financial perspective and guidance - alibaba...

Financial Perspective and GuidanceMaggie Wu, CFO

1. Report Card Since IPO

4. Financial Guidance

2. Evolving Value Proposition to Customers 3. Metrics

5. Valuation Framework

Key Topics

1. Report Card Since IPO

?How Sustainable is China Retail Marketplace’s GMV Growth

?How Sustainable is China Retail Marketplace’s GMV Growth

0

800

1,600

2,400

3,200

4,000

FY13 FY14 FY15 FY16 FY17

RMBbn

37% CAGR FY13-17

US$547

BILLION

GOAL REMAINS UNCHANGED

US$1 TRILLION GMVGOAL FOR FY2020

ALIBABA MARKET LEADERSHIP

11%CHINA RETAIL

SALES

SOURCE NBSMARKETSHARE IN FY17

Source: National Bureau of Statistics (NBS), Alibaba. Estimated market share as of March 31, 2017

?What’s Alibaba’s strategy to transition from PC to Mobile?

Will mobile monetization ever be higher than that of PC?

?What’s Alibaba’s strategy to transition from PC to Mobile?

Will mobile monetization ever be higher than that of PC?

GROWING MOBILE MAU

0

200

400

600

MAR 14 MAR 15 MAR 16 MAR 17

163

289

410

507

M

MOBILE GMV %

0%

25%

50%

75%

100%

FY14 FY15 FY16 FY17

19%

41%

65%

79%

Mobile GMV %

GMV

0%

1%

2%

3%

4%

5%

FY14 FY15 FY16 FY17

2.55% 2.44% 2.59%3.03%

Blended Monetization Rate

MONETIZATION RATE

0%

1%

2%

3%

4%

5%

FY14 FY15 FY16 FY17

2.94% 2.89% 2.73% 2.97%

0.91%

1.79%

2.51%3.04%

Mobile Monetization RatePC Monetization Rate

PC

Mobile

MOBILE REVENUE %

0%

25%

50%

75%

100%

FY14 FY15 FY16 FY17

7%

30%

63%

80%

Mobile Revenue %

Revenue

MOBILE GMV & REVENUE %

0%

25%

50%

75%

100%

FY14 FY15 FY16 FY177%

30%

63%

80%

19%

41%

65%

79%

Mobile GMV % Mobile Revenue %

Revenue

GMV

?What is Alibaba Cloud’s growth potential and when will it be profitable

0

440

880

1,320

1,760

2,200

Jun 30, 2015

Sep 30,2015

Dec 30, 2015

Mar 31, 2016

Jun 30, 2016

Sep 30, 2016

Dec 31, 2016

Mar 31, 2017

ALIBABA CLOUD REVENUE

RMBmn

?What is Alibaba Cloud’s growth potential and when will it be profitable

YoY 106% 128% 126% 175% 156% 130% 115% 103%

FY15 FY16 FY17

ALIBABA CLOUD ADJ. EBITA MARGIN

Adj. EBITA Margin

-41% -7%

?Why is SBC as % of revenue so high?

What’s the dilution impact from SBC?

FY16 FY17

SBC Dilution (0.9%) (0.7%)

SHARE DILUTION % OF TOTAL*

*Accretion / (dilution) effect calculated relative to fully diluted shares outstanding as of April 1, 2015 and April 1, 2016 for FY16 and FY17, respectively#Repurchase of shares represents shares repurchased pursuant to the Share Repurchase Program in FY2016 and shares repurchased from SoftBank in FY2017

