VNET Group, Inc. · NASDAQ:VNET

VNET — 21Vianet Group — Investor Presentation (March 2020)

30 slides from VNET's investor presentation, March 2020

  1. Slide 1: 21Vianet Group, Inc. Investor Presentation

    21Vianet Group, Inc. Investor Presentation March, 2020

  2. Slide 2: Disclaimer

    Disclaimer This presentation does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities of 21Vianet Group, Inc. (the “Company”) in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be

  3. Slide 3: At a Glance

    At a Glance Year of Establishment 1996 Listing Date April, 2011 Exchange / Ticker Nasdaq: VNET Price (as of 2nd Mar, 2020) $15.06 Market Cap $1.7 Billion

  4. Slide 4: A Leading Internet Data Center Services Provider in China

    A Leading Internet Data Center Services Provider in China ◼ China's internet infrastructure industry is among the fastest growing in the world. ◼ Carrier-neutrals internet data centers (IDC) are growing faster than the industry average. ◼ VNET is a leading carrier-neutral & cloud-neutral IDC service

  5. Slide 5: 4Q19 Highlights

    4Q19 Highlights 16% YoY 4,780 R net revenue growth self-built net adds 3% YoY 88% Strong adj. EBITDA(1) growth self-built cabinets sales momentum Source: Company filings. 1. Adjusted EBITDA defined as EBITDA excluding share-based compensation expenses, changes in the fair value of contingent purchas

  6. Slide 6: Comprehensive Customized Solutions

    Comprehensive Customized Solutions Product Offerings IDC Services Our Advantages ◼ Co-location ◼ Multi-carrier & multi-cloud connectivity ◼ Core Business ◼ Inter-connectivity ◼ High-performing facility & network 60%-70% of ◼ Hybrid IT services total revenue ◼ Turn-key solutions tailored for customer

  7. Slide 7: Dual-core Strategy for IDC Business

    Dual-core Strategy for IDC Business Scale Retail Wholesale Focus on high-growth verticals: Targeting large enterprise customers: @ Online Mobile IoT Internet Fintech streaming Our Advantages: Our advantages:  Scalable IDCs located in tier-1 cities provide  Dedicated team with 20 years of experienc

  8. Slide 8: Resource Pipeline to Support IDC Growth

    Resource Pipeline to Support IDC Growth IDC Pipeline Capacity (1) Tenure Status 1H2020 2H2020 FY2020 FY2021 Beijing East II Leased Under Construction ~1,600 ~1,600 Beijing West Phase II Leased Extension ~1,100 ~1,100 Beijing South Phase II Leased Under Construction ~1,100 Guangzhou SC Phase II Lease

  9. Slide 9: Ongoing Development of Wholesale Projects

    Ongoing Development of Wholesale Projects Initial Capacity ~ 3,000 R Client Commitment Alibaba Jiangsu III Jiangsu 1st Phase Expected Delivery Date 1H 2020 Jiangsu Campus Total Capacity > 6,000 R Total Capacity ~ 500 R Pre-commitment Rate N/A Jiangsu II Pre-commitment Rate 95% 1st Phase Expected Del

  10. Slide 10: Nationwide IDC Network Focusing on Tier-1 and Satellite Cities

    Nationwide IDC Network Focusing on Tier-1 and Satellite Cities # of Self-built Cabinets % Contribution Beijing ~17,800 56% Shanghai & Hangzhou ~5,000 16% Guangzhou & Shenzhen ~5,700 18% 56% Others ~3,500 10% Total 32,047 100% 16% 18% BJ 1 BJ 7 SH 1 GD 1 Source: Company Data as 31st Dec 2019. Note: T

  11. Slide 11: Investment Highlights

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  12. Slide 12: Investment Highlights

    Investment Highlights Hypergrowth Market for IDC Services in China Trusted Brand & Clear Leadership High Barriers to Entry Recurring Revenue & Diversified Customers Sustainable Growth & Profitability Strong Support from Shareholders & Partners 12

  13. Slide 13: Hypergrowth Market for IDC Services in China

    Hypergrowth Market for IDC Services in China Continuing Drivers of Demand China IDC Market Size (US$ bn) Internet Connectivity Cloud Computing Strong growth in mobile Demand for data centers internet penetration, being driven by huge Internet-of-things, growth in cloud Artificial Intelligence (AI),

  14. Slide 14: Trusted Brand and Clear Leadership

    Trusted Brand and Clear Leadership Secure & Reliable Data Centers Interconnectivity Hypersensitive Detection Highly Secure Buildings 99.9% Internet 99.9% power uptime & Supervision & Data Floors connectivity uptime Certifications ISO/IEC ISO/IEC ISO OHSAS GB/T22239- TCS ISO 22301 ISO 14001 20000 270

  15. Slide 15: Trusted Brand and Clear Leadership

    Trusted Brand and Clear Leadership 5% Leading Carrier-neutral IDC Service Provider in China China IDC Market Share in 2018 (1) ◼ 50+(2) premium data centers in 20+(2) cities ◼ 36,291(2) cabinets, 88%(2) self-built cabinets ◼ Connected to major carriers, non-carriers, and ISPs 15% ◼ Estimated capacit

  16. Slide 16: High Barriers to Entry

    High Barriers to Entry Resources ◼ Government-approved licenses or permits as prerequisites for data center, cloud, and VPN ◼ Access to limited power quota in tier-1 cities with high data center demand Funding Operating Efficiency ◼ Significant capital required to fund IDC ◼ Experienced operators ab

