VNET Group, Inc. · NASDAQ:VNET
VNET — 21Vianet Group — Investor Presentation (June 2018)
28 slides from VNET's investor presentation, June 2018
Slide 1: 21Vianet Group, Inc. Investor Presentation
21Vianet Group, Inc. Investor Presentation June, 2018
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
Slide 3: At a Glance
At a Glance Inception Time In 1996 Listing Time Apr, 2011 Exchange / Ticker Nasdaq: VNET Price (as of Aug 15, 2018) $ 9.02 Market Cap $ 1.01 Billion
Slide 4: A Leading Internet Data Centre Services Provider in China
A Leading Internet Data Centre Services Provider in China Market • 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. Leadership • VNET is a leading carrier-neutral & cloud-n
Slide 5: Hyper Growth of China's Internet Traffic
Hyper Growth of China’s Internet Traffic Internet Traffic per Month Internet Traffic per Capita China has the world’s largest under-addressed IDC market with significant potentials driven by: (EB) 42.4 (GB) 30 China’s ever deepening Internet penetration accelerates the demand for online services. 11
Slide 6: IDC: One of the Fastest Growing Sectors
IDC: One of the Fastest Growing Sectors Internet Data Center (IDC) Market Size in China Carrier-Neutral IDC Market to Outgrow (US$ Bn) (US$ Bn) 5.50 2.52 28.5 23.0 18.5 14.4 10.9 7.9 1.25 2.98 2016 2017E 2018E 2019E 2020E 2021E 0.51 0.74 Major growth drivers are: more data generated 2011 2015 per in
Slide 7: 21Vianet's Market Leadership
21Vianet’s Market Leadership China IDC Market Share in 2016 (1) Carrier-Neutral accounts for 44% Market (1) Carrier-Neutral Market: top 6 players represent ~70% share in tier 1 cities (1) Other Carrier- 21Vianet Neutral Carrier A 18% 26% 32% Carrier- Market Size YoY Growth Neutral or Carrier C $7.9
Slide 8: Investment Highlights
=e ae Investment Highlight
Slide 9: Investment Highlights
Investment Highlights Trusted Brand and Clear Leadership Advanced Technology with Customized Solutions Recurring Revenue and Diversified Customers Sustainable Growth and Profitability Strong Support from Shareholders and Partners 9
Slide 10: Trusted Brand and Clear Leadership
1 Trusted Brand and Clear Leadership Awards We build and operate our data centers in compliance with high industry standards in order to provide our customers with • Well-Known Trademark Honor (“中国驰名商标”) in 2014 secure and reliable environments necessary for optimal internet interconnectivity. • Rel
Slide 11: Advanced Technology with Customized Solutions
2 Advanced Technology with Customized Solutions Product Offering Managed Hosting Inter- Hybrid IT Other value- VPN Service Cloud Service (colocation) connectivity Service added service Customers value the most: Our Advantages • Multi-carrier & multi-cloud connectivity • Network features numerous int
Slide 12: Recurring Revenue and Customer Concentration
3 Recurring Revenue and Customer Concentration Recurring revenues contributing to over 90% of our net revenues since 2015 Top 20 customers in 2Q18 Net Revenue % Top 5 Customers % of 2Q Revenue Internet Company 10.8% 34% e-Commerce 2.4% e-Commerce 2.3% 66% Social Media 2.2% Financial Service 2.2% Top
Slide 13: Recurring Revenue and Diversified Customers
3 Recurring Revenue and Diversified Customers Social Mobile Search Engine Financial & E-Commerce Rich Media Enterprise Networking Internet /Portal Insurance Source: Company filings. 13
Slide 14: Sustainable Growth and Profitability
4 Sustainable Growth and Profitability Net Revenues Adjusted EBITDA (CNY mm) (CNY mm) 828 221 801 196 759 766 743 171 176 171 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Source: 2Q2018 Company filings, for hosting and related services. 14
Slide 15: Strong Support from Shareholders and Partners
5 Strong Support from Shareholders and Partners Shareholders ■ Controlling shareholder and ■ In Dec, 2014, we received a combined strategic investment from Kingsoft, strategic investor since May, 2016 Temasek and Xiaomi ■ We provide hybrid IT services to Xiaomi and Kingsoft. ■ 21.4% stake, 50.9% vot
Slide 16: Strong Support from Shareholders and Partners
5 Strong Support from Shareholders and Partners Major beneficial ownership of our ordinary shares, as of March 31, 2018; Principal Shareholders: % of Share Holding % of Voting Power Tuspark Innovation Venture Ltd. 21.3 50.9 Esta Investments Pte Ltd (Temasek) 9.6 2.9 King Venture Holdings Limited 8
Slide 17: Our Nationwide Data Centers
Our Nationwide Data Centers BJ 7 BJ 1 65% SH 1 SZ 2 XA 5 GD 1 ZJ 2 Source: Company Data. 17 The demographic displayed on the map only represent the range of company’s self-built data center.
