Joint Stock Company Kaspi.kz Price & Performance (KSPI)

And we just launched it like later in 2024. So it has been quite remarkable engagement from merchants and now merchants not only can accept the payments through us, not only sell or advertise the goods they have and also connect to the delivery, but actually merchants can also save the money if they have access cash and the Caspi deposit is the Caspi paid business deposit is a very good product, which was very much welcomed by the merchants. If you look at the cohorts, while cohorts continue a strong growth, So the payments cohort, as you can see, continues a nice growth, this cohort growing 65% of of our consumers are from the last five years. And again, as we continue we already have a very strong engagements from the merchants and from the consumers. This platform is the highest engaged, the most of consumers and merchants are using it. So by adding more reasons to transact will be supporting the growth in the payments business. [indiscernible] even sort of higher potential really and the growth and you can see each cohort also demonstrates a very sort of strong growth. Again, 54% of consumers are actually from the last five years.

But also every sort of co cohort, the consumers are shopping more. And this is really is a result of us either entering the new verticals on the e commerce side or adding more products items to buy, but also going into new businesses like we constantly launch something new, right? EGrocery is a good example, travel, tours, is another example, cars and so on and so forth. So marketplace will grow both as more consumers will use it, more merchants will connect, assortment will increase, but also the new services which we are constantly launching.

The grocery, business, so has showed a very strong growth. So we now we grew about 97% in the GMV. And 84% in the transactions. Almost 10,000,000 transactions last year. Just keep in mind that this business didn't exist a couple of years ago. So we have been able to scale it nicely rapidly with a good quality consumer experience and very high levels of engagement. We have been focused on the three cities. During 2024, we have been adding more dark stores during the year, but also expanding the capacity of existing dark stores, increasing the efficiency. So the entire team from e commerce to to the e grocery operation has done a remarkable job. By exciting consumers. This business is highly repetitive. So consumer experience is extremely important fundamental. If consumers are happy and excited, continue shopping with you. So high frequency business. The quality of the consumer experience is super important. And in twenty twenty five, we are considering entering the two new cities, Our existing cities will continue to grow and will continue to increase the capacity, but the same time, 02/2025, we would like to enter the two new cities, whether with our eGrocery value proposition.

The e cars, So the cars business, we have been also driving nicely. And again, it's we are going after the entire value chain sort of helping the consumers to buy the car and to own the car have shown a very good growth [indiscernible] And then 1P, it's it's a highly targeted product basically, which which will be for the sellers that want to get money faster, and the buyers that want to get the money with the card, which is has been sort of checked and verified for additional value created for both sellers of the cars and merchants of the car. Sort of buyers of the car. But in general, it's largely [indiscernible] integrated also with Calioca, our number one classified car classifies in the country. And yes, and we're streamlining the entire value chain and there usually they will move slightly in opposite directions. The larger is a 3P business smaller is the 1P business because eventually it's all about those same cars, which being solved but different way. 62% GMV growth, very encouraging. And the spare parts is our important priority this year and next year. If you look at the value chain or what we're trying to do this just to give you a little bit of an overview, consumers sellers and buyers of the cars, we help them to to lease the cars, we help them to buy the car, they can get online car finance, which is the fully digital experience, You can buy spare parts, You can register the car with our government services.

You can pay taxes for the car. You can issue driving license. So those are sort of the main parts of the value chain between buying the car, owning the car So very exciting continue to digitalize the buying ownership experience of the car and it's probably second largest item on this household budget. So yes, so we just continue developing this business, really excited about good growth in 2024. [indiscernible] at end of last year. So this is the it's just a very nice, cool feature personalized, you can You can actually basically just give a gift gift a gift card for the birthday of your friends or your coworkers when you don't really have to think about what you want to to buy. So instead of it, you can give a gift card and then and then the person can actually buy anything they want on a on 50,000 purchases So yes, so very excited. There will be a range of the innovation around the gift card experience during this year, but it's cool. It's fun. Consumers love it. Net Promoter Score is incredible. So yes, so it's really, really nice shopping experience. The delivery on our e commerce is our important well, I should call it asset So I think we are world class company in delivery, in our e commerce.

So we have grew our delivered orders 128% last year. And almost 100,000,000 orders delivered during the year. The important metrics of of the delivery, it's basically almost for free, 84% and almost half of those we deliver in less than two days. And very importantly, the low cost, caspi postamats, which we rolled out for the last several years is creating this unique opportunity of not just only exciting consumers by delivering on time with a very high success ratios, but also keeping the cost under control on the delivery side. So very, very excited about this. Now we have largely built the network at the moment. We have in excess of 8,000 postomats. And yes, and we will just continue sort of maintaining and increasing the efficiency, but we have pretty much built the network, which is required to cover the country. We have also launched and have been launched in 2023, I think. And then in 2024, we actually launched [indiscernible] much more advanced version of Caspe POS register. So that's something this product is very interesting and very useful for the merchants. So basically what you can do is you can you can enter the item which consumer wants to buy First of all, you create the product catalog, Then you enter what consumers want to buy.

And then you enter the price, you enter the quantity, you actually accept the payment through our POS. The software is integrated with our POS network. And then automatically we'll be producing also digital tax receipts. So this is very sort of high value additive product to the merchant operation. We provide it for free. But this just gives you a sense of that we're a company which is creating the value added services an increasing value of of Caspi as the company which helps merchants to develop.

So 35% of merchants now using the POS register. And yes, and it's we have processed €1,200,000,000,000 of the of the payments through our register. And again, if you think about the functionality and and the value we can create in the future, around this simple function of actually recording the the transactions and the purchases. Value added services, which we believe we can develop around the sales reports, around the inventory, around advertising and many other value added services for more But this is the product which has been showing extraordinary engagement and again one of more than one in three merchants already using it. And it's completely free from merchants. We have been also developing the further advertising offerings. So as you as you recall during the year, we launched brand advertising. So now we have two products well, last note, no. Yeah, now we have more. Last year, we had two products. We're now our own in March, right? So last year, we had two products. The one product is to advertise you can advertise your goods, so products which you have on our marketplace in e commerce platform. And now also if you have if you have a brand, now you can also advertise your brand and has been showing a very strong adoption and now our TASPI ad service is being used by 51,000 merchants and contributes significantly to both our revenue, but most importantly, really helps merchants merchants and brands to reach the right customers at the right time with the right product.

