March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are...

26
March Quarter & Fiscal Year 2015 Results May 7, 2015

Transcript of March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are...

Page 1: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

March Quarter & Fiscal Year 2015 Results

May 7, 2015

Page 2: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Disclaimer

This presentation contains forward-looking statements. These statements are made under the “safe harbor” provisions of 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,” “potential,” “continue,” “ongoing,” “targets” and

similar statements. Among other things, statements that are not historical facts, including statements about Alibaba’s beliefs and

expectations, the business outlook and quotations from management in this presentation, as well as Alibaba’s strategic and

operational plans, are or contain forward-looking statements. Alibaba may also make written or oral forward-looking statements in

its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in press releases and other written materials and

in oral statements made by its officers, directors or employees to third parties. Forward-looking statements involve inherent risks

and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking

statement, including but not limited to the following: Alibaba’s goals and strategies; Alibaba’s future business development;

Alibaba’s ability to maintain the trusted status of its ecosystem, reputation and brand; Alibaba’s ability to retain or increase

engagement of buyers, sellers and other participants in its ecosystem and enable new offerings; Alibaba’s ability to successfully

2

engagement of buyers, sellers and other participants in its ecosystem and enable new offerings; Alibaba’s ability to successfully

monetize traffic on its mobile platform; risks associated with limitation or restriction of services provided by Alipay; risks associated

with increased investments in Alibaba’s business; risks associated with acquisitions; privacy and regulatory concerns; competition;

security breaches; the continued growth of the e-commerce market in China and globally; and fluctuations in general economic

and business conditions in China and globally and assumptions underlying or related to any of the foregoing. Further information

regarding these and other risks is included in Alibaba’s filings with the SEC. All information provided in this presentation is as of the

date of this presentation and are based on assumptions that we believe to be reasonable as of this date, and Alibaba does not

undertake any obligation to update any forward-looking statement, except as required under applicable law.

This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the

United States (“GAAP”), including Non-GAAP EBITDA, Non-GAAP net income and free cash flow. For a reconciliation of these non-

GAAP financial measures to the most directly comparable GAAP measures, see GAAP to Non-GAAP Reconciliation.

Page 3: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

March Quarter 2015 Highlights

3

Page 4: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

40%YoY GMV

Growth

March Quarter 2015 Highlights

350MMAnnual

Active Buyers (2)

45%YoY Revenue

Growth

4

289MMMobile MAUs (3)

US$ 49BnMobile GMV (1)

51% of China

Commerce Retail GMV

Note: Unless otherwise indicated, all figures above are for the three months ended March 31, 2015(1) Assumes 1 US$ = 6.1990RMB(2) For the twelve months ended March 31, 2015(3) For the month ended March 31, 2015; based on the aggregate mobile MAUs of apps that contribute GMV on our China retail marketplaces

40%Mobile Revenue as a %

of China Commerce

Retail Revenue

Page 5: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

183176

293

219

529

430

501

556

787

600

Quarterly GMV (China Commerce Retail)

GMV

(RMB Bn)

53% 46%YoY

Growth 65% 64% 45%65% 40%49%49%

223257 275

346295

342380

494

381

71

8899

183

135

159

176

294

345374

430

Mar 31,

2013

Jun 30,

2013

Sep 30,

2013

Dec 31,

2013

Mar 31,

2014

Jun 30,

2014

Sep 30,

2014

Dec 31,

2014

Mar 31,

2015

Taobao Marketplace Tmall

5

For 3M

ended

Page 6: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Active Buyers & Mobile MAUs

255279

307334

350

(In Millions)

Annual Active Buyers Mobile MAUs

163

188

217

265289

(In Millions)

Mar 31,

2014

Jun 30,

2014

Sep 30,

2014

Dec 31,

2014

Mar 31,

2015For 12M

ended

163

Mar 31,

2014

Jun 30,

2014

Sep 30,

2014

Dec 31,

2014

Mar 31,

2015

For 1M

ended

6

Page 7: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Mobile GMV & Revenue Contribution

15%

20%

27%

33% 36%

42%

51%

19%

29% 30%

40%

(RMB Bn)

Quarterly Mobile GMV, Mobile Revenue and Mobile Penetration (China Commerce Retail)

(%)

7

32 41 55104 118

164199

327 304

11% 12% 15%

2% 3% 4%7%

12%

Mar 31,

2013

Jun 30,

2013

Sep 30,

2013

Dec 31,

2013

Mar 31,

2014

Jun 30,

2014

Sep 30,

2014

Dec 31,

2014

Mar 31,

2015

Mobile GMV

Mobile GMV as a % of Total GMV

Mobile Revenue as a % of China Commerce Retail Revenue

For 3M

ended

Page 8: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Business Review

8

Page 9: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

289MMMobile MAUs (2)

