GDS Holdings Ltd. · HKEX:9698

GDS — Q1 2021 Earnings Presentation

49 slides from GDS's earnings presentation, May 20, 2021

  1. Slide 1: 1Q21 Earnings Call

    1Q21 Earnings Call 20 May 2021 NASDAQ: GDS HKEX: 9698 © GDS 2016 0

  2. Slide 2: Disclaimer

    DISCLAIMER This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such a

  3. Slide 3: Business Strategy & Performance Highlights

    Business Strategy & Performance Highlights William Huang, Chairman & CEO © GDS 2016

  4. Slide 4: 1Q21 Highlights

    1Q21 HIGHLIGHTS (1)(2) Sales Momentum • Net additional total area committed of +23,723 sqm, or +63.3 MW • Total area committed increased by 48.2% y/y to 425,277 sqm Capacity Expansion • Total capacity (3) increased by 38,803 sqm to 494,145 sqm, +45.0% y/y • Land acquisitions adding ~67,000 sqm to th

  5. Slide 5: Sales Achievement

    Sales Achievement Net Additional Total Area Committed (Sqm) – By Quarter Net Additional Total Area Committed (Sqm) – By Year Organic (1) Acquisition (2) B-O-T (3) Organic (1) Acquisition (2) B-O-T (3) 136,676 46,471 14,112 37,996 (2) 27,911 19,927 30,097 14,112 81,215 81,135 7,984 23,723 9,984 5,000

  6. Slide 6: Hyperscale Orders

    Hyperscale Orders Largest Individual Orders Obtained In 1Q21 HK1 – Under Construction Area IT Power Contract Data Center Committed Committed Commences (Sqm) (MW) BJ13 5,465 13.5 1H22 LF11 2,345 6.5 2H21 LF12 2,660 6.5 1H22 LF13 5,672 12.9 1H22 HK1 3,162 7.9 2H22 CQ1 4,320 13.8 2H21 © GDS 2016 5

  7. Slide 7: Cloud Availability Zones In China

    Cloud Availability Zones In China Ulanqab Zhangjiakou Beijing Dalian Hohhot Hebei Baoding Ningxia Qingdao Jiangsu Suqian Suzhou Chengdu Nanjing Shanghai Chongqing Wuhan Hangzhou Guiyang Fujian Taipei Heyuan Kaohsiung Guangzhou Shenzhen Hong Kong Source: Cloud companies’ respective websites © GDS 201

  8. Slide 8: Scaling Up Supply – Area Under Construction

    Scaling Up Supply – Area Under Construction (U/C) Area U/C (Sqm) & Pre-Commitment Rate – By Quarter Area U/C (Sqm) & Pre-Commitment Rate – By Year 73.9% 73.9% 69.1% 68.4% 68.4% 63.6% 68.4% 48.4% 39.0% 62.3% 161,611 161,611 149,983 137,070 137,070 133,208 110,706 89,834 65,201 24,505 1Q20 2Q20 3Q20 4

  9. Slide 9: Growing Operational Capacity – Area In Service

    Growing Operational Capacity – Area In Service Area In Service & Commitment Rate – By Quarter Area In Service & Commitment Rate – By Year 91.9% 94.1% 95.8% 94.3% 94.6% 94.9% 94.3% 94.6% 91.8% 91.9% 332,534 318,272 332,534 318,272 279,618 266,260 225,963 229,986 160,356 101,258 1Q20 2Q20 3Q20 4Q20 1Q

  10. Slide 10: Total Developed & Developable Area By Cluster

    Total Developed & Developable Area By Cluster Shanghai – 333,584 sqm Beijing – 364,691 sqm Greater Bay Area – 236,681 sqm 72,850 49,000 52,820 10,660 67,999 84,533 7,000 Kunshan 38,027 6,634 38,027 92,059 28,572 2,133 20,583 19,427 9,946 2,062 72,952 20,629 18,714 11,272 14,000 14,501 218,583 Note:

