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OneSmart International Education Group Limited Investor Presentation - - PowerPoint PPT Presentation
OneSmart International Education Group Limited Investor Presentation - - PowerPoint PPT Presentation
OneSmart International Education Group Limited Investor Presentation November 2018 Disclaimer This presentation contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act
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Section 1
Company Overview
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Who We Are – Mission, Vision and Values
Bring out the utmost learning power in each student by cultivating his or her study motivation, capability and perseverance, and enable our students to pursue life-long success Our Mission Build the most trusted ‘‘Third Classroom’’ outside of home and school Our Vision Customer Focus Execution Innovation Teamwork Our Values
- Bring out the utmost learning power in each
student by cultivating his or her study motivation, capability and perseverance, and enable our students to pursue life-long success
Our Mission
- Build the most trusted ‘‘Third Classroom’’
- utside of home and school
Our Vision
- CEIT:
- Customer Focus
- Execution
- Innovation
- Teamwork
Our Values
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Who We Are - Largest Premium K-12 Education Service Provider in China
Notes 1. In terms of revenue in 2016 and 2017, according to Frost & Sullivan 2. For students from kindergarten to the third grade in Shanghai in terms of revenue in 2016 and 2017, according to Frost & Sullivan 3. As of August 31, 2018 4. In terms of revenue in 2017, according to Frost & Sullivan 5. A student enrollment is defined as a student who takes at least one class in one subject during a certain period. Under this definition, a student taking at least one class in each of two subjects during a certain period is treated as two student enrollments for the period. The number of students enrolled in our invested K-12 schools and OneSmart Online is not included for this purpose 6. For the fiscal quarter ended August 31, 2018 7. Fiscal year ended August 31
Well-recognized brand with 315
study centers covering 42 cities in China(3)
Dominant 2017 market share of 26.3%(4) in Shanghai’s premium K-12
after-school education market
122,498 average monthly student
enrollments(5)(6)
#1 premium K-12 after-school tutoring
service provider in China(1)
#1 young children mathematics education
service provider in Shanghai(2)
6,057
full-time teachers(3)
RMB2.9Bn
revenue in FY2018(7) with
36.8% 3-year CAGR
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OneSmart VIP
1-on-1, 1-on-3 3rd–12th Grade
Kids Math
1-on-8 1-on-14
Newly Acquired & New Program Initiatives
OneSmart Class OneSmart International Education HappyMath OneSmart VIP
Notes 1. In terms of revenue in 2016 and 2017, according to Frost & Sullivan 2. For students from kindergarten to the third grade in Shanghai in terms of revenue in 2016 and 2017, according to Frost & Sullivan
also covers Chinese, Computer Programming and Science Education
What We Do
FasTrack English
Kids English #1 premium K-12 after-school tutoring
service provider in China 3 to 8 Years Old
#1 young children mathematics
education service provider in Shanghai 3 to 8 Years Old Kids English with a focus on STEM English
OneSmart Study Camp Tianjin Huaying OneSmart Small Group Class Tus-Juren
Strategic Investments in Online Education
Yimi Online Tutoring UUabc BestMath
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Our Key Milestones
2008 2018
Launched Our UPC System(1) Opened Our First Study
Center in Shanghai
Opened Our First Study
Center Outside Shanghai
Launched
HappyMath Program
Number of Study Centers Surpassed 100 Launched 1-on-3 Programs
315 Study Centers in 42 Cities in China(2)
Listed on NYSE on March 28, 2018
2009 2012 2014 2016
U.S. Secretary of Education
- Dr. John B. King Jr.