US$394BnAnnual GMV (1)

Fiscal Year 2015 Highlights

350MMAnnual

Active Buyers

9

US$12.3BnTotal Revenue (1)

45%YoY Revenue

Growth

US$7.8BnNon-GAAP

Free Cash Flow (1)

Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31, 2015(1) Assumes 1 US$ = 6.1990RMB(2) For the month ended March 31, 2015; based on the aggregate mobile MAUs of apps that contribute GMV on our China retail marketplaces

Page 10: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Strategic Highlights

46% YoY Annual GMV growth

Significant

Expansion of

350 mm Annual Active Buyers

High retention & growth of merchants

95 mm Net Adds

10

Expansion of

Ecosystem

High retention & growth of merchants

Fast growing categories:

Category Expansion

► Dietary Supplement

► Household Products

Digital entertainment

Healthcare

Local services e.g.

► Car Accessories

► Furniture & Decoration

More than 8.6Bn packages generated on

our China retail marketplaces

Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31, 2015

Page 11: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Strategic Highlights

Mobile: Unrivaled LeadershipMobile: Unrivaled Leadership

11

US$160 bnAnnual Mobile GMV (2)

289 mm MAU (1)

126 mm Net Adds

Mobile Taobao App

No. 1 e-commerce app

in China

Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31, 2015(1) For the month ended March 31, 2015; based on the aggregate mobile MAUs of apps that contribute GMV on our China retail marketplaces(2) Assumes 1 US$ = 6.1990RMB

Page 12: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Strategic Highlights

Investment in Data & Cloud TechnologiesInvestment in Data & Cloud Technologies

12

Technology

improvements increased

infrastructure efficiency

Start-up Government Enterprise

No. 1 cloud services

provider in China (1)Expanded and diversified

customer base

Note: (1) Source: IDC Report

Page 13: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Strategic Highlights

Pioneered Cross Border EPioneered Cross Border E--commercecommerce

• Captured Tmall Global customer mindshare as source of quality products

• Attracted major global brands & retailers to the platform

• Established cross border ecosystem infrastructure

13

Page 14: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Strategic Highlights

Strategic M&A, Investment and AlliancesStrategic M&A, Investment and Alliances

Entertainment

Ecosystem

Content

Huayi Brothers Enlight Media

Ecommerce & Logistics

Mobile

MeizuUC Web Sina Weibo

14

Distribution

Youku TudouWasu

O2O / Travel

KuaidiAutoNavi

Shiji Information Intime

Healthcare

RRS Singapore Post

Page 15: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 & March Quarter 2015Financial ReviewFinancial Review

15

Page 16: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Fiscal Year 2015 Financial Highlights

In millions unless otherwise stated

FY2014 FY2015

YoYRMB RMB US$

Total Revenue 52,504 76,204 12,293 45%

Mobile Revenue 2,905 17,840 2,878 514%

Mobile Revenue as a % of China Commerce Retail Revenue 7% 30%

Non-GAAP EBITDA 30,731 40,753 6,574 33%

16

Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31(1) Assumes 1 US$ = 6.1990 RMB

Non-GAAP EBITDA 30,731 40,753 6,574 33%

Non-GAAP EBITDA Margin 59% 53%

Non-GAAP Net Income 28,274 34,981 5,643 24%

Non-GAAP Diluted EPS 12.09 13.97 2.25 16%

Free Cash Flow 32,269 48,121 7,763 49%

Page 17: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

430 600

27%

51%

Mar 31, 2014 Mar 31, 2015

GMV Mobile GMV as a % of Total GMV

March Quarter 2015 Financial Highlights GMV and Mobile Penetration

+40%

(RMB Bn)

12.0

17.4

Mar 31, 2014 Mar 31, 2015

+45%

Revenue

(RMB Bn)(%)

17

Non-GAAP EBITDA (1) and Margin(RMB Bn)

6.7 7.7

Mar 31, 2014 Mar 31, 2015

Non-GAAP Net Income (2) and Margin

(RMB Bn)

Margin 55% 44%

Note: For the three months ended on the respective dates (1) Non-GAAP EBITDA represents income from operations (which excludes interest and investment income, net, interest expense, other income, net, income tax expenses and share of

results of equity investees) before certain non-cash expenses, consisting of share-based compensation expense, amortization and depreciation that we do not believe are reflective of its core operating performance during the periods presented.

