Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Investor Presentation (March 2023)
61 slides from Digital Realty Trust's investor presentation, March 2023
Slide 1: Global. Connected. Sustainable. Investor Presentation March 2023
Global. Connected. Sustainable. INVESTOR PRESENTATION March 2023 The meeting place for companies, technologies and data
Slide 2: Digital Realty Overview
Digital Realty Overview Introduction 2
Slide 3: A Global Platform Supporting our Customers' Critical IT Architecture Requirements
A Global Platform Supporting our Customers’ Critical IT Architecture Requirements 4,000+ 200,000+ 50+ 300+ Customers Cross connects Metros Data Centers (1) EQUITY & ENTERPRISE VALUE TOP PUBLICLY TRADED U.S. REIT $30 Bn $47 Bn 11th 2016 EQUITY MARKET ENTERPRISE LARGEST MAY 2016 CAPITALIZATION (2) VAL
Slide 4: Executing on Strategic Vision
Executing on Strategic Vision Refining Strategy to Fuel Future Growth Strategic Priorities 1. Strengthening Customer Value Proposition Executing meeting place strategy with sustainable connectivity rich solutions 2. Integrating and Innovating Capabilities Building new applications on the world’s lar
Slide 5: Consistent Execution
Consistent Execution Progress Against Strategic Priorities 1 Customer Focus 2 Innovation & Differentiation 3 Go-to-Market Platform As of December 31, 2022 METROS • Record bookings • ServiceFabric™ • Enabling Hybrid IT development & rollout • Full spectrum product • Developing Connected 54 +18 offeri
Slide 6: Offering a Global Data Center Platform with Local Expertise
Offering a Global Data Center Platform with Local Expertise Stockholm Copenhagen Seattle Dublin Amsterdam Portland Minneapolis / Brussels St. Paul Toronto Düsseldorf Boston London Frankfurt San Francisco New York Metro Silicon Valley Vienna Seoul Chicago Paris Zurich Northern Tokyo Virginia Osaka Za
Slide 7: Global Footprint Enhanced by Strategic M&A
Global Footprint Enhanced by Strategic M&A 2015 2016 2017 2018 2020 2022 European Telx DuPont Fabros Ascenty Interxion Teraco Portfolio Acquisition 54 highly-connected 20 assets in 13 metro areas Eight highly-connected 12 assets and six Eight assets and six Seven highly-connected assets assets and 7
Slide 8: Sustainability Focus and Performance
Sustainability Focus and Performance Delivering Sustainable Growth for All Stakeholders Environmental Social Governance Appointed Mary Hogan Preusse as Leader in the Light Newsweek’s America’s Most Responsible Companies of 2023 Chairman of the Board, which aligns with Digital Realty’s NAREIT Leader
Slide 9: PlatformDIGITAL Designed for an Accelerating Digital Economy
PlatformDIGITAL® Designed for an Accelerating Digital Economy Enabling Enterprises to Harness Data Growth 9
Slide 10: Digital Economy and Digital Transformation
Digital Economy and Digital Transformation Driving Data Center Demand Growing and emerging demand drivers that have further accelerated over the past year are driving the need for digital infrastructure globally Digital Economy & Transformation Accelerated Digital Trends Digital Infrastructure Deman
Slide 11: PlatformDIGITAL 2.0
PlatformDIGITAL® 2.0 Customer Use Case Tailored Solutions Any-To-Any Interconnection Self-Service Enterprise Experience Capacity 11