  11. Slide 11: Resource Progress

    Resource Progress Resource Pipeline Development 1Q21 (Sqm) (1) Construction Program Development 1Q21 (Sqm) (1) 82,166 38,892 13,823 (2) 161,611 479,875 38,892 137,070 19,980 460,963 BJ8 HL1 Taicang Land BJ13 BJ15 LF11 BJ13 LF Land Site 5 TJ1 LF12 LF11 SH20 LF13 LF12 CQ1 LF13 CQ1 Area Held For Projec

  12. Slide 12: M&A Update

    M&A Update n BJ15 Acquisition Closed p 19,166 sqm of net floor area p 100% committed p Current utilization rate of ~80% p 2nd data center for expansion on the same site n TJ1 Acquisition Closed p ~14,000 sqm of NFA p Highly marketable capacity p New market for GDS, but only 30 kms from edge of Beiji

  13. Slide 13: Regionalization

    Regionalization Driven By Home Market Customer Demand SINGAPORE MALAYSIA n Less resource constrained than Singapore 2020 IT Capacity: 433 MW (1) n Greater availability of renewable energy 2024 Colocation Revenue: $2.1 bn (1) n Global Tier 1 market INDONESIA n Well established regional hub n Signific

  14. Slide 14: Financial & Operating Review

    Financial & Operating Review Dan Newman, CFO © GDS 2016

  15. Slide 15: 1Q21 P&L Analysis

    1Q21 P&L Analysis Quarterly Financial Review Rmb‘000 (unless indicated) 1Q20 4Q20 1Q21 Y/Y Q/Q Service Revenue 1,232,589 1,627,451 1,704,492 38.3% 4.7% Equipment Sales 7,829 4,149 1,475 (81.2%) (64.4%) Total Net Revenue 1,240,418 1,631,600 1,705,967 37.5% 4.6% Cost of Revenue (890,080) (1,201,554) (

  16. Slide 16: 1Q21 Underlying Trends

    1Q21 Underlying Trends Quarterly Financial Review Rmb‘000 (unless indicated) 1Q20 4Q20 1Q21 Y/Y Q/Q Total Net Revenue 1,240,418 1,631,600 1,705,967 37.5% 4.6% Less: Equipment Sales 7,829 4,149 1,475 (81.2%) (64.4%) Service Revenue 1,232,589 1,627,451 1,704,492 38.3% 4.7% Adjusted GP 664,938 873,529

  17. Slide 17: Revenue & Area Utilized

    Revenue & Area Utilized Total Revenue (Rmb Mn) Net Additional Area Utilized (Sqm) (1) & MSR Org anic Acquisition Service Revenue Equipment Sales 29,324 1,706.0 1,631.6 14,988 16,589 16,461 16,152 1,524.7 1.5 4.1 248 1,342.2 7,816 2.4 1,240.4 14,336 16,213 7.7 7.8 1Q20 2Q20 3Q20 4Q20 1Q21 1,627.5 1,7

  18. Slide 18: Underlying Adjusted GP & EBITDA & Margin

    Underlying Adjusted GP & EBITDA & Margin Underlying Adjusted GP (Rmb Mn) & Margin Underlying Adjusted EBITDA (Rmb Mn) & Margin 53.9% 54.0% 53.4% 53.7% 54.4% 47.4% 47.8% 47.1% 46.8% 47.9% 927.8 873.3 816.5 812.2 761.4 720.5 717.2 664.3 637.5 584.1 1Q20 2Q20 3Q20 4Q20 1Q21 1Q20 2Q20 3Q20 4Q20 1Q21 © G

  19. Slide 19: Construction Program

    Construction Program Self-Developed Data Centers Delivery Schedule (Sqm) Area Under Pre-Commitment RFS Date Tenure Type Construction (Sqm) Rate (%) SH12 2Q21 Lease Brownfield 3,653 100% SH17 Phase 1 2Q21 Own Convert 6,188 100% 53,719 LF3 LF9 2Q21 2Q21 Own Lease Greenfield Convert 11,664 10,830 100%

