VNET Group, Inc. · NASDAQ:VNET
VNET — 21Vianet Group — Investor Presentation (November 2019)
29 slides from VNET's investor presentation, November 2019
Slide 1: 21Vianet Group, Inc. Investor Presentation
21Vianet Group, Inc. Investor Presentation November, 2019
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 8th Nov, 2019) $ 8.31 Market Cap $ 934 Million
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: 3Q19 Highlights
3Q19 Highlights 13% YoY 6% YoY Strong net revenue growth total capacity growth males momentum 11% YoY 1,813 2,000 adjusted EBITDA(1) growth cabinet net adds cabinets sales backlog Source: Company filings. 1. Adjusted EBITDA defined as EBITDA excluding share-based compensation expenses, changes in th
Slide 6: Comprehensive Customized Solutions
Comprehensive Customized Solutions IDC Services Core Business Product Offering 60%-70% of total revenue Our Advantages Co-location Multi-carrier & multi-cloud connectivity Inter-connectivity High-performing facility & network Hybrid IT service Turn-key solutions tailored for customer nee
Slide 7: Dual-core Strategy for IDC Business
Dual-core Strategy for IDC Business New Retail Wholesale Focus on high growth verticals: Targeting large enterprise customers: @ Online Smartphone Internet Fintech streaming IoT Provide turn-key solutions that include IT Dedicated team with 20 years of structure strategic planning, experience in
Slide 8: Pipeline Status
Pipeline Status IDC Pipeline Capacity (1) Tenure Status 2019 2020 2021 Chengdu Leased Ready for Sale ~500 Beijing South Leased Ready for Sale ~1,000 Beijing West Leased Under Construction ~1,900 ~1,900 Beijing East I Leased Under Construction ~1,300 Beijing East II Leased Under Construction ~2,200 S
Slide 9: Wholesale Projects Development
Wholesale Projects Development Initial Capacity ~ 2,000 R Client Commitment Alibaba Jiangsu III Jiangsu 1st Phase Expected Delivery 1H 2020 Jiangsu Campus Total Capacity > 8,000 R Pre-commitment Rate N/A Total Capacity ~ 500 R Jiangsu II 1st Phase Expected Delivery 2H 2020 Pre-commitment Rate 95% Zh
Slide 10: Nationwide IDC Service Provider with Focus on Tier-1 and Quasi-Tier-1 Cities
Nationwide IDC Service Provider with Focus on Tier-1 and Quasi-Tier-1 Cities # of Self-built Cabinets % Contribution Beijing 14,892 55% Shanghai & Hangzhou 4,010 15% 55% Guangzhou & Shenzhen 3,282 12% Xian & Chengdu 2,621 10% 15% Others 2,462 9% 12% Total 27,267 100% BJ 1 BJ 7 SH 1 GD 1 Source: Comp
Slide 11: Investment Highlights
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Slide 12: Investment Highlights
Investment Highlights Hyper Growth Market for IDC Services in China Trusted Brand and Clear Leadership High Entry Barriers Recurring Revenue & Diversified Customers Sustainable Growth & Profitability Strong Support from Shareholders and Partners 12
Slide 13: Hyper Growth Market for IDC Services in China
Hyper Growth Market for IDC Services in China Continuing Drivers of Demand China IDC Market Size (US$ bn) Internet Connectivity Cloud Computing Strong growth in mobile internet Data centre demand 35.4 penetration, Internet- driven by the huge 28.5 of-things, Artificial growth of cloud 23.0 18.5 Inte
Slide 14: Trusted Brand and Clear Leadership
Trusted Brand and Clear Leadership China IDC Market Share in 2017 (1) Carrier-Neutral accounts for 46% Market (1) Carrier-Neutral Market: top 6 players represent ~70% share in Tier-1 cities (1) 21Vianet Other Carrier-neutral Carrier A 16% 25% 30% or Carries- Market Size YoY Growth neutral 21Vianet $
Slide 15: Trusted Brand and Clear Leadership (cont.)
