Post on 28-May-2020
2019 Second Quarter Corporate PresentationAugust 13, 2019
2
Disclaimer
This presentation has been prepared by BEST Inc. (the “Company”) solely for informational purposes and have not been independently verified. No representations or warranties, express or
implied, are made by the Company or any of its affiliates, directors, officers, employees, advisors, or representatives with respect to, and no reliance should be placed, on the accuracy, fairness
or completeness of the information presented or contained in these materials. None of the Company nor any of its affiliates, directors, officers, employees, advisers or representatives accepts
any responsibility or liability whatsoever for any loss howsoever arising from any information presented or contained in or derived from these materials. The information presented or contained
in these materials is as of the date hereof and is subject to change without notice and its accuracy, fairness or completeness is not guaranteed.
This presentation contains forward-looking statements. All statements, other than statements of historical facts, contained in this presentation, including, without limitation, statements
regarding our strategy and market opportunities, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-
looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,” and
similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are forward-looking
statements within the meaning of the U.S. securities laws. These forward-looking statements are made only, and are based on estimates and information available to the Company, as of the
date of this presentation, and are not guarantees of future performance. These forward-looking statements are based on a number of assumptions which are subject to known and unknown
risks, uncertainties and other factors that are beyond the Company’s control, such as the political, social, legal and economic environment in which the Company will operate in the future.
Accordingly, actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements and future results could materially differ
from historical performance. Further information regarding these and other risks is included in the Company’s filings with the SEC. The Company undertakes no obligation to update or revise
these forward-looking statements for events or circumstances that occur subsequent to the date of this presentation.
Nothing herein constitutes an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company in any jurisdiction or any inducement to enter into investment
activity, or may form the basis of or be relied on in connection with any contract or commitment whatsoever.
This presentation contains certain financial measures that are not recognized under generally accepted accounting principles in the United States (“GAAP”), such as “Non-GAAP Net Loss/Profit”
, “Non-GAAP Net Loss/Profit Margin”, “EBITDA”, “EBITDA Margin”, “Adjusted EBITDA”, “Adjusted EBITDA Margin”, “Adjusted Total Operating Expenses”, “Adjusted Selling Expenses”, “Adjusted
General and Administrative Expenses” and “Adjusted Research and Development Expenses”. Such non-GAAP financial measures have limitations as analytical tools. The presentation of such
non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. These non-GAAP
measures may differ from the non-GAAP information used by other companies and therefore their comparability may be limited.
2Q 2019 Results Review
2nd Quarter 2019 financial highlights
4
Strong revenue growth; solid gross profit, adjusted EBITDA, and non-GAAP net income improvement; compared with 2nd Quarter 2018:
Revenue was RMB8.8 billion, a YoY increase of 30.5%, revenue ex-Store+ was RMB8.0 billion, a YoY increase of 34.8%
– Revenue from Express was RMB5.4 billion, a YoY increase of 30.4%
– Revenue from Freight was RMB1.3 billion, a YoY increase of 26.8%
– Revenue from SCM was RMB598.7 million, a YoY increase of 20.1%
– Revenue from Store+ was RMB790.6 million, a YoY decrease of 1.0%
– Revenue from Others was RMB646.7 million, a YoY increase of 183.1%
Gross profit was RMB520.1 million, a YoY increase of 24.5%, gross profit margin was 5.9%, a YoY decrease of 0.3 percentage points; gross profit ex-
Store+ was RMB437.0 million, a YoY increase of 23.5%, gross profit margin ex-Store+ was 5.5%, a decrease by 0.5 percentage points YoY
Adjusted EBITDA was RMB148.2 million, representing a YoY improvement of RMB106.6 million, adjusted EBITDA margin was 1.7%, a YoY increase of
1.1 percentage points; adjusted EBITDA ex-Store+ was RMB247.2 million, adjusted EBITDA margin ex-Store+ was 3.1%
Non-GAAP net income was RMB6.5 million, representing a YoY improvement of RMB62.0 million; non-GAAP net income ex-Store+ was RMB107.0
million
Net cash generated from operating activities was RMB334.2 million; CAPEX was RMB380.9 million
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
2nd Quarter 2019 business highlights
5
Continued the strong momentum from 1Q, focused on market share gain, investing in networks and services, accelerating technology adoption, improving
operating efficiency and productivity, and enhancing customer experience
Express parcels delivered reached 1.91 billion, a YoY increase of 49.0%, 1.72x market growth; market share increased to 12.2% from 10.5% YoY;
continued to reduce unit costs and expenses significantly, cost per parcel reduced by 11.6% YoY to RMB2.73, highlighted by reductions in
transportation and labor costs
Freight volume delivered reached 1.73 million tonnes, a YoY increase of 26.6%; gross margin improved by 1.2 percentage points YoY to 6.4%; continued
to expand last-mile coverage by adding 6,171 service stations YoY to 17,380 as of June 30, 2019
SCM number of orders fulfilled reached 86.7 million, a YoY increase of 41.7%; managed 370 Cloud OFCs, over 2.8 million square meters of warehouses
as of June 30, 2019, gross margin improved by 1.1 percentage points YoY to 8.7%
Store+ number of branded stores reached 3,106 as of June 30, 2019, a YoY increase of 315.2%; number of membership stores exceeded 438,000 as of
June 30, 2019, a YoY increase of 10.3%; gross margin improved by 2.5 percentage points YoY to 10.5%
UCargo number of transactions reached over 114,000, a YoY increase of 19.4%, revenue generated from external customers reached RMB521.8
million, accounting for 5.9% of the Company’s total revenue
Global continued to expand nationwide express and fulfilment operation in Thailand; readied to launch nationwide express operations in Vietnam
Capital provided cumulative total financing solutions to 9,465 trucks as of June 30, 2019, a YoY increase of 84.6%
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
(375)(534) (532)
486
1,441
418520
(12.2%)
(10.2%)
(6.0%)
2.4%
5.2%
6.2% 5.9%
2014 2015 2016 2017 2018 2Q2018 2Q2019
Gross Profit/(Loss) Gross Profit/(Loss) Margin %
Strong top-line growth and profit improvement
6
6,7328,788
3,0665,256
8,844
19,990
27,961
2014 2015 2016 2017 2018 2Q2018 2Q2019
39.9%FY 2017 – FY 2018 YoY
73.8%2014-2018 Revenue CAGR
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. Starting in 2017, the Company revised its arrangements with franchisees and the scope of its service. As a result, the Company became the principal that is directly responsible for last-mile delivery of all parcels and freight processed through its network, and the Company is liable to senders for damage to or loss of parcels and freight in connection
with last-mile delivery. Therefore, in consideration of such expanded scope of services and increased responsibilities, the Company included the last-mile delivery service fee in its revenue.
