2nd quarter fy 2015 earnings presentation · 2015-03-05 · 2nd quarter fy 2015 earnings...
TRANSCRIPT
2nd Quarter FY 2015 Earnings Presentation
Zhaopin Limited
February 17, 2015
0
This presentation contains forward-looking statements made under the “safe harbor” provisions of Section 21E of
the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995.
These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,”
“intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Zhaopin may also make written or
oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange
Commission, in its annual report to shareholders, in presentations and other written materials and in oral
statements made by its officers, directors or employees to third parties. Any statements that are not historical
facts, including statements about Zhaopin’s beliefs and expectations, are forward-looking statements that involve
factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking
statements. Such factors and risks include, but not limited to the following: Zhaopin’s goals and strategies; its
future business development, financial condition and results of operations; its ability to retain and grow its user
and customer base for its online career platform; the growth of, and trends in, the markets for its services in
China; the demand for and market acceptance of its brand and services; competition in its industry in China; its
ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant
government policies and regulations relating to the corporate structure, business and industry; and its ability to
protect its users' information and adequately address privacy concerns.
Further information regarding these and other risks, uncertainties or factors is included in the Company's filings
with the U.S. Securities and Exchange Commission. All information provided in this presentation is current as of
the date of the presentation, and Zhaopin does not undertake any obligation to update such information, except
as required under applicable law.
Safe Harbor Statement and Disclaimer
1
Executive Summary Page 3
Business Overview Page 4-5
Investment Highlights Page 6-10
Key Financials and Operational Metrics Page 11-16
Growth Strategy Page 17-19
Table of Contents
2
Executive Summary
FY15 Q2 Results Highlights
• Solid revenue growth: total revenues ~19% YoY, net income
increased ~52% YoY
• Strong margins: gross margin at ~89%, net margin at ~18%
• Strong cash position: RMB1.7 billion, equivalent to cash per ADS of
approximately US$5.2.
Key Growth Drivers
• Number of unique customers for FY15 Q2 was 272,281, representing
~30% YoY growth
• Continued penetration into low tier cities and expansion of SME
customer base
• Market leadership in job seeker traffic (i.e. average daily unique
visitors) throughout 2014
• As anticipated and in-line with focus on expanding market share, Q2
FY15 ARPU experienced moderate decline.
Recent Developments
• From August to September 2014, the Company conducted a survey
for the “Best Employers in China for 2014”.
• In November, 2014, the Company launched its bi-annual 'Graduate
with a Future' employment campaign to help connect China's millions
of new university graduates with relevant job opportunities.
No. of
Unique
Customers
+30% yoyTotal
Revenues
+19% yoy
Net Income
+52% yoy
3
Overview of business and marketplace
Zhaopin engages white-collar users throughout their career lifecycle
Graduation
Campus recruitment
xiaoyuan.zhaopin.com
Change job
White collar
recruitment
www.zhaopin.com
Career advancement
High-end
Recruitment
www.highpin.cn
Skills and personality assessment
Assessment and
testing services
ceping.zhaopin.com
Continuous education
Vocational learning
and training
edu.zhaopin.com
Complementary service offerings across the entire career lifecycle of our users
Jobseekers EmployersBest search and
matching experience
Core onlinerecruitment platform
4
Zhaopin30%
Player 225%
Others45%
2.1 2.0
0.8
Zhaopin Player 2 Player 3
Zhaopin – China’s leading career platform
Source: iResearch Public Data, iResearch Survey
Note:
1) Simple average number of daily unique visitors each month in CY2014.
2) Average of monthly visits per user throughout CY2014.
3) According to iResearch Survey for CY2013.
4) As of Dec 31, 2014, including CJOL data.
5) For the Q2 FY2015, including CJOL data.
Zhaopin is a leading career platform in China which connects users with relevant job opportunities throughout their career lifecycle
Average daily unique visitors(1)
(in millions)
A large user and employer platform
Unique customers(5):
272,281Job postings(5):
5.5mn
Registered users(4):
93.8mnCompleted resumes(4):
69.2mn
Average monthly visits per user(2)
11.0
5.9
1.5
Zhaopin Player 2 Player 3
“Most frequently used job-search website in China” (3)
5
(frequency)
Source: Company data.
Key Investment Highlights
Nationwide sales and customer services network & large and diversified customer base
3
Evolving career platform exposed to a large and growing addressable market
1
Backed by a leading strategic investor and new IPO investors
4
Market leading career platform and highly recognized brand
2
6
74
104
151
2013 2017E
Zhaopin's (stand-alone) registered users
Number of online job seekers in China
Exposed to a large and growing employment market with
significant growth opportunities
Zhaopin registered users vs. China online job seekers Zhaopin unique employers vs. China online employers
1
(in millions) (in millions)
Source: Company data and iResearch Survey
Notes:
(1) # of online job seekers in China.
(2) # of online employers in China.
