for this session. Welcome to Grab's Fourth Quarter and Full Year 2023 Earnings Results Call. After the speakers' remarks, there will be a question-and-answer session. I'll now turn it over to Douglas Eu to start the call.

Good day, everyone, and welcome to Grab's fourth quarter and full year 2023 earnings call. I'm Douglas Eu, Head of Asia Investor Relations at Grab. And joining me today are Anthony Tan, Chief Executive Officer; Alex Hungate, Chief Operating Officer; and Peter Oey, Chief Financial Officer. During the call today, Anthony will discuss our key strategic and business achievements, followed by Alex who will provide operational highlights, and Peter will share details of our fourth quarter and full year 2023 financial results. Following prepared remarks, we will open the call to questions. During this call, we will be making forward-looking statements about future events, including our future business and financial performance. These statements are based on our current beliefs and expectations. Actual results could differ materially due to a number of risks and uncertainties as described on this earnings call in the earnings release and in our Form 20-F and our filings with the SEC. We do not undertake any duty to update any forward-looking statements. We will also be discussing non-IFRS financial measures on this call. These measures supplement, but do not replace IFRS financial measures. Please refer to the earnings materials for a reconciliation of non-IFRS to IFRS financial measures. For more information, please refer to our earnings press release and supplemental presentation available on our IR website. And with that, I will turn the call over to Anthony to deliver his remarks.

Thank you for joining us today. 2023 was a pivotal year for Grab. We set out to achieve a number of big milestones and we delivered on our key goals. Our mobility business, which was severely impacted by the pandemic exceeded pre-COVID levels as we exited 2023. This was done through focused product investments into our key affordability initiatives and targeting traveler demand. In deliveries, we drove a reacceleration of our deliveries GMV, executing upon three consecutive quarters of sequential growth post-COVID normalization. In the fourth quarter of 2023, deliveries GMV reaccelerated to grow 13% year-on-year setting us up strongly for 2024. At the same time, deliveries segment adjusted EBITDA margins expanded by over 160 basis points year-on-year as we continued to drive marketplace efficiencies and grow our category leadership position across all our core markets amid reductions in incentive spend. And finally at a group level, we achieved our bottom line goals. We turned group adjusted EBITDA profitable since the third quarter of 2023 and also achieved adjusted free cash flow and positive net profit for the first time in the fourth quarter of 2023. These outcomes were achieved by driving intense scrutiny and discipline on costs while innovating relentlessly to deliver top line growth. Our net profit benefited from an accounting accrual reversal. More importantly, our adjusted EBITDA continued to grow quarter-on-quarter. This showcases our ability to deliver strongly on the bottom line, which we are committed to improving in the coming years. Importantly, we took strides towards profitable growth while staying true to our mission empowering everyday entrepreneurs. During the year we generated over $11 billion of earnings for our driver and merchant partners, which is an all-time high. And our average driver earnings per transit hour also grew by 14% year-on-year while also onboarding over 700,000…

Thank you, Anthony. Our fourth quarter results demonstrate our commitment to driving both top line growth and bottom line improvements, while deepening market penetration across the region. Over the next few minutes, I will share our operational highlights and the underlying drivers of these results starting with Deliveries. We saw robust demand growth for Deliveries with both MTUs and GMV at record highs, driven by improving year-on-year spend per user across our 2000 to 2022 user cohorts. Our pre-COVID cohorts are spending well over two times relative to their initial year and even cohorts that started during or after the COVID lockdowns are showing higher spend relative to their initial year. Everything that we do is about making ourselves the number one choice for our users and partners in Southeast Asia. In order to achieve this, we continue to improve the affordability and reliability of our delivery services, as we reduced our cost to serve so effectively that we were able to expand our profitability at the same time. Our teams have executed strongly on this front and we have made meaningful improvements in several of our efficiency metrics such as batching and trips per transit hour. Almost 40% of our Deliveries orders were batched in the fourth quarter, growing by around 10 percentage points year-on-year. And average delivery fees for batched orders were 8% lower than unbatched orders supporting our push for greater affordability. Adoption of Saver deliveries, a key focus in 2023 also hit 23% of all delivery orders. And as we expected Saver users recorded average frequency levels that were 1.6 times higher than non-Saver users during the fourth quarter. In Singapore, where Saver was launched much earlier than our other markets, eight out of 10 Saver orders are now batched. And looking ahead, we see further…