visited OneSmart
Notes 1. Unique Personalized Coach, an operational management system that enables us to build a set of robust operational and management information solutions that integrate and unify our operations and improve the efficiency of how we expand and operate our study center network 2. As of August 31, 2018
2013
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Company Highlights
Leader in premium K-12 after-school education services market with established brands Significant expertise in teaching staff management and curriculum development brings R&D economy of scale Customized and comprehensive learning experience powered by innovation Robust teaching and operation system supported by our standardized technology platform Comprehensive suite of service offerings that significantly extend life time value of customers for margin expansion Experienced management team with proven track records
6 1 3 4 2 5
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Core Operation Strategies
Our future core operation strategies will focus on customer satisfaction, profitable growth and diversification of our business
- Strengthen our
technologies and in-house teaching capabilities
- Expand our online education presence
- Enrich our
education program offerings
Profitable Growth Diversification
1
Customer Satisfaction
- Continue to
penetrate premium K-12 tutoring market
- Enhance the
development and management of our teacher team and teaching materials
2 3
- Pursue selective strategic
investments and acquisitions to further build ecosystem
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1 3 4 2
Expand more subjects taken by each student and maximize student life-time revenue
Start offering Chinese, science, and computer programming subjects at HappyMath centers Cross-selling among Happymath and FasTrack English students
Manage geographic expansion profitably
Further penetrate into top cities that we operate to achieve higher marketing and G&A efficiency
and ensure early ramp-up of new learning centers
Selectively enter into new cities with great market potential
Enrich product and service offerings
Successfully acquired FasTrack English in Jan 2018 and Tianjin Huaying in Aug 2018 Strategically invested in Tus-Juren, Yimi Online Tutoring, UUABC and BestMath Launched OneSmart Small Group Class and OneSmart Class programs
Continuous margin expansion opportunity through better product mix
Higher revenue contribution from 1 on 8 HappyMath and 1 on 14 FasTrack English
Roadmap to Revenue Growth and Margin Expansion
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Section 2
Key Highlights for Fourth Fiscal Quarter of 2018
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Monthly Average Student Enrollments Increased by 49.9%
Year-over- Year
Net Revenues Increased by 46.6%
Year-over-Year
Net Revenues from OneSmart VIP Programs increased by 37.1%
Year-over-Year
Net Revenues from HappyMath increased by 63.9%
Year-over-Year
New Student Enrollments of newly acquired FasTrack English
increased by 75.8% Year-over-Year
Non-GAAP Net Income Attributable to OneSmart’s Shareholders
increased by 10.5% Year-over-Year
Key Financial Highlights for Fourth Fiscal Quarter of 2018
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Key Business Highlights for Fourth Fiscal Quarter of 2018
OneSmart VIP
Despite the opening of 18 new OneSmart VIP learning centers
in Shanghai over the past 12 months, OneSmart VIP business in Shanghai continued to achieve a healthy EBIT margin of above 40% during the quarter;
In the meantime, we experienced extremely strong growth in
markets outside Shanghai. Monthly average student enrollments increased by over 50% in the following 12 cities, most of which we entered during the past two years: Chengdu, Kunming, Xi’an, Zhengzhou, Chongqing, Hefei, Shenyang, Shijiazhuang, Yancheng, Zhuhai, Dongguan, and Taizhou;
We opened 5 new OneSmart VIP learning centers during the
fourth fiscal quarter of 2018；
To provide one-stop shopping opportunities for premium families
and further accelerate the growth, we newly launched OneSmart International Education (premium overseas study preparation, language training and consultation services), and OneSmart Study Camp programs. HappyMath
We
continued to accelerate
- ur
growth in HappyMath. Revenues increased by 63.9% year-over-year to RMB117.2 million (US$17.2 million) from RMB71.5 million in the same quarter of last year, with monthly average student enrollments increased by 67.2% year-over-year to 23,201 from 13,874 in the same quarter of last year；
Revenue in mature market continued to achieve strong growth
momentum – Revenue in Shanghai increased by 49.7% year-
- ver-year.
We see
strong revenue and student enrollment growth momentum in almost every city that HappyMath has entered
- into. Revenues in Chengdu, Xiamen, Suzhou, Shenzhen and
Changsha all achieved more than 100% growth year-over- year; while revenues in Beijing increased by 214.5% year-
- ver-year.
The three newly launched subjects, Chinese, science, and
computer programing, continued to experience rapid growth of student enrollments due to the strong market demand. More than 5,600 students were enrolled for the Chinese language classes during the fourth fiscal quarter of 2018.
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Successful Acquisition & Integration of FasTrack English
Leveraging our “Standard Operation Perfection System” (“SOPS”) for integration management of acquired business, we successfully accelerated growth of FasTrack English. We re-positioned it as premium kids English training brand with a focus on STEM English and expanded the operation into Shenzhen;
After the acquisition, we opened 9 new FasTrack English learning centers;
New student enrollments increased by 75.8% year-over- year, compared to approximately 30.0% historical growth before acquisition;
The above demonstrated
- ur
strong acquisition and integration capabilities, which will continuously accelerate the growth of FasTrack English business nationwide.”
Key Business Highlights for Fourth Fiscal Quarter of 2018 (Cont’d)
New program Initiatives & Strategic Investments
We continued to benefit from the consumption upgrade in Tier 1
and Tier 2 cities, where we are incubating and investing heavily in new online and offline product offerings, in order to deliver rapid top-line growth over the next five years –
For example, Yimi Online Tutoring, a leading premium online K-
12 tutoring company, which we incubated and took a significant strategic stake, achieved accelerated growth since its inception. For the first nine months ended September 30, 2018, its gross billings and revenues increased by 336.1% and 341.6% year-over-year, respectively.
We also strategically invested in UUABC (online kids English
training services) and BestMath (online kids mathematics training services), which will further expand our footprints in the
- nline education market and form an integral part of our
ecosystem.
