May 7, 2015 - expectations, the business outlook and quotations from ... A number of factors could cause actual results to differ materially from those ..... 1,800. 19,408. 5,767. Less: Purchase of property, equipment and intangible assets.
March Quarter & Fiscal Year 2015 Results
May 7, 2015
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 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 nonGAAP financial measures to the most directly comparable GAAP measures, see GAAP to Non-GAAP Reconciliation.
2
March Quarter 2015 Highlights
3
March Quarter 2015 Highlights
40%
350MM
45%
YoY GMV Growth
Annual Active Buyers (2)
YoY Revenue Growth
US$ 49Bn
40%
289MM
Mobile GMV (1)
Mobile Revenue as a % of China Commerce Retail Revenue
Mobile MAUs (3)
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
4
GMV Quarterly GMV (China Commerce Retail) (RMB Bn)
YoY Growth
65%
65%
64%
53%
46%
45%
49%
49%
40%
787
293 556
529
501
294
88
159
374 135 99
71
494 346
223
For 3M Mar 31, 2013 ended
219
176
430
183 345
600
257
275
Jun 30, 2013
Sep 30, 2013
295
Dec 31, 2013
Mar 31, 2014
Taobao Marketplace
342
Jun 30, 2014
381
380
Sep 30, 2014
Dec 31, 2014
Mar 31, 2015
Tmall 5
Active Buyers & Mobile MAUs Annual Active Buyers
Mobile MAUs
(In Millions)
(In Millions)
334
289
350 265
307 255
279
217 188 163
For 12M Mar 31, 2014 ended
Jun 30, 2014
Sep 30, 2014
Dec 31, 2014
Mar 31, 2015
For 1M Mar 31, ended 2014
Jun 30, 2014
Sep 30, 2014
Dec 31, 2014
Mar 31, 2015
6
Mobile GMV & Revenue Contribution Quarterly Mobile GMV, Mobile Revenue and Mobile Penetration (China Commerce Retail) (RMB Bn)
(%)
51% 42%
40%
36% 33% 29%
27% 20%
30%
19%
15% 11%
12%
12% 7%
2%
32 For 3M Mar 31, 2013 ended
3%
4%
41
55
Jun 30, 2013
Sep 30, 2013
104
118
Dec 31, 2013
Mar 31, 2014
164
Jun 30, 2014
327
304
Dec 31, 2014
Mar 31, 2015
199
Sep 30, 2014
Mobile GMV Mobile GMV as a % of Total GMV Mobile Revenue as a % of China Commerce Retail Revenue 7
Fiscal Year 2015 Business Review
8
Fiscal Year 2015 Highlights
US$394Bn
350MM
289MM
Annual GMV (1)
Annual Active Buyers
Mobile MAUs (2)
US$12.3Bn
45%
US$7.8Bn
Total Revenue (1)
YoY Revenue Growth
Non-GAAP Free Cash Flow (1)
Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31, 2015 (1) Assumes 1 US$ = 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
9
Fiscal Year 2015 Strategic Highlights
46% YoY Annual GMV growth
350 mm Annual Active Buyers 95 mm Net Adds Significant Expansion of Ecosystem
High retention & growth of merchants Fast growing categories: ► ►
Car Accessories Furniture & Decoration
► ►
Dietary Supplement Household Products
Category Expansion Digital entertainment
Healthcare Local services e.g.
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
10
Fiscal Year 2015 Strategic Highlights
Mobile: Unrivaled Leadership
289 mm MAU (1) 126 mm Net Adds
US$160 bn Annual Mobile GMV (2)
Mobile Taobao App No. 1 e-commerce app in China
Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31, 2015 (1) For the month ended March 31, 2015; based on the aggregate mobile MAUs of apps that contribute GMV on our China retail marketplaces (2) Assumes 1 US$ = 6.1990RMB
11
Fiscal Year 2015 Strategic Highlights
Investment in Data & Cloud Technologies
No. 1 cloud services provider in China (1)
Technology improvements increased infrastructure efficiency
Expanded and diversified customer base
Start-up Government Enterprise
Note: (1) Source: IDC Report
12
Fiscal Year 2015 Strategic Highlights
Pioneered Cross Border EE-commerce • Captured Tmall Global customer mindshare as source of quality products • Attracted major global brands & retailers to the platform • Established cross border ecosystem infrastructure
13
Fiscal Year 2015 Strategic Highlights
Strategic M&A, Investment and Alliances Mobile
Entertainment Ecosystem
UC Web
Sina Weibo
Meizu Content Huayi Brothers
Ecommerce & Logistics
Enlight Media
Distribution RRS
Wasu
Singapore Post
Youku Tudou
Healthcare O2O / Travel
Shiji Information
Intime
AutoNavi
Kuaidi 14
Fiscal Year 2015 & March Quarter 2015 Financial Review
15
Fiscal Year 2015 Financial Highlights
FY2014 In millions unless otherwise stated
Total Revenue
RMB
FY2015 RMB
US$
YoY
52,504
76,204
12,293
45%
2,905
17,840
2,878
514%
7%
30%
30,731
40,753
6,574
33%
59%
53%
Non-GAAP Net Income
28,274
34,981
5,643
24%
Non-GAAP Diluted EPS
12.09
13.97
2.25
16%
32,269
48,121
7,763
49%
Mobile Revenue Mobile Revenue as a % of China Commerce Retail Revenue Non-GAAP EBITDA Non-GAAP EBITDA Margin
Free Cash Flow
Note: Unless otherwise indicated, all figures above are for the twelve months ended March 31 (1) Assumes 1 US$ = 6.1990 RMB
16
March Quarter 2015 Financial Highlights Revenue
GMV and Mobile Penetration (RMB Bn)
51%
(%)
(RMB Bn)
27% +40%
+45%
600
12.0
Mar 31, 2015
Mar 31, 2014
430 Mar 31, 2014 GMV
17.4
Mar 31, 2015
Mobile GMV as a % of Total GMV
Non-GAAP EBITDA (1) and Margin
Non-GAAP Net Income (2) and Margin
(RMB Bn)
(RMB Bn)
Margin
Margin
55%
44%
8.6
6.7
7.7
Mar 31, 2015
Mar 31, 2014
Mar 31, 2015
57%
49%
6.9 Mar 31, 2014
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.
