Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Q2 2022 Earnings Presentation
37 slides from Digitalbridge's earnings presentation, Aug 4, 2022
Slide 1: Earnings Presentation 2Q 2022
1 EARNINGS PRESENTATION 2Q 2022 A u g u s t 4 , 2 0 2 2
Slide 2: Forward-Looking Statements
2 This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not his
Slide 3: Agenda
3 AGENDA 1 2 3 4UPGRADED ROADMAP BUSINESS UPDATE FINANCIAL RESULTS EXECUTING THE DIGITAL PLAYBOOK
Slide 4: DBRG Upgraded Roadmap
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Slide 5: DBRG Upgraded Strategic Roadmap
5 DBRG UPGRADED STRATEGIC ROADMAP Stage I The Transition (2019 - 2021) Stage II The Acceleration (2021, 2022, 2023) Hospitality Real Estate Healthcare Real Estate Other Equity and Debt Industrial Real Estate BrightSpire Management Legacy Invest. Management Stage II+ Scaling and Capital F
Slide 6: IM Growth Potential Unlocked – 2x FEEUM Growth
6 IM GROWTH POTENTIAL UNLOCKED – 2X FEEUM GROWTH (1) Pro forma for AMP Capital transaction Note: There can be no assurance that actual amounts will not be materially higher or lower than these expectations. Readers should refer to the discussion in the Cautionary Statement Regarding Forward-Looking
Slide 7: What Does 2x FEEUM Translate Into?
7 WHAT DOES 2X FEEUM TRANSLATE INTO? FEEUM growth translates simply into significant incremental revenue and earnings (1) Pro forma for AMP Capital transaction Note: There can be no assurance that actual amounts will not be materially higher or lower than these expectations. Readers should refer to
Slide 8: Roadmap Consistent With Our Track Record
8 $6.8 $12.8 $18.3 $25B+(1) 2019 2020 2021 2022E >3X FEEUM over past 3 years driven by secular tailwinds and DBRG strategic position as ‘Partner of Choice’ ROADMAP CONSISTENT WITH OUR TRACK RECORD $13.5B $30.0B $45.3B $65B+(1) FEEUM Sources: DigitalBridge Note: The Company undertakes no obligation t
Slide 9: Strategic Capital Allocation Priorities
9 STRATEGIC CAPITAL ALLOCATION PRIORITIES With Wafra transaction close ($0.4B) in 2Q, DBRG has $0.9B to redeploy, we have earmarked 3 simple uses: Strategic Digital M&A, Capital Structure Optimization, and Share Repurchases & Dividends Strategic Digital M&A CAPITAL ALLOCATION FRAMEWORK ($ in million
Slide 10: A More Scalable Roadmap – An Updated Business Mix
10 Note: There can be no assurance that actual amounts will not be materially higher or lower than these expectations. Readers should refer to the discussion in the Cautionary Statement Regarding Forward-Looking Statements section at the end of this presentation. Additionally, The Company undertakes
Slide 11: Business Update
11 2 BUSINESS UPDATE
Slide 12: Adversity Presents Opportunity
12 ADVERSITY PRESENTS OPPORTUNITY Ability to Differentiate – Great chance to out-execute the competition – who is delivering for customers? Logic of Outsourcing - Capital scarcity drives increased outsourcing, shared- infra model makes even more sense, we are seeing this already More Rational Pricin
Slide 13: Portfolio Performing Well Despite Macro Environment
13 PORTFOLIO PERFORMING WELL DESPITE MACRO ENVIRONMENT DigitalBridge’s diversified portfolio of digital infrastructure businesses continues to deliver solid growth with current and leading indicators in positive territory. Towers Data Centers Small Cells Fiber Investment Management Portfolio Perform
Slide 14: Capital Formation: First Commitments to New Strategies
14 CAPITAL FORMATION: FIRST COMMITMENTS TO NEW STRATEGIES Closed initial commitments on Core and Credit strategies…building momentum into the second half of 2022. Success with ‘FULL STACK’ approach and co-invest opportunities position DBRG to exceed ‘22 target. Credit Fund – Initial Commitments Init
Slide 15: DBRG 2Q22 - Establishing New Signature Platforms
15 DBRG 2Q22 - ESTABLISHING NEW SIGNATURE PLATFORMS During 2Q, DigitalBridge continued to reinforce its position as a leader in digital infrastructure globally, establishing two new signature platforms in addition to ongoing investment in existing portfolio companies ESTABLISHING NEW SIGNATURE PLATF
Slide 16: Creating Shareholder Value