SBC AS % OF REVENUE HAS BEEN TRENDING DOWN

0%

5%

10%

15%

20%

25%

30%

Sep 30, 2014

Dec 31, 2014

Mar 31, 2015

Jun 30, 2015

Sep 30, 2015

Dec 31, 2015

Mar 31,2016

Jun 30,2016

Sep 30,2016

Dec 31,2016

Mar 31,2017

18% 16%

27%

20%

14%13%

19%

11% 12%

7%

11%

Overall SBC

0%

5%

10%

15%

20%

25%

30%

Sep 30, 2014

Dec 31, 2014

Mar 31, 2015

Jun 30, 2015

Sep 30, 2015

Dec 31, 2015

Mar 31,2016

Jun 30,2016

Sep 30,2016

Dec 31,2016

Mar 31,2017

16%

12% 13%10% 9% 10%

13%

8%10%

6%

10%

18% 16%

27%

20%

14%13%

19%

11% 12%

7%

11%

Overall SBC SBC Related to Alibaba Shares

SBC AS % OF REVENUE IS EVEN LOWER EXCLUDING GRANTS TO ALIBABA EMPLOYEES FROM ANT

?Why is SBC as % of revenue so high?

What’s the dilution impact from SBC?

Accretive Share Repurchase 1.8% 1.0%

Accretion / (Dilution) 0.8% 0.3%

?How would Alibaba strategic investments impact the core

commerce margin

?How would Alibaba strategic investments impact the core commerce margin

50%

56%

62%

68%

74%

80%

Jun 30,2015

Sep 30,2015

Dec 31,2015

Mar 31,2016

Jun 30,2016

Sep 30,2016

Dec 31,2016

Mar 31,2017

65%62%

65%

59%61% 62%

64%

59%

CORE COMMERCE ADJ. EBITA MARGIN

62%FY17

63%FY16

2. Evolving Value Proposition to Customers

?Would Alibaba’s Higher Monetization Rate Hurt

Merchants’ ROI ?Will China Retail revenue

growth continue to outpace GMV growth

Alibaba Economy's Broader Value Proposition vs GMV

TAKE RATE =CHINA RETAIL

REVENUE

CHINA RETAIL GMV

OLD & NARROW

OFFLINE SALES

ONLINE SALES

BRAND VALUE

CUSTOMER ACQUISITION

+ ENGAGEMENT

PRODUCTIVITY GAINS

++=OUR TAKE

VALUE PROPOSITION TO BRANDS AND MERCHANTS

MARKETING REVENUE

CUSTOMER SERVICE

DISTRIBUTION REVENUE

High Growth In User & User Engagement

VALUE PROPOSITION

KEEPS EVOLVING: Enable Merchants to Manage Customer

Life Cycle

80%+ YoY# of Users and # of Times

Sharing the Product

60%+ YoYDaily Avg. Unique

Product PV

140+% YoYContent Driven Product PV

45%+ YoYDaily Avg. Buyers Adding

to Shopping Cart

For the month ended Apr 30, 2017 For the month ended Apr 30, 2017 For the month ended Apr 30, 2017For the month ended Mar 31, 2017

Increase User Engagement From Robust Growth of Daily Content PVCrazy about ShoppingGood Find Taobao HeadlinesWeitao

Taobao Live SteamingYour Advice Please

120%+ YoY

Daily Content PV

For the month ended Apr 30, 2017

Increase User Engagement From Robust Growth of Daily Content PVCrazy about ShoppingGood Find Taobao HeadlinesWeitao Taobao Live SteamingYour Advice Please

120%+ YoY

Daily Content PV

For the month ended Apr 30, 2017

The Longer the Consumer Is on the Platform… The More Orders They Place

Consumer Registered Year 2016 (Year 1) 2015 (Year 2) 2014 (Year 3) 2013 (Year 4) 2012 (Year 5)

230

184

138

92

46

0

Avg. Annual No. of Orders

123

38


230

184

138

92

46

0


123

38

40

32

24

16

8

0


Avg. Annual No. of Categories Purchased

24

9

The Longer the Consumer Is on the Platform… The More Categories They Purchased


230

184

138

92

46

0


123

38

40

32

24

16

8

0



24

9

RMB12,000

9,600

7,200

4,800

2,400

0



Avg. Annual Spend Per Consumer

~12K RMB

~3K RMB

The Longer the Consumer Is on the Platform… The Higher the Spend

3. Metrics

Annual Active

Buyer Annual Active

Consumer

Online Marketing Revenue

Help Merchants & Brands toAcquire, Engage & Retain Their Customers

MARKETING

CUSTOMER SERVICE

DISTRIBUTION

Customer Management

Revenue

4. Financial Guidance

FY 2018 Annual Revenue Guidance

TOTAL REVENUE GROWTH

RANGE:45% – 49%

FY16

FY17FY18

45% – 49%

56%*

33%

*Excluding the impact from Youku and Lazada consolidation beginning April 2016, the growth rate would have been 45%.