  20. Slide 20: Capital Expenditure

    Capital Expenditure Capex Paid – By Quarter (Rmb Mn) (1) Capex Paid – By Year (Rmb Mn) (1) Organic Acquisition 9,378.0 Rmb Mn 1Q20 2Q20 3Q20 4Q20 1Q21 1,357.5 Organic (2) 2,525.6 1,021.9 2,141.0 2,332.0 2,274.9 5,131.2 4,733.1 578.6 475.1 Acquisition 10.3 327.0 607.0 413.2 32.8 8,020.5 2,005.1 2,307

  21. Slide 21: Financing Obligations & Liquidity

    Financing Obligations & Liquidity Debt & Cash Outstanding Loan Maturity Schedule As At 31/03/21 (Rmb Mn) 31/03/20 31/12/20 31/03/21 Workin g Capital / LQA Adjusted Rmb Mn Rmb Mn Rmb Mn 4,056 EBITDA Project Loan Total Loan 9,466.4 12,720.1 14,026.6 4.3 3,685 Convertible Bond C onvertible Bond 2,084.7

  22. Slide 22: Backlog & Move-In Analysis

    Backlog & Move-In Analysis Backlog Build-Up For 1Q21 (Sqm) Backlog By Data Center Status (Sqm) Net Additional Total Area Committed Backlog for Area Under Construction Net Additional Area Utilized Backlog for Area In Service 182,912 175,341 161,705 23,723 16,152 182,912 140,298 175,341 123,152 101,34

  23. Slide 23: Business Outlook

    Business Outlook Confirming FY21 Annual Guidance Rmb Mn FY20 Actual FY21 Guidance Implied Y/Y Total Revenue 5,739.0 7,700 – 8,000 34.2% – 39.4% Adjusted EBITDA 2,680.6 3,660 – 3,800 36.5% – 41.8% Capex (1) 9,378.0 12,000 ~28% Note: 1. Refers to net cash used in investing activities. © GDS 2016 22

  24. Slide 24: Questions & Answers

    Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016

  25. Slide 25: Appendix

    Appendix © GDS 2016

  26. Slide 26: Our Data Center Portfolio – Beijing & Shanghai Markets

    Our Data Center Portfolio – Beijing & Shanghai Markets Self-Developed Data Centers In Service & Under Construction 1Q21 (1) Greater Beijing – 31 DCs (2) Greater Shanghai – 23 DCs CS1 BJ5/10/11/12 SH1/2/3/4/6/7/8/9/ 88 10/11/12/14/15/19 BJ4/6 54 13 50 33 BJ13 27 27 SH5 61 BJ1/2/3/9 SH16/17 30 50 SH13

  27. Slide 27: Our Data Center Portfolio – Greater Bay Area & Chengdu / Chongqing

    Our Data Center Portfolio – Greater Bay Area & Chengdu / Chongqing Self-Developed Data Centers In Service & Under Construction In Tier 1 Markets (1) Great Bay Area – 13 DCs Chengdu / Chongqing – 3 DCs HZ1 SZ4 GZ1/2/3/6 SZ5 65 57 45 38 GZ4 SZ6 25 HK1 SZ1/2/3 CD1/2 CQ1 Note: 1. Distance in km. © GDS 2

  28. Slide 28: Key Operating KPIs

    Key Operating KPIs Last 8 Quarters As At 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 (1) 4Q20 1Q21 Area In Service (Sqm) 180,441 198,097 225,963 229,986 266,260 279,618 318,272 332,534 Area Under Construction (Sqm) 78,373 84,765 89,834 110,706 133,208 149,983 137,070 161,611 Total Capacity (Sqm) 258,814 282,862 3

  29. Slide 29: Data Center Summary By Market

    Data Center Summary By Market As At 31/03/21 (Sqm, Unless Indicated) (1) Area Held for Pre- Area In Area Under Total Area Area Pre- Total Area Area Commitment Utilization Future Commitment # of Self- Service Construction Capacity Committed Committed Committed Utilized Rate Rate Development Rate Mark