17
Quarterly Monetization Rate Trends 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 Quarterly Monetization Rate (China Commerce Retail) (%)
3.53% 3.23% Non-mobile monetization 2.52% rate(1) Blended monetization 2.30% rate
3.03% 2.77%
2.61% 3.05%
2.51%
2.63%
2.54%
2.63% 2.70%
2.52%
2.17%
2.30%
2.31%
2.18% 1.87%
1.96%
Sep 30, 2014
Dec 31, 2014
1.73%
1.49% Mobile monetization rate(2) 0.47% For 3M ended
Mar 31, 2013
1.12% 0.58%
0.61%
Jun 30, 2013
Sep 30, 2013
Mobile Monetization Rate
Dec 31, 2013
0.98%
Mar 31, 2014
Jun 30, 2014
Non-mobile Monetization Rate
Notes: (1) Derived from China commerce retail non-mobile revenue / non-mobile GMV (2) Derived from China commerce retail mobile revenue / mobile GMV
Mar 31, 2015
Blended Monetization Rate 18
Quarterly Revenue Total Revenue
Revenue Breakdown by Business
(RMB Bn)
(% of Total Revenue)
Cloud Computing and Internet Infrastructure
26.2
International Commerce Wholesale
15.8
17.4
16.8
12.0
International Commerce Retail 2%
7%
2%
China Commerce Wholesale 5%
Others (1)
9%
75% China Commerce Retail
For 3M Mar 31, ended 2014
Jun 30, 2014
Sep 30, 2014
Dec 31, 2014
Mar 31, 2015
For 3M ended Mar 31, 2015 (1)
Revenue Growth of Major Businesses
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.
(YoY Growth % )
82%
39%
42%
53%
1. 2. 3. 4. 5.
19% 1
2
3
4
5
China Commerce Retail China Commerce Wholesale International Commerce Retail International Commerce Wholesale Cloud Computing and Internet Infrastructure 19
Quarterly Margin Trends • 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 Non-GAAP EBITDA (1) and Margin
Non-GAAP Net Income (2) and Margin
(RMB Bn)
(RMB Bn)
Margin
57%
58%
49%
Margin
55%
15.1
8.6
Dec 31, 2014
44%
13.1
6.9
Mar 31, 2014
50%
Mar 31, 2015
7.7
6.7
Mar 31, 2014
Dec 31, 2014
Mar 31, 2015
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.
20
Quarterly Cost Trends Product Development Expenses (Pre-SBC)
Cost of Revenue (Pre-SBC) (RMB Bn)
(% of revenue)
(RMB Bn)
(% of revenue)
29% 24%
23%
6.1
5.1
8%
7%
8%
1.0
1.8
1.4
Mar 31, 2014
Dec 31, 2014
Mar 31, 2015
2.9 Mar 31, 2014
Dec 31, 2014
Mar 31, 2015
General & Administrative Expenses (Pre-SBC)
Sales & Marketing Expenses (Pre-SBC) (RMB Bn)
(% of revenue)
10% 1.2
10% 2.6
(RMB Bn)
(% of revenue)
11% 1.9
3% 0.4
Mar 31, 2014
Dec 31, 2014
Mar 31, 2015
Mar 31, 2014
5%
6%
1.2
1.1
Dec 31, 2014
Mar 31, 2015
21
Free Cash Flow • 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. Free Cash Flow (1) (%)
(RMB Bn)
63%
61%
48.1
33%
+49%
19%
2.3 Mar 31, 2014
32.3
5.7 +143% Mar 31, 2015 For 3M ended Free Cash Flow
FY2014
FY2015
% of Revenue
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.
22
Capital Expenditures and Cash Cash, Cash Equivalents and Short-term Investments
Capital Expenditures (RMB Bn)
(% )
(RMB Bn)
130.7 5%
122.3
23.7
14.1
107.0
108.2
As of Dec 31, 2014
As of Mar 31, 2015
4%
1.5
1.5
0.3
2%
43.6
0.8
10.6 0.4
1.2
0.2 0.2 Mar 31, 2014
Dec 31, 2014
0.7
33.0
Mar 31, 2015
As of Mar 31, 2014
Non-real Estate CAPEX
Cash and Cash Equivalents
Acquisitions of Land Use Rights and Construction in Progress Non-real Estate CAPEX as a % of Revenue
Short-term Investments
Note: Unless otherwise indicated, all figures in the above charts are for the three months ended on the respective dates
23
GAAP to Non-GAAP Reconciliation For 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
-
175
-
6,886
15,103
8,583
5,661
5,983
2,869
Add: Share based compensation expense
925
4,313
4,632
Add: Amortization of intangible assets
118
614
643
39
1,032
-
Add: Impairment of goodwill and intangible assets Non-GAAP EBITDA Non-GAAP net income Net income
Add: Impairment of goodwill, intangible assets and investments 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
-
6,671
13,115
7,741
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)
Non-GAAP net income Free cash flow
Add: Changes in loan receivables, net Free cash flow
808
4,738
598
2,333
22,924
5,665
24
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 • • • •
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