Thanks Alex. We closed out 2023 on a strong footing. In the fourth quarter, revenue grew 30% year-on-year to reach $653 million, while full year revenue grew to $2.36 billion. This is above the top end of the revenue guidance that we revised up in the last quarter. The strong revenue growth was driven by all segments of our business. On a year-on-year basis, in the fourth quarter, Mobility revenue was up 26% as we continued to see strong demand from domestic users and international travelers across the region. Deliveries revenues grew 20% as we continued to grow GMV, while reducing incentive spend. Financial Services revenue doubled in the fourth quarter and we improved payment monetization and increased lending contributions. And Enterprise revenues, consisting primarily of advertising, more than doubled year-on-year to hit an annualized revenue run rate of around $160 million. This was attributable to increased ads monetization and ads demand from our merchant partners. On GMV, our on-demand segments of Mobility and Deliveries saw fourth quarter GMV growth of 18% year-on-year. Mobility GMV grew strongly by 28% year-on-year, exceeded pre-COVID levels as we exited 2023. Deliveries GMV, its third consecutive quarter of growth, with a reacceleration in growth to 13% year-on-year. This was supported by strong underlying demand trends with Deliveries MTUs hitting a record high, coupled with increasing levels of GMV per Deliveries MTU. Moving on to segment, adjusted EBITDA. Total segment adjusted EBITDA doubled year-on-year to $228 million in the fourth quarter. This growth can be attributed to all segments of the business. Deliveries segment adjusted EBITDA grew to $96 million in the fourth quarter, with segment adjusted EBITDA margins expanding by over 160 basis points to 3.6%. Mobility segment adjusted EBITDA grew 20% year-on-year to $182 million, with margins at 12.3%. Financial Services segment adjusted…

Thank you. [Operator Instructions] Our first question comes from Pang Vitt of Goldman Sachs. Your line is open. Please go ahead.

Hi. Good afternoon, management and thank you very much for the opportunity. First of all, congratulations on your first profitable quarter and announcing a positive surprise in the $500 million share buyback. On this point, can you share with us more, on this repurchase program you announced? What will be the pace of this? And how do you plan to utilize this program for the rest of the year? That's question number one. Question number two, we understand that Foodpanda, as you mentioned has terminated discussion with regards to a potential sale in Southeast Asia. On this point, could you share potential color with us on why this asset was not of your interest? And how does this potentially impact the competitive landscape in Southeast Asia going forward?

Hey, Pang. This is Peter. Let me take the first one around the $500 million buyback and I'll ask Alex, to address your second question around Foodpanda. The announcement of the first purchase repurchase program, we view this as an ideal opportunity to look at investing in the long-term upside in our business and also, we coupled with the $5.2 billion net cash liquidity position. Now, as to the pace of how we deploy the capital, we will be efficient in how we're using that and a lot of that Pang will be influenced by the dynamic market itself. We will be very cautious in how we're deploying this cash in the market, but we are committed to the Board mandate for the share buyback program. And we'll continue to update the market, as we continue into the program.

Hi Pang. It's Alex here. Let me talk about the Foodpanda situation. As we were indicating in our comments, in food deliveries we are more than double the size now of the next largest competitor in Southeast Asia. And we've been able to translate that scale into significant efficiency advantages. The cost to serve that Anthony was talking about and hyper-batching the just-in-time allocation. All of these things work better, at higher volume with higher density. And that means we've been able to then drive affordability which drives growth and improves our competitive position even better. So increasing CP in all markets, increasing margin in all markets, and we've even shared today that we expect our long-term margins in Deliveries to go up by another 1% to 2% higher than the 3% plus that we've mentioned in the past as our long-term target. And that reflects the confidence that we have that we can continue with this organic strategy, driving growth and driving improved margin and driving better services for our consumers. And therefore the bar for any inorganic use of shareholder funds has to be very high in comparison with that. And so in the end, any asset that we would acquire would have to be available at a very attractive price to cross that bar. And I think probably that's all I should say.