Continuous Investments for

Future Growth

< 3 Years 3 ~ 7 Years > 7 Years

Core Commerce

Cloud Computing

Digital Media & Entertainment

Innovation Initiatives

®

INCUBATION TRACTION CASH FLOW

Supermarket

Cross Platform Uni-Marketing New Retail

International Rural

Subscription InternationalContent

Mapping IOTEnterprise Communication AI

#1 ChinaeCommerce

Platform3,767 RMBbn

GMV

454mnANNUAL ACTIVE BUYERS (FY17)

Successful Track Record from Multi-Year Investments#1 ChinaCloud Platform

US $968mnREVENUE IN FY17

874,000# OF PAYING CUSTOMERS

As of Mar 31, 2017 0

3,500

7,000

10,500

14,000 Alibaba Cloud

RMBbn

0

30,000

60,000

90,000

120,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14

China Commerce RetailRMBbnChina Commerce Retail Revenue

114,109 RMBmnUS $16,578mn

Year

Alibaba Cloud Revenue6,663 RMBmn

US $968mn

5. Valuation Framework

Alibaba is the Market Leader in Multiple Businesses

#1 Market Share in B2C in China(iResearch)

#1 eCommerce APP Measured by Mobile MAU in China(QuestMobile 201704)

®

#1 eCommerce Site Measured by GMV in 5 SEA Countries (App Annie)

#1 2nd Hand eCommerce APP Measured by Mobile MAU in China (QuestMobile 201704)

#3 Online Video Platform in China(QuestMobile)

#1 Public Cloud Service Provider in China (IDC 2016)

… More

#1 Browser in India and Indonesia(Statcounter)

#2 Mobile Search Engine in China(iiMedia)

#2 Map APP Measured by Mobile MAU in China(QuestMobile)

#1 Office Communication APP Measured by Mobile MAU in China (QuestMobile 201704)

Globally Leading Techfin Company

#1 Online Payment(iResearch)

#1 Shopping APP in

Russia and #3 in Spain (App Annie)

#2 Movie Ticketing Service Measured by Mobile MAU in China(QuestMobile 201704)

(Ant Financial)

Notes:Tao Piao Piao, Ant Financial, and Alipay are affiliated businesses.

CORE COMMERCE CLOUD COMPUTING DIGITAL MEDIA & ENTERTAINMENT INNOVATION INITIATIVES & OTHERS STRATEGIC INVESTMENT

Notes:Financial data presented is for FY17.1.Estimate based on information as of Mar 31, 2017. Based on

valuation implied by recent equity financing (if applicable), or carrying value as of Mar 31, 2017. Translations of RMB into US$ were made at RMB6.8832 to US$1.00.

2.Mobile MAU for China retail marketplaces in the month ended Mar 31, 2017.

3.As of Mar 31, 2017.4.Global MAU in the month ended Mar 31, 2017.

VALUATION COMPARISON PEERS

RMBmn % YoY

Revenue 133,880 45%

Adj. EBITA Margin 62%

Mobile MAU(2) 507mn

> US$50bn(1)RMBmn % YoY

Revenue 6,663 121%

Adj. EBITA Margin (7%)

Paying Customers(3) 874,000

RMBmn % YoY

Revenue 2,997 65%


®

RMBmn % YoY

Revenue 14,733 271%


MAU(4) 500mn+

0

14,000

28,000

42,000

56,000

70,000


RMBmn

NON-GAAP NET INCOME CAGR OF 43%

US$8.4

BILLION

0

14,000

28,000

42,000

56,000

70,000


RMBmn

FCF CAGR OF 37%

US$10.0

BILLION

US $8.0BILLION

NET CASH

AS OF MARCH 2017

Robust Profitability and Cash Flow

financial perspective and guidance - alibaba...

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