(3) Zhaopin’s number of registered users as of December 31, 2013.(Zhaopin standalone data)
(4) Zhaopin’s number of unique employers for the 12 months ended December 31, 2013. (Zhaopin standalone data)
Multiplier effect on the
number of placements as
a result of increase in job
changes per user
Under-penetrated and growing user(1)
base … …and employer base(2)
0.27
2.0
3.9
2013 2017E
Zhaopin's (stand-alone) number of unique customers
Number of online employers in China
(4)
Penetration
=71.3%
Penetration
=13.5%
(3)
7
Jan 2014 1st 2nd 5th
Feb 2014 1st 2nd 6th
Mar 2014 1st 2nd 7h
Apr 2014 1st 2nd 6th
May 2014 1st 2nd 6th
Jun 2014 1st 2nd 6th
Jul 2014 1st 2nd 6th
Aug 2014 1st 2nd 5th
Sep 2014 1st 2rd 4th
Oct 2014 1st 2rd 4th
Nov 2014 1st 2rd 4th
Dec 2014 1st 2rd 4th
Market leader focused on recruitment and career
related services
Players that focus exclusively on
recruitment and career-related services
High-end niche recruitment websites
Does not provide full suite of recruitment and
career-related services
Professional networking websites
Student-focused niche websites
General websites which offer recruitment as
part of their services
2
Source: iResearch Public Data. The ranking is measured among major
online recruitment companies in China.
Based on job seeker metrics, Zhaopin is consistently the
market leader that is exclusively focused on recruitment and
career related services through a jobseeker’s career lifecycle
Ranking by average daily unique visitors
8
Extensive nationwide network leading to a strong and
diversified customer base
Our nationwide sales footprint enables us to develop business relationships with customers in targeted local markets and
industry verticals
Cities with online coverage only
Cities with online and newspaper
City with online and centralized call center
Regions covered by centralized call center
Shanghai
Chongqing
Chengdu
Changsha
Wuhan
Xian
Fuzhou
Xiamen
ShenzhenGuangzhou
Hangzhou
SuzhouHefei
Zhengzhou
DalianShijiazhuang Tianjin
Beijing
JinanQingdao
ShenyangMore than 2,700
sales and account management representatives in 33 regional offices nationwide
Taiyuan
Haerbin
Nanjing
Kunming
Ningbo
Wuxi
ChangchunJilin
Nanchang
Guiyang
3
Real estate
Automotive
Consumer /
retail
Technology
Financial
services
9
*
• Numbers are calculated as of end of December 2014. The company opened its second call center in Suzhou in October 2014.
SEEK is a global online employment business
Largest global online employment marketplace by earnings and
market cap
Operations in 14 countries
Strong growth track record (FY10 to FY14)
− Revenue CAGR = 34%
− EBITDA CAGR = 50%
SEEK has delivered large excess returns over S&P/ASX 200(1)
over a sustained period.
Source: Seek public filings, Seek website, CIA world Factbook and Internet World Stats
Note:
1) Total shareholder returns include dividends and share price appreciation to 13 February, 2015
4
New Shareholders since the IPO
Apax Partners came in as a Concurrent Private
Placement investor
Other new shareholders include leading institutional
investors across U.S., Europe, Asia and Australia
markets
Zhaopin is currently covered by Credit Suisse & UBS
10
13.0%57.1%
118.9%45.1%
214.1%
882.0%
1 year TSR 5 year TSR Since SEEK's IPO (19 April 2005)
S&P/ASX 200 SEEK
Strong shareholder support from SEEK & other new
shareholders
821.5
908.9
1,079.8
288.0 341.8
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
772.9
866.9
1,057.7
282.2336.9
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
Total revenues
(RMB million)
Net revenues
11
(RMB million)
Source: Company data.
Strong Q2 result with total revenues and net revenues growth
of 18.7% and 19.4% YoY, respectively
692.8
769.1
882.5
219.1264.0
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
Online recruitment services revenues Number of unique customers and ARPU
(RMB million) (Average Revenue per Customer ("ARPU") in RMB)
Expanding customer base drive online recruitment revenue
growth
• Faster growth in online recruitment services revenues primarily driven by strong growth in customer volume, which is a
reflection of our strategic focus on growing expansion of SME base and further penetrating in lower tier cities.
• As anticipated and consistent with market share focus, ARPU decline attributable to strong growth in newly acquired SMEs who
typically purchase introductory, lower-priced products on the expectation that over time there will be opportunities to cross or up
sell additional products and services. 12
Source: Company data.
222
257
335
210
272
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
No. of unique
customers('000)
3,114 2,991
2,633
1,043 970
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
ARPU
(RMB million)
13
Source: Company data.
84% 85% 82%76% 77%
16% 15% 18%24% 23%
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
Online recruitment services Other services revenues
128.8
139.8
197.3
68.9 77.8
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
Revenue Breakdown Between Online and Other Services Other Services Revenues
• Particularly pleasing growth in assessment & campus services
Continuation of solid growth in other services which reflects
ongoing customer demand
Operating expenses (unaudited)
Operating profit and margin (unaudited)
(RMB million)
(RMB million)
(RMB million)
* All quarters refer to fiscal quarters. Zhaopin’s fiscal year refers to the 12 months ended June 30.