RevenueRMB mm
Gross Profit/(Loss)RMB mm
Strong track record of top-line growth across segments; in the second quarter revenue grew 30.5% YoY, gross profit grew 24.5% YoY, gross profit increased
by RMB102.4 million
24.5%2Q18 – 2Q19 YoY
196.8%FY 2017 – FY 2018 YoY
1 1
30.5%2Q18 – 2Q19 YoY
Strong volume growth, ongoing network optimization, and increased technology application drive lower costs and operating leverage; adjusted operating
expenses as a percentage of revenue improved by 1.0 percentage points YoY
7
Continuously improving operating leverage
349 554
868
1,470
1,992
493 551
11.4%
10.5%
9.8%
7.4% 7.1%
7.3%
6.3%
2014 2015 2016 2017 2018 2Q2018 2Q2019
% of Revenue
Cost of RevenueRMB mm
Adjusted Operating Expenses1
RMB mm
3,440 5,791
9,377
19,504
26,520
6,315 8,268
112.2%
110.2%
106.0%
97.6%
94.8%
93.8% 94.1%
2014 2015 2016 2017 2018 2Q2018 2Q2019
% of Revenue
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. Adjusted operating expenses represent total operating expenses excluding SBC.
(718)
(1,059)
(1,363)
(923)
(452)
(56)
6
(23.4%) (20.2%)
(15.4%)
(4.6%)
(1.6%)
(0.8%)0.1%
2014 2015 2016 2017 2018 2Q2018 2Q2019
Non-GAAP Net Income/(Loss) Non-GAAP Net Income/(Loss) Margin
Profitability inflection point
8
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. Before the completion of the Company’s IPO in September 2017, no SBC expense had been recognized. Upon completion of the I PO, the Company immediately recognized a substantial amount of SBC expense associated with vested share-based awards, especially in the third quarter of 2017.
2. Non-GAAP net loss represents net loss excluding SBC expense, amortization of intangible assets resulting from business acquis itions and fair value change of equity investments.
Adjusted EBITDA and Adjusted EBITDA MarginRMB mm
Non-GAAP Net Income/(Loss)2
RMB mm
2Q2019 recorded positive non-GAAP net income for the first time during a second quarter; adjusted EBITDA improved by 256% YoY while adjusted EBITDA
margin improved by 1.1 percentage points
1 1
(629)
(905)
(1,120)
(583)
(18) 42
148
(18.3%)
(17.2%)
(12.7%)
(2.9%)(0.1%)
0.6%
1.7%
2014 2015 2016 2017 2018 2Q2018 2Q2019
Adj. EBITDA Adj. EBITDA Margin
(329) (312)
(789)
26
637
432 334
2014 2015 2016 2017 2018 2Q2018 2Q2019
Operating CashflowsRMB mm
CAPEXRMB mm
212
398
628
750
1,078
230
381
6.9%
7.6% 7.1%
3.8%
3.9%
3.4%
4.3%
2014 2015 2016 2017 2018 2Q2018 2Q2019
% of Revenue
Improving cash flow generation with minimal capex spent
9
Asset-light model drives solid cash flow generation. CAPEX is expected to be within 3-4% of revenue annually; company invested RMB369.8 million in
automation in 2Q 2019.
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. Starting in 2017, the Company revised its arrangements with franchisees and the scope of its service. As a result, the Company became the principal that is directly responsible for last-mile delivery of all parcels and freight processed through its network, and the Company is liable to senders for damage to or loss of parcels and freight in connection
with last-mile delivery. Therefore, in consideration of such expanded scope of services and increased responsibilities, the Company included the last-mile delivery service fee in its revenue.
1
*Decrease in operating cash flow in 2Q was due to seasonal cash flow cycle which is offset over the six
month period. Net cash flow for the first six months in 2019 was RMB128.7 million compared to
negative RMB178.1 million for the same period in 2018, an improvement of RMB306.8 million.
*
10
RMBmm(Except for %)
GAAP to non-GAAP measures reconciliation
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. In the second quarter of 2019, the Company recorded share-based compensation (“SBC”) expense of RMB25.7 million, of which approximately RMB0.3 million was allocated to cost of revenue, RMB1.8 million was allocated to selling expenses, RMB21.8 million was allocated to general and administrative expenses, and RMB2.4 million was
allocated to research and development expenses.
Non-GAAP Net Income/(Loss) FY17 FY18 2Q18 2Q19
Net Loss (1,228) (508) (94) (22)
Add:
Share-based Compensation Expense1 299 109 35 26
Amortization of Intangible Assets
Resulting from Business Acquisitions 7 12 3 3
Non-GAAP Net (Loss)/Income (923) (452) (56) 6
Non-GAAP Net (Loss)/Income Margin (4.6%) (1.6%) (0.8%) 0.1%
EBITDA and Adjusted EBITDA FY17 FY18 2Q18 2Q19
Net Loss (1,228) (508) (94) (22)
Add:
Depreciation & Amortization 364 462 107 151
Interest Expense 47 75 22 15
Income Tax Expense 10 12 3 4
Subtract:
Interest Income (75) (103) (32) (26)
EBITDA (882) (62) 6 122
Add:
Share-based Compensation Expense1 299 109 35 26
Adjusted EBITDA (583) (18) 41 148
Adjusted EBITDA Margin (2.9%) (0.1%) 0.6% 1.7%
11
Financial highlights by segment – 2nd Quarter 2019
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. Others include BEST Global, BEST Capital, BEST UCargo and other new initiatives.
2. EBITDA represents net loss excluding depreciation, amortization, interest expense and income tax expense and minus interest income. Adjusted EBITDA represents EBITDA excluding share-based compensation (SBC) expense and fair value change of equity investments.
3. See the slide entitled “GAAP to Adjusted/Non-GAAP Measures Reconciliation” for more information about the non-GAAP measures used in this presentation.
4. Ex-Store include BEST Express, BEST Freight, BEST Supply Chain Management and Others.
RMBmm (Except for %) 2Q2017 2Q2018 2Q2019 %Change YoY
Revenue 4,856 6,732 8,788 30.5%
Express 3,076 4,177 5,446 30.4%
Freight 782 1,030 1,306 26.8%
Supply Chain Management 376 499 599 20.1%
Store+ 594 798 791 (1.0%)
Others1 28 228 647 183.1%
Gross Profit 133 418 520 24.5%
Gross (Loss)/Profit Margin 2.7% 6.2% 5.9% -0.3ppts
Express 3.6% 5.5% 4.5% -1.0ppts
Freight (7.8%) 5.2% 6.4% +1.2ppts
Supply Chain Management 9.4% 7.6% 8.7% +1.1ppts
Store+ 5.7% 8.0% 10.5% +2.5ppts
Others1 48.3% 14.4% 8.9% -5.5ppts
Adjusted EBITDA 2, 3 (135) 42 148 256.0%
Ex-Store+ 4 289
Store+ (99)
Unallocated (42)
Adjusted EBITDA Margin (2.8%) 0.6% 1.7% +1.1ppts
Business Overview
Participant in vast, fast-growing target addressable markets
13
Logistics market size of China, US and Southeast Asia(1)
US$ bn
Fast-growing logistics sub-sectors in ChinaRMB bn
1,602 1,634 1,672
1,829
2,010
1,451 1,482 1,393
1,495
1,636
226 249 281 313 348
2014 2015 2016 2017 2018
China USA SEA
733
1,194
2019E 2023E
Express
1,611 2,270
2019E 2023E
Less than truckload Freight
We are a key player in the world’s largest and fastest-growing logistics markets and its sub-sectors
Source: Frost and Sullivan
Note:
1. 2018 year-end exchange rate, US$ / RMB = 6.6174
4,087 5,247
2019E 2023E
Full truckload Freight
1,571 2,111
2019E 2023E
Supply chain management
299
1,002
2019E 2023E
Truckload service brokerage platform
492
2,084
2019E 2023E
FMCG B2B platform
Before
Monoline logistics companies create islands of
disparate online and offline information
Our vision is to leverage technology and an integrated supply chain and logistics platform…
BEST provides one-stop online-offline
smart supply chain solutions
Our Platform
B2B2CO2O
Online
B2C
B2B
Supply Chain
Systems
Last-mile
Express
Trucking
Cross-border
Offline
14
15 Source: Council of Supply Chain Management Professionals (CSCMP), Frost and Sullivan, iResearch, State of Logistics Report, National Bureau of Statistics of China and China Federation of Logistics & Purchasing.
