VNET Group, Inc. · NASDAQ:VNET
VNET — 21Vianet Group — Investor Presentation (May 2019)
26 slides from VNET's investor presentation, May 2019
Slide 1: 21Vianet Group, Inc. Investor Presentation
21Vianet Group, Inc. Investor Presentation May, 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 May 15, 2019) $ 7.97 Market Cap $ 892 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: 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 6: Investment Highlights
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Slide 7: 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 7
Slide 8: 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 9: Trusted Brand and Clear Leadership
Trusted Brand and Clear Leadership 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 22301 ISO
Slide 10: Trusted Brand and Clear Leadership (cont.)
Trusted Brand and Clear Leadership (cont.) China IDC Market Share in 2017 (1) Carrier-Neutral accounts for 44% 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 21
Slide 11: 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 12: Recurring Revenue and Diversified Customers
Recurring Revenue and Diversified Customers Low average quarterly hosting churn rate for core IDC business, consistently below 1% on quarterly basis Recurring revenues contributing to over 90% of net revenues since IPO Low concentration risk with top 20 customers contributing 34% of revenue in
Slide 13: Sustainable Growth and Profitability
Sustainable Growth and Profitability +11.5% +14.3% Key Growth Drivers FY16: 2,669 FY17: 2,975 FY18: 3,401 (CNY mm) • Increase in cabinet capacity 828 870 902 801 670 699 703 707 743 759 766 • Improvement on Hosting 596 MRR(1) due to higher adoption of value-added services and high power density cabi
Slide 14: Strong Support from Shareholders and Partners
Strong Support from Shareholders and Partners ■ In 2014, a combined strategic investment from Kingsoft, Temasek and Xiaomi ■ TUS Holdings is an S&T investment holdings Shareholders group established in reliance on Tsinghua ■ As of Dec 31, 2018, Xiaomi has become the single largest customer of the co
Slide 15: Strong Support from Shareholders and Partners (cont.)
Strong Support from Shareholders and Partners (cont.) ➢ 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 Limit
Slide 16: Financial Overview
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Slide 17: 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) 8,788 870 902 872 8,384 8,457 828 8,271 801 7,697 7,817 7,766 7,905 30,303 30,654 30,578 29,035 29,149 4,942 4,943 4,867 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19
Slide 18: Margin Improvements through Efficiency Enhancement
Margin Improvements through Efficiency Enhancement Adjusted Cash Gross Profit & Margin (1) Adjusted EBITDA & Margin (2) (CNY mm) (CNY mm) 46.6% 44.5% 43.4% 29.1% 42.0% 27.0% 24.5% 22.5% 17.1% 1,513 1,248 918 671 347 407 457 196 253 2017 2018 1Q18 1Q19 2016 2017 2018 1Q18 1Q19 Adjusted Cash Gross Pro
Slide 19: CAPEX Plan For Business Expansion
CAPEX Plan For Business Expansion Capital Expenditures (1) Capital Expenditures Policy (CNY mm) • We estimate that our data center capital expenditures in ~130 2019 will be within the range of RMB700 - 900 million, which means 5,000 - 7,000 self-built cabinets addition, mostly in Tier-1 cities; • We
Slide 20: Capital Structure, Credit Stats and Cash Flow
Capital Structure, Credit Stats and Cash Flow Total Debt (1) / Adjusted EBITDA Adjusted EBITDA Interest Coverage (2) 9.9x 4.9x 4.8x 4.3x 4.4x 3.4x 2.5x 2.4x 2.3x 1.4x (4) (4) 2015 2016 2017 2018 Mar 19 2015 2016 2017 2018 1Q19 Operating Cash Flow (CNY mm) Healthy Working Capital 705 Improved Margin
Slide 21: 1Q19 Financial Highlights
1Q19 Financial Highlights CNY'000 1Q18 4Q18 1Q19 YoY QoQ Net revenues 800,765 901,887 871,859 8.9% -3.3% Gross profit 227,902 246,341 240,775 5.6% -2.3% Adjusted cash gross profit(1) 347,478 409,214 406,670 17.0% -0.6% Adjusted cash gross margin 43.4% 45.4% 46.6% 3.2 bps 1.2 bps Operating (loss)/pro
Slide 22: Guidance
Guidance CNY mm 2Q18 A 1Q19 A 2Q19 E YoY(1) Revenues 828 872 880 - 900 7.5% Adjusted EBITDA 221 253 250 - 270 17.6% CNY mm 2018 A 2019 E YoY(1) Revenues 3,401 3,760 – 3,860 12.0% Adjusted EBITDA 918 1,000 – 1,100 14.4% Source: Company filings 1. YoY represents the midpoints of the guidance ranges co
Slide 23: Three-Year Plan
Three-Year Plan IDC Pipeline Capacity (1) Status 2019 2020 2021 Beijing West Under Construction ~1,900 ~1,900 Beijing East I Under Construction ~1,300 Beijing East II Under Construction ~2,200 Beijing South Acquisition ~1,000 Chengdu Acquisition ~500 Shanghai SJ Under Construction ~1,400 ~1,600 Jian
Slide 24: 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 25: Appendix
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Slide 26: Our Nationwide Data Centers
Our Nationwide Data Centers BJ 1 BJ 7 63% 19% 18% SH 1 SZ 2 SH 4 GD 1 ZJ 2 Source: Company Data as 31st Dec 2018. 26 The demographic displayed on the map only represent the range of company’s self-built data center.