VNET Group, Inc. · NASDAQ:VNET
VNET — Q2 2024 Earnings Presentation
33 slides from VNET's earnings presentation, Aug 28, 2024
Slide 1: Earnings Presentation for 2Q2024
VNET Group, Inc. Earnings Presentation for 2Q2024 August 28, 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by VNET Group, Inc. (the “Company”) solely for informational purposes and has not been independently verified. No representations, warranties or undertakings, express or implied, are made by the Company or any of its affiliates, advisers or representati
Slide 3: Gavin Shen, Rotating President of VNET
Gavin Shen Rotating President of VNET 3
Slide 4: 2Q 2024 Highlights
2Q 2024 Highlights Financials (in RMB) Liquidity (in RMB) Revenue: 1,994 million (+9.4% YoY) - Wholesale IDC Business: 402 million (+81.0% YoY) Unused Credit Line: 1,829 million Adjusted EBITDA: 574 million (+7.3% YoY) Cash Position (1) : 2,224 million Wholesale IDC Business Updates Retail IDC Busin
Slide 5: Largest IDC Customer Order Wins
Largest IDC Customer Order Wins Capacity Contracted Signing Time of Region IDC Code Customer Sector Project Type / Under MoU (MW) Contract / MoU 200 2Q24 Internet Wholesale Greater Beijing Area N-OR Campus 01 19 3Q24 IT Services Wholesale 16 3Q24 IT Services Wholesale Source: Company data 5
Slide 6: Differentiated Business Model with Comprehensive Offerings
Differentiated Business Model with Comprehensive Offerings Managed Hosting Services Cloud Services VPN Services (1) (IDC) • Co-location • Multi-protocol Label Switching (MPLS) & • Interconnectivity Software-defined Wide Area Network (SD-WAN) • Hybrid IT Services • Internet Access & Network Security
Slide 7: Dual-Core Growth Strategy of IDC Business
Dual-Core Growth Strategy of IDC Business Wholesale Retail Hyperscale IDC Interconnectivity Services Retail Colocation Full-stack Services Targeting hyperscalers which require huge amount of space and power to Covering large and loyalty customer base across verticals including: financial services, s
Slide 8: AI Demand and Capability
AI Demand and Capability Providing High-Power Liquid Cooling Solutions for AI Computing ü As an industry leader, the company provides customers with tailored high-performance computing solutions while remaining at the forefront of AI trends. Supporting AI Needs Across Multiple Industries ü Current r
Slide 9: Ulanqab Base Project
Ulanqab Base Project Total Planned IT Power Exceeding 1.2 GW A gigawatt-scale, hyperscale green computing cluster is planned to cover an area of over 638 square kilometers, with a total planned IT power exceeding 1.2 gigawatts. Currently secured orders exceeding 200 megawatts. This cluster will focu
Slide 10: Data Centers by Region
Data Centers by Region Wholesale Capacity In Service（332MW） Region % Yangtze River Delta 52.2% Greater Beijing Area 47.8% Total 100.0% Wholesale Capacity Under Construction（279MW） Ulanqab Region % Yangtze River Delta 45.8% BTH Greater Beijing Greater Beijing Area 54.2% Area Total 100.0% Xi‘an Wholes
Slide 11: Wholesale Data Centers at a Glance - New Growth Driver
Wholesale Data Centers at a Glance - New Growth Driver Total Capacity in Service & Capacity Utilized (MW) Utilization Rate (1) 332 332 332 75.9% 71.0% 63.4% 65.8% 290 55.4% 224 252 236 219 06/30/2023 09/30/2023 12/31/2023 03/31/2024 06/30/2024 161 142 Mature & Ramp-up Capacity Contribution & Utiliza