0%
5%
10%
15%
20%
25%
30%
1991 1996 2001 2006 2011 2016
Warehousing Transportation Administration
Development of China Logistics Market Logistics Costs as % of GDP
Warehousing: 31.3% 34.6%
Transportation: 55.4%
51.9%
Development of US Logistics Market Logistics Costs as % of GDP
0%
3%
6%
9%
12%
15%
18%
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Warehousing: 49.1%30.2%
Transportation: 47.2%
63.4%
Total: 16.1% of GDP
Total: 8.0% of GDP
Total: 24.0% of GDP
14.8% of GDP
OutsourcingTechnology Standardization Consolidation
K E Y D R I V E R S O F T H E T R A N S F O R M A T I O N
…to transform China’s inefficient supply chain and logistics industry
Administration: 3.7%
6.4%
Administration: 13.3%
13.5%
2018
2018
Market leading growth
16
CAGR 2016–2018
(vs. Industry)
2Q2019
(vs. Industry)
Express
Started operation in 2010, currently is the 4th largest express provider by volume(1)
Market share grew from 2.0% in 2014 to 10.8% in 2018
Parcel volume grew from 1.0 billion in 2014 to 5.4 billion in 2018
58.9% vs 27.3% 49.0% vs. 28.4%
Freight Started operation in 2012, currently is the 2nd largest LTL provider by volume(2)
Freight volume grew from 0.5 million tonne in 2014 to 5.4 million tonnes in 201834.9% vs 19.8%(2) 26.6%(3)
Supply Chain Management
Started operation in 2009, leading 3PL supply chain management service provider
for fashion & apparel and FMCG segments
Number of orders fulfilled grew from 10.0 million in 2014 to 246.7 million in 2018
29.3% vs. 9.5%(2) 20.1%(3)
Store+
Started operation in 2015, one of the leading online and offline FMCG platforms
for convenience stores
Number of orders fulfilled grew from 687,692 in 2016 to 3,055,042 in 2018
125.4% vs 177.8%(2) (1.0)%(3)
UCargo
Started operation in 2015 to source transportation needs for internal BUs, opened
platform to external customers in March 2018
Number of transactions increased from 17,626 in 2016 to 466,278 in 2018
N/A vs 100.0%(2) 246.5 %(3, 4)
We have consistently outperformed and outgrown the industry with strong momentum in gaining market share from competitors
Note:
1. In terms of parcel volume
2. According to Frost & Sullivan industry research
3. Industry data not available
4. Growth is calculated based only on revenue generated by transactions with external customers
By Volume By Revenue
Sender /
Recipient
Sender /
Recipient
Express
17
Asset-light business utilizing our network, franchisee partners and 3rd party transportation service providers to provide express delivery of parcels
Highlights
Fast growth and market share gain: continual significant above-market growth, moving from 6th (6.9% market share) in 2016 to 4th (10.8% market share) in 2018; YoY
growth by parcel volume was 49.0% in 2Q 2019, market share improved to 12.2% as of June 30, 2019 from 10.5% as of June 30, 2018
Continuous reduction in unit cost: Cost per parcel decreased by 11.6% YoY, driven by a decrease in transportation cost per parcel by 17.7% to RMB0.71, labor cost per parcel
by 31.5% to RMB0.23, lease cost per parcel by 15.0% to RMB0.09 and other costs per parcel by 25.2% to RMB0.14
Operating efficiency enhancement: leveraged critical scale and network to optimize operations, reduced the number of hubs and sortation centers to 97 as of June 30, 2019
from 128 as of June 30, 2018
Technological advancements: 75 automated sorting and 732 dimensions and weight scanning systems in operation, digital waybill usage was 100% as of June 30, 2019
Strategies
Brand building: continue to improve service quality and enhance customer experience
Network optimization: further reduce total number of hubs and sortation centers to around 90 by end of 2019 to lower transportation, labor, lease and other costs
Technology application: continue to invest in automation technology to increase productivity
Market share gain: target minimum parcel volume growth to be 1.5x of industry growth in 2019
Pick-Up/DeliverySorting and Transporting
Service
Stations
Service
Stations
Hubs and
Sortation Centers
Line-Haul Transportation and
Feeder Services*
Hubs and
Sortation Centers
Pick-Up / Delivery
Operated by BEST Operated by Franchisee Partners *All transportation outsourced to 3rd party transportation service providers
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
5.3%
6.8% 6.9%
9.4%
10.8% 10.5%
12.2%
2014 2015 2016 2017 2018 2Q2018 2Q2019
18
Express – fast growth and market share gain
735
1,4022,166
3,769
5,470
1,280
1,907
128.0%
90.8%
54.4% 74.1%
45.1%
39.6%
49.0%51.9%
48.1%
51.3%
28.0%
26.6% 25.0%28.4%
2014 2015 2016 2017 2018 2Q2018 2Q2019
BEST Express Volume BEST Express YoY Industry YoY
65.2%2014-2018 CAGR
Note: Data as of June 30, 2019.
Source: iResearch, State Post Bureau of China.