Slide 12: Connected Campus Strategy
Connected Campus Strategy Solving for the Complete Deployment: Land and Expand 12
Slide 13: Multi-Tiered Cloud Architectures
Multi-Tiered Cloud Architectures Solving for the Complete Deployment: Land and Expand Connected Campus Colo Network Access Nodes Higher Connectivity High network requirements to efficiently distribute and aggregate traffic Applications: network connectivity, network peering and WAN optimization
Slide 14: The Connected Campus: Digital Ashburn
The Connected Campus: Digital Ashburn 580+ (1) DLR’s in-place IT capacity in the world’s largest data center market (2) MWs 94% in Northern Virginia rose by 170 basis points in the fourth quarter Occupancy 78 DLR’s active development pipeline to be delivered under committed leases MWs AWS DLR adds o
Slide 15: Density at Scale and at Hubs
Density at Scale and at Hubs Expand, Tether, and Densify Data Center Campuses CHICAGO CAMPUS NEW YORK CAMPUS DALLAS CAMPUS FRANKFURT CAMPUS 350 E. CERMAK 111 8th AVENUE 2323 BRYAN STREET HANAUER LANDSTRAßE Connect@Scale suites, Connect@Scale suites, Connect@Scale suites, Connect@Scale suites, Powere
Slide 16: Digital Realty is the Edge
Digital Realty is the Edge Network Density that Promotes Innovation and Collaboration Amsterdam Atlanta Chicago 24 200K+ Science Park 56 Marietta St. 350 E. Cermak Metros CROSS-CONNECTS Globally Where Our GLOBALLY Internet Gateways Are Located Johannesburg London Marseille ~3,000 JB1 Isando Sovereig
Slide 17: Diversifying Product Offerings
Diversifying Product Offerings ServiceFabric™ Removes Complexity from Enterprise Hybrid IT Environments Partners Customers Developers INTERFACE Orchestration Layer APIs Portal Removes complexity Connect seamlessly to open Interconnection Layer partner ecosystem services built on global backbone Impl
Slide 18: ServiceFabric Connect: Private Connections Made Easy
ServiceFabric™ Connect: Private Connections Made Easy 1 Establish a Port Customers establish a port which supports multiple virtual private connections Metro 2 Connect Customers establish direct, private connections to multiple Cloud Service Providers, Network Providers, SaaS Providers and other par
Slide 19: ServiceFabric Connect Use Cases: Multi-Cloud Connectivity and Beyond
ServiceFabric™ Connect Use Cases: Multi-Cloud Connectivity and Beyond Multi-Cloud Redundant Inter-metro/ Connectivity Disaster Service-chain Connectivity Cloud Inter-region to ecosystems Recovery Multiple Connectivity Connectivity in 3rd party Set-up Services facilities One port to Redundant Connect
Slide 20: ServiceFabric Connect
ServiceFabric™ Connect Available in 30+ global metros North America EMEA APAC 14 Markets 13 Markets 5 Markets Regional • 10G / 100G native ServiceFabric™ • 10G native ServiceFabric™ ports • 10G / 100G native Launch ports • 100G backbone ServiceFabric™ ports Capabilities • 100G backbone • Available f
Slide 21: Conservative Financial Strategy
Conservative Financial Strategy Committed to a Strong Investment Grade Balance Sheet Supported by Multiple Funding Sources 21
Slide 22: Proven Track Record of Sustainable Growth