  17. Slide 17: Recurring Revenue and Diversified Customers

    Recurring Revenue and Diversified Customers ◼ ~2,000 enterprise customers: 70% Internet customers and 30% GOE & Financial customers ◼ Over 90% of net revenues were recurring revenues since IPO ◼ Maintain low concentration of risk with top 20 customers contributing 26.7% of total revenues in 4Q19 Sou

  18. Slide 18: Sustainable Growth and Profitability

    Sustainable Growth and Profitability +11.5% +14.3% +11.4% FY16: 2,669 FY17: 2,975 FY18: 3,401 FY19: 3,789 Key Growth Drivers (CNY mm) 1,048 ◼ Increase in cabinet capacity 981 828 870 902 872 888 ◼ Improvement in Hosting MRR(1) due to 759 766 801 699 703 707 743 higher adoption of value-added service

  19. Slide 19: Strong Support from Shareholders and Partners

    Strong Support from Shareholders and Partners Shareholders ■ TUS Holdings is an S&T investment holdings group established in ■ In 2014, a combined strategic investment from Kingsoft, Temasek, reliance on Tsinghua University and Xiaomi ■ TUS Holdings has been a controlling shareholder and strategic ■

  20. Slide 20: Financial Overview

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  21. Slide 21: 4Q19 Financial Highlights

    4Q19 Financial Highlights CNY'000 4Q18 3Q19 4Q19 YoY QoQ Net revenues 901,887 980,969 1,048,119 16.2% 6.8% Gross profit 246,341 222,555 247,871 0.6% 11.4% Adjusted cash gross profit(1) 409,214 396,731 425,887 4.1% 7.3% Adjusted cash gross margin 45.4% 40.4% 40.6% -4.7 bps 0.2 bps Adjusted EBITDA(2)

  22. Slide 22: 2019 Full Year Financial Highlights

    2019 Full Year Financial Highlights 2019 vs. 2018 CNY'MM 2017 2018 2019 YoY Revenues 2,975 3,401 3,789 11.4% Gross profit 845 945 939 -0.6% Adjusted cash gross profit(1) 1,248 1,513 1,633 8.0% Adjusted cash gross margin 42.0% 44.5% 43.1% -1.4 pp Adjusted EBITDA(2) 671 918 1,050 14.5% Adjusted EBITDA

  23. Slide 23: Revenue Growth Supported by Capacity, MRR, & Utilization

    Revenue Growth Supported by Capacity, MRR, & Utilization Net Revenues & Cabinets (1) IDC MRR per Cabinet (2) (Net Revenues in CNY mm) (CNY) 1,048 8,788 8,663 8,711 8,822 981 8,271 8,384 8,457 902 7,905 872 888 36,291 31,111 32,116 4,244 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 30,654 30,578 4,849 Uti

  24. Slide 24: Margin Improvements Through Efficiency Enhancement

    Margin Improvements Through Efficiency Enhancement Adjusted Cash Gross Profit & Margin (1) Adjusted EBITDA & Margin (2) (CNY mm) (CNY mm) 44.5% 45.4% 42.0% 43.1% 40.6% 27.0% 27.7% 28.3% 25.2% 22.6% 1,633 1,513 1,248 1,050 918 671 409 426 255 264 2017 2018 2019 4Q18 4Q19 2017 2018 2019 4Q18 4Q19 Adju

  25. Slide 25: CAPEX Plan for Business Expansion

    CAPEX Plan for Business Expansion Capital Expenditures (1) Capital Expenditures Policy (CNY mm) ■ 2020 Total Capex range: RMB 2.4bn –2.8bn, including property purchase, building construction and strengthening and IDC equipment procurement ■ Additional Capex for other potential land parcel purchases

  26. Slide 26: Capital Structure, Credit Stats, & Cash Flow

    Capital Structure, Credit Stats, & Cash Flow Gearing Ratio Operating Cash Flow (CNY mm) 63.3% 51.9% 47.5% 705 707 487 (1) (2) 2017 2018 2019 2017 2018 2019 Total Debt (3) / Adjusted EBITDA Adjusted EBITDA Interest Coverage (4) 4.3x 4.8x 3.4x 3.6x 2.5x 3.2x 2017 2018 2019 2017 2018 2019 Source: Compa

  27. Slide 27: Guidance

    Guidance CNY mm 1Q19 A 4Q19 A 1Q20 E YoY(1) Revenues 872 1,048 1,070 – 1,090 24% Adjusted EBITDA 254 264 245 – 265 0.6% CNY mm 2019 A 2020 E YoY(1) Revenues 3,789 4,600 – 4,800 24% Adjusted EBITDA 1,050 1,250 – 1,350 24% Source: Company filings. 1. YoY represents the midpoints of the guidance ranges

  28. Slide 28: Appendix

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  29. Slide 29: Shareholding Structure

    Shareholding Structure ◼ Major beneficial ownership of our ordinary shares, as of Feb 28, 2019; Principal Shareholders: % of Share Holding % of Voting Power Tuspark Innovation Venture Ltd. 21.2 50.9 Esta Investments Pte Ltd (Temasek) 9.6 2.9 King Venture Holdings Limited 8.5 9.9 Xiaomi Ventures Limi

  30. Slide 30: Thank You!

    Contact Information: Company website: Thank You! http://www.21vianet.com Email: IR@21vianet.com Leading carrier -neutral & cloud-neutral service provider IR Contacts: Rene Jiang in China Julia Jiang

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