Outperforming Industry Growthmm Parcels
Continuously Gaining Market ShareMarket Share (%)
5.5 ppts2014-2018
1.7 ppts2Q2018-2Q2019
1.72x2Q Industry Growth
3.52 2.88 2.62
1.83 1.48 1.50 1.17
1.47 1.61 1.58
1.56
3.30 3.09 3.08
2.73
2014 2015 2016 2017 2018 2Q2018 2Q2019
Cost per Parcel Last-mile delivery service fee
19
Express – volume growth, network optimization, technology application drive unit economics improvement
Parcel Volumemm
Revenue per ParcelRMB
Gross Profit/(Loss) per ParcelRMB
(0.45)
(0.23) (0.13)
0.09 0.14
0.18 0.13
(14.7%)
(8.7%) (5.2%)
2.7% 4.4% 5.5% 4.5%
2014 2015 2016 2017 2018 2Q2018 2Q2019
Gross Profit/(Loss) per Parcel Gross Profit/(Loss) Margin*
735 1,402
2,166
3,769
5,470
1,280 1,907
2014 2015 2016 2017 2018 2Q2018 2Q2019
Cost of Revenue per ParcelRMB
3.07 2.65 2.49
1.92 1.63 1.68 1.30
1.47 1.61 1.58
1.56
3.39 3.24 3.26 2.86
2014 2015 2016 2017 2018 2Q2018 2Q2019Revenue per Parcel Last-mile delivery service fee
45.1%FY 2017 – FY 2018 YoY
65.2%2014-2018 CAGR
6.4%FY 2017 – FY 2018 YoY
19.5% (ex-LM)2014-2018 CAGR
11.6%2Q18 – 2Q19 YoY
4.4%FY 2017 – FY 2018 YoY
14.6% (ex-LM)2014-2018 CAGR
12.4%2Q18 – 2Q19 YoY
55.6%FY 2017 – FY 2018 YoY
28.4%2Q18 – 2Q19 YoY
*Gross Profit Margin is calculated based on revenue per parcel including last-mile delivery service fee starting from 2017Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
1. Starting in 2017, the Company revised its arrangements with franchisees and the scope of its service. As a result, the Company became the principal that is directly responsible for last-mile delivery of all parcels and freight processed through its network, and the Company is liable to senders for damage to or loss of parcels and freight in connection
with last-mile delivery. Therefore, in consideration of such expanded scope of services and increased responsibilities, the Company included the last-mile delivery service fee in its revenue.
1
1
49.0%2Q18 – 2Q19 YoY
1.97 1.48 1.29
1.01 0.87 0.87 0.71
2014 2015 2016 2017 2018 2Q2018 2Q2019
0.29 0.23
0.43
0.22 0.18 0.19 0.14
2014 2015 2016 2017 2018 2Q2018 2Q2019
0.23 0.22 0.20
0.13 0.11 0.11 0.09
2014 2015 2016 2017 2018 2Q2018 2Q2019
1.02 0.94 0.70
0.47 0.33 0.34
0.23
2014 2015 2016 2017 2018 2Q2018 2Q2019
20
Transportation Cost per ParcelRMB
Labor Cost per ParcelRMB
Other Costs per ParcelRMB
Lease Cost per ParcelRMB
Express – continuous reduction in cost per parcel
13.8%FY 2017 – FY 2018 YoY
18.5%2014-2018 CAGR
17.7%2Q18 – 2Q19 YoY
15.4%FY 2017 – FY 2018 YoY
16.8%2014-2018 CAGR
15.0%2Q18 – 2Q19 YoY
29.8%FY 2017 – FY 2018 YoY
24.6%2014-2018 CAGR
31.5%2Q18 – 2Q19 YoY
18.2%FY 2017 – FY 2018 YoY
11.2%2014-2018 CAGR
25.2%2Q18 – 2Q19 YoY
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Sender /
Recipient
Sender /
Recipient
Freight
21
Asset-light business utilizing our network, franchisee partners and 3rd party transportation service providers to provide LTL and FTL delivery
Highlights
Strong volume growth: freight volume increased from 678,000 tonnes in 2014 to 5,430,000 tonnes in 2018; increased by 26.6% YoY to 1,730,000 tonnes in 2Q19
Ongoing network optimization: number of hubs and sortation centers reduced by 20.5% YoY to 101 which resulted in improved operational efficiency with lower
transportation and labor costs, while shortened delivery time
Significant margin improvement: gross profit/loss per tonne improved from negative RMB107 in 2014 to positive RMB29 in 2018; gross profit margin improved by 1.2
percentage points YoY to 6.4% in 2Q19
Service coverage expansion: total number of franchised last-mile service stations increased by 55.1% YoY to 17,380 as of June 30, 2019 from 11,209 as of June 30, 2018
Strategies
E-commerce focus: increase percentage of e-commerce related transactions to improve product mix and profit margin
Network optimization: optimize number of hubs and sorting centers to around 90 by 2020 to further reduce costs and shorten delivery time
Dynamic routing integration with Express: centralize dynamic route planning to further reduce transportation costs
Customer experience and service quality enhancement: continue to increase number of service stations and provide value-added services to customers
Pick-Up/DeliverySorting and Transporting
Service
Stations
Service
Stations
Hubs and
Sortation Centers
Line-Haul Transportation and
Feeder Services*
Hubs and
Sortation Centers
Pick-Up / Delivery
Operated by BEST Operated by Franchisee Partners *All transportation outsourced to 3rd party transportation service providers
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
499 613 639 656 585 578 545
123 142 136 161
779 727 714 707
2014 2015 2016 2017 2018 2Q2018 2Q2019
Cost per Tonne Last-mile delivery service fee
22
(107)
(164)
(101)
(43)
29 39 49
(27.3%)
(36.5%)
(18.8%)
(5.8%)
3.8% 5.2% 6.4%
2014 2015 2016 2017 2018 2Q2018 2Q2019
Gross Profit/(Loss) per Tonne Gross Profit/(Loss) Margin*
678
1,507
2,982
4,316
5,430
1,366 1,730
2014 2015 2016 2017 2018 2Q2018 2Q2019
392 449 538 604 614 618 594
132 142 136 161
736 756 754 755
2014 2015 2016 2017 2018 2Q2018 2Q2019
Revenue per Tonne Last-mile delivery service fee
Freight – growth in e-commerce and consumption drives demand for LTL services
Freight Volume000’s tonnes
Revenue per TonneRMB
Cost of Revenue per TonneRMB
Gross Profit/(Loss) per TonneRMB
25.8%FY 2017 – FY 2018 YoY
68.2%2014-2018 CAGR
26.6%2Q18 – 2Q19 YoY
7.2%FY 2017 – FY 2018 YoY
4.1% (ex-LM)2014-2018 CAGR
5.7%2Q18 – 2Q19 YoY
2.7%FY 2017 – FY 2018 YoY
11.9% (ex-LM)2014-2018 CAGR
0.1%2Q18 – 2Q19 YoY
22.5%2Q18 – 2Q19 YoY
9.6pptsFY 2017 – FY 2018 YoY
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
*Gross Profit Margin is calculated based on revenue per tonne including last-mile delivery service fee starting from 2017
1
1
303 402 436 423 382 382 352
2014 2015 2016 2017 2018 2Q2018 2Q2019
39 40 31
48 45 41 45
2014 2015 2016 2017 2018 2Q2018 2Q2019
48 57
66 63 57 55 55
2014 2015 2016 2017 2018 2Q2018 2Q2019
110 114 107 113 101 101 94
2014 2015 2016 2017 2018 2Q2018 2Q2019
23
Transportation Cost per TonneRMB
Labor Cost per TonneRMB
Other Costs per TonneRMB
Lease Cost per TonneRMB
Freight – ongoing reduction of unit costs
9.7%FY 2017 – FY 2018 YoY
8.0%2Q18 – 2Q19 YoY
9.5%FY 2017 – FY 2018 YoY