Proven Track Record of Sustainable Growth Disciplined Financial Management 2018 4Q22 Better/ Worse Change Properties / Data Centers (1) 214 316 48% Total Enterprise Value (2) $35 billion $47 billion 34% SIZE & DIVERSIFICATION RMZ Rank 5th 11th (3) -6 places IG-equivalent AAA-rated Fortune 50 T
Slide 23: Consistent Access to Capital
Consistent Access to Capital Portfolio Growth Financed by Match-Funding Access to Capital in Multiple Currencies Enables Digital Realty to Match-Fund across its Global Portfolio FULL MENU OF $27 BILLION OF EQUITY WELL-KNOWN, SEASONED ISSUER CAPITAL OPTIONS RAISED SINCE 2009 ACROSS MULTIPLE CURRENCIE
Slide 24: Committed to Conservative Capital Structure
Committed to Conservative Capital Structure Growing Enterprise Value While Maintaining Target Credit Metrics CREDIT METRICS CAPITAL STRUCTURE Net Debt (1) / LQA Adjusted EBITDA (2) Fixed Charge Coverage (2)(3) 6.9x 35% 6.4x 6.1x 6.0x 6.2x 5.6x 5.6x 5.7x 5.9x 5.8x 5.8x 5.9x 5.7x 5.7x 5.7x 5.2x 5.4x 5
Slide 25: DLR Continues to Offer a Premium Dividend
DLR Continues to Offer a Premium Dividend Seventeen Consecutive Years of Dividend Increases Cash Dividend /Common Share AFFO Payout Ratio(1) $4.88 4.9% $4.64 $4.48 $4.32 $4.04 $3.72 $3.52 $3.32 $3.40 $3.12 Dividend Yield (2) $2.92 $2.72 10% $2.02 $1.47 $1.17 $1.26 $1.00 $1.08 93% 95% 84% 84% 86% CAG
Slide 26: Prudent Financial Management
Prudent Financial Management Positioning for Growth INVESTMENT GRADE BALANCE SHEET Consistently maintain balance sheet positioned for growth ORGANIC GROWTH Focus on driving higher same-capital cash NOI growth RISK-ADJUSTED RETURNS Leverage our full product suite and global footprint to drive premium
Slide 27: Financial Results: 4Q22 Financial Results
Financial Results 4Q22 Financial Results 27 Note: Certain data in this section was originally posted to the Company’s Website on February 16, 2023 and has not been updated to reflect changes occurring after that date.
Slide 28: High-Quality, Diversified Customer Base
High-Quality, TOP 20 CUSTOMERS Customer Rank Locations % of Customer Rank Locations % of Diversified ARR (1) ARR (1) Customer Base 11. Fortune Fortune 50 500 1. Software Company 65 10.2% SaaS Provider 15 1.7% 2. 38 3.6% 12. 15 1.7% 3. Social Content Platform 19 3.6% 13. Social Media Platform 8 1.7%
Slide 29: Connected Data Communities: Another Record Year of Bookings
Connected Data Communities Another Record Year of Bookings @ INTEGRATED 106 SOLUTION Avnet Virtual Labs being deployed in three top North new logos American markets to optimize video streaming workloads Production installations available anywhere across $47 million PlatformDIGITAL®’s 54 Global M
Slide 30: Record Backlog
Record Backlog BACKLOG ROLL-FORWARD (1) COMMENCEMENT TIMING (2) New Signings $ in millions $103M $102M $ in millions Outpace $87M $76M Commencements $466M $10M $477M $64M $477M $132M $44M • Record Backlog of $125M $477 Million $281M $424M $421M $421M • Signed >$500 Million of New Leases in 2022 $252
Slide 31: Lease Expiration Schedule
Evenly-Staggered % of Lease Expirations by Annualized Base Rent (1) Lease Expiration >1 MW 0-1 MW Other Schedule 30% >3.0% 27.4% 25% 2023 Guidance (2) for 20% cash rental rate on • Stable >1 MW Roll-Over renewals Reflects Longer Term 15% 13.2% Leases 11.7% 4.7years 9.9% 9.5% 10% 7.0% 4.6% 5% 3.6% 3.