  30. Slide 30: Self-Developed Data Centers In Service – Greater Beijing

    Self-Developed Data Centers In Service – Greater Beijing As At 31/03/21 (Sqm, Unless Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate BJ1 2H15 Convert Lease 2,435 2,395 98.4% 2,349 96.5% BJ2 2H17 Convert Lease 5,819 5,

  31. Slide 31: Self-Developed Data Centers In Service – Greater Shanghai

    Self-Developed Data Centers In Service – Greater Shanghai As At 31/03/21 (Sqm, Unless Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate SH1 2H11 Purpose-Built Lease 6,432 6,305 98.0% 6,103 94.9% SH2 2H15 Purpose-Built L

  32. Slide 32: Self-Developed Data Centers In Service – Greater Bay Area

    Self-Developed Data Centers In Service – Greater Bay Area As At 31/03/21 (Sqm, Unless Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate SZ1 2H14 Convert Lease 4,286 4,272 99.7% 4,252 99.2% SZ2 1H16 Convert Lease 4,308 4

  33. Slide 33: Self-Developed Data Center In Service – Chengdu / Chongqing

    Self-Developed Data Center In Service – Chengdu / Chongqing As At 31/03/21 (Sqm, Unless Indicated) Data Center Ready For Service Type Tenure Area In Service Area Committed Commitment Rate Area Utilized Utilization Rate CD1 1H17 Purpose-Built Own 6,262 6,262 100% 4,953 79.1% CD2 Phase 1 2H18 Purpose-

  34. Slide 34: Self-Developed Data Centers Under Construction

    Self-Developed Data Centers Under Construction As At 31/03/21 (Sqm, Unless Indicated) Area Under Area Pre- Pre-Commitment Market Data Center Ready For Service Type Tenure Construction Committed Rate BJ13 1H22 Purpose-Built Own 13,903 5,465 39.3% LF3 1H21 Purpose-Built Own 11,664 11,664 100% LF4 Phas

  35. Slide 35: Self-Developed Data Center Capacity – Lease Vs Own

    Self-Developed Data Center Capacity – Lease Vs Own As At 31/03/21 Area Under Held For Future Total Developed & Sqm Area In Service Construction Development Developable Capacity Lease 276,979 58,019 42,203 377,201 Own 46,973 103,592 418,760 569,325 Total 323,952 161,611 460,963 946,526 % Lease 85.5%

  36. Slide 36: Stabilized Vs. Ramping-Up Data Centers

    Stabilized Vs. Ramping-Up Data Centers Breakdown Of Area In Service As At 1Q21 Stabilized Data Centers Ramping-Up Data Centers Area In Service (Sqm) Commitment Rate Utilization Rate Area In Service Area In Service (Sqm) Commitment Rate Utilization Rate KS1 6,546 98.6% 94.2% SH6 7,620 88.9% 55.9% KS2

  37. Slide 37: Build-Operate-Transfer Data Centers for Customer 1

    Build-Operate-Transfer (“B-O-T”) Data Centers for Customer 1 Note: These projects are still under GIC arrangement and are not included in our KPIs. As At 1Q21 Number of Data Centers Sqm Area Under Construction 2 7,777 Area In Service 7 27,247 Area Utilized -- 8,699 © GDS 2016 36

  38. Slide 38: Customer Franchise

    Customer Franchise Customer Segment Breakdown By Total Area Committed Leading CSP / Large Internet Customer Additions FSI & Large Enterprises 2011 – 2016 9.1% (1) 38,613 2017 13.2% Sqm Large Internet 56,162 Sqm 709 77.7% 2018 Customers 330,502 +11.0% Y/Y Sqm (2) 2019 (3) 2020 Cloud Service Providers

  39. Slide 39: Top 5 Customers

    Top 5 Customers By Total Area Committed (1)(2) By Revenue (1) % Of Total Area Number of Data End User End User % Of 1Q21 Total Net Revenue Committed As At 1Q21 Centers (3) Customer 1 38.2% 34 Customer 1 24.3% Customer 2 21.0% 19 Customer 2 23.3% Customer 3 5.5% 5 Customer 3 8.7% Customer 4 5.3% 10 C