** Reported net profits for FY13 Q3 and Q4 included withholding taxes associated with cash dividends by a subsidiary to Zhaopin Ltd. in an amount of RMB12.5 million and RMB 9.9 million respectively.
Excluding such taxes, the net profits and net margins would be RMB 35.8m and 16.8% for FY13 Q3 and RMB47.5m and 20.4% for FY13 Q4, respectively.
***Excluding the one-time tax expense of RMB4.8 million arising from the ownership change of a consolidated affiliated entity, our net profit and net margin for FY15, 1Q would have been RMB64.7 million
and 22.4%, respectively.
1
Net profit and margin (unaudited)
(RMB million)
Gross profit and margin (unaudited)
185.8
202.2 194.8215.5 216.7
249.5 237.9258.3
268.3299.993.5%
91.0%91.3%92.7%93.0%
88.4%
90.3%
92.6% 92.8%
89.0%
13 Q1* 13 Q2 13 Q3 13 Q4 14 Q1 14 Q2 14 Q3 14 Q4 15 Q1 15 Q2
131.6150.6 151.6 156.1
165.2194.0 184.6 191.7 200.0
228.1
66.2%67.8%71.0%67.2%70.8%68.7%70.0%68.7%69.2%67.7%
13 Q1 13 Q2 13 Q3 13 Q4 14 Q1 14 Q2 14 Q3 14 Q4 15 Q1 15 Q2
54.2 51.6
43.3
59.4
51.555.5 53.3
66.5 68.4 71.8
27.3%
23.2%20.3%
25.5%22.1%
19.7%20.2%
23.9%23.7%21.3%
13 Q1 13 Q2 13 Q3 13 Q4 14 Q1 14 Q2 14 Q3 14 Q4 15 Q1 15 Q2
14
Source: Company data. All quarterly margins are calculated as a % of quarterly net revenue.
49.6
45.2
23.3
37.6
47.2 40.5 43.4
55.5 59.9 61.5 25.0%
20.3%
10.9%
16.2%20.2%
14.4%16.5%
19.9% 20.7%18.3%
13 Q1 13 Q2 13 Q3 ** 13 Q4 ** 14 Q1 14 Q2 14 Q3 14 Q4 15 Q1*** 15 Q2
Track record of steady margin expansion despite a focus on re-
investment to grow Zhaopin’s market share
617.8
944.9
1,536.7
1,662.1
FY2012 FY2013 FY2014 FY15Q2
330.0
390.7
488.7 534.4
FY2012 FY2013 FY2014 FY15Q2
Deferred revenue Cash balance*
(As of fiscal year-end )
(RMB million)
• Including restricted cash, time deposits and restricted time deposits.
15
Source: Company data.
(As of quarter-end )
(RMB million)
(As of fiscal year-end )
(RMB million)
(As of quarter-end )
(RMB million)
The growth rate in deferred balance Q2 FY15 v Q1 FY15 was 7.7%
and has accelerated from the growth rate of 1.6% (Q1 FY15 v Q4)
Healthy growth in key operating metrics*
No. of Registered Users No. of Completed Resumes
No. of Job Postings
(in million)
56.6
76.9 89.5 81.4 93.8
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
7.6 11.0
18.1
4.1 5.5
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
41.3
57.1 66.5 60.3
69.2
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
Average Daily Unique Visitors
(in million)
1.4 1.8 2.2 1.8 2.0
FY2012 FY2013 FY2014 FY14Q2 FY15Q2
* Includes CJOL’s metrics for the four months ended June 30, 2013, for the fiscal year ended and as of June 30, 2014 and for quarter ended and as of December 31, 2014, when both
Zhaopin Ltd. and CJOL were under common control of SEEK16
(As of fiscal year-end / quarter-end)
(in million)
(As of fiscal year-end / quarter-end)
( in million)
Source: Company data.
Our vision and growth strategy
Our vision is to connect the largest number of users with
career opportunities throughout their career lifecycle
Attract and retain more users and customers through branding and
enhanced user experience
Leverage our core platform to expand into adjacent product offerings
Continue to pursue our mobile strategies
Pursue strategic investment and acquisition opportunities
17
Attract and retain customers of our core business
1 2
3 4
Geographic expansion
Expand to areas outside of tier-
one and tier-two cities to cover
over 500 cities
Cooperation with local
government
SME customer base growth
Introduce new product offerings such
as priority listing and prominence
products
Refine product packages to meet
special needs of customers (e.g.,
iPin, ExpressPin)
Customer retention and loyalty
Further build brand loyalty and
increase repeat usage of our
website by providing key account
services
Customer lifecycle engagement
("Moment of Truth")
Targeted industries penetration
Acquire new customers from key
industry verticals where we are
already well established, such as real
estate, finance, high-tech, and
automotive
18
White-collar Higher endWhite-collarCollege
Learning
Recruiting
Assessment
Leverage our core platform to expand into adjacent product
offerings
智 联 培 训
19
(Corporate Training)edu.zhaopin.com
(Campus Recruitment)xiaoyuan.zhaopin.com
(High-End Recruitment)www.highpin.cn
(Candidate Assessment Service)ceping.zhaopin.com