Business deposit, we launched last year Again, that was something which I mentioned in the beginning of our of our call. Has been extraordinary adoptions. We just launched it this product in the in the third Q. And as you can see, 77,000 merchants were already saving having Kaspi business deposit end of last year, incredible growth in terms of the amounts, 443% now is a growth just during the year as we were scaling it. The unique feature of this savings deposit you take the merchant perspective, I am in a trading business. I had a good week or a good month of the sales or day. Driven by promotion campaigns, for example. So I have some extra cash and I can fully online, fully digital I can place this extra cash business deposit, interest is accrued daily, and And yes, and this is very attractive for the merchants. So now merchants not only can pay and we process payments for for them or help to sell the goods, but also merchants can now save money and and make a revenue from the interest, which we pay on the on the cash, which is extra and you can place it on the savings account on the Caspi deposit with us.

So impressive growth and merchants welcome this product we launched last year. Another product which we have launched end of last year, it's buy inventory now pay later. So basically what that means is that you are to simplify, you are a convenience store, you have You have your supplier from on the B2B side that takes work with distributors, B2B payments as you know. So those suppliers come in, to the convenience store and they bring some products from FMCG brands, you can actually buy this inventory and pay thirty days later to us. But we will pay to distributor straight away. And it's a fully online product select the amount, you can select the, you know, sort of the limit which you want when when the transactions are happening for example, on a daily basis by the employee and then you pretty much scan the suppliers QR code, which courier has and you can pay a delivery. And then we pay immediately and then you pay us thirty days later. [indiscernible] this product basically helps to streamline the B2B it's another program B2B side of things. On top of B2B payments and it's additional product which helps the merchants to grow and improve working capital and the suppliers or distributors is also helps to to reduce the residual receivables and yes, and we are in a risk management business, so we can do our job better than anyone else in the value chain.

So another exciting products, and we be scaling it during this year. In 2025. Just a couple of slides as about the Gaspe and our products in terms of consumer recognition and the brand perception. Again, this is something just important to keep in mind. This is our probably the most important asset that we have which is the result of high quality products which we'll launch. So if you ask the consumer which mobile application is installed on your mobile phone, will be 5.5 times more mentioned than the nearest brand. Or which payment app you know and uses almost 20 times the nearest Brent is GasBiguez. If you ask about e commerce apps that you know use almost three times more than the nearest brand, which travel apps sites sort of use, its nearest brand is three times more. Again, the travel didn't exist several years ago. So we've built this business from scratch. Where you would take a loan you know, it's four times unit brand where you would put your deposit funds with three times nearest brand And then on the current real estate if you yes, consumer basically in terms of the cars where you would buy a car, 10 times the nearest brand.

So number one car vertical, in the on the market and then where you would buy real estate, 4.4 times than the nearest brand. And again, all those all those brand metrics are just a reminder that while we are on just a 20,000,000 people market, we are innovating. We're launching the new services. We're driving the engagement in every service and some of them have just showed you earlier, they are receiving increasing adoption The foundation for this is actually quality of the services and the quality of our operations, and we do care about the consumers and the merchants, and that is is a result of it is a strong brand perception, which is an important asset and and we just continue to innovate, exciting our customers But yes, the consumers and the merchants love us for the quality of the services we develop. Yes, I would like to mention just high level preview of the hep C Branded transaction. So we basically closed the transaction in in January, January, we received all the regulatory approvals and we paid the first part of the acquisition price and the second part of the acquisition price will be paid basically not mid summer, not later than six months post closing.

Just wanted to mention the transaction is being funded from From our cash flow, and first payment and the second payment [indiscernible] no dividend for the 4Q and the first half we just wanted to make this clear. We did mention this end of last year, but still just to clarify. And then we will yes, we'll update later in the year second half about the return of the cash excess cash to our shareholders. Again, we have been very disciplined About this historically, but every single time on this call, I did mention that investing in the future, investing into the growth is the important priority. So I do hope it doesn't come as a surprise but we did mention this on every call. For so many years. Just a couple of things and the review of the of the opportunity. Again, the population, 85,000,000 people, Turkey is really exciting. Market for us. It brings us to 100 Plus million people, the retail is is obviously much bigger than the Kazakhstan. The ecom penetration is still allows a very nice growth. The GDP growth forecast about 4.4% Joint then then clearly the macro inflation outlook is showing sort of signs of the normalization.

We believe that this year should be still challenging from the consumer perspective as this as this transition to the macro and inflation sort of stability continues through the year. But the medium term is an exciting opportunity for us and and the hep C Borata is a strong foundation and platform which we would like to build on in the country on top of it, Caspe itself, yeah, Casper itself looking to launch some services in Turkey. KEPT SIBRATA has been quite disciplined post COVID and focused on the stabilizing its financials and moving to positive cash flow. So that has been been a very important priority for the company and it's its founders and the management teams have done done a very good job. And now over time, this would be also an opportunity where we can build on and And probably switch to more of a product development and innovations on this short foundation. And then then a couple of things about the Habsigurata in terms of the size, it's about $3,500,000,000 Joint So GMV is a reasonable size and has been growing around 17%. We're presenting you by the way those are nine month numbers and perhaps we're at the definition of it Financials, you I would hope you appreciate Abstagorat is a public company.

And therefore, it's communicating its own results on its own merit. And therefore, here what we have is actually the nine month numbers, which are publicly available and you can also see it from Hebziburata on the nine month But GMV growth has been 17%. Share of 3PE70, so 1.3 is 1PE, three 3P is two thirds of the business roughly. Active consumers €12,000,000 which is a good foundation and active merchants around 100,000. All of this really, most importantly, is just a good foundation for us to to enlarge our market and basically a strong start international expansion, which we always had as a target for many years Derek, back to you.