Thank you. Our next question comes from Venugopal Garre of Bernstein. Please go ahead. Your line is open.

Hi Grab management. Thanks a lot for the opportunity. So two questions from me, firstly, I remember last year you had started with an EBITDA loss guidance of about $275 million to $325 million and eventually you ended up reporting a loss of only $20-odd million. So I want to understand that while you've given a guidance of about $180 million to $200 million of profit this year on EBITDA level, but if I annualize your fourth quarter EBITDA that itself is $140 million. So you're not really looking for a guidance, which is materially different from what you've delivered in fourth quarter in terms of run rate. I just wanted to understand that given a broadly positive outlook in the medium term as well on almost all your segments, why are we being a bit conservative on guidance? What is it that's something that we should watch out for if at all? And if the prices emerge, which are the areas you think the prices could emerge? That's my first question. Second one is a smaller one largely on the Financial Services sector. While we were anticipating some increase in losses sequentially given that you had noted the Malaysia launch. Could you just quantify the impact if at all more importantly for us to understand how the losses would shape up especially through the year? Is it going to be elevated for a while before it comes down or is it going to be a swift improvement? Thank you so much.

Hi, Venu. Let me address the first one around the EBITDA, and Alex I'll ask you to address the second part of the question. A few things here, Venu. One is as Anthony and Alex mentioned, we are in 2024 focusing deepening our product moats, and we're incubating a number of product and tech investments, particularly around operational efficiency improvements that we will expect to see growth acceleration in revenue beyond 2024. For this year, as we also alluded in the remarks, we are keeping our margins on Deliveries and Mobility fairly stable at the 3% and 12% plus respectively. Now, we do see opportunities for our Deliveries margin to expand in the midterm we quoted somewhere around 100 basis points to 200 basis points and this you will see part of the EBITDA expansion in 2025 and beyond. But given where we are today and the line of sight that we have from a guidance perspective, this is where we are committed as a point in time. And as we continue to roll out these new product features, which we're very excited about, we will continue to update our EBITDA guidance.

Thanks for the question, Venu, on Financial Services. Yes, you're right, the increase in the EBITDA losses in the fourth quarter as we had indicated was because of the Malaysia launch, the launch of GXB in Malaysia, which has been very successful. As Anthony said, in the first two weeks alone we gathered 100,000 new accounts, but there were launch related expenses in the fourth quarter. We took in deposits of course which is great, but we are not able to redeploy those deposits into the income generating lending products until we launch the loan products, which is upcoming in this coming quarter. So that is the first part of the question. I think the GrabFin costs remain relatively stable. You asked for some of the underlying factors elsewhere. So, GrabFin costs remained relatively stable quarter-on-quarter, despite their improvements in revenues actually, so they're heading on the right track there. And within that you've got the cost of funds for our payments business, which supports the on-demand platform payments. That is approximately $30 million in the quarter, representing about 26% of the total Financial Services segment cost structure. So, hopefully that's helpful for you to understand that that's an underlying piece of the cost structure in GrabFin. I want to call out that we see payments though as one of our core moats, because having our own payments infrastructure will significantly lower the payment cost for Grab, and we expect that payment cost to now because it's under our own control, so to speak, we expect it to remain roughly stable as a percentage of our on-demand GMV in 2024. So there are two indicators for you, which might help you to model going forward. So going forward, the last part of your question, Q4 does represent the peak of the quarterly losses for the Financial Services segment for Grab. Now going forward, we'll see the revenue kicking in from the loan book. So, we're already lending in Singapore. We've got GFin also doing well with its high velocity low ticket ecosystem lending. And then from this quarter, we'll start to have Malaysian loan revenue on top of that again. And in Singapore as the regulatory caps are lifted, the Singapore business can start to scale more aggressively also. So that's why we're calling Q4 as the peak of the losses for the Grab Financial Services.

Our next question comes from Sachin Salgaonkar of Bank of America. Please go ahead. Your line is open.