1.5%2Q18 – 2Q19 YoY
10.6%FY 2017 – FY 2018 YoY
7.2%2Q18 – 2Q19 YoY
6.3%FY 2017 – FY 2018 YoY
9.7%2Q18 – 2Q19 YoY
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Supply Chain Management
24
• Integrated supply chain solutions including warehouse and inventory planning, online and offline fulfillment and transportation solutions, intra-city
same-day delivery, and SaaS platform for merchants
Highlights
Solid growth: number of orders fulfilled increased from 20 million in 2014 to 247 million in 2018; increased by 41.7% YoY to 86.7 million in 2Q19
Improved margins: Gross margin improved by 1.0 percentage points YoY to 8.7% as a result of focusing on fashion & apparel and FMCG segments
Significant scale: managed 370 warehouses across China and over 2.8 million square meters of facilities, of which franchisees owned and operated 259 Cloud OFCs and 1.2
million square meters of facilities as of June 30, 2019
Strong growth in franchised Cloud OFC business: orders fulfilled by franchised Cloud OFCs increased by 78.5% YoY to 36.6 million in 2Q19, accounting for 42.3% of total
number of orders fulfilled
Strategies
One-stop solution: accelerate integration with other business units to offer integrated supply chain solutions to more customers
Fashion & Apparel and FMCG segments focus: continue to expand market leading position in these two segments
New products and services offering: provide SaaS platform to merchants to digitize their supply chain; build out intra-city delivery network in major cities; develop fresh
produce supply chain to enable rural villages to sell fresh produce directly to consumers
Online
Merchants
Offline
OtherTransportation
ServiceProviders
Consumers
BEST CloudOFCs
CustomerWarehouses
Membership Storesand Branded Stores
Customer StoresDistributors
B2C
B2B
O2O
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
442 721
1,161 1,389 1,719
1,380 1,607 45 201
561
995
1,090
1,008 1,235
487
922
1,722
2,384 2,809
2,388 2,842
2014 2015 2016 2017 2018 2Q2018 2Q2019
Self-Operated Cloud OFCs Franchised Cloud OFCs
47 52 93 99 115 110 111 18 54
140
228 237 238 259
65 106
233
327 352 348 370
2014 2015 2016 2017 2018 2Q2018 2Q2019
Self-Operated Cloud OFCs Franchised Cloud OFCs
25
28 33 58
98 104
38 52
5.1%4.0%
4.7%
6.1%5.0%
7.6%8.7%
2014 2015 2016 2017 2018 2Q2018 2Q2019
Gross Profit Gross Profit Margin
Supply Chain Management – extensive nationwide network and services
Number of Orders fulfilledmm
Gross ProfitRMB mm
Total Warehouse GFA000’s sqm
Cloud OFCs
1945
88132
164
41 501
9
33
48
82
20 3720
54
121
180
247
6187
2014 2015 2016 2017 2018 2Q2018 2Q2019
Self-Operated Cloud OFCs Franchised Cloud OFCs
36.7%FY 2017 – FY 2018 YoY
87.3%2014-2018 CAGR
41.7%2Q18 – 2Q19 YoY
7.6%FY 2017 – FY 2018 YoY
52.6%2014-2018 CAGR
6.3%2Q18 – 2Q19 YoY
6.0%FY 2017 – FY 2018 YoY
38.8%2014-2018 CAGR
36.3%2Q18 – 2Q19 YoY
17.8%FY 2017 – FY 2018 YoY
55%2014-2018 CAGR
19.0%2Q18 – 2Q19 YoY
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Store+
26
Smart supply chain for convenience stores and last-mile services for consumers
Highlights
Rapidly growing network: number of branded stores increased to 3,106 from 748 YoY, number of membership stores increased by 10.3% YoY to 438,140
Significant increase in orders fulfilled for branded stores: the total number of store orders fulfilled was 755,756; of which 214,417 orders, accounting for 28.4% of total
orders, was fulfilled for branded stores, representing a 13.3 percentage-point increase YoY in 2Q19
Strong margin improvement: improved gross margin from negative 0.1% in 2015 to positive 9.0% in 2018; improved by 2.5 percentage points YoY to 10.5% in 2Q19
2C last mile services: rolled out Store+ membership programs, online-to-offline and last-mile services, including parcel pick-up/drop-off, home delivery, community group-
buying etc.
Strategies
Branded stores expansion: expand franchised BEST-Neighbor stores to critical scale to improve gross margin and reduce fulfillment costs per order
Membership store quality enhancement: improve margins and reduce fulfillment costs further by enhancing the quality of membership stores and their orders
Technology application: deploy data analytics to deepen cooperation with brands and stores to optimize merchandise procurement, improve operating efficiency, and roll out
new services
Last-mile services to consumers: expand membership program, online-to-offline and last-mile services to grow 2C business
Online
Merchants
Offline
Membership
and Branded
Stores
Last-Mile Services
Consumers
Merchandise and services flow
Data flow
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
282 351 272 34594
1,489
476
2,761
376
1,840
748
3,106
2017 2018 2Q2018 2Q2019
Self-Operated Stores Franchised Stores
3,556
247,631
363,755
423,636 397,289
438,140
2015 2016 2017 2018 2Q2018 2Q2019
242,237
698,673
131,632 214,417
2,161,301
2,521,568
738,959 541,339 10,151
687,692
2,403,538
3,220,241
870,591 755,756
2015 2016 2017 2018 2Q2018 2Q2019
Branded Stores Membership Stores Total
27
Store+ – rapid network expansion, strong margin improvement
Number of Branded Stores Number of Membership Stores
Gross Profit/(Loss) per OrderRMB
Number of Orders Fulfilled
(1)
(14)
64 84 73
110
(0.1%) (1.7%)
6.9%
9.0% 8.0%
10.5%
2015 2016 2017 2018 2Q2018 2Q2019Gross Profit/(Loss) per order Gross Profit/(Loss) Margin
389.4%FY 2017 – FY 2018 YoY
315.2%2Q18 – 2Q19 YoY
27.1%FY 2017 – FY 2018 YoY
570.2%2015-2018 CAGR
13.2%*
2Q18 – 2Q19 YoY
16.5%FY 2017 – FY 2018 YoY
392.1%2015-2018 CAGR
10.3%2Q18 – 2Q19 YoY
31.1%FY 2017 – FY 2018 YoY
49.7%2Q18 – 2Q19 YoY
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
* Decrease in store orders was due to ongoing efforts to improve the quality of orders from membership stores
Other service offerings
28
Highlights Strategies
UCargo
Significant increase in transaction volume since opening the platform
to external customers in March 2018. Number of transactions
increased from 17,626 in 2016 to 466,278 in 2018
The number of total transactions increased by 19.4% YoY to 114,538,
of which external transactions increased by more than 3.6 times to
94,406 in 2Q 2019
Continue to roll out new solutions such as multimodal,
LTL, clean energy vehicles, etc.