(2) Non-GAAP net income represents net income before share-based compensation expense, amortization, impairment of goodwill, intangible assets and investments, gain (loss) on deemed disposals/disposals/revaluation of investments and amortization of excess value receivable arising from the restructuring of commercial arrangements with Ant Financial.

6.9 8.6

Mar 31, 2014 Mar 31, 2015

Margin 57% 49%

Page 18: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

2.52% 2.77% 2.61%

3.53%

2.63%

3.03%

2.54%

3.23%

2.63% 3.05%

Quarterly Monetization Rate Trends

Quarterly Monetization Rate (China Commerce Retail)

(%)

Non-mobile

monetization

rate(1)

We manage the business for growth in GMV and active buyers, not for monetization rate

• Blended monetization rate is stable Y/Y

• Mobile monetization rate is higher Y/Y

• Blended monetization rate is lower sequentially due to business seasonality

0.47% 0.58% 0.61%

1.12% 0.98%

1.49%

1.87% 1.96% 1.73%

2.52% 2.54% 2.63%

2.30%2.51%

2.31%

3.05%

2.18%

2.52%2.30%

2.70%

2.17%

Mar 31,

2013

Jun 30,

2013

Sep 30,

2013

Dec 31,

2013

Mar 31,

2014

Jun 30,

2014

Sep 30,

2014

Dec 31,

2014

Mar 31,

2015

Mobile Monetization Rate Non-mobile Monetization Rate Blended Monetization Rate

18

Notes:

(1) Derived from China commerce retail non-mobile revenue / non-mobile GMV

(2) Derived from China commerce retail mobile revenue / mobile GMV

Mobile

monetization

rate(2)

rate(1)

Blended

monetization

rate

For 3M

ended

Page 19: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

75%5%

2%

7%2%

9%

China Commerce Retail

Cloud

Computing

and Internet

InfrastructureInternational

Commerce Wholesale

International

Commerce Retail

China Commerce

Wholesale

(1)

Quarterly RevenueRevenue Breakdown by BusinessTotal Revenue

(% of Total Revenue)(RMB Bn)

Others

12.0

15.8 16.8

26.2

17.4

39% 42%53%

19%

82%

19

For 3M ended Mar 31, 2015(1) Other revenue mainly represents interest income generated from micro loans and revenue

generated by UCWeb and AutoNavi. The restructuring of our relationship with Ant Financial

completed in the March 2015 quarter, upon which we no longer consolidate revenue generated

by the SME loan business in our financial results.

Mar 31,

2014

Jun 30,

2014

Sep 30,

2014

Dec 31,

2014

Mar 31,

2015For 3M

ended

Revenue Growth of Major Businesses(YoY Growth % )

1 2 3 4 5

1. China Commerce Retail

2. China Commerce Wholesale

3. International Commerce Retail

4. International Commerce Wholesale

5. Cloud Computing and Internet Infrastructure

Page 20: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Quarterly Margin Trends

Non-GAAP Net Income (2) and MarginNon-GAAP EBITDA (1) and Margin (RMB Bn) (RMB Bn)

• We don’t manage to a margin target

• Lower Y/Y non-GAAP EBITDA margin was due to:

• Consolidation of acquired businesses (mainly UCWeb, AutoNavi) with lower margins

• Investment in initiatives such as mobile OS, cloud computing, local services and digital entertainment

• We will continue to invest in new and existing businesses to drive long-term growth in GMV, new active buyers, revenue and profit

49%57% 44%55%Margin Margin58% 50%

6.7

13.1

7.7

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

6.9

15.1

8.6

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

20

Note: For the three months ended on the respective dates (1) Non-GAAP EBITDA represents income from operations (which excludes interest and investment income, net, interest expense, other income, net, income tax expenses and share of

results of equity investees) before certain non-cash expenses, consisting of share-based compensation expense, amortization, depreciation and impairment of goodwill and intangible assets that we do not believe are reflective of its core operating performance during the periods presented.

(2) Non-GAAP net income represents net income before share-based compensation expense, amortization, impairment of goodwill, intangible assets and investments, gain (loss) on deemed disposals/disposals/revaluation of investments, amortization of excess value receivable arising from the restructuring of commercial arrangements with Ant Financial, and one-time expense items consisting of the expenses relating to the sale of shares by existing shareholders in our initial public offering and charge for financing-related fees as a result of early repayment of bank borrowings.