Trusted Brand and Clear Leadership (cont.) Certification We build and operate our data centers in compliance with high industry standards in order to provide our customers with secure and reliable environments necessary for optimal internet interconnectivity. Inter- ISO/IEC 20000 ISO/IEC 27001 ISO 2
Slide 16: High Entry Barriers
High Entry Barriers Resources Government-approved licenses or permits as prerequisites for data center, cloud and VPN Operating Efficiency Access to limited power quota in Tier-1 cities with Experienced operators being able to build and operate high data center demand data centers with low PUE
Slide 17: Recurring Revenue and Diversified Customers
Recurring Revenue and Diversified Customers Around 2,000 enterprise customers, 70% of Internet customers, and 30% GOE & Financial customer Recurring revenues contributing to over 90% of net revenues since IPO Low concentration risk with top 20 customers contributing 29.2% of revenue in 3Q19 So
Slide 18: Sustainable Growth and Profitability
Sustainable Growth and Profitability +11.5% +14.3% +10.9% min FY16: 2,669 FY17: 2,975 FY18: 3,401 FY19 min: 3,771 Key Growth Drivers (CNY mm) • Increase in cabinet capacity • Improvement on Hosting 981 828 870 902 872 888 MRR(1) due to higher adoption 759 766 801 670 699 703 707 743 of value-added s
Slide 19: Strong Support from Shareholders and Partners
Strong Support from Shareholders and Partners ■ TUS Holdings is an S&T investment holdings ■ In 2014, a combined strategic investment from Kingsoft, Temasek and Xiaomi Shareholders group established in reliance on Tsinghua University focusing on S&T services ■ As of Dec 31, 2018, Xiaomi has become t
Slide 20: Financial Overview
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Slide 21: 3Q19 Financial Highlights
3Q19 Financial Highlights CNY'000 3Q18 2Q19 3Q19 YoY QoQ Net revenues 870,068 888,020 980,969 12.7% 10.5% Gross profit 241,195 228,248 222,555 -7.7% -2.5% Adjusted cash gross profit(1) 391,940 403,809 396,731 1.2% -1.8% Adjusted cash gross margin 45.0% 45.5% 40.4% -4.6 bps -5.0 bps Operating profit
Slide 22: Revenue Growth Supported by Capacity, MRR & Utilization
Revenue Growth Supported by Capacity, MRR & Utilization Net Revenues & Cabinets (1) IDC MRR per Cabinet (2) (CNY) (Net Revenues in CNY mm) 8,788 8,663 8,711 981 8,271 8,384 8,457 902 7,817 7,766 7,905 870 872 888 32,116 30,303 30,654 30,578 31,111 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4,849 4
Slide 23: 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% 45.0% 28.2% 27.8% 41.9% 27.0% 40.4% 22.6% 1,513 1,248 918 671 392 397 245 273 2017 2018 3Q18 3Q19 2017 2018 3Q18 3Q19 Adjusted Cash Gross Profit Margin % Ad
Slide 24: CAPEX Plan For Business Expansion
CAPEX Plan For Business Expansion Capital Expenditures (1) Capital Expenditures Policy (CNY mm) • 2019 Total Capex range: RMB1.4 bn - RMB1.6 bn: - RMB800 mm - RMB1,000 mm associated with 6,000 - ~600 8,000 self-built cabinets addition, mostly in Tier-1 cities; - RMB600 mm for IDC capacity expansion
Slide 25: Capital Structure, Credit Stats and Cash Flow
Capital Structure, Credit Stats and Cash Flow Gearing Ratio (CNY mm) Operating Cash Flow 61.2% 55.5% 51.9% 44.8% 47.5% 705 487 217 262 58 (3) (3) (4) 2015 2016 2017 2018 Sep-19 2015 2016 2017 2018 9M19 Total Debt (1) / Adjusted EBITDA Adjusted EBITDA Interest Coverage (2) 9.9x 4.9x 4.8x 4.3x 3.4x 3.
Slide 26: Guidance
Guidance CNY mm 4Q18 A 3Q19 A 4Q19 E YoY(1) Revenues 901.9 981.0 1,030 – 1,050 15.3% Adjusted EBITDA 255.3 272.5 245 - 265 - CNY mm 2018 A 2019 E YoY(1) Revenues 3,401 3,771 – 3,791 11.2% Adjusted EBITDA 918 1,033 – 1,053 13.6% Source: Company filings 1. YoY represents the midpoints of the guidance
Slide 27: Thank You!
Contact Information: Company website: Thank You! http://www.21vianet.com Email: [email protected] IR Contacts: Rene Jiang Leading carrier -neutral & cloud - Julia Jiang neutral service provider in China
Slide 28: Appendix
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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
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