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Section 3
Financial Highlights
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72 117
FQ4 2017 FQ4 2018
567 777
FQ4 2017 FQ4 2018 HappyMath
1,529 2,058 2,863
FY2016 FY2017 FY2018 Net Revenues(1) OneSmart VIP
RMB MM
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31
RMB MM +78.6% RMB MM +63.9% Growth +30.6% CAGR CAGR
637 934
FQ4 2017 FQ4 2018
+46.6% Growth
113 212 359
FY2016 FY2017 FY2018
+36.8% CAGR +37.1% Growth
Strong Top-line Growth Momentum in Different Business Segments
36 73 FQ4 2017 FQ4 2018 FY2017 FY2018 FasTrack English
1,416 1,840 2,416
FY2016 FY2017 FY2018
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2,943,745 4,116,138 549,524 988,627 207,258
FQ4 2017 FQ4 2018 123 157 225 27 38 66 24 FY2016 FY2017 FY2018 OneSmart VIP Happymath FasTrack 7,486 8,711 11,744 FY2016 FY2017 FY2018
Scaling-up in Various Metrics
48,153 63,295 85,830 7,867 13,545 18,884 7,431
FY2016 FY2017 FY2018
112,145
67,846 89,470 13,874 23,201 9,827
FQ4 2017 FQ4 2018
+41.5% CAGR
Average Monthly Enrollments(1) Consumed Class Units(1) Number of Classrooms(1)
+25.3% CAGR
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31
Number of Study Centers(1)
+44.9% CAGR
150 195 315
+49.9% Grow th 56,019 76,841
7,618,276 9,611,332 12,383,864 935,902 1,600,858 2,680,033 433,160
FY2016 FY2017 FY2018
11,212,290 8,554,178 +34.6%
CAGR OneSmart VIP Happy Math FasTrack English OneSmart VIP Happy Math FasTrack English
+52.1% Grow th 15,497,057 81,720 122,498 5,312,023 3,493,269
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Gross Profit and Gross Margin(1)
High Gross Margin
RMB MM
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31
52.2% 51.3%
735 935 1224 63 126 203 26 FY2016 FY2017 FY2018
50.8% 50.6%
FY 2016 FY 2017 FY 2018 FQ4 2017 FQ4 2018 Premium Tutoring
51.9% 50.8% 50.6% 50.7% 50.3%
Happy Math
56.3% 59.6% 56.5% 62.4% 57.4%
FasTrack English
NA NA 35.5% NA 38.0%
Overall Gross Margin
52.2% 51.3% 50.6% 50.8% 50.6%
Gross Margin
OneSmart VIP FasTrackEnglish
287 391 45 67 14 FQ4 2017 FQ4 2018
50.6%
Happy Math
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30.9% 32.0%
8.5% 9.2% 2.9% 2.3% 6.9% 5.9%
FQ4 2017 FQ4 2018
31.7% 30.8% 30.5% 8.4% 9.0% 9.9% 2.9% 2.6% 3.0% 4.8% 6.3% 6.0%
FY2016 FY2017 FY2018
Clear Cost Structure
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31
47.8% 48.7% 49.4% 49.2%
Staff costs Rental costs Depreciation and amortization Other costs
49.4%
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Non-GAAP Selling & Marketing Expenses as % of Revenues(1)(2) Non-GAAP General & Administrative Expenses as % of Revenues(1)(2)
Efficient Management Leads to Lower and Stabilizing Expenses
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31 2. Excluding share based compensati on expenses
16.1% 17.4% 16.9% 17.0% 17.9% 20.6% 16.8% RMB MM RMB MM
261 368 588 FY2016 FY2017 FY2018 104 193 FQ4 2017 FQ4 2018 247 357 485 FY2016 FY2017 FY2018 107 141 FQ4 2017 FQ4 2018
16.4% 20.7% 15.1%
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112 138 FQ4 2017 FQ4 2018 291 330 376 FY2016 FY2017 FY2018 234 305 229 FY2016 FY2017 FY2018 109 111 FQ4 2017 FQ4 2018
Robust Income and Healthy Margin
Operating Income and Operating Margin (1) Non-GAAP operating Income and Operating Margin (1) Net Income and Net Income Margin (1) (2) Non-GAAP Net Income and Net Income Margin (1) (2)
RMB MM RMB MM RMB MM RMB MM
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31 2. Net income attributable to OneSmart
19.1% 16.0% 13.1% 17.6% 14.8% 15.3%
189 259 246 FY2016 FY2017 FY2017
14.8% 8.0% 17.1% 11.9% 12.4% 12.6% 8.6% 15.0% 8.8%
247 284 392 FY2016 FY2017 FY2018
16.1% 13.8% 13.7% 15.5% 11.7%
96 83 FQ4 2017 FQ4 2018 99 109 FQ4 2017 FQ4 2018
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84 173 255 FY2016 FY2017 FY2018
Robust Cash Flows and Healthy Balance Sheet with Low Capex Requirements
Operating Cash Flows(1) Capex and Capex as a % of net revenues(1) Prepayments from Customers(1) Cash and Cash Equivalents and Short-term Investments(1)
RMB MM RMB MM RMB MM RMB MM
Notes 1. Fiscal years ended August 31 and fiscal fourth quarters ended August 31
5.5% 8.4% 8.9% 6.0%
614 773 945 FY2016 FY2017 FY2018 289 286 FQ4 2017 FQ4 2018 38 77 FQ4 2017 FQ4 2018 1,053 1,531 1,992 FY2016 FY2017 FY2018 1,010 1,396 2,296 FY2016 FY2017 FY2018
8.3%
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