Thanks, Mikael. So I'll run you through the financial results for 2024. Guidance outlook for 2025. So starting on the payments platform, foundation really of the business. I think overall mass message from this slide is that payments growth remains strong and actually highly predictable and consistent throughout the year. So this is volumes, volumes up 33%, year on year in the fourth quarter and up 40% for the full year. Ongoing strong volume growth reflects the strength of the respective products. Ongoing growth in the merchant base It was up 27% year on year for 2024. And a healthy end customer environment, both consumers and merchants. Consumer Balances in wallets were up 22%. Year on year. Volumes then translate into TPV. Growth Again, the drivers here remain very, very predictable. Less by [indiscernible] and B2B products B2B in 2025, [indiscernible] continue to outperform. Mild take rate dilution, that is a reflection of changes in mix. QR and B2B becoming more important in the mix, they're lower take rate products. And that dilution is consistent for those of you who have followed us since 2020. That dilution is consistent with long run. [indiscernible] Terms of what that then means for revenue, lower take rates, year on year, [indiscernible] what happened over 24 interest rates for eleven months of the year moved down, that meant lower liquidity revenue So the result is overall payments revenue growth below transaction growth.

But still up 23% for the year. 20 Consistently with the payments you've seen, tight cost control, operational gearing, top line dropping through to the bottom line, in 2024. That remained the case. Bottom line growth of 22%. In the fourth quarter, VESSA's 19% revenue growth and 24% for the full year. Ahead of 23% revenue growth for the year. Bottom line growth for 2024 of 24% pretty much bang in line with the around 25% guidance that we provided exactly twelve months Go. So moving on to then the marketplace platform. Marketplace is and should remain the fastest growing platform within the business. What you actually saw this is purchases an acceleration in purchases in the fourth quarter up 48% year on year versus plus 42% for the full year. A combination of promotional events and grocery being the reasons for that acceleration. And overall, Very, very solid trends In terms of what purchases mean for GMV growth, [indiscernible] We talked at both the H1 stage and at the Q3 stage how we expected strong GMV trends in the fourth quarter. And acceleration versus the third quarter. Primarily because of the timing of Juma. And that is exactly what played out Q4 GMV growth up 39%.

You remember Q3 sorry, Q4 GMV growth up 39%. Q3 GMV growth was up 24%. And for the year, full year GMV growth up 44%. In terms of the drivers behind that, what's important now is the e commerce is equal in size to e commerce. So if you think about what's been happening directionally over time is that eCommerce or payments merchants migrated to eCommerce, eCommerce merchants have migrated to e commerce, and e commerce now has real scale. And should continue to see very, very fast growth. Ongoing take rate expansion primarily affects reflects the benefit of value added services, advertising and delivery, Miguel talked about them, at the beginning, and they're adding around 170 bps to GMV growth. For 2025, in terms of the quarterly timing of tumor events, you should assume it's consistent with 2024. So e commerce the fastest growing component of marketplace very, very strong numbers. Pretty much across the board. General Goods, e cars and e grocery or contributing and in particular, as Mikhail flagged earlier, eGrocery, very, very strong E commerce is the main beneficiary of the value added services. Particularly Deliverum. That's relevant really only for e commerce. And you see that in take rate moving up again.

Both for the fourth quarter to an all time high of 11.6% and for the year to 11.3%. So the combination of value added services, the timing of promotional events, humor in court, Q4 contributing to that very strong sort of take rate. At the end [indiscernible] On e commerce, as I sort of flagged, that is now that is the slower growing component of m commerce. Talked about at the Q3 numbers how M Commerce is very promo sensitive. You might remember that in Q3, GMV growth was down 5% year on year. You see that in the fourth quarter, it was up 21% year on year. Again, that's what we described. Benefit of promotional campaigns in the fourth quarter. G and A up 21% for the fourth quarter and solid overall 19% for the full year. Whilst the growth may be slower again, and commerce take rate hitting gold ties all time highs are reflection of the value this product brings to the merchants. And again, even with a slower growth, an additional value proposition is that there's it describes merchant onboarding for e commerce as merchants become more sophisticated and ready to sell remotely. [indiscernible] really just solid trends for both the fourth quarter and the full year, 30% GMB growth in the fourth quarter, 34% GMV growth for the full year, take rate moving up to 5% for the fourth quarter, approximately 40 bps and up to 4.6% for the full year, again, sort of all time high take rates.

The reason as sort of Macau flagged at the beginning is travel travel is tours. Tours both additive to GMV and additive to ticket size are now representing 9%. The mix from pretty much zero eighteen months ago. To wrap up sort of on the marketplace, what you've then seen is sort of that strong GMV growth of 39% in the fourth quarter, 44% for the full year, plus take rate expansion mainly as a result of value added services. Here, this is adding up to faster revenue growth of 43%, in the fourth quarter, up 64% for the full year. Net income growth is slower and that reflects changing mix in whereas 1P, primarily grocery and also 1P cars. Growing share, something we've sort of talked about over the last eighteen months but even taking that into account marketplace still delivered bottom line growth of 41% for the full year making it on all sort of metrics, our fastest growing platform. And then finally moving on to the FinTech platform. Actually, TFE loan origination, you've seen very healthy and consistent trends now over several years that remain the case over the last twelve months, origination of 21% in the fourth quarter, up 30%.

For the full year. Conversion 2.1 Joint. That's an indication of how quickly people repay their loans. And the message there is that the trend is stable. A healthy consumer is repaying normally Reflect on average within six months. Number one and number two, in terms of the growth drivers, again, the growth drivers are loan products integrated with marketplace so that's buy now pay later, but increasingly really merchant financing and car financing, which are both integrated with marketplace and car financing, specifically with e cars and Calasa, and this is at the relative expense of the general purpose loan, which will continue to decline in share Loan portfolio sometime now growing faster than deposits, some more efficient use of the balance sheet In the fourth quarter, loan portfolio of 37% versus deposits up 23% for the full year. The loan to deposit ratio moving up to 88% from 78% in 2023. So that again was one of the factors that contributed positively. To the acceleration in [indiscernible] in the final particularly in the final quarter of the year. That is even taking into account some yield dilution So that yield dilution again is a reflection of sort of mix changes.