Slide 18: Financial Overview
Financial Overview
Slide 19: Revenue Growth Supported by Capacity, MRR & Utilization
Revenue Growth Supported by Capacity, MRR & Utilization Net Revenues & Cabinets (1) Hosting MRR per Cabinet (2) (Net Revenues in CNY mm) (CNY mm) 828 801 8,271 759 766 7,878 7,817 7,766 7,905 743 7,746 7,615 7,598 7,697 29,080 29,035 29,149 27,361 27,424 5,257 5,196 4,982 2Q16 3Q16 4Q16 1Q17 2Q17 3Q
Slide 20: Margin Improvements through Efficiency Enhancement
Margin Improvements through Efficiency Enhancement Adjusted Cash Gross Profit & Margin (1) Adjusted EBITDA & Margin (2) 26.7% (CNY mm) 43.4% 43.9% (CNY mm) 42.8% 24.5% 41.6% 41.8% 23.0% 23.2% 22.3% 364 221 347 318 320 196 294 176 171 171 1Q17 2Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Adjusted Cas
Slide 21: CAPEX Plan For Business Expansion
CAPEX Plan For Business Expansion Capital Expenditures (1) Estimated Investment Regions (CNY mm) 2018 Capacity Pipeline: - Two-thirds in North China 1,052 - One-third in East China wholesale projects 801 M&A 752 575 396 400 ~500 2013 2014 2015 2016 2017 2018E 2013 2014 2015 2016 2017 2018E The expen
Slide 22: Cash Positions & Liquidity
Cash Positions & Liquidity Operating Cash Flow (1) Adjusted EBITDA Interest Coverage (2) (CNY mm) 4.9x 402 325 3.4x 3.4x 2.4x 217 111 2Q 1.4x 96 84 1Q FY14 FY15 FY16 FY17 1H18 FY14 FY15 FY16 FY17 1H18 Source: Company filings. 1. The statistics displayed on the charts above for 2018 Q2 only represent
Slide 23: Financial Highlights
Financial Highlights CNY'000 2Q17 1Q18 2Q18 YoY QoQ Revenues 743,398 800,765 828,317 11.4% 3.4% Gross profit 221,374 227,902 229,433 3.6% 0.7% Adjusted cash gross profit(1) 318,194 347,478 364,008 14.4% 4.8% Adjusted cash gross Margin 42.8% 43.4% 43.9% - - Operating (loss)/profit 48,637 56,439 51,49
Slide 24: Guidance
Guidance CNY‘MM 2Q18 A 3Q18 E 3Q17 A YoY Revenues 828 840 - 860 759 10.7% - 13.3% Adjusted EBITDA 221 230 - 250 176 30.7% - 42.0% CNY‘MM Previous FY18 Updated FY18 FY17 A YoY Revenues 3,250 – 3,350 3,280 - 3,380 2,975 10.3% - 13.6% Adjusted EBITDA 750 - 830 800 - 880 671 19.2% - 31.1% Source: Compan
Slide 25: Thank You!
Contact Information: Company website: Thank You! http://www.21vianet.com Email: IR@21vianet.com IR Contacts: Rene Jiang Leading carrier -neutral & cloud - Julia Jiang neutral service provider in China
Slide 26: Appendix
Appendix
Slide 27: Key Milestones
Key Milestones Start-up Listed on NASDAQ Issued CNH 2bn 3-yr Received $388 million of strategy investment from TUS Holding Dim Sum Bond Awarded Well- Known Trademark Honour 1996 1999 2011 2012 2014 2015 2016 2017 First Data Centre Signed commercial Extend Commercial Divestitu
Slide 28: Business Restructuring Completed
Business Restructuring Completed Business Structure Before Sep 2017 Business Structure After Sep 2017 VNET Businesses (By Revenue %) VNET Businesses (By Revenue %) Hosting and Related Hosting and Related Services Services - IDC - IDC - Cloud - VPN - Cloud Managed - VPN Network Services Divest MNS Ad