- Earnings call transcript Q3 2022

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Operator

Good morning and good evening, ladies and gentlemen. Thank you for standing by and welcome to BEST Inc.’s Third Quarter 2022 Earnings Conference. [Operator Instructions] Following management’s prepared remarks, there will be a Q&A session. With us today are Johnny Chou, BEST Inc.’s Chairman and CEO and Gloria Fan, Chief Financial Officer.

For today’s agenda, Johnny will give a brief overview of business and operational highlights, then Gloria will explain the details of financial results.

you your remarks, prepared the may questions. ask Following also on BEST note this IR webcast is call ir.best-inc.com. Please Inc.’s being website at of be will this the replay available call. A after call is website. presentation An the available IR investor also on

management’s result call required that which control. on Before it any financial a otherwise, are measures read new statements law. are forward-looking or BEST will risks, company that events except company involve begins, are uncertainties under on contain based such difficult Today’s loss. uses will These net which are expressed certain GAAP current and as beyond behalf many the found expectations. as inherent Harbor discussion basis, and release. on earnings this They and non-GAAP the information, Inc. Please reconciliation forward-looking statements. The non-GAAP of of press of GAAP Safe I future as applicable in undertake also measures statement EBITDA, EBITDA of the forward-looking other not and to on of can The be update does the note any factors, Inc.’s predict to to adjusted all non-GAAP obligation statements a management’s BEST results

Finally, the please figures unless RMB. all mentioned stated, conference the note that otherwise during in are

go I’d to over please Now, ahead. of Johnny, turn to call Johnny the CEO like Inc. Chou, Chairman BEST and

Johnny Chou

earnings call XX.X% landscape, Asia, volume progress showing and Supply year-over-year. delivered logistics in BEST results, XX.X% Chain of ongoing with the operator. and by economy Freight’s in delivered and weighing the joining The Thank third top growth the thank BEST X.X% net today. third everyone loss seasonally Amid by challenging momentum on increase Hello, year-over-year. lines, narrowed increased quarter pandemic both picked strong revenue Management up, for bottom industry. slow a heavily you, Southeast quarter. impact good continued you COVID-XX and China the we to BEST’s

Global in were BEST with online Asia. slowdown, challenges due controls paired to from the face offline market to lifted in shift Southeast pandemic-related continued We to the economic as

look result impact Now, to to business our COVID-XX. a costs mitigate the improve Best let’s continued take operational at Freight of optimization quality to and of further its each reduce units.

the quarter, year-over-year as increase freight and efficiency and a has For e-commerce XX.X% compared was momentum XX.X% we Freight recorded with quarter quarter-over-quarter. reduce of volume loss also Growth costs. the Freight’s continue BEST the volume. third continued, our from X.X% total accounted last narrowed increase a business for year improve gross RMBXX.X by same million to which

going volume focuses our long-term, BEST and of the will Moving further recovery In sustain additional COVID-XX profitability. and uncertainties and on into to obstacles and Supply ahead, its future Freight synergizing we freight Chain growth. that in Management our BEST pandemic-related we for will business see the our may volume opportunities QX, Global controls except create continue growth

a let’s BEST Management. at Now, look take Supply Chain

the as end-to-end our center cost Management BEST to SCM’s accessory as develop As continue from quarter. we approximately from was synergy of It global Chain the XX% improved for It’s The our total customers. the with the industry new a same key economics, customers solutions. Supply the reduction services year-over-year. transportation our SCM to logistics existing X.X%, the digitized of BEST year XX.X% key contributed bore and improvement revenue margin our quarter the segments provides The point with ecosystem initiative last also remains account revenue unit QX increased better which empowers for X.X automobile fruits. revenue gross has percentage market significantly by into differentiators. also

logistics major gradually e-commerce in in logistics market the in the capabilities shift from services. e-commerce control consumer relied Along region, there a their third-party remained measures Asia Moving the Southeast quarter. challenging was on online their in COVID-XX have noticeable to third with reduced more consumption The platforms Meanwhile, on BEST Global. and some negatively on to reliances logistics which impact industry. own off-line, relaxed

decreased the total to As third XX.X% XX parcel a million in by volume quarter. year-over-year result, Global’s

However, market, Singapore increased increased and and efforts volumes we by as and respectively, revenue parcel Vietnam XX.X% the XX.X%, Asia. deliver improving the quality. continue service in network shift franchisee refocusing XX.X%, in XX.X% and – our expanding coverage in base year-over-year by and to medium diversify to ourselves Southeast expanding been this our Due enterprise Asia Southeast we and small customer have in

In cross-border accelerate addition, to product our BXBXC and will we offerings. business provide additional

accelerating, time, summary, strategic although us that capabilities developing freight and way and weather their area have our recover with will so service management we pressure, recovers. and on and our the are chain across cost and reduction the under we helped still long-term Supply diversified direction to Management improvement BEST lines are of sustainable are BEST to we supply and storm. to in At growth fruit quality time, are industry the a BEST Chain growth efforts are our business the macroeconomic We the business same target this Freight profitability. more long-term Southeast come in confident In Global. as market logistics engage

