Kingdee International Software Group Co., Ltd. · HKEX:268

Kingdee International Software — H1 2021 Earnings Presentation

44 slides from Kingdee International Software's earnings presentation, Aug 19, 2021

  1. Slide 1: Kingdee International Software Group 2021 Interim Results Announcement

    Kingdee International Software Group 2021 Interim Results Announcement Stock Code: 268.HK 19 August 2021

  2. Slide 2: Business Highlights

    Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 2

  3. Slide 3: Business Highlights

    Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 3

  4. Slide 4: Financial Summary

    Financial Summary Group Revenue Cloud Service ERP & Others Revenue Revenue (RMB mn) 935 1,238 1,872 311 +55% +35% 589 634 1,485 1,387 798 550 2019 1H 2020 1H 2021 1H 2019 1H 2020 1H 2021 1H 2019 1H 2020 1H 2021 1H KIS & K/3 Wise revenue 2019 1H-2021 1H CAGR: +12.3% 2019 1H-2021 1H CAGR: +50.0% 2019

  5. Slide 5: Growth of Cloud Services

    Growth of Cloud Services +55.1% 57.5% 66.1% Cloud Services in 2020 1H Cloud Services in 2021 1H 5

  6. Slide 6: Growth of Cloud Subscription

    Growth of Cloud Subscription Subscription ARR +71.5% 1.27bn 740mn 2020/6/30 2021/6/30 Subscription ARR reflects approximate annualized recurring revenue from Kingdee Cloud subscription services. 6

  7. Slide 7: Key Financial Drivers - OPEX

    Key Financial Drivers - OPEX S&M G&A R&D as a % of total revenue as a % of total revenue as a % of total revenue 47.4% 11.1% 33.4% -4.9pp -2.5pp +7.6pp RMB 888mn RMB 208mn RMB 625mn +22.3% y-y growth +9.7% y-y growth +74.3% y-y growth 7

  8. Slide 8: Key Financial Drivers – R&D expenditure & expenses

    Key Financial Drivers – R&D expenditure & expenses R&D expenditure R&D capitalization R&D expenses rate 625 (Rmb mn) 77.3% (Rmb mn) 668 +71% 188 62.4% +74% 358 390 340 252 34.2% 2019 1H 2020 1H 2021 1H 2019 1H 2020 1H 2021 1H 2019 1H 2020 1H 2021 1H R&D expense impact due to lower capitalization rat

  9. Slide 9: Key Financial Drivers – Net Profit, Operating Cash Flow

    Key Financial Drivers – Net Profit, Operating Cash Flow Net profit attributable to Net Operating Cash shareholders Flow (Rmb mn) 2020 1H 2021 1H 2020 1H 2021 1H -82 -97 -224 -248 9

  10. Slide 10: Growth of Cloud Contract Liabilities

    Growth of Cloud Contract Liabilities (RMB’000) 2021 1H 2020 1H Change Subscription 1,007,563 552,868 82.2% Others 236,473 158,617 49.1% Total Cloud Contract Liabilities 1,244,036 711,485 74.9% 10

  11. Slide 11: Kingdee Cloud Cosmic / Constellation

    e °. Kingdee e .. °*. Kingdee CioudCosmic e *, Kingdee CloudConstelation

  12. Slide 12: Cosmic & Constellation – EBC Cloud for Large Enterprises

    Cosmic & Constellation – EBC Cloud for Large Enterprises Newcustomers Upsellcustomers Total contract value Pernew customer 2021.6 2016.7 2018.8.8 2019.11 2020.11 V4.0 Launch & Brand Upgrade R&D Launch V1.0 Launch V2.0 Launch V3.0 Launch 12

  13. Slide 13: Cosmic & Constellation Milestone Achievement

    Cosmic & Constellation Milestone Achievement Global HR System Phase One officially on-boarded. Huawei and Kingdee will continue to move forward with the system, jointly building the digital capability for the future Cosmic-based integrated ERP on-boarded on 1 Jan 2021. With stable performance, it su

  14. Slide 14: Cosmic & Constellation Customer Analysis

    Cosmic & Constellation Customer Analysis Cloud technology Customer Origin Customer Industry 2% 10% 3% 4% 33.6% 38% 42.5% 4% 44% 5% 56% 6% 7% 10% 11% 23.9% Manufacturing Retail & Wholesale Kingdee new customers Construction & Real Estate Agriculture Public Cloud Hybrid Cloud Kingdee ERP upgrade Finan

  15. Slide 15: Cosmic & Constellation Subscription Distribution

    Cosmic & Constellation Subscription Distribution 6% 2% 1% 9% 23% 39% 14% 38% 37% 32% Cosmic Platform Finance/Accounting Cosmic Platform Finance/Accounting Supply Chain Construction & Real Estate Supply Chain Construction & Real Estate Tax Manufacturing 2020 1H 2021 1H 15

