OneSmart International Education Group Limited Investor Presentation January 2019
Disclaimer 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. 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 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 OneSmart does not undertake any obligation to update such information, except as required under applicable law. 2
Section 1 Company Overview
Who We Are – Leading Diversified Premium K-12 After-school Education Service Provider in China Our Mission Our Vision Our Values Bring out the utmost learning power in each Customer Focus Build the most trusted student by cultivating his or her study Execution ‘‘Third Classroom’’ outside of home motivation, capability and perseverance, and Innovation and school enable our students to pursue life-long success Teamwork #1 premium K-12 after-school tutoring Well-recognized brand with 367 Dominant 2017 market share of 26.3% (4) in Shanghai’s premium K -12 study centers covering 42 service provider in China (1) cities in China (3) #1 young children mathematics education after-school education market service provider in China (2) RMB2.9Bn 142,387 average monthly student 6,365 revenue in FY2018 (7) with full-time teachers (3) enrollments (5)(6) 36.8% 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 November 30, 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 first fiscal quarter ended November 30, 2018 7. Fiscal year ended August 31 4
What We Do Kids English OneSmart VIP Kids Math OneSmart OneSmart OneSmart VIP International HappyMath Study Camp Education FasTrack English also covers Chinese, Computer Programming and Science Education #1 premium K-12 after-school tutoring #1 young children mathematics Kids English with a focus on education service provider in China STEM English service provider in China 3rd – 12th Grade 3 to 8 Years Old 1-on-1, 1-on-3 1-on-14 1-on-8 3 to 8 Years Old Newly Acquired & New Program Initiatives Strategic Investments in Online Education BestMath UUabc OneSmart Small Yimi Online Tutoring Tianjin Huaying OneSmart Class Tus-Juren Group Class Notes 1. In terms of revenue in 2016 and 2017, according to Frost & Sullivan 5 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-3 367 Study Centers in 2009 Programs Number of Study 42 Cities in China (2) 2008 Centers Surpassed 100 Listed on NYSE on March 28, 2018 Successfully acquired FasTrack English Successfully acquired Tianjin Huaying Launched Our UPC System (1) Opened Our First Study Strategically invested in Tus-Juren 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 6 2. As of November 30, 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 7
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 8
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 and Tianjin Huaying in Aug 2018 Strategically invested in Tus-Juren, Yimi Online Tutoring, UUABC and BestMath Launched OneSmart Small Group Class and OneSmart Class programs 4 Continuous margin expansion opportunity through better product mix Higher revenue contribution from 1 on 8 HappyMath and 1 on 14 FasTrack English 9
Section 2 Key Highlights for First Fiscal Quarter of 2019
Key Financial Highlights for First Fiscal Quarter of 2019 Monthly Average Student Enrollments Increased by 70.5% Year-over- Year Net Revenues Increased by 46.6% Year-over-Year Net Revenues from OneSmart VIP Programs increased by 33.8% Year-over-Year Net Revenues from HappyMath increased by 51.1% Year-over-Year New Student Enrollments of FasTrack English increased by 55.6% Year-over-Year 11
Three Pillars to Drive the Growth Core Premium K-12 Education Business Strategic -OneSmart VIP Investments & -HappyMath Acquisitions -FasTrack English Online Education 12
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