Portfolio Optimization Program to Become Cash Flow Profitable in 2023

Dear partners,

When we started Swvl five years ago, we wanted to create opportunities for everyone by building a platform that enables women to pursue better opportunities, provides captains with more certainty in their lives, and allow colleagues the opportunity to contribute to solving a problem that impacts millions of lives around the world while supercharging their careers. Swvl's core solution is based on enabling people to move in a more efficient, safe, and reliable commute.


When COVID hit, everyone had to stay safe at home. We had one thing in mind: People first. We avoided layoffs or salary reductions for our colleagues, created must-have free trips on the most vital roads for our customers, and raised funds from colleagues and investors to support our captains. We wanted to set an example that "When the going gets tough, the tough get going." COVID was an opportunity for us to stop and reflect. We rebuilt Swvl towards more efficiency and focus, which enabled us to bounce back much stronger and serve more people with more solutions.




Strategy


Businesses around the world are suffering from higher costs and overall uncertainty. Declining stock markets have led to a global crisis with unforeseen consequences. Over the past few weeks, Swvl has been hit like others across the globe with changes to its financial realities. While change is often unexpected, we believe that any attempt to resist it instead of adapting to it will prove futile. Today, with the current global economic downturn, as much as we did everything we could to put people first, we now know that we are not able to keep everyone unimpacted. We know we have to make tough decisions in order to prioritize profitability over growth to ensure that Swvl thrives once we are on the other side of this.


Business models are tools that help companies create value before they can capture value. Yet it is often overlooked that there is more than one way for a company to create value with its current resources and expertise. One of our core values is "Customers are the end destination and starting point." Our mission is to provide safe, reliable, and affordable mass transit across the globe. We are committed to re-inventing a mass transit system that has not been revisited for years, and providing a solution where people need it most and where it is most complex—megacities with high density, overpopulation, and broken public transport systems, and infrastructures. We are certain that the world needs efficiency now more than ever, and thus efficiency is the core of our solutions. At times when companies are struggling with their cost, we can help them by providing more efficient, higher-quality transportation. Swvl will focus on expanding its B2B and B2G product line to fulfill this urgent market need while optimizing its B2C operations. A rising tide lifts all boats, and it's a privilege to be able to help our customers and business partners.



Become Free Cash Flow Profitable in 2023


- Swvl is implementing a portfolio optimization program to focus on its highest profitability operations, enhance efficiency and reduce central costs


- Capitalizes on the highest profitability operations TaaS and SaaS which currently have > 500 contracts in > 10 countries generating > $5m revenue per month


- B2C business is also expected to be contribution margin positive before the end of 2022


- Builds on recent acquisitions of TaaS and SaaS businesses Viapool, Volt Lines, Shotl and pending acquisition of door2door which improve profitability margins


- Benefits from a world class engineering and product team and technology stack which allows for scalability and sustainable growth




Resources


No matter how big, resources are not infinite; cash is meant to be responsibly utilized. We need to be as disciplined as ever, which is why today, May 30, 2022, we announced that our portfolio optimization program to turn cash flow positive in 2023.


As part of that program, we have considered various scenarios that will allow us to demonstrate how much we value our workforce. We believe that Swvl has reached such a level of success only because of the team, and we are also sure that Swvl will continue to get stronger.



What we did:


- Voluntary salary deductions from the top management team


- Reduction of current office spaces


- Freezing our current hiring program


- Freezing travel and accommodation expenses


- Tying expenditures to essential business requirements 



People


Effective today, May 30, 2022, we are optimizing our operations in some of our markets while reducing our workforce. The reduction follows an extensive evaluation of team redundancy and how this complements our strategy. We have arranged for one-to-one communications with all of the impacted teammates. Each member of the reduced workforce will receive an invitation to have a conversation with a relevant senior leader to receive clarity on the next steps based on each market's local laws, severance rules, and best practices.


To those who will leave, I would like to say I am sorry. And more importantly, this is not your fault. You will forever be part of Swvl, and our door will always be open to you in the future. We are incredibly lucky and grateful to have worked with such remarkable talent that many companies would be fortunate to have. Besides your work, what will stay with us is knowing that we genuinely did hire people better than us. I am sure you will continue to have a significant impact wherever you go, as you have done day in and day out at Swvl.



Easing the transition for impacted employees:



- Severance: All impacted employees to receive severance based on gross salary and complete cash payout


 - Provident Fund, Gratuity & Leave encashment other legal payments


 - All RSU to be considered vested

 

 - Expense claims/OPD claims to be cleared


 - All Final Settlements to be taxed as per local requirement


 - Payout Transfer to be complete in the next 21 days


Medical Insurance: to be extended for all entitled employees


Stock Options: all unvested stocks for impacted employees to continue to vest as per schedule


Alumni Directory: an alumni network directory to support our impacted workforce


No interview policy for Rejoiners


Laptops to be retained by employees subject to data security requirements



Last but not least, it's important to remember that throughout history, change has been the only constant in life. However, it is also important to remember that this too shall pass, and Swvl will always be at your service.

Yours Sincerely,

Mostafa Kandil