Slide 12: Wholesale Data Centers – Backlog Growth
Wholesale Data Centers – Backlog Growth 1,139 (MW) 1,028 +61 408 Company’s Expansion Pipeline to Support Long-term Growth Held for Future Development (Long-term) 347 Held for Future Development (Short-term) 120 Robust Infrastructure and Operational Capabilities Enabling -90 Rapid Capacity Expansion
Slide 13: Retail Data Centers at a Glance - Solid Foundation
Retail Data Centers at a Glance - Solid Foundation Total Capacity in Service (Cabinet) Utilization Rate (1) 53,702 52,200 52,233 52,068 52,177 3,771 3,814 3,740 3,565 3,661 62.0% 64.8% 64.0% 64.0% 63.7% 49,931 48,386 48,493 48,503 48,516 06/30/2023 09/30/2023 12/31/2023 03/31/2024 06/30/2024 06/30/2
Slide 14: Resource Pipeline for the Next 12 Months
Resource Pipeline for the Next 12 Months Region IDC Code Tenure Status 2024E Capacity (MW) 1H25 Capacity (MW) Total (MW) E-JS Campus 02 D Owned Under Construction 26 - 26 E-JS Campus 02 E Owned Under Construction 65 - 65 Yangtze River Delta E-JS Campus 03 Owned Under Construction - 30 30 E-JS04 Leas
Slide 15: Qiyu Wang, Chief Financial Officer of VNET
Qiyu Wang Chief Financial Officer of VNET 15
Slide 16: 2Q24 Financial Highlights
2Q24 Financial Highlights RMB MM 2Q23 1Q24 2Q24 YoY QoQ Net revenues 1,822 1,898 1,994 9.4% 5.0% Gross profit 343 411 425 24.0% 3.5% Adjusted cash gross profit (1) 743 766 787 6.0% 2.8% Adjusted cash gross margin 40.8% 40.3% 39.5% -1.3 pps -0.8 pps Adjusted EBITDA (2) 535 540 574 7.3% 6.3% Adjusted
Slide 17: Total Net Revenues Breakdown
Total Net Revenues Breakdown (RMB MM) 1,887 1,898 1,898 1,994 1,822 627 621 628 613 603 924 965 997 985 975 281 295 361 402 222 2Q23 3Q23 4Q23 1Q24 2Q24 Wholesale IDC Business (1) Retail IDC Business (1) Non-IDC Business (2) Source: Company data as of June 30, 2024 Notes: (1) IDC business refers to
Slide 18: Healthy Margins through Efficiency Enhancement
Healthy Margins through Efficiency Enhancement Adjusted Cash Gross Profit & Margin (1) Adjusted EBITDA & Margin (2) (RMB MM) (RMB MM) 40.8% 39.1% 39.1% 40.3% 39.5% 29.4% 26.9% 23.2% 28.4% 28.8% 766 787 574 743 738 742 535 508 540 440 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 Adjusted Cash Gr
Slide 19: Strong Liquidity Position
Strong Liquidity Position Net Operating Cash Flow Cash Position (1) (RMB MM) (RMB MM) 5,456 2,440 357 2,063 US$600 million Credit line availability: 1015 Convertible RMB 1,829 MM unused Senior Notes 1,388 2,989 Repurchase 1,185 5,099 2,224 799 1,708 88 673 (2) 1,425 2,989 (2) 878 ~1,800 2,136 673 1,
Slide 20: Well Laddered Debt Profile
Well Laddered Debt Profile Total Debt & Net Debt / TTM Adj. EBITDA (1) Debt Breakdown by Maturity (RMB MM) 5,785 6.4x 5.9x 5.5x 1,863 4.6x 3.9x 5.3x 4.6x 2,981 4.5x 3.9x 1,914 1,817 178 1,426 3,922 802 169 1.8x 1,736 160 109 1,257 1,005 693 2020 2021 2022 2023 2Q24 2024 end 2025 end 2026 end 2027 en
Slide 21: Capex Paid by Year
Capex Paid by Year Capital Expenditure (1) Highlights (RMB MM) FY2024 Revised Guidance: 5,000 - 5,500 n Within the RMB 1.88 billion capex for the first half of 2024, RMB 1.48 billion was used for wholesale business expansion. 4,060 3,991 3,352 3,578 n Our previous 2024 full-year capex guidance was f
Slide 22: Guidance
Guidance FY2024 Original FY2024 Revised RMB MM FY2023 Actual Implied YoY Implied YoY Guidance Guidance Revenues 7,413 7,800 - 8,000 5.2% - 7.9% Unchanged - Adjusted EBITDA 2,039 2,220 - 2,280 8.9% - 11.8% Unchanged - Capex 3,578 3,700 - 4,200 0.0% - 11.8% 5,000 - 5,500 39.7% - 53.7% Source: Company