Product mix changes and is consistent with the trend that you've also seen now for many years in the business and I think would be a reasonable base case to assume continues as BNPL and merchant financing grow that share. Within the mix. The deposit growth of 27% for the full year, whilst it's slower than the loan portfolio growth, still actually incredibly strong growth, particularly given the context of our scale. In local currency. Deposits In terms of sort of risk and credit metrics, really no change at all. Our metrics very, very consistent over the last twelve months and over a longer period of time. That's both on the origination and on the collection. Side of things. And again, it's just indicative of a very stable predictable end customer consumer merchant environment, which you see throughout the business, whether we're talking about payments or we're talking about trends and savings, or some of the other areas. And so again, I think this is a realistic base case to carry forward. [indiscernible] Indication of that is actually probably in cost of risk, 2.1 times. Sorry, 2.1% for full year 'twenty four. Versus 2% for full year 2023. So it's stable now over a sort of long period of time.

NPL coverage is lower. This something we flagged at the H1. And Q3 results, and that just reflects growth in the collateralized car loan product, is collateralized. It requires less provisioning Number two, just continued sort of strong and actually improving stats from NPLs, you'd expect this to sort of stay broadly stable increase slightly. In 2025. So then finally to sort of wrap up on FinTech revenue. Strong healthy origination even with yield dilution translates into strong healthy revenue growth of 26% in the fourth quarter. Or 25% for the full year. We flagged both at H1 and we flagged at Q3 that the combination of sort of the faster growth in loans versus deposits, number one, and interest rate cuts earlier on yeah, at the February, we translate into slower growth in funding costs and faster growth in FinTech earnings in the second half particular the fourth quarter of the year. Again, that's exactly what you saw play out, bottom line growth of 28%. In the fourth quarter, up 12% for the full year. I think the caveat to that would be what you did have in or the partial caveat that would be what you did have in December is that rates once again actually moved up.

So certainly when we talked to the market in October, that wasn't something that I think any of us were expecting. That did have implications the bottom line in December. So when you look at the sort of 12% growth versus guidance of around 15% that's why rates moving up in December. And also what it means for 2025 Sorry, yes, 2025, what we had said last year is that as rates continue to move down, fintech earnings would be a beneficiary of that. I think you should look into 2025 now. A reasonable assumption would be that rates will stay higher for longer. I mean, this isn't actually inconsistent with sort of trends in many parts of the world. And that probably means that fintech bottom line growth goes slower, grows slower than FinTech top line growth in 2025. Overall, to sum it all up, strong growth in line with guidance across four of our platforms, ultimately 25% bottom line growth the year exactly in line with the around 25% guidance that we provided on this date, twelve months ago. So a pretty good results across the business. Again, we see that you only take into account the scale that we now have This slide really is just summarizing what I've just talked through, so I'll sort of leave that one there.

Moving on to the guidance for 2025, I think I would just say that number one, we are sort of simplifying our approach. Guidance is GMV, TPV and TFV vessels last year revenue Actually, this reflects investor feedback, a preference. So these sort of very high level metrics, number one. Number two, as the big business becomes more will provide guidance Joint bottom line guidance Joint for consolidated business as a whole rather than at a platform level. From a reporting perspective, nothing changes. This is simply a change in sort of approach to guidance, but all the sort of metrics, including net income on a platform level will continue to be provided. Bottom, ultimately, here, we're looking for bottom line guidance of around 20%. This excludes Turkey. It's our intention for the remainder of this year. To guide excluding Turkey, but I think over time, it would be a reasonable assumption. That it would be brought into the guidance on a mid perspective. So that wraps up on the guidance side of things. I would reiterate two points that Mikael Joint. So on number one, on the dividend, our track record, I think, of returning the excess cash to our shareholders is long established.

Funding of the $1,100,000,000 investment in Hepce Berrada will come from operating cash flow generated between Q4 and across the first half of this year, we'll be in a better position. We'll be able to update on cash returns, whether that be dividends or buybacks, the second half of the year. So that was one point to reiterate. And the second point to reiterate, again, Hephaesti please keep in mind, it is an independent publicly traded traded company, its own management, independent board members and very importantly, its own shareholders. Important developments need to be communicated by them, it wouldn't be appropriate for us to sort of front run that communication, so please keep that in mind. On that note, let's open the call up to Q and A, please.

Thank you, David. We will now begin the question and answer session. You have joined us via Zoom.

Okay. So, Brie, let's take Rika, let's take Dara from Wolfe's question first, please.

Perfect. Taryn, your line is now open.

Thanks guys. Nice job exiting the year in this growth format. Can I just ask about guidance for a moment? Mean, when you look at the 20%, I guess there's puts and takes both on the fintech from a net income standpoint and interest income Joint, but more importantly the drivers Really the drivers that you're looking at exiting the year are materially higher than we you're implying in your underlying growth assumptions from a KPI standpoint. Just looking at marketplace GMV expected, I think you said 25% to 30%. Or even payments in the 15%, 20% versus the exit rates Can you just touch on maybe what's conservatism built in versus any implications or factors that are going to drive some sort of a deceleration in those manners on those KPIs or is it just size of the business?

So thanks for your question, Darren. I'll make two points. And then maybe Mikael will want to add something. So the first one I think is guidance conservative? Is guidance aggressive? Just take it on face value. That would be sort of my advice, and I wouldn't sort of [indiscernible] trying to over interpret. That's one simple point. The second point more specific to your question I think that all the trends that I've just described there in 2024, pretty much you can assume carry forward into 2025. So for example, on payments, we talked about sort of Caprate dilution long term trends. [indiscernible] On FinTech, again, we talked about yield dilution. As asset and products grow. In the mix. These things are sort of what explain the difference between top line and bottom line. And then also, again, particularly, I think, on the FinTech, I think the scenario, the situation we're in today is different to where the world was three months ago.