Hi. Thank you for the opportunity. I have two questions. First question perhaps a follow-up to Venu's question, but want to ask that in a slightly different format. So if you look at what you guided for adjusted EBITDA and revenue it does imply an adjusted EBITDA margin anywhere between 7.3% to 7.5% at the high end. Your last reported adjusted EBITDA margin was close to around 5%. So in a way we are looking for a 200 bps improvement in margin. And if the mobility margin is around 12%, delivery margin around 3% plus; is a large part of the improvement predominantly driven by the Financial Services losses going down or it's also the delivery margin 3% less implies maybe 100 bps improvement from that? So that's question number one. Question number two, wanted to understand a bit more color on the centralized regional expense what you guys are talking about. I understand in the next quarter you're going to give details, but anything this quarter you guys want to provide in terms that will help us quantification going into next quarter? And the related question is basis my understanding, roughly 30% of your costs, are largely linked to GMV. So as in how GMV increases, we should see an increase in these expenses in a pretty hefty manner right? I just wanted to understand how one should look at the regional cost expense going ahead? Thank you.

Okay. Sachin, let me take all those questions. Let me take the first part around the EBITDA margin. There's a couple of things here that I want to call out. One is, there are operating leverage in the business. A lot of the product initiatives that we're pushing is also generating operational efficiency in our business. Some of that may be translated in the segment margins some of those can be translated in outside of our segments in our corporate cost structure also. So there is improvement. There's operating leverage in the business. And what we said was the margin for our Mobility and Deliveries will be around about the 12% and 3% plus. Now GFin though, you're right. The GFin part or the Financial Services segment as Alex just alluded earlier will see improvements in the cost structure of our business, as well as they start to generate revenue especially from our banking and as we start to scale loan even further of that business. So you'll see a dynamic of operating leverage in the business in terms of efficiencies and also the GFin or the Financial Services segment also coming down. The third part is around our regional corporate costs. That's going up roughly inflation with around about say 4% on a year-over-year basis which is at a significantly lower clip versus what our GMV growth is. Your second question around centralized regional corporate costs. So the cost structure there is growing in line with inflation like I said earlier. Now, there's always a couple of pieces in regional corporate cost. There's a variable piece and there is the fixed cost piece. Now, the cloud and direct marketing will obviously commensurate with the growth of the pace of the business itself. Those are variable costs. And while we're continuing to see efficiency both in cloud and marketing and you saw the reduction in those cost structure in 2023, we'll continue to make sure that those have been efficiently optimized. We will see as a percentage of GMV those revenue -- those cost structure being stable, but from an absolute dollar perspective will continue to grow with the growth of our on-demand business. On the fixed cost structure though, it's going to be pretty much in line with the growth of the inflation. That's how we're thinking about it. We're being very disciplined in terms of how we're managing our fixed cost structure. We're going to be very prudent in terms of how we are looking at headcount across the business, and we are going to continue to find productivity across our workforce space as it comes. I hope that answers the question.

Our next question is from Piyush Choudhary of HSBC. Please go ahead. Your line is open.

Hi. Thanks a lot for taking the questions, and congrats to Anthony and entire team on good set of results and announcing the share buyback. Two questions. Firstly, how do you expect MTU growth going forward across segments? In fourth quarter, we saw good growth in MTU. Is it driven by gaining market share or you're able to expand the TAM with new solutions? And if you can call out, how much is seasonally driven due to travel and tourism in the region? Secondly, on the deliveries segment, can you talk a little bit about your margin range across various countries? I would imagine that there is a big difference between deliveries margin and there could be room for improvement over there in some of the countries where you have more intense competition. So why we are saying deliveries margin will remain more constant year-on-year? Wouldn't that mix or improvement in those countries helped to lift margin even in 2024? Thank you.