Provide after-market services such as bulk purchases,
insurance, maintenance and repairs to drive revenue
growth and margin
Capital
Financial services provider to participants in our ecosystem to help
them grow their businesses, and improve the overall efficiency of our
network
Have provided financing solution to 9,465 trucks as of June 30, 2019
Deepen strategic cooperation with truck manufacturers
to expand financing offerings
Provide supply chain financing solutions to ecosystem
participants
Global
International service coverage in 18 countries and regions outside of
China via partners and our own networks
Continued to grow nationwide express and fulfilment operation in
Thailand, as well as readied to launch nationwide express operations
in Vietnam in 2Q 2019
Capture enormous growth opportunities in Southeast
Asia, invest and roll out networks in Vietnam, Indonesia
and others
Develop more cross-border solutions to cover more
countries
Cloud
Backbone to BEST’s integrated services and smart solutions
Strong proprietary technology and big data analytics capabilities drive
operational excellence and enhance value creation across ecosystem
Invest in human capital and new technologies; continue
to create more solutions and improve company’s
operational efficiency
Monetize SaaS platform
29
Others service offerings – new growth engines
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
4 4
68
138
33
57
2015 2016 2017 2018 2Q2018 2Q2019
32 49
198
1,236
228
647
2015 2016 2017 2018 2Q2018 2Q2019
RevenueRMB mm
Gross ProfitRMB mm
523.5%FY 2017 – FY 2018 YoY
238.0%2015-2018 CAGR
183.1%2Q18 – 2Q19 YoY
103.3%FY 2017 – FY 2018 YoY
225.5%2015-2018 CAGR
74.2%2Q18 – 2Q19 YoY
213
4,228
8,591
5,126
9,465
2016 2017 2018 2Q2018 2Q2019
17,203 103,713
318,727
70,144 20,132
423
7,874
147,551
25,781 94,406 17,626
111,587
466,278
95,925 114,538
2016 2017 2018 2Q2018 2Q2019
Internal External
UCargo- Number of Transactions
317.9%FY 2017 – FY 2018 YoY
414.3%2016-2018 CAGR
19.4%2Q18 – 2Q19 YoY
180,000
261,414222,362
295,440
3,027
4,514
3,947
4,830
2017 2018 2Q2018 2Q2019 2017 2018 2Q2018 2Q2019
Agents Trucks
UCargo - Registered Agents and TrucksEnd of Period
45.2%FY 2017 – FY 2018 YoY
32.9%2Q18 – 2Q19 YoY
49.1%FY 2017 – FY 2018 YoY
22.4%2Q18 – 2Q19 YoY
UCargo – Revenue Generated from External CustomersRMBmm
18
151
257
467 444
522
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19
30
Others service offerings – rapid expansion of networks and growth in transaction volume
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Capital - Trucks FinancedEnd of Period
103.2%FY 2017 – FY 2018 YoY
535.1%2016-2018 CAGR
84.6%2Q18 – 2Q19 YoY
246.5%2Q18 – 2Q19 YoY
Senior management Experience
Johnny Chou Shaoning
Founder, Chairman and CEOGoogle, UTStarcom, AT&T Bell Laboratory, Master in Science and Engineering Princeton University
George Chow
Director, Chief Strategy and Investment OfficerCredit Suisse, UBS, Merrill Lynch, MBA in Finance Stern School of Business, New York University
Felix Dong Feng
GM of BEST Capital service lineHangzhou Guangfa Bank, Southwestern University of Finance and Economics
Andy Liu Bo
Senior Vice President, GM of Store+ service lineUTStarcom, Motorola, China University of Mining and Technology
Mary Liu Jimei
Senior Vice President of Human Resources and AdministrationUTStarcom, Ting Hsin International Group, Central South University, University of Texas
Tony Liu Tao
Senior Vice President, GM of Freight service line
Shandong Zitong International Logistics, Zhilian Logistics, Shandong University of Finance and
Economics
Jenny Pan Xiaojie
Principal Accounting OfficerState Street Corp Zhejiang, KPMG China, South China University of Technology, Zhejiang University
Ted Yuan Xingjun
Vice President, GM of UCargo service line
Hangzhou PoolMaster Logistics, UTStarcom, Hangzhou Kelong Electrical Appliances, City University
of Leeds
Mandy Zhang Mangli
Senior Vice President, GM of SCM service line
UTStarcom, Zhejiang Province Economics and Construction Development Consulting Company,
Hangzhou Wireless Equipment Factory, Zhejiang University
Fred Zhang Yanbing
Senior Vice President of Engineering, GM of Cloud service line
UTStarcom, China TravelSky, National University of Defense Technology, Karlsruhe Institute of
Technology
Richard Zhou Jian
Senior Vice President, GM of Global service line
UTStarcom, Shanghai Ziimoo Communication Technology, Cellon (Shanghai) Communication
Technology, Huazhong University of Science and Technology
Victor Zhou Shaohua
Senior Vice President, GM of Express service lineUTStarcom, Motorola, China Mobile, Beijing University of Posts and Telecommunications
Diverse and experienced management team
31
Positioned to continue strong growth momentum
32
We are focused on maximizing long-term value propositions to businesses and consumers through comprehensive integrated services and enhanced
experience driven by technology and service quality
Technology enabled networks well-positioned to capture opportunities from demand for integrated supply chain solutions and services as a result of
strong growth in e-commerce, online-to-offline integration, and ongoing industry consolidation
Asset-light business model ensures solid operating cash flow with minimal CAPEX spent and a high return on capital
Outperforming industry growth in key sub-sectors
New businesses provide growth engines with strong revenue and margin contribution
Significant gross profit, EBITDA, net income improvement YoY
Adjusted EBITDA and margin to continue to improve
Adjusted net income is at an inflection point, strive to turn positive for full year 2019
Supplemental Materials
Business Model
Financial Statements
Integrated logistics and supply chain networks
Express Freight SCM Store+
Express parcel delivery LTL and FTL delivery Smart online-offline supply chain
management
S2B2C smart supply chain for
convenience stores and last-mile
services for consumers
• Youngest and one of the fastest growing
express networks among major players,
ranked within the top 4 by parcel volume
• 100% province and city, 99% district and
county coverage
• Asset-light model with 5,300+ franchisee
partners operating 36,000+ service
stations, self-operate 97 hubs and
sortation centers, 100% of facilities
leased, 100% transportation needs
outsourced
• Leading and among the fastest growing
LTL service providers in China. Ranked
number 2 by LTL volume
• 100% province and 99% city coverage
• Asset-light model with 4,800+ franchisee
partners operating 17,000+ service
stations, self-operate 101 hubs and
sortation centers, 100% of facilities
leased, 100% transportation needs
outsourced
• Provides value-added services to
customers
• Leading 3PL supply chain management
services provider offers customized
solutions and services to multinationals,
corporates and SMEs
• Solutions include warehouse and inventory
planning, online and offline fulfillment and
transportation solutions, intra-city same-
day delivery, and SaaS platform for
merchants
• Nationwide coverage with 370 Cloud Order
Fulfillment Centers (OFCs), 2.8 million
square meters of GFA
• Asset-light model with 259 franchised
cloud OFCs operated 1.2 million square
meters of facilities, 100% of facilities
leased, 100% transportation needs
outsourced
• Addresses pain points in the traditional
retail industry such as high channel costs
and inefficient supply chain management
• Offers online merchandise sourcing and
store management services for
convenience stores; and provides online to
offline, and last-mile services to
consumers
• Covers 24 provinces and 41 tier 1 and 2
cities; 3,100+ branded stores and
438,000+ membership stores as of June
30, 2019
• Integrated with SCM - fulfillment and
transportation services provided by SCM
Business model: technology enabled integrated smart logistics and supply chain platform
34
Our mission is to empower business and enrich life by leveraging technology and business model innovation to create a smarter, more efficient supply chain
Notes: As of June 30, 2019
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Integrated logistics and supply chain networks (cont’d) Financial services Technology platform
UCargo Global Capital Cloud
Truckload service brokerage platform International e-commerce logistics Financial services for BEST’s ecosystem Proprietary cloud-based SaaS services
and applications platform
• Provides customized solutions to
customers and sources truckload capacity
from transportation service providers to
match demand from both the external
customers and internal business units
• Executes real-time bidding, en route
monitoring, service quality evaluation,
insurance and settlement
• Provides value-added services such as
bulk purchase of vehicles, insurance, ETC,
parts sales and general maintenance, etc.