Slide 32: Improving Pricing Environment
Improving Pricing 4Q22 RE-LEASING SPREADS Environment 2022 Renewal Spreads 0-1 MW > 1 MW OTHER (1) TOTAL Finish Up ~2% RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 4.1% (3.6)% 2.4% 0.8% CASH CASH CASH CASH • Driven by Continued 4.4% (3.5)% 8.0% 1.1% Strength Within GAA
Slide 33: High Utilization Provides Downside Protection
High Utilization Provides Historical Retention on Rentable Square Feet (1)(2) Downside $15 - $30 Trailing Twelve-Month Tenant Retention Long-Term Historical Average Protection 100% million 90% approximate cost of a new 1.125 MW data center deployment (3) • Significant Investment by Customers Helps t
Slide 34: Power Exposure by Region
Power Exposure by Region 2,200MW (1) 86% Pass Thru Impact of Higher Energy 86% Hedged (2) Prices Mitigated By Lease Structures and Hedging 1,285MW (1) 85% Pass Thru 88% Hedged 128MW (1) North America EMEA 100% Pass Thru APAC 578MW (1) 81% Pass Thru 83% Hedged Latin America 209MW (1) 96% Pass Thru 99
Slide 35: Revenue Exposure by Currency
EXPOSURE BY REVENUE (1) 56% 20% 7% 6% 3% 2% 2% 1% 1% <1% <1% <1% <1% <1% <1% <1% <1% <1% USD EURO GBP SGD ZAR BRL JPY CHF AUD CAD SEK DKK HKD HRK KES KRW NGN MZN Revenue Exposure by Currency <1% 7% < 1% < 1% Currency Headwinds 20% 1% < 1% Abating 56% <1% 2% <1% <1% < 1% 6% • Local Operations Funded
Slide 36: Data Center Revenue Growth Recovers in 2022
Data Center Y/Y Growth Rate, as Reported Y/Y Growth Rate, Constant Currency Revenue Growth Fourth Quarter Full Year 2022 Recovers in 2022 16.1% Improving Revenue Growth 10.6% Sets the Stage for 2023 11.0% 6.0% • CC Same Capital 5.8% 4.0% Revenue Growth Accelerates in 4Q 2.1% 2.5% • Double Digit CC 0
Slide 37: Matching the Duration of Assets and Liabilities
Matching the Duration of Assets and Liabilities Modest Near-Term Maturities, Well-Laddered Debt Schedule DEBT PROFILE DEBT MATURITY SCHEDULE AS OF DECEMBER 31, 2022 (1)(2) (U.S. $ in billions) Unsecured 97% Secured Unsecured $3.3 5.2 YEARS 2.7 % Weighted Avg. Weighted Avg. Maturity (1)(2) Coupon (1)
Slide 38: Digital Transformation Driving Steady Demand
Digital HISTORICAL BOOKINGS ANNUALIZED GAAP BASE RENT Transformation $ in millions Driving Steady $150 Demand Global Full-Product Spectrum Provides $100 Broadest Solutions $50 • 4Q Leasing Caps Record Year $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 • Record Interconnection Bookings in
Slide 39: 2023 Outlook
2023 Outlook Improving Core Growth Actual 2022 Full Year 2023 Better/Worse Total Revenue $4,692 $5,700 - $5,800 Adjusted EBITDA $2,473 $2,675 - $2,725 Rental Renewal Rates Cash Basis 1.8% Greater than 3.0% Year-End Portfolio Occupancy 84.7% 85.0% - 86.0% Same-Capital Cash NOI Growth -5.8% 3.0% - 4.0
Slide 40: 2023 Outlook: Capital Recycling and Funding Plan
2023 Outlook Capital Recycling and Funding Plan Harvest Value from Core Hyperscale Assets to Redeploy into Premium Growth Opportunities 1/4 3/4 Dispo + JV Non – Core Hyperscale Capital Dispositions JVs Guidance • Non-Campus Locations • Core, Stabilized, Hyperscale • $1.5 - $2.5 billion in 2023 • Sec
Slide 41: Appendix
Presenter Name 15/09/22 Appendix
Slide 42: Management Statements on Non-GAAP Measures
Appendix Management Statements on Non-GAAP Measures The information included in this presentation contains certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures
Slide 43: Forward-Looking Statements
Appendix Forward-Looking Statements This information in this presentation contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes an
Slide 44: Reconciliation of Non-GAAP Items
Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) (unaudited) Non-GAAP Items Three Months Ended Twelve Months Ended December 31, 2022 December 31, 2
Slide 45: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) To Their Closest GAAP (in thousands, except per share and unit data) (unaudited) Equivalent Three Months Ended December 31, 2022 December 31