Three months ago when we had this call or four months ago when we had this call, were talking about rates potentially continuing to move down. A nice tailwind to fintech bottom line, Actually, not only are they not moving down, but they've just moved up.

Or they moved up at the end of last year, and we'll see what happens over the next couple of months. So that's clearly a change in the outlook. But overall, 20% Prudence versus 25 last year. Is a reflection of the scale of the business.

Right. Okay. That's helpful. I mean, so it sounds like it's really just the larger B more than anything underlying in the business changing much. And then my follow-up would just be on a quick follow-up Turkey and Hetasparada. Just maybe just remind us of the timeline and your hopes What are you hoping to see in terms of integration and opportunities there and just further international It's a broader question, but I know that was it was great to see the closing of that and couple of months ago.

Mikhail, do you want to add anything on [indiscernible] Well, I mean, I mean, just to kind of repeat myself, it's it's a big market. We do see a lot of opportunities in the mobile services. And on the merchants, the consumer side, So, yes, I mean, we're it's a good strong foundation for us that the country's economic policies are providing its positive effect of normalizing the the inflation and the macro outlook. With as it happens with this type of changes, the consumer sentiment might be a bit challenging during the year? Yes, we are excited about the opportunity and Pepsi Buada serving 12,000,000 consumers sort of 100,000 merchants is a good platform and And we are also considering launching exploring services as cost beats of So yes, so it's in general, it's really exciting market, very similar to Kazakhstan from the from the consumer dynamics perspective. Is a public company. So they they will focus on their own numbers and yes, we'll be focused on the on the quality of the products, innovations and things like that, which GASP has a very strong track record of executing And keep in mind, we're like three, four weeks, right?

We just closed transaction January 29. And there is one thing also to keep in mind, I think everybody who has been with us for many years we always prefer the results talk for ourselves. And And I think that would be the same approach. So it's not like I think we just want to Right. [indiscernible] Work on the products, work on the services, work on the consumer. On a consumer and merchant services quality, but also innovations and launching some services and again including GASP launching its services itself on a standalone basis.

Got it. All right, guys. Thanks very much.

Thank you. Your next question comes from James Friedman with SIG. Please go ahead. [indiscernible] Good afternoon, good morning So I just you had some observations about the macro environment in Kazakhstan. If you could just reiterate what it is that you're seeing in it movement in interest rates, but also on the inflation Joint, sometimes that could be a good guy, bad guy. Anyway, any perspective that you're sharing on Kazakhstan, Mac All right, James. So I'll just take macro very quickly. So I think simple message here. Is that we see for the most part a very sort of stable predictable environment with consumer trends, consumer and the hatchet trends. Consistent really with the last sort of eighteen months, if not longer. And I guess ultimately, the evidence of that is you can look at the guidance, payments. Payments is big business for us. And in the context of the country. And growth is still sort of this year guiding for 15% to 20%. So that is indicative of of those sort of volume numbers we showed you for both March marketplace and purchases, that is indicative of at least in part, it's not just macro, but part sort of stable macro in environment.

So that's The main factor. I'd say just the one caveat. I wouldn't overplay it. It's really only relevant for our FinTech business and it's probably just a sort of a timing issue. The combination of sort of currency weakness, currency weakness translates into higher inflation. Higher inflation translates into interest rates moving up. That's sort of the only real change that I can point to. Over the last couple of months. Well, again, let's not overplay that. I think it's not inconsistent inconsistent with sort of global trends that inflation is moving down. More slowly, that rates are moving down more slowly. And the good news is that rates and funding costs for our business are high. And so whilst it may be timing, and take longer to come down directionally, I think it's still a reasonable assumption over the next year's next few years that they will come down and that will has the potential to be a nice tailwind for the business, maybe not in 2025, But in 'twenty six onwards. So let's just see how things evolve over the next couple of months.

Yes. And David, just to add also the the sort of temporary or end of the year interest exchange rates increasing, I think it's also was very encouraging and to see and the testament to the National Bank and the government that they patiently sort of worked through this process and it was basically driven by the market. And it was yes, it was very encouraging to see that the free market and exchange rate flexibility actually eventually it improved.

So the exchange rate now is back below or around 500, about 5% less than it was end of the year. So that was, yes, that's good. Well, sort of well managed, but also it was pretty much the market sort of driving up and down, which is testament to the patience of the government initial bank. Doing it. Like managing this properly. [indiscernible] Yes, James. I'm sorry, go ahead, Mikael.

Yes, just one thing to also to keep in mind that Kazakhstan is not immune also from from the regional geopolitical trends and that also obviously perception of investors is is there and that has its own impact as well, positive, negative, whatever it is, it clearly has played its own factor in the in the dynamics. So Joint this to keep in mind as well, yes. But you know this better than me, of course. And then in terms of hepcivirata, [indiscernible] one question we get is about the margin characteristics of their business for your business. Is that a conversation where assignment that PASP will be engaged with or is that all under their auspices? We're just trying to figure out who's [indiscernible] margin [indiscernible] James, and I understand the question. I think you should let's not oversort of complicate it. [indiscernible] report into HAPSIE BERIDA's Board Caspi controls hep C, Berarda's board. So with any company, it's a conversation between senior management, and the board on all aspects of financial performance. It's nothing different at Pepsi Barada. Versus any other sort of company. So is there a plan to drive margin expansion in hep Cibriana? So again, the same comments.

Pepsi Verada reports quarterly. It provides quite detailed updates on its strategy. Strategy can evolve and it needs to be communicated by them But I think it would be unfair on Hep C's other shareholders if we said that they have to listen to the Caspi call to find out what's going on at the company, that would not be the appropriate way for hep C to communicate.

Okay. Got it. I'll drop back in the queue. Thank you.