Piyush, thanks for your questions. I'll take the first one on the MTU growth and then hand to Peter for the second one. Yeah, we see opportunity on the MTU side from the mobility recovery. Clearly the traveler segment is not fully recovered since pre-COVID. As I mentioned in my remarks earlier, most external estimates suggest that it's only around 70% so far. Then we've got on the deliveries, we're starting to see the effect of the affordability initiatives that we flagged to you earlier last quarter. We can see that it does drive new users using the platform and also frequency, so that will give us an MTU boost as well. And then the family accounts that Anthony mentioned earlier, we're optimistic about that. We think that that will improve the self-generated growth of MTUs, the network itself generating new MTUs. So we're very keen on that as a hyper-growth driver as well. And then we think that we're barely tapped into the premium segment, the corporate premium segment and as we mentioned in our remarks there will be some really fantastic new offerings coming up for that segment. So we hope that that will be a high margin and high growth opportunity for our MTUs going forward. Peter?

Yeah. Piyush also I just would add also from an MTU perspective, we're also driving engagement in our business. It's really important that yes we can add MTUs, but also we've got to make sure these users are constantly engaging in our platform and we have more and more users now using the Grab platform. We finished the quarter at 38 million and we see opportunities to grow that even further in 2024. But it's also equally as important that they are constantly coming back to the platform and using them. That's part of our growth factors also in 2024, but that's going to also come from product features that we're investing in the business, and tied to that actually is your question around margins. Now you asked about country specific margins. We only see our business as a portfolio. We don't look at while countries are important, but it's really important that we see it across the board, across all the countries itself. And if you step back in terms of what we've done in Deliveries margin, we've seen margin improvement of over 500 bps over the last two years itself. Now this is a year that we are going to continue to consolidate and make investments into these new product initiatives that will drive engagement as well as also broaden the TAM base. We've worked hard last year in affordability with growth at TAM base there. We ended [Technical Difficulty] with record GMV and we're going to push this year also to make sure that we bring in new user base; but also, that these user base are sticky, these user base are constantly using our product base and that will lead to further acceleration in growth of revenue and margins for our Deliveries business in 2025 and 2026. So this is how we're thinking about it. Where there is upside in margins, we'll obviously capture those margins. But for us, making sure that we are going to see revenue growth acceleration in the business, especially in 2025 and 2026.

The next question comes from Ranjan Sharma of JPMorgan. Your line is open.

Hi. Good evening, and thank you for the presentation. Two questions from my side. Firstly, in the buybacks there's a reference to privately negotiated transactions. If you can help us understand what could be -- how would you determine the reference share price for such transactions? The second question is on your overall cost base. Can you share some color like what percentage of your costs are coming in like U.S. dollars and Singapore dollars? Thank you.

Ranjan on the buyback, look it's hard for us to quantify. Buybacks as you know is influenced and led by the market dynamics at the end of the day. And the mandate that the Board has given us has given full flexibility in just how we deploy those capital. We'll see how the market from a dynamic perspective and will enter into the markets, whether it's block trades, whether it's trades that we do in the open market that's all influenced by the price of the market itself. So it's hard for us to say because we can't control the market. What I can say is that we'll be efficient in how we use that cash for those buybacks for the highest return for our shareholders. On your second question around costs in USD and SGD. We're a USD denominated business. What we do with our cash predominantly will be fairly concentrated in USD. We naturally hedge our business itself. We're a diversified portfolio when it comes to countries as you know. But we make sure that from an FX perspective, we're not exposed and where we will we will heavily concentrate our balance sheet on USD.

Our next question comes from Alicia Yap of Citigroup. Please go ahead.

Hi. Thank you. Good evening management. Thanks for taking my question. I have very quick two questions. First is, just wondering how much of the FX fluctuation that you have baked into your 2024 revenues and EBITDA guidance? And then second on follow-up on your comments about the inorganic versus the organic growth. Just wondering in what type of situations or what kind of synergies that you are looking for that will trigger you to think about the inorganic opportunity potentially, if it arises? Thank you.

Hi, Alicia. Let me take those two questions. In the FX part of your question, look we've obviously built in buffer in the movement in FX. We have to be prudent. We can't read in terms of what the forward FX rates will be. We have built in some conservatism in our foreign exchange, in our model and that's being appropriate. We don't know where the rates will be in terms of the next 12 months. In terms of inorganic versus organic growth Alex mentioned this a couple of times that we have a very high hurdle rate when it comes to inorganic opportunities. We are very, very focused in making sure that organic growth takes the most highest priority for us and we are investing in those products Alicia to make sure that to drive this engagement, to drive the user base, to drive growth especially because that's really what's going to deepen our competitive moat in the business today.