• Nationwide network, 4,800+ service
providers and agents with access to
295,000+ trucks as of June 30, 2019
• Provides international logistics solutions
including inbound and outbound door-to-
door international express, LTL, fulfilment,
reverse logistics and freight forwarding
through our own networks and global
partners
• Covered 18 countries and regions outside
of China as of June 30, 2019
• Operated 3 Cloud OFCs in the US,
continued to expand nationwide express
and fulfilment operation in Thailand, and
readied to launch nationwide express
operations in Vietnam as of June 30, 2019
• Operated 110,000+ square meters of
facilities outside of China as of June 30,
2019
• Provides financial services and support to
participants in our ecosystem to help them
grow their businesses, while improve the
overall efficiency of our network
• Offers finance leases to help our
franchisee partners and transportation
service providers acquire trucks and other
logistics equipments
• Centralizes sourcing of products and
services used by our franchisee partners
and transportation service providers such
as bulk procurement of trucks and
accessories to obtain group discount to
reduce costs
• Strong proprietary technology and big data
analytics capabilities drive operational
excellence and enhance value creation
across ecosystem
• Powers the technology solutions and
applications for our ecosystem. Offers
integrated web and mobile portal for
merchants, consumers, franchisee
partners, transportation service providers
and employees
• Provides access to a wide range of
application and services such as SMS,
OMS, TMS, WMS, billing and payment
settlement, CRM and customer data
tracking and analytics
• 820+ engineers, and 800,000+ external
users of our SaaS platform as of June 30,
2019
Business model: technology enabled integrated smart logistics and supply chain platform (cont’d)
35
We have built comprehensive logistics and supply chain infrastructures and operations, powered by our proprietary cloud-based SaaS technology, and
supported by our financial services platform
Notes: As of June 30, 2019
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Income statementFor the year Ended December 31, For the three months Ended June 30,
(RMB ‘000 Unless Noted Otherwise) 2016 2017 2018 2018 2019
Revenue
Express 5,388,833 12,786,279 17,702,869 4,177,173 5,446,395
Freight 1,604,573 3,178,044 4,102,610 1,029,676 1,305,785
Supply Chain Management 1,241,356 1,600,952 2,074,414 498,521 598,674
Store+ 560,226 2,226,034 2,845,002 798,480 790,558
Others 49,149 198,253 1,236,084 228,470 646,718
Total Revenue 8,844,137 19,989,562 27,960,979 6,732,320 8,788,130
Cost of Revenue
Express (5,671,356) (12,435,550) (16,915,801) (3,948,228) (5,202,070)
Freight (1,906,930) (3,362,652) (3,946,032) (975,846) (1,222,296)
Supply Chain Management (1,183,245) (1,502,570) (1,970,105) (460,451) (546,778)
Store+ (569,557) (2,072,912) (2,589,883) (734,571) (707,497)
Others (45,479) (130,327) (1,098,021) (195,577) (589,422)
Total Cost of Revenue (9,376,567) (19,504,011) (26,519,842) (6,314,674) (8,268,063)
Gross (Loss)/Profit (532,430) 485,551 1,441,137 417,646 520,067
Selling Expenses (370,017) (694,852) (893,859) (205,736) (213,222)
General and Administrative Expenses (521,237) (928,188) (1,020,671) (271,108) (301,169)
Research and Development Expenses (80,326) (139,009) (184,581) (51,499) (62,517)
Other Operating Income 104,047 – – - -
Total Operating Expenses (867,533) (1,762,049) (2,099,111) (528,343) (576,908)
Loss from Operations (1,399,963) (1,276,498) (657,974) (110,697) (56,841)
Interest Income 24,386 75,056 102,821 31,675 26,024
Interest Expense (21,379) (47,154) (75,060) (21,836) (14,696)
Foreign Exchange (Loss) (1,864) (6,320) (6,533) (4,318) (2,198)
Other Income 44,409 56,035 171,370 17,650 33,076
Other Expense (8,542) (18,507) (30,672) (2,681) (3,225)
Loss Before Income Tax and Share of Net Income/(Loss) of Equity Investees (1,362,953) (1,217,388) (496,048) (90,207) (17,860)
Income Tax Expense (570) (9,856) (11,887) (3,440) (4,410)
Loss Before Share of Net Income/(Loss) of Equity Investees (1,363,523) (1,227,244) (507,935) (93,647) (22,270)
Share of Net Income/(Loss) of Equity investees 43 (816) (456) (101) (101)
Net Loss (1,363,480) (1,228,060) (508,391) (93,748) (22,371)
Net Loss Attributable to Non-controlling Interests – (167) (403) - (3,077)
36 Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Balance sheet
(RMB ‘000 Unless Noted Otherwise) As of June 30,
2018
As of September 30,
2018
As of December 31,
2018
As of March 31,
2019
As of June 30,
2019
ASSETS
Current Assets
Cash and Cash Equivalents 1,770,238 610,962 1,630,444 1,469,631 1,575,254
Restricted Cash 1,314,505 1,135,259 1,278,326 1,351,466 1,223,996
Accounts and Notes Receivables 772,044 858,658 1,046,844 945,990 1,026,171
Inventories 179,580 164,268 151,031 168,830 175,294
Prepayments and Other Current Assets 1,677,633 1,892,305 1,904,846 1,880,370 1,999,878
Short-term Investments 1,197,342 2,082,201 1,007,329 926,706 1,083,465
Lease Rental Receivables 270,745 388,479 613,439 677,952 153,737
Amounts Due from Related Parties 117,470 104,943 197,488 114,158 715,180
Total Current Assets 7,299,557 7,237,075 7,829,747 7,535,103 7,952,975
Non-current Assets
Property and Equipment, Net 1,544,692 1,818,441 2,064,657 2,088,339 2,410,140
Intangible Assets, Net 145,196 139,636 143,810 136,257 129,905
Long-term Investments 144,877 228,334 214,339 214,304 214,203
Goodwill 457,514 457,514 469,076 469,076 469,076
Non-current Deposits 68,131 69,186 77,043 100,372 103,052
Other Non-current Assets 59,715 46,551 45,531 44,526 69,525
Lease Rental Receivables 67,520 82,955 90,638 113,397 163,026