Thank you. James you now have Yigal Arunyan with Citigroup.

Hey, good morning, good afternoon.

First, just to focus on the marketplace segment. And in the letter, Mikael, you talked about that continuing to be the most important growth engine. This year. Got a number of initiatives that are still pretty early. As we think about this year, maybe this year, next year, are are those the key initiatives that we should expect to be the major focus? Are there new initiatives that are coming down the pipe? How should we think about that [indiscernible] with I know it's early on hep C and turn and kind of all the things you talked about, but Is there a plan or intention to kind of roll out products like auto and grocery and some of the newer ones that are working really well in CAS [indiscernible] Turkey as well.

Good to hear from you and thanks for questions. In terms of the marketplace, the way to really think about it is is the way that historically and as we also sort of explained this trend before, both consumers and merchants, they initially come to our payments business, then they move to to the the e commerce and then eventual destination is e commerce. And this is both true for merchants and consumers because e commerce is actually much more advanced fully digital experience, fully online. Fully mobile, like 100%, there is no offline part of it apart from us actually managing the delivery in the real in the real offline world. So from that perspective, nature of the marketplace growth and also the fact that the services of the marketplace and especially e commerce are the least penetrated. So those are the those are the the factors which will support the growth of the marketplace. Again, if you look at the previous years, our payments was growing faster. Then our e commerce was growing faster and now e commerce. So this is the value chain that you see. E grocery sort of being the least penetrated businesses, It has the biggest potential.

But we are in the type of business which operations of our grocery, operations of our e commerce, which means the window for the grocery also the marketing guys have we have been doing in the consumer experience, we all have been doing this incredible job of generating highly satisfied consumers, which means they are staying with us and they are highly repetitive. Therefore, the only or the major limitation to the growth of the grocery [indiscernible] creating the entering the cities building the dark stores, and starting to run the operations and basically providing the suppliers in these dark stores in terms of assortment which we sell. So this is like demand is there. We're really in Corson excited to see the demand is there. We're just building the infrastructure. The good news is that we are so execution driven that we're doing it quite efficiently. But But that's basically so eGrosil will grow together with expansion of the Dutch stores as entering the new cities, but also growing the but also growing the an increasing efficiency of existing operations, which is never ending exercise for our for our management team. And then we're just looking at some specific verticals as well.

Again, the way to look at this is that we historically started from electronics, with the large ticket transactions. If you look at the size of our transaction, it's very different from many other e commerce players. Usually, people start from low ticket transactions and they hope to get up and make business profitable. In our case, we started from high ticket transactions, which was electronics. And now we're moving down stream. And the size of average transaction is actually increasing. And we are driving the frequency. But this is this is really exciting because then when you are driving frequency, you are driving more business and you already have the network which can deliver those items. So that you can sustain your profitability while growing e commerce. Because other guys are usually going in, but from the opposite direction. So we're going for a new category. We started with electronics and and some of the categories which we are now becoming increasingly strong would be home and garden, would be fashion and some other categories. But they're built up on existing network of the delivery, existing consumers, payment options and so on and so forth. So that's why the marketplace will grow faster.

For so many reasons. In terms of the hep Ziburrata, for hep Ziburrata, I would say that for us, it's Yes, it's just a company which has been built on a very sound financial foundation. Which is an important Joint. And 12,000,000 consumers and 100,000 merchants is also a very good foundation. But again, Joint I don't know how to say it. We want just to take our time basically and just make sure that that the services which are considered can be provided on the market and innovation around those services. But you also should keep in mind that as I mentioned before, Caspi can and probably will launch services on a standalone basis as GASPI, right? There's a as a company in Turkey as well. So all of those things we currently be considering.

Okay.

A quick follow-up on that. Can you just explain the rationale, what the advantages and launching Caspi standalone versus [indiscernible] Have seen or what what would be an AppSeq product? What would be a CASB product?

Well, I mean, we are looking for we are looking for ability to to launch the services. It does matter who is launching it, right? So if there is ability and there is a knowledge and technology to launch the services, we'll be taking those those opportunities. There is nothing of short term in this But again, our target is to launch the services in provide services to the merchants and consumers. That's our goal.

Okay.

And where the services are born or where the service is being developed, it really depends where the capabilities are. And where the knowledge is in technology and experience.

All right, understood.

And one more quick follow-up on the macro. You probably know better, but at least I do so. I'd like to understand, you talked about the investment perception on the geopolitical trends and after regional half of it kind of comes to an end, what what's the reality in terms of the Kazakhstan consumer and their exposure [indiscernible] how much healthier they might get if that does come to an end. Thanks.

Do you mean if the you mean if conflict is over, what impact that would have on Kazakhstan consumer? That's the question. [indiscernible] Well, I think in general, I mean, I would say that it will I mean, of course, it will have positive impact on numerous fronts, right? I still would put in front of everything that, you know, I think the I think peace and then for people in the region, I think all of us have Again, I mean, it's just I mean peace is good for everyone and I'm highly confident that that the geopolitical stability in the region will have a very positive impact [indiscernible] pretty much every country is in the region and consumers. I have no doubt with anything that you can add to this, but I do think that it will have a multiplier effect and it will be positive for everyone. I mean, most important, people will stop dying. As far as I'm concerned, but also for the countries and economies, I think should be positive for the whole region.

Yes.

I mean, I can't Really much be on that. I mean, I just would add that I suppose keep in mind that from a political perspective, Kazakhstan has navigated very challenging situation think over the last couple of years. So that's one point Joint. I would make. But I think beyond Mikael's Joint on the sort of the human impacts, This would manifest itself in just broader geopolitical derisking across the entire region So from a risk perspective, a risk normalization perspective, clearly would be helpful. [indiscernible] Thank you. We have next question from Dan Mikolaos with Virgin Asset Management. Please go ahead.

Hi, Mikhail. Hi, David.

Congratulations on the results. I'll shut two quick questions on hep C Brada.