The next question is from Jiong Shao of Barclays. Please go ahead.

My questions. I think, Peter you mentioned a couple of times about the reacceleration in growth in 2025 and beyond. So usually the law of large numbers is growth rate tend to decelerate, moderate as you get bigger. But I was hoping you can elaborate a bit more on why the growth rate in 2025 and beyond will be higher than 2024 other than the advertising and fintech will contribute more. My second question is about travelers. I think Alex mentioned a couple of times as well that the travelers now only back to 70% of pre-COVID and some of the new stats we have seen from Chinese New Year for travelers seem pretty good. So I was wondering if you can talk about sort of how big is that Chinese travelers, is that revenue contribution to your Mobility business? Any color or numbers you can share the trends you have seen during this holiday period a couple of weeks ago would be helpful. Thank you.

Hey, Jiong thanks so much for the question. I'll talk about growth and reacceleration of growth and why 2025 and how we are thinking about the confidence of it. We are actually very confident as a team our ability to execute to drive revenue growth, especially, in the mid-term. Hence, we set out these stretch goals across not just for 2024, but beyond. If you just look at our past history in 2022 and 2023 we showed some internal targets; for example our cost to serve. We had very broad numbers that many people thought we couldn't achieve. But we've shown now, we're actually the most efficient our cost to serve platform in the region by orders of magnitude, and that's what we are going to keep demonstrating. We said what we're going to do and then we did it. We said that the Mobility GMV will exit 2023 above pre-COVID and we did that as we drove focus and we targeted [Technical Difficulty] and the affordability segment and that grew very well. We said, hey, Deliveries will come back into growth -- into GMV growth and we saw that with Q4 growing at 13% year-on-year and sequential growth for three quarters, because we focused on GrabUnlimited. We focused on Saver and differentiation of pricing. And then, we said we're going to deliver on EBITDA and we did actually way ahead of time. Now, what we are saying now is we are incubating growth with a lot of initiatives. One you talked about it, advertising. We still see tremendous headroom there. We've seen increase in penetration across, whether it's the big BD clients, whether it's small long tail, we've seen and yet penetration compared to other markets is still very low. So we see a lot of headroom there. And we've seen how the ROAS or the return on advertised sales for them continues to provide even greater earning opportunities for all our merchant partners. The second, what Alex talked about was banking, for example. We are very excited, because we see revenue growth as our loan book scales. We saw that with GrabFin. We're very happy with our GFin team as they drove costs [Technical Difficulty] continue to grow with loan growth. Now with banks, as we are very conscious on cost at the same time we believe deposits and loans will continue to be growing strongly. With all that said, we also have shared or Peter has actually shared that a Deliveries margin upside of somewhere between 100 bps to 200 bps will continue to take place over the longer term as we invest more into tech and product. All that, are just examples that we’ll continue to reinforce reacceleration of revenue growth even beyond 2024.

Thanks for your question, Jiong. Yes, let me pick up the question about Chinese travelers. In fact, Chinese travelers are more significant now than they were before COVID. But I think that could be largely driven by the efforts that we put into targeting them, because we've done the integration with WeChat, Ali, trip.com. We've got the Chinese translation as well in-app translation. So, I think our top of mind awareness with Chinese travelers has increased and therefore, we're seeing that impact in our numbers. Having said that, I just happened to meet with the Asia head of a very large global hotel chain, and he was saying that they're seeing much more domestic Chinese travel at this point than they saw pre-COVID as a proportion and less international. So, I think there's still upside as the China economy starts to regrow again and the Chinese consumers start to travel internationally. But right now, I think they're disproportionately traveling domestically based on some of the feedback we have from our partners.

Thank you. This concludes Grab's fourth quarter 2023 earnings conference call. Thank you for your participation. You may now disconnect.