  40. Slide 40: Forthcoming Contract Renewals

    Forthcoming Contract Renewals Contract Renewal Schedule (1) Period Sqm % of Total Area Committed 2Q21-4Q21 29,697 7.0% FY22 22,487 5.3% FY23 38,337 9.0% FY24 40,222 9.5% Thereafter 294,534 69.3% Total Area Committed As At 31/03/21 425,277 100% Note: 1. Include two B-O-T Data Centers for Customer 2 a

  41. Slide 41: Principal Shareholders

    Principal Shareholders As At 31/03/21 Pro Forma Ordinary Shares (1) Equivalent ADS Equivalent ADS % of Total ADS Change (3) William Huang (2) 80,446,240 10,055,780 10,055,780 5.4% Directors & Officers 16,048,767 2,006,095 2,006,095 1.1% STT GDC 477,288,484 59,661,060 59,661,060 32.1% Ping An 0 0 +4,

  42. Slide 42: Working Capital Management

    Working Capital Management Accounts Receivable Turnover Days (# of Days) (1) Days Payable Outstanding (DPO) (2) 88 88 # of Days 1Q20 2Q20 3Q20 4Q20 1Q21 87 84 77 DPO – Opex 96 114 107 88 85 DPO – Capex 94 106 136 139 185 Total DPO 95 108 129 127 155 Total DPO (Excl. Acquisitions) 82 89 110 108 128 1

  43. Slide 43: Historical Financial Results – Statements of Operations

    Historical Financial Results Condensed Consolidated Statements of Operations Amounts in thousands Three Months Ended Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 RMB RMB RMB RMB RMB USD Net Revenue Service revenue 1,232,589 1,334,475 1,522,353 1,627,451 1,704,492 260,156 Equipmen

  44. Slide 44: Historical Financial Results – Balance Sheets

    Historical Financial Results Condensed Consolidated Balance Sheets Amounts in thousands. As of Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 RMB RMB RMB RMB RMB USD Cash 3,611,121 7,742,082 6,004,537 16,259,457 14,914,125 2,276,340 Accounts receivable, net of allowance for doubtfu

  45. Slide 45: Historical Financial Results – Cash Flows

    Historical Financial Results Condensed Consolidated Statements of Cash Flows Amounts in thousands Three Months Ended Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 RMB RMB RMB RMB RMB USD Net cash (used in) provided by operating activities (169,799) 186,037 (7,943) 312,592 (24,197)

  46. Slide 46: Reconciliation from Gross Profit to Adjusted GP

    Reconciliation from Gross Profit to Adjusted GP Adjusted GP Amounts in thousands Three Months Ended Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 RMB RMB RMB RMB RMB USD Gross profit 350,338 361,102 408,965 430,046 396,852 60,571 Depreciation and amortization 296,601 341,618 378,2

  47. Slide 47: Reconciliation from Net Loss to Adjusted EBITDA

    Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Mar 31, 2020 Jun 30, 2020 Sep 30, 2020 Dec 31, 2020 Mar 31, 2021 RMB RMB RMB RMB RMB USD Net loss (92,031) (101,047) (204,635) (271,501) (278,737) (42,544) Net interest expenses 260,865 300,649 33

  48. Slide 48: Definition of KPIs

    Definition of KPIs Area In Service Entire net floor area of data centers (or phases of data centers) which are ready for service Entire net floor area of data centers (or phases of data centers) which are actively under construction and have not yet reached the stage Area Under Construction of being

  49. Slide 49: Analyst Coverage

    Analyst Coverage Broker Analyst Contact BofA Paul Dewberry paul.dewberry@baml.com BOCI Michael Meng michael.meng@bocigroup.com Berenberg Nate Crossett nate.crosssett@berenberg-us.com CICC Kai Qian kai.qian@cicc.cn Citi Arthur Lai arthur.y.lai@citi.com Citic Securities Yingbo Xu xuyb@citics.com CMB I

GDS Holdings — Q1 2021 Earnings Presentation on 6ix