OneSmart International Education Group Limited Investor Presentation May 2018
Disclaimer This press release 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. OneSmart may also make written or oral forward- looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about OneSmart'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: OneSmart's goals and strategies; its future business development, financial condition and results of operations; its ability to continue to penetrate premium K-12 after-school education services market; diversify and enrich our education offerings; enhance the development and management of our teacher team and teaching materials; competition in our industry in China; its ability to maintain and expand online education presence; relevant government policies and regulations relating to the corporate structure, business and industry; and its ability to protect our students’ information and adequately addres s 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 press release is current as of the date of the press release, and OneSmart does not undertake any obligation to update such information, except as required under applicable law. 2
Section 1 Company Overview
Who We Are – Mission, Vision and Values • Bring out the utmost learning power in each Our student by cultivating his or her study motivation, capability and perseverance , and Mission enable our students to pursue life-long success Our Mission Our Vision Our Values Bring out the utmost learning power in each Build the most trusted Customer Focus student by cultivating his or her study ‘‘Third Classroom’’ outside of home Execution Our • Build the most trusted ‘‘ Third Classroom ’’ motivation, capability and perseverance, and and school Innovation Vision outside of home and school enable our students to pursue life-long success Teamwork • CEIT: • Customer Focus Our • Execution Values • Innovation • Teamwork 4
Who We Are - Largest Premium K-12 Education Service Provider in China #1 premium K-12 after-school tutoring Well-recognized brand with 273 Dominant 2017 market share of 26.3% (4) in Shanghai’s premium K -12 study centers covering 41 service provider in China (1) cities in China (3) #1 young children mathematics education after-school education market service provider in Shanghai (2) RMB2.1Bn 102,613 average monthly student 5,044 revenue in FY2017 (7) with enrollments (5)(6) full-time teachers (3) 37.4% 3-year CAGR Notes 1. In terms of revenue in 2016 and 2017, according to Frost & Sullivan 2. For students from kindergarten to the third grade in Shanghai in terms of revenue in 2016 and 2017, according to Frost & Sullivan 3. As of February 28, 2018 4. In terms of revenue in 2017, according to Frost & Sullivan 5. A student enrollment is defined as a student who takes at least one class in one subject during a certain period. Under this definition, a student taking at least one class in each of two subjects during a certain period is treated as two student enrollments for the period. The number of students enrolled in our invested K-12 schools and OneSmart Online is not included for this purpose 6. For the fiscal quarter ended February 28, 2018 7. Fiscal year ended August 31 5
What We Do Premium Tutoring Services Premium Young Children Education Services Largest Premium K-12 After-school Education Largest Young Children Mathematics Education Service Provider in Shanghai (2) Service Provider in China (1) HappyMath FasTrack English OneSmart VIP also covers Chinese and STEM education Kindergarten – 3rd – 12th Grade 1-on-1, 1-on-3 1-on-8 Primary School Language and Culture Programs New Program Initiatives OneSmart OneSmart Overseas OneSmart OneSmart Class OneSmart Online Elite English Language Training Study Camp Notes 1. In terms of revenue in 2016 and 2017, according to Frost & Sullivan 6 2. For students from kindergarten to the third grade in Shanghai in terms of revenue in 2016 and 2017, according to Frost & Sullivan
Our Key Milestones U.S. Secretary of Education Dr. John B. King Jr. visited OneSmart Launched 2016 HappyMath Program 2013 2018 2014 Opened Our First Study 2012 Center in Shanghai Launched 1-on-3 273 Study Centers in 2009 Programs Number of Study 46 Cities in China (2) 2008 Centers Surpassed 100 Listed on NYSE on March 28, 2018 Launched Our UPC System (1) Opened Our First Study Center Outside Shanghai Notes 1. Unique Personalized Coach, an operational management system that enables us to build a set of robust operational and management information solutions that integrate and unify our operations and improve the efficiency of how we expand and operate our study center network 7 2. As of February 28, 2018
Company Highlights 1 Leader in premium K-12 after-school education services market with established brands 2 Customized and comprehensive learning experience powered by innovation Significant expertise in teaching staff management and curriculum development 3 brings R&D economy of scale Robust teaching and operation system supported by our standardized 4 technology platform Comprehensive suite of service offerings that significantly extend life time value of 5 customers for margin expansion 6 Experienced management team with proven track records 8
Core Operation Strategies Our future core operation strategies will focus on customer satisfaction, profitable growth and diversification of our business Customer 1 2 Profitable Growth Satisfaction • Enhance the • Enrich our development and education management of our program offerings teacher team and teaching materials • Strengthen our • Continue to technologies penetrate and in-house premium K-12 teaching tutoring market capabilities Diversification 3 • Expand our online education presence • Pursue selective strategic investments and acquisitions to further build ecosystem 9
Roadmap to Revenue Growth and Margin Expansion 1 Expand more subjects taken by each student and maximize student life-time revenue Start offering Chinese, science, and computer programming subjects at HappyMath centers Cross-selling among Happymath and FasTrack English students 2 Manage geographic expansion profitably Further penetrate into top cities that we operate to achieve higher marketing and G&A efficiency and ensure early ramp-up of new learning centers Selectively enter into new cities with great market potential 3 Enrich product and service offerings Successfully acquired FasTrack English in Jan 2018 Launched OneSmart Class and OneSmart Online programs 4 Continuous margin expansion opportunity through better product mix Higher revenue contribution from 1 on 3 premium tutoring services and 1 on 8 young children education programs 10
Section 2 Key Highlights for Second Fiscal Quarter of 2018
Key Highlights for Second Fiscal Quarter of 2018 Net revenues increased by 34.1% Net income attributable to OneSmart increased by 107.3% Monthly average student enrollments increased by 38.4% Net revenues from premium young children education services increased by 82.1% Operating profit margin increased by 330 bps Prepayments from customers increased by 44.0% 12
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