Frontier Digital Ventures : Quarterly Activity Report and Appendix 4C

For personal use only

ASX Code: FDV

27 July 2022

2Q 2022 Quarterly Activity Report and Appendix 4C

Frontier Digital Ventures Ltd ("FDV" or the "Company") is pleased to release its Quarterly Activity Report and Appendix 4C for the June quarter ("2Q 2022").

• FDV reaches operating cash flow breakeven, significantly reducing net operating cash outflows to A$48k in 2Q 2022, with FDV LATAM and FDV Asia both operating cash flow positive
• Zameen and PakWheels were operating cash flow positive in 2Q 2022 (as FDV's two equity accounted businesses that are excluded from the consolidated results)
• Half-yearportfolio EBITDA of A$1.8m on an FDV % share basis, improving A$2.2m from A$(0.4m) in 1H 2021, with FDV achieving positive EBITDA in every quarter over the last 12 months
• Record half-year revenue of A$41.7m on an FDV % share basis, increasing 72% from A$24.2m in 1H 2021
• FDV Asia businesses in Pakistan, Myanmar and Sri Lanka continue to achieve operational progress, despite political disruptions, demonstrating the strength of the core classifieds business model and value of market leadership
• Cash balance of A$30.8m as at 30 June 2022, providing funding flexibility underpinned by FDV's operating cash flow trajectory

FDV REACHES CASH FLOW BREAKEVEN

In 2Q 2022, FDV reported net operating cash outflows of just A$48k. Figure 1 highlights FDV's significant progress towards cash flow breakeven in the first half of 2022 following the increase of ownership in Encuentra24 and targeted investments, primarily in FDV LATAM, to drive revenue and earnings growth. This result is consistent with FDV's strategy since listing on the ASX in 2016, focused on long-term sustainable growth and equity value transformation.

Figure 1: Quarterly net operating cash flows (A$m; unaudited)

Adevinta	Yapo	Encuentra24	Targeted
acquisitions	acquisition	increase in	investments in
		ownership	FDV LATAM

3Q 2019	4Q 2019	1Q 2020	2Q 2020	3Q 2020	4Q 2020	1Q 2021	2Q 2021	3Q 2021	4Q 2021	1Q 2022	2Q 2022
			(0.2)	(0.3)				(0.4)				(0.0)
	(1.0)	(0.9)					(1.0)		(0.8)
(1.2)
				(1.5)
						(2.5)				(2.4)
Progress towards cash flow breakeven pre-
	Adevinta acquisitions

Frontier Digital Ventures Ltd

39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia1 Tel: [phone] www.frontierdv.com

For personal use only

FDV's Founder and CEO, Shaun Di Gregorio said:

"Once again, FDV has returned, within 6 months, to cash flow breakeven following the increase to 100% ownership in Encuentra24 and targeted investments in product, technology, and people in early 2022. This achievement is consistent with FDV's history of prudently deploying growth capital and rapidly transitioning portfolio companies to profitability.

Our attention remains firmly on further building on the strength of the core classifieds businesses and exploring opportunities to unlock their earnings potential through transactions. The performance of operating companies in Pakistan, Myanmar, and Sri Lanka this half highlights the resilience of the core classifieds model, despite external disruptions. FDV is in a strong position heading into 2H 2022 with a significantly enhanced cash flow profile providing funding flexibility."

FOCUS ON EARNINGS GROWTH

FDV reported portfolio EBITDA of A$1.8m on an FDV % share basis, an A$2.2m improvement from A$(0.4m) in 1H 2021. Zameen and Avito contributed strongly to the result with improvements in EBITDA performance of A$1.4m and A$0.4m, respectively (FDV % share basis). Notably, Avito was operating at close to EBITDA breakeven in the final months of 1H 2022 (FDV % share basis). FDV's portfolio EBITDA margin in 1H 2022 was +4%, which sits comfortably within FDV's target range.

In 1H 2022, nine of FDV's operating companies reported positive EBITDA on an FDV % share basis, increasing from six in 1H 2021. Similarly, nine operating companies recorded EBITDA improvements relative to 1H 2021. Hoppler recorded the largest decline in EBITDA of A$(141k), relative to 1H 2021, following planned investment to enable the transaction platform to scale more efficiently.