When we look at hep C Brada, one thing that's stands out, they were among I think they were the first in the Turkish market to do credit in e commerce. I think they were the first ones to launch BNPL products to apply for a deposit license. What do you think in your analysis of the company, what do you think you guys can do very differently to the Epsy Barada's existing management in sort of making sure that the credit franchise actually translates into meaningful growth And the second question, do you plan to kind of Pepsi Brada or will you be bringing a lot more CASB kind of CASB people to run the business as as you become more familiar with it?

Kyle, is there anything you can add on those, please?

Yes, sure. I think I did actually respond to this also on the on the previous call.

So our goal is really to build yeah, to build capabilities on the ground. There is no intention whatsoever. We're not we're not the usual sort of strategic guys would just come in and suddenly start teaching everyone was the best way to do business. I think Capsy Burata, on a standalone basis, has has a very strong management team that delivered delivered profitable sound growth and have worked through the very challenging times and they have together with the previous the founders and the shareholders have done a job, a remarkable job, which is a strong foundation for us to take forward. So we're not we're not in the business of we're in the business of creating the incredible products, which which are innovative and improve people's lives and their they're mobile driven and technology driven. We are in this business and there is a wealth of knowledge can be shared between the teams and again, if there are some products which can be launch will be focused on the launching of those products. That's we're a product company, so we're not we're not Caspe is not the political animal corporate structure. We're extremely lean. And from that perspective, no.

There is no intention whatsoever start flying people. And it's also expensive. I'm just kidding. No. Is no such intention. I think we'll be we're very happy and working forward to looking forward to work together with Habsburgat, the team that have done a very good job last several years. In terms of the and then there was a question about there was a question about the credit. Well, I mean, we will see, right? The credit credit is is a good is a good product, which Perhaps Gurrata also has developed At the same time, the market in Turkey is very wide. From that perspective. And there are also financial institutions and the banks that provide products Yes, so we will see. I mean, we always I mean, you always should keep in mind that even though we are innovative and we innovate on the things which are driving and needed for consumers and merchants. So if we see innovation is needed on the credit side, we'll look into it. But Again, we follow consumer, we follow merchant, we make their lives better and and it's an exciting opportunity. There are a number of things that can be done on a digital services, mobile services side for both merchants and consumers.

And it's a big market and yes, so we're just we'll put our heads down work and hopefully, the results will speak for itself, but we don't want to we don't want to I don't know, David, how to say it, like walk and talk or what's the expression for this?

Yes. Look, it's easy to promise a million things. I think what you should look at is how we've reported on five years, we provide update [indiscernible] [indiscernible] Not promises. Everything you sort of saw in the first part of that presentation was real initiatives that many of which you've not even heard of eighteen months ago. That are now being rolled out and have got strong momentum behind them. You should expect more of the same going forward. In whatever market we're talking about.

Yes. And then just the one thing to add that, hep C Brata is e commerce. Company. So that's the core expertise and the core knowledge, which is a good foundation in the platform. [indiscernible] [indiscernible] A very, very strong very experienced the e commerce company. Thank you. We now have Gabriel Kennedy with Autonomous You may proceed.

Hi, Tim. A few clarifications from me, please. The first one is a higher level question on your guidance. So the 20% profit growth you guide is is just a slight slowdown from what you delivered last year. Whereas we if we look at the volume dynamics, those are just more of a slowdown. So my question is that where do you see margins improving? And what is driving that? I believe you indicated fintech margins possibly coming down this year, so that would leave us with marketplace and payments Any color would be useful here. The second one is on the currency, which has been volatile. You mentioned it has bounced back a bit, but I think still 6% weaker against the dollar than it was in 2024. I guess the question is, do you have any hedges, any balance sheet position we should be aware of? Shall we translate the FX moves to your P and L one to one? We think about it in dollar terms. Yes. And my last question is on hep C. Is resuming the dividends in the second half dependent on the buyout of the minorities? That's it from me. Thank you. [indiscernible] take it.

Yes. All right, Gabriel. So I'll do them, I think, In reverse, order.

So on buyout of minorities, the Binko simply just stay there.

That at this point in time, we are focused on we just closed the initial sort of 65% We've made an initial payment We have a remaining payment to make over the next six months, which will take us up to sort of £1,100,000,000 That's our focus.

There's no proposal on the table for anything else to to to to date. So that's important to be aware of that. And again, that point there's different things that can happen across the business.

You've highlighted one There are multiple other sort of moving parts in the second half of the year.

Be in a better position to take into account everything can make a call at that particular point in time.

Again, our track record, I think, shows if we have excess cash, return it to shareholders, sweep said, Quite clearly here, we can look at both dividends and or buybacks, and we'll update on the second half of the year. In terms of minorities, there's really no proposal on the table today. Your last question, question on hedging. No material hedging in the business. That's a sort of simple [indiscernible] There.

Largely, this is a ten day revenue and a ten day cost [indiscernible] [indiscernible] most, most part, On your first question, again, similar to Darren's question. So Again, I think I can only sort of reiterate that volume trends will be very, very strong in the business this year. I mean, you think about our scale, marketplace growth of up to 30% year on year, payments growth of up to 20%, growth year on year. These are decent volume numbers for a business. That's north of $2,000,000,000 in net income. So the business is big. The growth is still forecast to be strong. I think ultimately, you just have to look at the complete picture. So if 2024 was 25% growth, is probably an unrealistic assumption that 2025 will be 25% growth as well. 20% does not seem like a dramatic change outlook. It just seems like natural sort of scale effects within the business to make This is Kazakhstan. Of course, going forward, the medium term, can be contributions to income from other parts of the world.

Very helpful. Thank you.

Thank you.

We now have Reggie Smith with JPMorgan. Please go ahead.

Thank you. Good morning. Congrats on the quarter. Most of my questions have been asked, but I did have a follow-up it sounds like [indiscernible] that your impact or influence over FC will primarily come through board meetings question is, has the new reconstituted board met yet? And how frequently [indiscernible] You want to take it on account?

