Puxin Limite ted Investor Presentation March 2019 / Becoming is - PowerPoint PPT Presentation

Puxin Limite ted Investor Presentation March 2019

敦兮若朴 / 敝而新成 Becoming is better than being

Safe fe Harbor bor Sta tatement tement This presentation contains forward-looking statements made under the “safe harbor” provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates”, “confident” and similar statements. The Company may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: its goals and strategies, its ability to achieve and maintain profitability, its ability to attract and retain students to enroll in its courses, its ability to effectively manage its business expansion and successfully integrate businesses it acquired, its ability to identify or pursue targets for acquisitions, its ability to compete effectively against its competitors, its ability to improve the content of its existing courses or to develop new courses, and relevant government policies and regulations relating to the Company’s corporate structure, business and industry. Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange Commission. All information provided in this presentation is current as of the date of the press release, and the Company does not undertake any obligation to update such information, except as required under applicable law.

Contents Contents 01. COMPANY OVERVIEW 02. STRATEGIC & OPERATIONAL HIGHLIGHTS 03. FINANCIAL HIGHLIGHTS 04. OPERATIONAL PERFORMANCE 05. APPENDIX

COM OMPANY ANY OV OVER ERVIEW VIEW 01. . 敦兮若朴 / 敝而新成

Mission, Vision and Values Mission —— 知识改变命运，学习成就未来 We believe that education inspires personal growth and creates opportunities. Our mission is to empower people to build better lives through learning. Vision —— 致力教育培训 引领行业发展 We are committed to providing high-quality education services to students and to enhancing service quality in China’s after -school education industry by applying our acquisition and integration expertise. Values —— 敦兮若朴 敝而新成 We value sincerity, simplicity, and humbleness which we believe ideally positions us for future growth. 01

Who We Are China’s 3 rd Largest After-School Education Service Provider 2 35 Cities 1.8 Million + 386 Learning Centers 1 Student Enrollments 1 M&A Integration Industry Consolidator 4,500 + Full-time Teachers & 51 Acquired schools 1 Consultants 1 Comprehensive: K-12 + Study-abroad tutoring Note: 1. Data as of DEC 31, 2018. 2. Based on the Frost & Sullivan report, in terms of student enrollments in 2017. 02

What We Do Providing Comprehensive Education Services Puxin Brand Study-abroad tutoring Extra-curricular K-12 after-school Online platform courses & consulting services education services 03

Corporate Milestones 2014 Established on Sep. 28, 2014 2015 First acquisition on Apr. 2015 017 Acquired Global Education, the No.1 2017 IELTS brand in China, in Aug. 2017 Revenue exceeded RMB1 billion, by the 2017 end of 2017 2018 Listed on NYSE on Jun. 15, 2018 04

Investment Highlights Establi lish shed d Reputati tion on Established reputation underpinned by teaching quality PBS System Track Record Modular and evolving Track record of disciplined management system acquisitions and integration Experie ienc nced d Team & Leading ng Positio ion Talent t Manage geme ment nt System Leading position in China’s Visionary management team after-school education market and sophisticated talent management system 05

02. . STRA TRATEGIC TEGIC & O OPE PERA RATION TIONAL AL HIGH IGHLIGHTS IGHTS 敦兮若朴 / 敝而新成

Generating Organic Growth and Acquiring School Organic Growth Value Chain M&A M&A Integration Ecological Industrial Chain Chain Ecological Chain Physical Expansion 06

Puxin Business System Modular and Evolving Deploy Management System Strategy Budget Planning & Management Financial Business P Operational Operational Budgeting Management Planning Targets L R A E Internal Reporting & Communication N V Applied throughout the entire N I operational process Management Strategy Business I E Meetings Outlook Review N W Covering over 3,000 operation and G management processes Operational Management Closely tracks more than 10,000 Business Knowledge Rapid day-to-day tasks required for Enrollment Adjustments Sharing Execution smooth daily operations 07

Sophisticated Talent Management System Builds a high-quality talent pool to support long-term growth Puxin Puxin Talents Leadership Designed for highly-talented staff to Designed for mid-level management Building Designed for senior management to strengthen strengthen teaching skills and build a solid a strong talent pool to fuel Puxin’s overall leadership capabilities mid-level management talent pool long-term development 08