Figure 2: Portfolio EBITDA margin (unaudited; FDV % share basis)

1H 2017 2H 2017 1H 2018 2H 2018 1H 2019 2H 2019 1H 2020 2H 2020 1H 2021 2H 2021 1H 2022

		Onset of COVID-19
			8%	6%	4%
(4%)	(5%)	(5%)		(2%)

(20%) (22%)

(32%)

(51%)

Note: Results figures quoted for entities with continuing operations as at 30 June 2022

Frontier Digital Ventures Ltd

39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia2 Tel: [phone] www.frontierdv.com

For personal use only

Table 1: Half-year EBITDA by business1 (A$, unaudited; FDV % share basis)

				FDV		1H 2022		1H 2021		EBITDA change
				ownership		EBITDA		EBITDA
							(in absolute terms)
			(%)		A$ (FDV % basis)		A$ (FDV % basis)
	FDV LATAM					398,728			70,863			327,864
Fincaraíz	100%	295,899		290,706		5,193
InfoCasas2	100%	237,215		111,522		125,693
Encuentra243	100%	195,163		(63,885)	259,048
Yapo	100%	(329,549)	(267,480)	(62,069)
	FDV Asia					2,313,235			879,589			1,433,645
Zameen	30%	2,390,512		994,849		1,395,663
AutoDeal	56%	81,783		(53,677)	135,460
PakWheels	37%	33,650		50,485		(16,835)
iMyanmarhouse	53%	29,910		(27,330)	57,240
LankaPropertyWeb	53%	3,748		(62)		3,810
CarsDB	65%	(65,222)	(64,584)	(638)
Hoppler4	51%	(161,146)	(20,092)	(141,055)
	FDV MENA					(876,675)			(1,342,760)			466,085
West Africa5		N/A	14,262		17,545		(3,283)
Moteur	100%	(21,976)	10,024		(32,000)
Tayara	100%	(269,941)	(324,232)	54,290
Avito	100%	(599,019)	(1,046,097)	447,077
	Total EBITDA					1,835,288			(392,307)			2,227,595

Notes:

1. Results figures quoted for entities with continuing operations as at 30 June 2022
2. FDV increased its shareholding in InfoCasas from 51% to 100% on 23 June 2021
3. FDV increased its shareholding in Encuentra24 to 100% on 23 December 2021
4. FDV increased its shareholding in Hoppler from 42% to 51% on 15 July 2021
5. West Africa includes PropertyPro (Nigeria: 39% owned) and MeQasa (Ghana: 69% owned)

CONTINUED REVENUE GROWTH

FDV reported another record half-year result with revenue of A$41.7m in 1H 2022 (FDV % share basis), increasing 72% on 1H 2021. Figure 3 highlights the continued revenue growth achieved in 1H 2022, with FDV LATAM and FDV Asia contributing strongly to the result. FDV reported a new record of monthly revenue in May on an FDV % share basis, beating the previous record set two months prior.

Figure 3: Half-year portfolio revenue since IPO (A$m, unaudited, FDV % share basis)

41.7

36.0

						Onset of COVID-19	24.2
					10.4	11.8	9.8	14.0
				7.8
			6.2
		5.0
2.4	3.5
2H 2016	1H 2017	2H 2017	1H 2018	2H 2018	1H 2019	2H 2019	1H 2020	2H 2020	1H 2021	2H 2021	1H 2022

Note: Results figures quoted for entities with continuing operations as at 30 June 2022

Frontier Digital Ventures Ltd

39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia3 Tel: [phone] www.frontierdv.com

For personal use only

Table 2: Half-year revenues by business1 (A$, unaudited; FDV % share basis)

			FDV		1H 2022		1H 2021
			ownership		Revenue		Revenue		Growth
			(%)		A$ (FDV % basis)		A$ (FDV % basis)		(% in A$)
	FDV LATAM				22,312,339			10,789,946			107%
InfoCasas2	100%	8,536,448		2,480,441	244%
Encuentra243	100%	4,664,444		1,057,692	341%
Fincaraíz	100%	4,618,925		4,048,002	14%
Yapo	100%	4,492,522		3,203,812	40%
	FDV Asia				15,059,936			9,525,150			58%
Zameen	30%	13,187,155		8,166,141	61%
PakWheels	37%	577,944		449,144		29%
AutoDeal	56%	551,156		445,960		24%
LankaPropertyWeb	53%	234,183		176,104		33%
Hoppler4	51%	218,366		148,347		47%
iMyanmarhouse	53%	223,668		103,262		117%
CarsDB	65%	67,464		36,191		86%
	FDV MENA				4,348,965			3,910,360			11%
Avito	100%	3,490,739		2,933,769	19%
Tayara	100%	327,731		444,074		(26%)
Moteur	100%	272,896		350,273		(22%)
West Africa5	N/A	257,599		182,243		40%
	Total revenue			41,721,240			24,225,456			72%

Table 3: Half-year revenues by business1 (A$, unaudited; 100% basis)