Page 21: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Quarterly Cost Trends

Cost of Revenue (Pre-SBC)

2.9

6.1 5.1

24% 23%

29%

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

Product Development Expenses (Pre-SBC)

1.0 1.8 1.4

8% 7% 8%

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

(% of revenue)(RMB Bn) (% of revenue)(RMB Bn)

0.4 1.2 1.1

3% 5% 6%

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

21

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

Sales & Marketing Expenses (Pre-SBC)

1.2 2.6 1.9

10% 10% 11%

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

General & Administrative Expenses (Pre-SBC)(% of revenue)(RMB Bn) (% of revenue)(RMB Bn)

Page 22: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Free Cash Flow

Free Cash Flow (1)

(%)(RMB Bn)

48.1

61% 63%

• We enjoy strong cash flow based on our significant earnings and our capital efficient marketplace business model.

• This robust cash flow provides us with the flexibility and confidence to invest in new initiatives to add new users, improve engagement and customer experience and expand our ecosystem.

2.3

5.7 19%

33%

Mar 31, 2014 Mar 31, 2015

Free Cash Flow

22

Note: (1) Free cash flow represents net cash provided by operating activities as presented in Alibaba Group’s consolidated cash flow statement less purchases of property and equipment and

intangible assets (excluding acquisition of land use rights and construction in progress) and adjusted for changes in loan receivables relating to micro loans of its SME loan business.

32.3

48.1

FY2014 FY2015

% of Revenue

+143%

+49%

For 3M ended

Page 23: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

Capital Expenditures and Cash

1.5 1.5

5%

4%

Capital Expenditures(RMB Bn) (% )

130.7 122.3

23.7 14.1

Cash, Cash Equivalents and

Short-term Investments(RMB Bn)

23

0.2

1.2

0.7 0.2

0.3 0.8

0.4

2%

Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

Non-real Estate CAPEX

Acquisitions of Land Use Rights and

Construction in Progress

Non-real Estate CAPEX as a % of Revenue

43.6

33.0

107.0 108.2

10.6

As of Mar 31,

2014

As of Dec 31,

2014

As of Mar 31,

2015

Cash and Cash Equivalents

Short-term Investments

Note: Unless otherwise indicated, all figures in the above charts are for the three months ended on the respective dates

Page 24: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

GAAP to Non-GAAP ReconciliationFor the Three Months Ended

RMB MM Mar 31, 2014 Dec 31, 2014 Mar 31, 2015

Non-GAAP EBITDA

Income from operations 5,451 9,347 2,599

Add: Share based compensation expense 925 4,313 4,632

Add: Amortization of intangible assets 118 614 643

Add: Depreciation and amortization of property and equipment and land use rights 392 654 709

Add: Impairment of goodwill and intangible assets - 175 -

Non-GAAP EBITDA 6,886 15,103 8,583

Non-GAAP net income

Net income 5,661 5,983 2,869

Add: Share based compensation expense 925 4,313 4,632

Add: Amortization of intangible assets 118 614 643

Add: Impairment of goodwill, intangible assets and investments 39 1,032 -

24

Add: Impairment of goodwill, intangible assets and investments 39 1,032 -

Add: (Gain) loss on deemed disposals /disposals/revaluation of investments (72) 241 (468)

Add: Amortization of excess value receivable arising from the restructuring of

commercial arrangements with Ant Financial - 66 65

Add: Expenses relating to the sale of shares by existing shareholders in initial public

offering - 36 -

Add: One-time charge for financing-related fees as a result of early repayment of

bank borrowings - 830 -

Non-GAAP net income 6,671 13,115 7,741

Free cash flow

Net cash provided by operating activities 1,800 19,408 5,767

Less: Purchase of property, equipment and intangible assets

(excluding land use rights and construction in progress)(275) (1,222) (700)

Add: Changes in loan receivables, net 808 4,738 598

Free cash flow 2,333 22,924 5,665

Page 25: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,

FY2016 Strategic Priorities

Expand and upgrade existing platform

services

• Emphasis on quality growth

• Consumer acquisition and user experience

• Mobile, rural

• Empower merchants to better serve consumers

on mobile

• Local services

• Cloud computing to extend services to broader base

Develop new business initiatives

• Cloud computing to extend services to broader base

of 3rd party customers

• Cross border

• Affiliate marketing network

• Mobile Internet services

• Entertainment

People development • Culture, organization and leadership

25

Page 26: March Quarter & Fiscal Year 2015 Results - Alibaba Group · Among other things, statements that are not historical facts, including statements about Alibaba’sbeliefs and expectations,