Online and Offline Integration Word of Mouth Marketing Retention Online Platform with Foreign Teachers Quality Resource Sharing Improving User Stickiness Referral HQCLASS.cn Online Dual-teacher Customized Courses 1-on-1 Offline Youke Offerings Traffic Acquisition 09

FI FINANCIAL NANCIAL HI HIGH GHLIG LIGHTS HTS 03. . 敦兮若朴 / 敝而新成

4Q 2018 Financial Highlights- (GAAP) • Net Revenues of RMB531.4 million, an increase of 24.2% YoY • Gross Profit of RMB225.2 million, an increase of 46.2% YoY • Gross margin of 42.4% Net Revenues Gross Profit and Margin (RMB millions) (RMB millions) Margin 24.2% 46.2% 42.4% 36.0% 531.4 225.2 428.0 154.0 Q417 Q418 Q417 Q418 10

4Q 2018 Financial Highlights- (GAAP) Q4 FY2018 24.2 % Q417 ( RMB’000) Q4 FY2017 Q4 FY2018 vs. Q4 FY2017 Q418 Net revenues 427,952 531,441 24.2% 46.2 % Gross profit 154,026 225,206 46.2% 531,441 Gross margin 427,952 36.0% 42.4% 640bps Operating loss 225,206 10.3% 0.5% (165,150) (165,930) 0.5% 154,026 Operating margin (38.6%) (31.2%) 740bps (165,150) (165,930) Loss before income taxes (216,057) (232,475) 7.6% (217,426) (239,740) Net loss attributable to (217,426) (239,740) 10.3% Puxin Limited Net margin (50.8%) (45.1%) 570bps Revenue Gross profit Operating profit/(loss) Net income/(loss) 11

4Q 2018 Financial Highlights- (GAAP) • • Significantly strengthened margin profiles Operating margin improved 740 bps YoY • • Gross margin increased 640 bps YoY Net margin improved 570 bps YoY Net Loss Attributable to Puxin Limited Gross Profit and Margin Operating Loss and Margin and Margin (RMB’000) Q417 Q418 640bps Q417 Q418 42.4% (217,426) (165,150) 36.0% (239,740) (50.8%) (38.6%) (165,930) 225,206 (45.1%) 154,026 (31.2%) 570bps 740bps Q417 Q418 12

4Q 2018 Financial Highlights- (non-GAAP) • Adjusted operating margin increased 1,100 bps YoY • Adjusted net margin increased 490bps YoY Adjusted Net Loss Attributable to Puxin Limited 3 Adjusted Operating Loss 2 and Margin and Margin (RMB’000) Q417 Q418 Q417 Q418 (120,728) (148,753) (34.8%) (22.7%) (144,018) (158,918) 1,100 (33.7%) (29.9%) bps 490bps Note ： 1. Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. 2. Adjusted net loss attributable to Puxin Limited is a non-GAAP financial measure, which is defined as net loss attributable to Puxin Limited excluding share-based compensation expenses and loss/gain on changes in fair value of convertible notes, derivative liabilities and warrants. 13

OP OPER ERATIONA TIONAL HI HIGH GHLIGHTS LIGHTS 04. . 敦兮若朴 / 敝而新成

4Q 2018 Operational Highlights Total enrollments were 521,161, an increase of 45.0% YoY • Improving operating efficiency ： class utilization rate increased 800 bps YoY and student retention • rate increased 350 bps YoY Total Enrollment Class Utilization Rate Student Retention Rate 45.0% 800bps 350bps 78.7% 521,161 71.2% 359,528 70.6% 67.7% Q417 Q418 Q417 Q418 Q417 Q418 14

4Q 2018 Operational Highlights Number of Learning Centers Continuously optimizing productivity capacity & ensuring compliance • Q4 FY2017 Q4 FY2018 Focused on growing existing learnings centers organically on an annual basis • （ 14 ） （ 12 ） 7 5 6 400 386 386 408 0 0930 acquired built closed 1231 0930 acquired built closed 1231 22

APP PPENDIX ENDIX 05. . 敦兮若朴 / 敝而新成