Good to hear from you. Yes, I mean, it's proper board dynamics really for a company which is listed on NASDAQ. So we have We have a very good strong board with [indiscernible] three independent directors And yes, it's all it's actually have been yes, been working in accordance with all the governance requirements, which are applicable for for a NASDAQ listed company in The States. So we haven't had yet the formal board meeting. [indiscernible] So I think the requirement or the standard is just like one meeting per quarter, but some companies will meet more frequently. I guess my question is, is the plan to meet more frequently or just the standard is kind of the standard?

Well, I think the Board needs the Board will do what [indiscernible] we shouldn't be putting any limitations whether it's quarterly or it's monthly. I think the meetings will take place at like in Kasper, the meetings take place when important decisions are needs to be made. And the Board needs to review or so different committees that have to do their job. So I think it's it's it just needs to be guided by the requirements of the company and the governance policies, which the companies have. And the governance policies are actually quite good detailed and substantial and in a sense similar between Caspi and Hebsi Borata.

Got it. And then just to make sure that I understand this correctly, your influence, you being Cassy influence on operations strategy, or whatever as it relates to hep C, we'll will happen through board meetings. As opposed to somebody just calling up and saying, hey, you know, we want you to do this or look at this or something to that degree. Am I interpreting that correctly?

I'm just saying where you're going with this question.

No, is it no, because what I so I guess typically, what I think of an acquisition, and this is different because you guys inquired the entire company companies can come in and really have a super hands on approach to life changes. And I guess I'm trying to understand the distinction here and making sure that, like, I I fully appreciate that it's not it's not going to be super hands on, but it's not a passive investment either. So just trying to understand, like, like, where it falls in that [indiscernible] You following me?

Yeah, of course. I mean, I think in general, it's we're in general, we're just excited to we're excited to launch the services in Turkey with our experience and and our execution skills. So and we are shareholders in the company and we We invest Joint the company or bought the company because we believe that e commerce has high potential. So whatever we can add the value and pool, it's not we're not pride equity fund. And we're not asset management company. Are actually a strategic investor, right?

So [indiscernible] So we'll do We'll do things which are which are applicable for any strategic for a strategic investor company We're not going to be of course working on the On the Board level, You're right. [indiscernible] That makes sense. I appreciate it. Thank you. Congrats on the quarter. Look forward to watching this evolve.

Sure.

Thank you. We have Sandeep with Wood and Company on the line.

Hi, gentlemen. Thank you for taking my questions. So the first question is the NPL for merchants is that a market price product or is that a FinTech product? So I just wanted to clarify that. And secondly, on the government's comments that merchants should advertise both cash and BNPL finance price for the products I was wondering what your take on that is and how do you think that would affect your e commerce business? Or Is that more a noise that we should maybe overlook? And thirdly, on Ukraine, we know that you have a payments company there. Would you Would you focus on going back if there's a piece still That's the third question. Thank you very much. Sure.

You can take all three questions. Or, David, do you want to do it?

It'd be good if you do and maybe broaden out anything else on the regulatory side that needs you think is relevant to raise?

Yes, okay. In terms of the Ukraine and other around the region. I would say let's just hope that there will be a piece and then I think we will revisit our strategy I can all but at the same time, I can almost imagine you guys asking us when you will go to Ukraine and then when we will go to Ukraine, you will ask why did we go to Ukraine.

So, [indiscernible] Yes.

And then you will ask us what's your five year detailed plan strategy and things like that. So anyway, just joking. But I think let's just keep in mind, I think they just hope the piece will be there. Mutually beneficial for everyone, and we will explore opportunities down the line. In terms of the In terms of the the buy better now pay later, it's both FinTech and the payments product.

So it actually works on the both side because we're processing the payment and we're also taking the credit risk for thirty days, which is is very low risk. So it basically works on the both platforms. It works on the credit risk side of course, is a credit, it's a fintech. Side. On the payment side, it's still processing the payments because it's it's built on the it's built also on top of the B2B payments. This is just another innovation on the top of B2B. When we launched the B2B payments, I detailed you guys several years ago, this is we want to get the scale, we want it run you know, we want transactions running. And once distributors and convenience stores have transactions between them, at some Joint, we'll start innovating on top of those transactions. Like we did in every other verticals. And that's what's happening now. So it's another B2B product which we've launched. And again, the credit risk side is on the FinTech and credit risk and the interest rate. I mean, FinTech and then the payment processing side is on the payment side. So that's on by now pay later. Product in terms of the in terms of regulation Well, I mean, in general, I would say there was there was general discussion.

There's really nothing sort of I don't know, nothing really specific to report. [indiscernible] So I mean, in general, there is a discussion also about the VAT tax [indiscernible] when this discussion is going in with a wide audience and the businesses and the retailers So there is yes, there is discussion ongoing on the VAT, for example, There is discussion going on the on the payment network as well the national payment network. So we are involved in all those discussions. I don't know anything else, David, I am missing.

No.

There's nothing material to report. As you've followed us for several years, can you know, there's always different aspects of regulation being discussed and different stakeholders contribute different opinions with one stakeholder.

But I think what you've seen over the last five years, there's never really been a reg [indiscernible] a dramatic impact on the business model or investment case.

And we've generally been well positioned as the regulatory landscape has changed. There will be changes in the future, and we'll look to make sure we're well positioned for those those changes, but there's nothing imminent that we need to flag to you or to other investors.

Okay.

Thank you, both.

Okay.

Thank you. I would now like to hand it back to David for some final comments. Yeah. Thanks, Priya. So we've gone on for over an hour and a half.

There are some questions remaining in the queue, but we do need to wrap things up to move to another meeting. So thank you for your time today. Happy to follow-up offline if we didn't get to your apologies and happy to follow offline if we didn't get to your question today.

Happy to continue your discussion with everyone over the next couple of weeks. So a lot for your time. Thanks for the questions, guys, and, I speak to you all quite soon. [indiscernible] Thank you.

Thank you all for joining today's call with Caspi. You may now disconnect from