Slide 23: ESG Initiatives – Commitment to Sustainability
ESG Initiatives – Commitment to Sustainability Commitment to achieve both targets of operational carbon neutrality and 100% renewable energy usage by 2030 Received A rating by MSCI, representing the highest ranking to-date in China’s Internet Services & Infrastructure industry Scored 53 by the S&P C
Slide 24: Appendix
tec GH VNET Appendix
Slide 25: Wholesale Capacity in Service – Yangtze River Delta
Wholesale Capacity in Service – Yangtze River Delta Capacity in Service Capacity Utilized Total Capacity Region IDC Code Tenure Utilization Rate (2) Commitment Rate (3) (MW) (MW) Committed (1) (MW) E-JS Campus 01 Phase 1 Owned 28 26 28 91.1% 99.7% E-JS Campus 01 Phase 2 Owned 16 8 12 49.8% 75.2% E-J
Slide 26: Wholesale Capacity in Service – Greater Beijing Area
Wholesale Capacity in Service – Greater Beijing Area Capacity in Service Capacity Utilized Total Capacity Region IDC Code Tenure Utilization Rate (2) Commitment Rate (3) (MW) (MW) Committed (1) (MW) BJ15 Owned 9 4 7 39.1% 77.7% N-HB02 Phase 1 Owned 28 28 28 98.2% 99.3% N-HB02 Phase 2 Leased 19 13 19
Slide 27: Wholesale Capacity Under Construction & Held for Future Development
Wholesale Capacity Under Construction & Held for Future Development Under Construction Capacity Under Total Capacity Region IDC Code Tenure Pre-commitment rate (2) Ready for Service Construction (MW) Pre-committed (MW) (1) E-JS Campus 02 D Owned 26 26 (1) 100.0% 2H24 (2) E-JS Campus 02 E Owned 65 65
Slide 28: Key P&L Items
Key P&L Items Three months ended Amount in thousands June 30, 2023 March 31, 2024 June 30, 2024 RMB RMB RMB US$ Net revenues 1,821,744 1,898,126 1,993,760 274,351 Cost of revenues (1,478,995) (1,487,405) (1,568,865) (215,883) Gross profit 342,749 410,721 424,895 58,468 Sales and marketing expenses (
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations Three months ended Amount in thousands June 30, 2023 March 31, 2024 June 30, 2024 RMB RMB RMB US$ Gross profit 342,749 410,721 424,895 58,468 Plus: depreciation and amortization 400,173 352,604 364,616 50,173 Plus: share-based compensation expenses - 2,190 (2,190) (3
Slide 30: Key Balance Sheet Items
Key Balance Sheet Items As of As of Amount in thousands December 31, 2023 June 30, 2024 RMB RMB US$ Cash, cash equivalents and Restricted cash 5,098,987 2,135,833 293,900 Accounts and notes receivable, net 1,715,975 1,802,572 248,042 Property and equipment, net 13,024,393 14,281,580 1,965,211 Land u
Slide 31: Key Cash Flow Items
Key Cash Flow Items Three months ended Amount in thousands June 30, 2023 March 31, 2024 June 30, 2024 RMB RMB RMB US$ Net cash generated from operating activities 423,476 267,587 405,204 55,758 Net cash used in investing activities (1,051,510) (650,940) (1,027,098) (141,334) Net cash (used in) gener
Slide 32: Definitions
Definitions Term Definition IDC business refers to managed hosting services, consisting of the wholesale IDC business and the retail IDC business. Beginning in the first quarter of 2024, our IDC business was IDC Business subdivided into wholesale IDC business and retail IDC business according to the
Slide 33: THANKS!
THANKS! http://ir.vnet.com Email: [email protected] IR Contact: Xinyuan Liu