  16. Slide 16: Cosmic PaaS Portfolio

    Cosmic PaaS Portfolio Work Flow Integration Block Chain Cloud Service Cloud Cloud 4 apps 2 apps 3 apps • Work flow service • Integration • Block chain control • Business flow service management center • Message center • Data center • Block chain deploy • Business center service • Block chain deposit

  17. Slide 17: Constellation SaaS Portfolio

    Constellation SaaS Portfolio Finance Supply Chain Manufacturing Project Cloud Cloud Cloud Cloud 71 apps 40 apps 31 apps 10 apps • Financial Accounting Cloud • Production Manufacturing Cloud • Enterprise Performance • Purchase Cloud • Project initiation • Sales Cloud • Manufacturing coordination Clou

  18. Slide 18: Cosmic PaaS: High productivity PaaS for Enterprises

    Cosmic PaaS：High productivity PaaS for Enterprises (Enterprise Performance, Financial, Capital , Human , Collaborative , Project , Channel , Supplier Collaboration , SaaS Supply Chain , Manufacturing , Industry ) Cloud. High Kingdee Cloud Cosmic SaaS + PaaS Core Services APPLICATION DEVELOPMENT APPL

  19. Slide 19: Cosmic PaaS: Integration with Major Cloud Players

    Cosmic PaaS: Integration with Major Cloud Players 19

  20. Slide 20: Kingdee Cloud Galaxy

    e °. Kingdee e ... °*. Kingdee CloudGalaxy

  21. Slide 21: Galaxy – EBC Cloud for High-growth Enterprises

    Galaxy – EBC Cloud for High-growth Enterprises Life Science customers +45% y-y High-Tech dollar retention ARR significantimprovement customer retention sincebreakeven Manufacturing 21

  22. Slide 22: Galaxy Customer Analysis

    Galaxy Customer Analysis Customer subscription distribution 2021 1H new customers mix 28% 23% of customers have 2 of customers have 3+ solutions solutions On-premise upgrade to Cloud 97.3% 22.4% 54.3% 21.4% 4.3% 1.0% 77.6% 22

  23. Slide 23: Galaxy SaaS Portfolio

    Galaxy SaaS Portfolio Finance Supply Chain PLM Manufacturing Cloud Cloud Supply Chain Cloud Manufacturing Cloud Cloud Cloud 35apps 10apps 10apps • General Ledger 24apps • Sales Mgmt • Engineering Data Mgmt • Smart Accounting • R&D Project Mgmt • Purchase Mgmt • Manufacturing Mgmt Platform • Design D

  24. Slide 24: Kingdee Cloud Stellar / Jingdou

    e °. Kingdee e |. *. Kingdee CoudStelar @ .. °. Kingdee CloudJingdou

  25. Slide 25: Stellar & Jingdou Overview

    Stellar & Jingdou Overview customers Launched in 2020 customers customer retention 25

  26. Slide 26: Stellar & Jingdou SaaS Portfolio

    Stellar & Jingdou SaaS Portfolio Operation Finance Eco-system Data Service 5apps 2apps 8apps 8apps • Customization • Lite Analysis • Retail Cloud (Unmanned • Finance Cloud Development Platform • Smart Reporting Store, Cashier Free, Code • Tax Cloud • Open API • Business Dashboard Scan Purchase) • AP

  27. Slide 27: Cloud Market Update

    Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 27

  28. Slide 28: China Enterprise Application SaaS Market Trend

    China Enterprise Application SaaS Market Trend EA SaaS market CAGR in PRC EA SaaS Market Forecast, 2020-2024($ M) 37.5% 2020-2025: 14000 35.4% 35.0% 32.6% 30.4% The EA SaaS market in China is becoming more and 12000 28.2% more mature, which is mainly focused on the 10000 following four sections 8000

  29. Slide 29: Cloud Market Recognitions

    Cloud Market Recognitions • Only Chinese enterprise SaaS vendor ranked top- five market share in Gartner’s 2020 Application Platform Software • Only Chinese enterprise SaaS vendor selected into Gartner’s Global Market Guide for Cloud ERP • Only Chinese vendor won IDC’s 2020 Global SaaS Customer Sati

  30. Slide 30: Cloud Strategy Update

    Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 30

  31. Slide 31: Core Strategy - Platform + Finance & HR & Tax + Ecosystem

    Core Strategy - Platform + Finance & HR & Tax + Ecosystem (including Finance CONGLOMERATES TRANSPORTATION COSTRUCTION & PROPERTIES AGRICULTURE TOBACCO ENERGY MORDEN & LOGISTICS STEEL Large Enterprises … LIFE SCIENCES FOOD & DAILY CHEMICALS RMB4bn+ WHOLESALE & RETAIL MANUFACTURING ） High Tech CATERIN