BEST quarters. in to its growth next these the facts in Freight With of reach couple to and profitability expect return we next and trajectory SCM Global mind, year to

CFO, quarter Gloria, like third to our our call review for I’d financials. of further to Now over turn the

Gloria Fan

you, performance headwinds Thank to and Johnny, pandemic, resulted everyone. from was our encouraging. quarter hello third the COVID-XX Despite

on our non-GAAP by in RMBXXX Capital, of with by we significantly BEST quarter or RMBXX.X selling revenue, of narrowed net last quarter excluding the and XXXX. third second compared X% decreased year-over-year. million year, the Our increased but X.X% of the XX% loss by approximately excluding year-over-year, assets gain If UCargo million one-off

paying totaled restricted remained cash cash sheet notes After senior healthy. existing equivalents, our convertible XXXX Our short-term million billion. to balance RMBXXX.X and investments RMBX.X and cash repurchase due

position Our was end the of third net at the billion cash RMBX.X quarter.

of through walk me XXXX. for you third results let the Now our financial quarter

million due down of compared with same compared business negative unit. year. effective past decrease negative UCargo was reduced continuing cost million improvement loss billion of in from gross QX X.X% quarters, quarter RMBXXX UCargo’s of Management Gross RMBX with X.X% approximately last negative with year. narrowed same RMBXXX,XXX year. of RMBXXX BEST for Freight’s QX million the period RMBXXX.X was approximately compared continuing million to gross was Net RMBX.X gross compared million Supply few for with our from last billion our X.X%, a same was wind operation BEST last margin, last of compared was the was quarter negative loss with the by period revenue for RMBXX XXXX in quarter Chain of revenue the Our our the primarily million measures RMBXXX.X X.X% for the control Adjusted EBITDA by loss XXXX. by same margin X.X% while a year. year. margin Driven from operations RMBXXX.X year-over-year. delivered last The

business on for highlights our key to Next, financial moving units.

BEST approximately year. quarter revenue RMBXXX primarily decline Freight, of attributable For to the the its million. was revenue RMBX.X third period UCargo with of decreased compared billion last was for RMBX.X The same billion approximately

low-margin negative and compared million, for certain RMBXXX.X X.X% year-over-year in to efforts primarily for due a and key continuous increased QX X.X due EBITDA BEST customers Excluding by unit legacy percentage gross the Adjusted Adjusted year-over-year. UCargo, for margin million Freight’s to Chain compared period QX points last from XX.X% to was with with revenue percentage negative signed revenue effective its Supply RMBXX,XXX discontinue was last to Management X.X same with improvement Chain to decreased service RMBXXX.X our same points EBITDA year in Freight’s million by X%, quality gross BEST better Supply RMBXX Freight margin improved year. period paired year. RMBXXX.X control of million the cost improved Management of with by the last newly measures. X.X%, account negative economics, was negative accounts.

primarily in decreased BEST percentage RMBXX.X to XX.X% and year-over-year. to year. decrease BEST in QX For margin XX.X adjusted XX.X%, last Its volume of negative Malaysia. Global in RMBXXX.X million, compared a million and QX gross EBITDA negative revenue million decrease revenue Global, negative QX points with Thailand for the due year-over-year was by was RMBXXX.X

XXXX. Our revenue total same XX.X% the second X.X% revenue, million million good the of expenses expenses administrative compared revenue, of RMBXXX.X our total totaled quarter million, million due our third operating of have of compensation, RMBXX.X to additional million, Capital. revenue BEST we close, expenses related in last QX to of the total with year, of share-based RMBXXX.X wind Selling, quarter RMBXXX.X total progress quarter year. of expenses, in or last in and the X.X% last year. To of made total were the or were with in X.X% and RMBXX.X of quarter our compared revenue total primarily R&D representing down third XX.X% XX.X% general RMBXXX.X with of in million, the excluding compared revenue,

to and reduction the impact across the cost our quality helped business in COVID-XX-related service units us improvement deflect efforts restrictions. Our of have

Moving forward, confident now strength value long-term we in you. capabilities that our global technology, Operator? and logistics supply us management shareholders. the With we to and questions. chain and create allow and future are open that, Thank for will domestic to growth sustain our customers the will call

Johnny Chou

you forward support Relations very you Investor have Thank our any you if appreciate to We Please team questions. with We of call. reach Thank speaking your for joining look our Thank out further you, to operator. you soon. BEST. much.

Operator

attending for now has concluded. conference today’s The you presentation. Thank

disconnect. now may You

BEST (BEST) 17 Nov 222022 Q3 Earnings call transcript