Vianet : Consolidated Annual Report & Accounts – Year ended 31 March 2022

CONSOLIDATED ANNUAL REPORT & ACCOUNTS

YEAR ENDED 31 MARCH 2022

GROUP PLC

Vianet Group plc is a leading international Business to Business ("b2b") provider of internet enabled, cloud based, telemetric services to the hospitality, unattended retail vending, and remote asset management sectors where we provide data services, actionable management information, and business insight. Combining data from our customers' assets with our smart, cloud-based, Internet of Things ('IoT') solutions, we deliver critical insight and analysis that drives superior operational performance.

With over 300 customers and nearly 215,000 connected devices across the UK, Europe, and the US, Vianet's experience and knowledge form a powerful market- leading proprietary technology and insight capability.

We connect customers to their assets via single or multiple IoT smart devices which interface to the asset, collecting the relevant data. The machine data is sent to our cloud-hosted IoT platform, where it is processed.

Vianet currently operates in two core business verticals. Our Smart Machines solution is designed for the unattended coffee, snack and soft drink vending machine market, and our Smart Zones solution is designed for the pub and hospitality industry, both connecting customers to their assets and delivering powerful insights and analytics in real-time.

The Group's Smart Zones division provides unparalleled product quality and waste management, business intelligence and stock management services to the drinks retailing industry.

Our Smart Machines division provides innovative real time monitoring, software management applications, business intelligence and data insights for unattended vending machines that significantly improve operational efficiency, stock control, sales, and cash flow, whilst also reducing our customers' carbon footprint. Smart Machines is one of the largest b2b connected solutions providers in Europe with established long-term relationships with major industry players and growing recurring revenues, which comprise over 85% of total revenues. The acquisition of Vendman Systems Limited ("Vendman") in 2017 resulted in a further c. 200,000 machines connected via mobile technology, the majority of which will, over time, become higher value Smart Machines connections.

By connecting customers to their assets, we gather data from which insight and analytics support improves decision-making and enables our end-to- end contactless payment solution. The outcome for our clients is increased sales and asset utilisation, reduced operating costs and improved operational performance, with more informed customer decision- making.

We achieve this by;

• Increasing utilisation and significantly reducing servicing costs by identifying asset performance opportunities;
• Maximising asset uptime and sales by providing alerts on fault conditions and product availability;
• Providing seamless touchless payment solutions, reducing customer dependency, in a COVID conscious world, on 'dirty' cash, and providing the contactless payment solutions that consumers increasingly desire;
• Improving cash flow management and resource planning by tracking real-time sales performance and enabling more frequent invoicing; and
• Defining potential new procedures, revenue streams, and automation services and incorporating these into the customers' existing processes.
• Real time capture and processing of machine data from the installation base allows customers to significantly improve the efficiency of re- stocking and maintenance operations providing substantial cost and sales benefits whilst also reducing our customers' carbon footprint.

In both divisions, the data collected is structured and rendered through an advanced web portal and mobile applications to provide the analytics and insight that support better business decision making to improve our customers' asset utilisation and profitability.

Whilst our technologies were developed for unattended retailing and hospitality, the flexibility and functionality of our smart devices offer multiple applications and can be connected to practically any machine with a data output. The device used in our Smart Machines division is the same used to connect our contactless payment solution and communicate payment terms to our cloud-based payment services providers. Ongoing successful asset management and contactless payment field trials and conversion have been completed in other verticals such as Fuel Forecourts, fast casual restaurant chains, and environmental services.

As a business, we are passionate about developing innovative solutions and employing talented people focused on transforming business performance.

Our ambitions are underpinned by driving our financial performance through long-term contracts typically with recurring high cash margins and scalable annuity revenue streams that facilitate ongoing product development.

Vianet Group plc

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FINANCIAL HIGHLIGHTS

TURNOVER PERFORMANCE

18000		TURNOVER (£'000)
	16,282
16000	15,683
14000				13,215
12000
10000
8000			8,369
6000
4000
2000
0
	Mar-19	Mar-20	Mar-21	Mar-22

£2.36 MILLION ADJUSTED OPERATING PROFIT(a)

		OPERATING PROFIT (£'000)
5000
4000	3,855	4,030
3000
				2,363
2000
1000
0
	Mar-19	Mar-20	Mar-21	Mar-22
-1000			(687)

RECURRING REVENUE

88%

(2021: 89%)

OPERATIONAL CASH GENERATION

		CASH GENERATION (£'000)
4500		4,233
4000
3500
3000
2500				2,397
2000	2,037
1500
1000			1,052
Mar-19	Mar-20	Mar-21	Mar-22

BASIC EPS

0.65P

(2021: (6.75p))

NET DEBT OF £3.00 MILLION(b)

		NET CASH/(DEBT) (£'000)
0	Mar-19	Mar-20	Mar-21	Mar-22
-500
-1000		(952)
-1500	(1,196)
-2000
-2500
-3000			(2,661)
				(2,999)
-3500

NEW CONNECTIONS

16,927

(2021: 8,115)

Note:

1. Adjusted operating profit is profit before exceptional costs, amortisation, interest and share-based payments
2. Net debt includes a CBIL loan

ii	Vianet Group plc

OPERATIONAL HIGHLIGHTS

Our business currently has two divisions: Smart

Machines and Smart Zones.

Smart Machines added 12,895 connections with a current estate at just over 48,000. The division returned a profit of over £1.6 million, above both FY2021 and, importantly, FY2020 pre-pandemic levels.

The Smart Zones division delivered a strong H2 rebound from C19 lifting operating profit to £2.99m (FY2021: £0.5m), being almost 68% of FY2020 pre- pandemic performance of £4.57m.

The Group's Smart Zones connected device base remains significant with c. 167,000 devices in over 10,100 premises in the UK and USA.

CONNECTED DEVICES -TOTAL

Mar-22		166,804			48,179
Mar-21		173,580			37,557
0	50,000	100,000	150,000	200,000	250,000
		Smart Zones	Smart Machines

SMART MACHINES

• 12,895 new connected devices (FY2021: 7,215) being 78% YOY growth.
• The highest Payment Card Industry Compliance level (PCI-DSS level 1) was re-confirmed in September 2021 for Contactless Payment deployment.
• 41 new contract wins across various customer sizes, and 6 contract renewals.
• Smart Machines adjusted operating profit of £1.82 million (FY2021: £1.10 million) being a 19% increase on pre-pandemic FY2020 of £1.53m.

Vianet Group plc

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