  32. Slide 32: Xu Shaochun’s WeChat Public Account

    Xu Shaochun’s WeChat Public Account In 2021 1H, received ~5,000 In 2021 1H, received 240+ customer effective inquiries, and over 85% appreciation letters (+110% y-y) and were product and service related. customer complaints decreased by 40% yoy 这个数字化转型模型总结的好，可以 作为企业数字化转型的程序指引。 徐董，有数字化转型哲学手册 模版吗？ 32

  33. Slide 33: Subscription ARR Three-Year Target

    Subscription ARR Three-Year Target 3.3bn (RMB) 2021-23 CAGR 50% ~1bn ~630mn 2019 2020 2021 2022 2023 33

  34. Slide 34: Cloud Services Revenue Guidance

    Cloud Services Revenue Guidance (RMB mn) 3,000 45%+ Guidance: 2,500 2021 Cloud 2,000 services revenue 1,500 up by yoy 1,000 500 0 2015 2016 2017 2018 2019 2020 2021 34

  35. Slide 35: CFO Report

    Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 35

  36. Slide 36: Financial Overview

    Financial Overview Revenue 1,872,399 1,387,445 35.0% Cost of Sales -698,266 -496,951 40.5% Gross Margin 62.7% 64.2% -1.5pp Total Operating Expenses -1,747,844 -1,295,076 35.0% Other Income & Gains 219,127 151,020 45.1% Operating Profit -354,584 -253,562 39.8% Operating Margin -18.9% -18.3% NA Financ

  37. Slide 37: Appendix

    Business Cloud Market Cloud Strategy CFO Report Appendix Highlights Update Update 37

  38. Slide 38: Total Revenue by Segments

    Total Revenue by Segments % of Total % of Total (RMB’000) 2021 1H 2020 1H Change Revenue Revenue Cloud services business 1,238,258 66.1% 798,376 57.5% 55.1% ERP and Others 634,141 33.9% 589,069 42.5% 7.7% - Sale of software licenses 254,664 13.6% 206,479 14.9% 23.3% - Maintenance & Services 379,477

  39. Slide 39: Software License by Segments

    Software License by Segments % of Total % of Total (RMB’000) 2021 1H 2020 1H Change Revenue Revenue EAS Cloud 133,351 7.1% 117,892 8.5% 13.1% KIS 57,823 3.1% 51,031 3.7% 13.3% Others 63,490 3.4% 37,556 2.7% 69.1% Total software license 254,664 13.6% 206,479 14.9% 23.3% turnover 39

  40. Slide 40: R&D Expenses

    R&D Expenses (RMB’000) 2021 1H 2020 1H Change Salaries and staff welfare 622,325 344,589 80.6% Fixed costs 21,372 15,693 36.2% Option & restricted stock expense 16,431 25,219 -34.8% Travelling costs 5,810 3,116 86.5% Others 1,973 1,138 73.4% Total R&D costs 667,911 389,755 71.4% Less: development co

  41. Slide 41: Selling & Marketing Expenses

    Selling & Marketing Expenses (RMB’000) 2021 1H 2020 1H Change Salaries and staff welfare 573,398 441,623 29.8% Sales promotion & marketing 204,484 186,361 9.7% Fixed costs 41,930 34,578 21.3% Travelling expenses 31,138 23,622 31.8% Business advertising expenses 15,409 17,460 -11.7% Project cooperati

  42. Slide 42: Administrative Expenses

    Administrative Expenses (RMB’000) 2021 1H 2020 1H Change Salaries and staff welfare 129,217 116,294 11.1% Option & restricted stock expenses 29,989 39,599 -24.3% Fixed costs 21,298 13,947 52.7% Professional service costs 16,974 10,893 55.8% Employee recruitment and training 4,254 3,092 37.6% expense

  43. Slide 43: Other Gains

    Other Gains (RMB’000) 2021 1H 2020 1H Change VAT refund 69,655 52,540 32.6% Government projects 22,761 15,289 48.9% Rental income - net 35,915 38,634 -7.0% Others 90,796 44,557 103.8% Total 219,127 151,020 45.1% VAT % of Total Revenue 3.7% 3.8% 43

  44. Slide 44: Thanks

    . Kingdee VOUAM pees >? a ARALARAG © 1993-2021 ease HEAIS IRAE)

Kingdee International Software Group — H1 2021 Earnings Presentation on 6ix