		FDV		1H 2022		1H 2021
		ownership		Revenue		Revenue		Growth
		(%)		A$ (100% basis)		A$ (100% basis)		(% in A$)
	FDV LATAM			22,312,339			15,774,167			41%
InfoCasas2	100%	8,536,448	4,499,182	90%
Encuentra243	100%	4,664,444	4,023,171	16%
Fincaraíz	100%	4,618,925	4,048,002	14%
Yapo	100%	4,492,522	3,203,812	40%
	FDV Asia			48,267,036			30,425,136			59%
Zameen	30%	44,311,677	27,442,056		61%
PakWheels	37%	1,568,796	1,219,109	29%
AutoDeal	56%	987,912	799,355		24%
LankaPropertyWeb	53%	441,771	332,210		33%
Hoppler4	51%	427,749	380,360		12%
iMyanmarhouse	53%	424,981	196,204		117%
CarsDB	65%	104,150	55,841		87%
	FDV MENA			4,580,135			4,091,900			12%
Avito	100%	3,490,739	2,933,769	19%
West Africa5	N/A	488,769	363,783		34%
Tayara	100%	327,731	444,074		(26%)
Moteur	100%	272,896	350,273		(22%)
	Total revenue			75,159,510			50,291,202			49%

Frontier Digital Ventures Ltd

39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia4 Tel: [phone] www.frontierdv.com

For personal use only

Notes:

1. Results figures quoted for entities with continuing operations as at 30 June 2022
2. FDV increased its shareholding in InfoCasas from 51% to 100% on 23 June 2021
3. FDV increased its shareholding in Encuentra24 to 100% on 17 December 2021
4. FDV increased its shareholding in Hoppler from 42% to 51% on 15 July 2021
5. West Africa includes PropertyPro (Nigeria: 39% owned) and MeQasa (Ghana: 69% owned)

OPERATIONAL UPDATES

FDV LATAM - 53% of 1H 2022 revenue (FDV % share basis)

All four FDV LATAM businesses were operating cash flow positive in 2Q 2022 following a number of one-off investments in product, technology and employees in the prior quarter. FDV LATAM also recorded a positive EBITDA result of A$399k in 1H 2022, with three of four operating companies seeing improvements relative to 1H 2021 (100% basis). The region has continued to perform strongly, achieving revenue of A$22.3m in 1H 2022, an increase of 41% on pcp (100% basis).

InfoCasas, the leading property marketplace in Uruguay, Paraguay and Bolivia with a growing presence in Peru, recorded 1H 2022 revenue of A$8.5m, increasing 90% on pcp (100% basis). InfoCasas continues to deliver strong operational performance, recording EBITDA in 1H 2022 of A$237k (100% basis). The operating company's highly scalable proprietary technology platform has delivered strong growth in volume of transactions in 1H 2022, increasing 57% on pcp.

Encuentra24, the leading online marketplace across five key Central American markets, recorded revenue of A$4.7m in 1H 2022, increasing 16% on pcp (100% basis). Following the move to 100% ownership in December 2021 (see announcement, Increase in Encuentra24 ownership and capital raising, 17 December 2021), FDV conducted a review of operations which resulted in organisational changes contributing to greater marketing efficiencies and increased employee productivity. This has resulted in a significant improvement in EBITDA to A$195k in 1H 2022, compared with A$(243k) in 1H 2021 (100% basis).

Fincaraíz, the leading property marketplace in Colombia, recorded revenue of A$4.6m in 1H 2022, an increase of 14% on pcp, and EBITDA of A$0.3m (100% basis). Notably, Fincaraíz has recorded nine consecutive months of positive EBITDA while also continuing to optimize the core classifieds marketplace and trial transactions.

Yapo, the leading general marketplace in Chile across the high value auto and property verticals, recorded revenue of A$4.5m in 1H 2022, an increase of 40% on pcp (100% basis). While Yapo recorded a slight decline in EBITDA in 1H 2022, the operating company has continued to further strengthen its core classifieds offering and trial transactions, successfully completing seven property and 49 auto transactions in 1H 2022.

FDV Asia - 36% of 1H 2022 revenue (FDV % share basis)

FDV Asia was operating cash flow positive in 2Q 2022. Notably, this result does not include Zameen and PakWheels, as FDV's two equity accounted businesses that are excluded from the consolidated results, which were also cash flow positive in 2Q 2022. FDV Asia recorded EBITDA of A$7.9m and revenue of A$48.3m in 1H 2022, increasing 59% on pcp.

Frontier Digital Ventures Ltd

39-8 The Boulevard, Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia5 Tel: [phone] www.frontierdv.com