Restricted Cash 950,379 1,114,904 1,431,441 1,396,821 1,352,958
Operating lease right-of-use assets - - - 4,442,251 4,036,752
Total Non-current Assets 3,438,024 3,957,521 4,536,535 9,005,343 8,948,637
Total Assets 10,737,581 11,194,596 12,366,282 16,540,446 16,901,612
37 Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Balance sheet (cont’d)
38 Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
(RMB ‘000 Unless Noted Otherwise) As of June 30,
2018
As of September 30,
2018
As of December 31,
2018
As of March 31,
2019
As of June 30,
2019
Liabilities and Shareholders’ Equity
Current liabilities
Securitization Debt - - - - 145,359
Short-term bank loans 1,297,000 1,454,900 1,782,900 2,135,000 2,271,500
Accounts and notes payable 2,248,970 2,326,568 2,851,557 2,767,388 2,849,868
Income tax payable 1,728 3,356 5,767 8,401 4,969
Customer advances and deposits and deferred revenue 1,091,020 1,200,973 1,219,230 1,127,295 1,329,016
Accrued expenses and other current liabilities 1,916,563 1,946,259 2,238,785 1,857,933 2,016,272
Capital lease obligation 2,851 2,851 2,851 1,953 1,884
Operating Lease Liabilities - - - 1,026,425 776,510
Amount due to related parties 10,511 13,265 12,429 25,324 597
Total current liabilities 6,568,643 6,948,172 8,113,519 8,949,719 9,395,975
Non-current liabilities:
Securitization Debt - - - - 67,272
Capital lease obligation 3,070 872 745 2,207 2,095
Deferred tax liability 30,136 29,425 25,356 24,583 23,843
Non-current liabilities 79,126 79,126 86,504 90,282 91,032
Operating lease liabilities - - - 3,588,439 3,380,525
Total non-current liabilities 112,332 109,423 112,605 3,705,511 3,564,767
Total liabilities 6,680,975 7,057,595 8,226,124 12,655,230 12,960,742
BEST Inc. Shareholders’ Equity 4,056,606 4,134,237 4,138,115 3,882,282 3,941,012
Non-controlling Interests - 2,764 2,043 2,934 (142)
Total Shareholders’ Equity 4,056,606 4,137,001 4,140,158 3,885,216 3,940,870
Total Liabilities and Shareholders’ Equity 10,737,581 11,194,596 12,366,282 16,540,446 16,901,612
Statement of cashflows
For the year Ended December 31, For the three months Ended June 30,
(RMB ‘000 Unless Noted Otherwise) 2016 2017 2018 2018 2019
Net Cash Generated (used in)/from Operating Activities (788,794) 25,602 637,204 432,412 334,242
Net Cash Generated from/(used in) Investing Activities 677,074 952,503 (1,230,953) (369,276) (638,496)
Net Cash Generated from/(used in) Financing Activities 4,110,498 3,730,859 557,149 (331,583) 304,705
Exchange Rate Effect on Cash and Cash Equivalents, and Restricted Cash (18,751) (18,751) 53,179 75,231 27,331
Net Increase/(Decrease) in Cash and Cash Equivalents, and Restricted Cash 2,636,517 (368,213) 16,579 (193,216) 27,782
Cash and Cash Equivalents, and Restricted Cash at Beginning of Period 291,064 3,380,532 2,982,829 3,345,479 2,934,494
Cash and Cash Equivalents, and Restricted Cash at End of Period 2,927,581 3,012,319 2,999,408 3,152,263 2,962,276
39 Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Reconciliation of adjusted EBITDA and non-GAAP net income
40
Reconciliation of Adjusted EBITDA
For the year Ended December 31, For the three months Ended June 30,
(RMB ‘000 Unless Noted Otherwise) 2016 2017 2018 2018 2019
Net Loss (1,363,480) (1,228,060) (508,391) (93,748) (22,371)
(+) Depreciation & Amortization 246,311 363,909 461,612 106,515 151,250
(+) Interest Expense 21,379 47,154 75,060 21,836 14,696
(+) Income Tax Expense 570 9,856 11,887 3,440 4,410
(-) Interest Income (24,386) (75,056) (102,821) (31,675) (26,024)
EBITDA (1,119,606) (882,197) (62,653) 6,368 121,961
Share-based Compensation Expenses – 298,963 109,107 35,251 26,212
Fair Value Change of Equity Investments – – (64,628) - -
Adjusted EBITDA (1,119,606) (583,234) (18,174) 41,619 148,173
Reconciliation of Non-GAAP Net Income
For the year Ended December 31, For the three months Ended June 30,
(RMB ‘000 Unless Noted Otherwise) 2016 2017 2018 2018 2019
Net Loss (1,363,480) (1,228,060) (508,391) (93,748) (22,371)
Share-based Compensation Expense – 298,963 109,107 35,251 26,212
Amortization of Intangible Assets Resulting from Business Acquisitions – 6,580 12,003 2,981 2,644
Fair Value Change of Equity Investments – – (64,628) - -
Non-GAAP Net (Loss)/Income (1,363,480) (922,517) (451,909) (55,516) 6,485
Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
Reconciliation of adjusted EBITDA and non-GAAP net income by segment
For the three months Ended June 30, 2019
(RMB ‘000 Unless Noted Otherwise) BEST (ex-Store+) Store+ Unallocated Total
Net Income/(Loss) 132,766 (104,158) (50,979) (22,371)
(+) Depreciation & Amortization 138,542 3,666 9,042 151,250
(+) Interest Expense - - 14,696 14,696
(+) Income Tax Expense 4,844 (434) - 4,410
(-) Interest Income - - (26,024) (26,024)
EBITDA 276,152 (100,926) (53,265) 121,961
Share-based Compensation Expenses 13,337 1,922 10,953 26,212
Adjusted EBITDA 289,489 (99,004) (42,312) 148,173
Breakdown and Reconciliation of Adjusted EBITDA by Segments
41 Notes:
All numbers presented have been rounded to the nearest integer, tenth, or hundredth and may not add up. Year over year comparisons are based on figures before rounding.
For the three months Ended June 30, 2019
(RMB ‘000 Unless Noted Otherwise) BEST (ex-Store+) Store+ Unallocated Total
Net Income/(Loss) 132,766 (104,158) (50,979) (22,371)
Share-based Compensation Expense 13,337 1,922 10,953 26,212
Amortization of Intangible Assets Resulting from Business Acquisitions
Fair Value Change of Equity Investments 906 1,737 - 2,643
Non-GAAP Net Income/(Loss) 147,010 (100,499) (40,026) 6,484
Breakdown and Reconciliation of Non-GAAP Net Income
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