Slide 46: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended Three Months Ended Three Mont
Slide 47: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA (in thousands) To Their Closest GAAP (unaudited) Equivalent Three
Slide 48: Reconciliation of Non-GAAP Items
Net Debt/LQA Adjusted EBITDA QE 12/31/22 Total debt at balance sheet carrying value $ 16,596,803 Reconciliation of Add: DLR share of unconsolidated joint venture debt 906,210 Add: Capital lease obligations, net 325,228 Non-GAAP Items Less: Unrestricted cash (315,949) Net Debt as of September 30, 202
Slide 49: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent 49
Slide 50: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items To Their Closest Net Debt/LQA Adjusted EBITDA - As Adjusted Net Debt/LQA Adjusted EBITDA in 000’s QE 6/30/20 QE 6/30/20 Net Debt as of June 30, 2020 $ 12,643,652 Total debt at balance sheet carrying value $ 12,371,621 GAAP Equivalent Add: DLR share of unconsolidated
Slide 51: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA in 000’s QE 9/30/20 Non-GAAP Items Total debt at balance sheet carrying value $ 12,874,760 Add: DLR share of unconsolidated joint venture debt 568,757 Add: Capital lease obligations 228,486 Less: Unrestricted cash (971,305) To Their Closest GAAP Net Deb
Slide 52: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA in 000’s Non-GAAP Items QE 12/31/20 Total debt at balance sheet carrying value $ 13,304,717 Add: DLR share of unconsolidated joint venture debt 574,055 Add: Capital lease obligations 239,846 Less: Unrestricted cash (108,501) To Their Closest GAAP Net De
Slide 53: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items in 000’s To Their Closest GAAP Equivalent 53
Slide 54: Reconciliation of Non-GAAP Items
Reconciliation of in 000’s Non-GAAP Items To Their Closest GAAP Equivalent 54
Slide 55: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA in 000’s QE 9/30/21 Net Debt/LQA Adjusted EBITDA - As Adjusted Non-GAAP Items QE 9/30/21 Total debt at balance sheet carrying value $14,087,539 Net Debt as of September 30, 2021 $ 14,714,905 Add: DLR share of unconsolidated joint venture debt 684,666 To
Slide 56: Reconciliation of Non-GAAP Items
Reconciliation Net Debt/LQA Adjusted EBITDA in 000’s QE 12/31/21 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 12/31/21 of Non-GAAP Total debt at balance sheet carrying value $ 13,448,210 Net Debt as of Dceember 31, 2021 $ 14,194,189 Add: DLR share of unconsolidated joint venture debt 826,799 Add: C
Slide 57: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA in 000’s QE 3/31/22 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 3/31/22 Non-GAAP Items Net Debt as of March 31, 2022 $ 15,184,306 Total debt at balance sheet carrying value $ 14,388,215 Less: Gross Proceeds from Forward Equity (947,405) Add: DLR share
Slide 58: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA in 000’s QE 6/30/22 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 6/30/22 Non-GAAP Items Total debt at balance sheet carrying value $ 14,294,307 Net Debt as of June 30, 2022 $ 15,104,319 Less: Gross Proceeds from Forward Equity (939,787) Add: DLR share
Slide 59: Reconciliation of Non-GAAP Items
Reconciliation of Net Debt/LQA Adjusted EBITDA QE 9/30/22 Fixed Charged Ratio (LQA Adjusted EBITDA/total fixed charges) QE 9/30/22 Non-GAAP Items Total debt at balance sheet carrying value $ 15,758,509 Add: DLR share of unconsolidated joint venture debt 794,087 GAAP interest expense plus capitalized
Slide 60: Reconciliation of Non-GAAP Items
Net Debt/LQA Adjusted EBITDA QE 12/31/22 Total debt at balance sheet carrying value $ 16,596,803 Reconciliation of Add: DLR share of unconsolidated joint venture debt 906,210 Add: Capital lease obligations, net 325,228 Non-GAAP Items Less: Unrestricted cash (315,949) Net Debt as of September 30, 202
Slide 61: Thank you
r Thank you FN DIGITAL Lv REALTY.
Digital Realty Trust — Investor Presentation (March 2023) on 6ix