16 CREATING SHAREHOLDER VALUE +$230M Recap Creates long-term continuation vehicle Harvests significant profit at attractive valuation (recycling into new Digital M&A) Maintains exposure to next stage of DataBank’s growth including participation in carried interest Balance Sheet Proceeds Initial ~$23
Slide 17: Financial Results
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Slide 18: 2Q 2022 Financial Overview
18 2Q 2022 FINANCIAL OVERVIEW Note: All $ in millions except per share & AUM TOTAL COMPANY 2Q21 2Q22 % Change from 2Q21 2Q21 LTM 2Q22 LTM % Change from 2Q21 LTM Consolidated Revenues $237.2 $289.4 +22% $736.2 $1,054.9 +43% DBRG OP Share of Revenues $66.7 $90.9 +36% $189.1 $319.1 +69% Net Income (DBR
Slide 19: 2Q 2022 Segment Earnings – Investment Management
19 2Q 2022 SEGMENT EARNINGS – INVESTMENT MANAGEMENT NOTE: All $ in millions except FEEUM DIGITAL INVESTMENT MANAGEMENT 2Q21 2Q22 % Change from 2Q21 2Q21 LTM 2Q22 LTM % Change from 2Q21 LTM Consolidated Revenues $46.9 $46.1 (2%) $123.6 $204.7 +66% Fee Related Earnings (FRE) $27.7 $25.5 (8%) $65.0 $11
Slide 20: 2Q 2022 Segment Earnings – Digital Operating
20 2Q 2022 SEGMENT EARNINGS – DIGITAL OPERATING NOTE: All $ in millions Earnings from Digital Operating investments, DataBank and Vantage SDC, continued to contribute positive earnings growth driven by continued lease-up at Vantage SDC and Houston data center additions at DataBank. DIGITAL OPERATING
Slide 21: Stabilized Growth
21 STABILIZED GROWTH Digital IM and Digital Operating divisions have continued to grow consistently with ‘lower left to upper right trajectory’ (1) Includes pro-forma run rate adjustments for the acquisition of the 31.5% minority interest completed in May 2022 and for the AMP Capital transaction; Th
Slide 22: Guidance Update – 2023 & 2025
22 2023 2025 Previous Update Previous Update Digital IM Fee Revenue $220 - $260M $300 - $360M $270 - $330M $460 - $520M Digital IM FRE (earnings) $130 - $160M $175 - $195M $165 - $215M $270 - $310M Average (mid) / Ending FEEUM (Implied) $25B / $26-28B $38B / $36-40B $32B / $34-38B $55B / $52-$58B Di
Slide 23: Evolution to an Earnings-Driven Valuation Framework
23 EVOLUTION TO AN EARNINGS-DRIVEN VALUATION FRAMEWORK FEE RELATED EARNINGS (“FRE”) VALUE • Predictable and growing management fee streams associated with long-dated funds • Valued on multiple of FRE basis, consistent with other alternative asset managers, adjusted for DBRG growth & margin profile •
Slide 24: Valuation Framework: Sum-of-the-Parts (SOTP)
24 VALUATION FRAMEWORK: SUM-OF-THE-PARTS (SOTP) OTHER NET ASSET VALUE 4 Digital Principal Investments GP Investments (DBRG Investment in our funds) $218 Warehouse Investments (held to seed new strategies) 591 Total Digital Principal Investments $809 Legacy BRSP Shares (35M shares @ $8.62)(1) $302 Co
Slide 25: Executing the Digital Playbook
25 4 EXECUTING THE DIGITAL PLAYBOOK
Slide 26: DigitalBridge Is a Business Builder in Digital Infra
26 Pair capital and operating expertise with the right strategic business plan built around both greenfield and strategic M&A – Build & Buy Customer-driven investment framework that allocates capital and resources to support network growth PHASE 1: ESTABLISH PLATFORM PHASE 2: TRANSFORM AND SCALE PHA
Slide 27: Stage 3: Vantage – Leading Global Hyperscale Provider
27 After partnering with DigitalBridge, Vantage has built a state-of-the-art data center platform serving hyperscalers, cloud providers and large enterprises across 17 markets globally STAGE 3: VANTAGE – LEADING GLOBAL HYPERSCALE PROVIDER 2022 ~7x EBITDA Growth 25 Campuses 5 Continents 1.5+ GW Poten
Slide 28: Phase 3: DataBank – A Leader at the Edge
Strictly Private and Confidential 28 PHASE 3: DATABANK – A LEADER AT THE EDGE… A Premier Edge Platform Positioned To Benefit From the Substantial Secular Growth In Edge Computing 2022 8x EBITDA Growth 64 Current U.S. Facilities 26 US Markets Served 200+ MW In-Place Capacity 6 Facilities 3 US Markets
Slide 29: Phase 2: EdgePoint – Leading SE Asian Tower Platform
Strictly Private and Confidential 29 PHASE 2: EDGEPOINT – LEADING SE ASIAN TOWER PLATFORM In under 18 months, EdgePoint Infrastructure has become one of the largest multi-country wireless tower operators in Southeast Asia with more than 13,000 towers across Indonesia, Malaysia and the Philippines. A
Slide 30: Execution Matters
Strictly Private and Confidential 30 EXECUTION MATTERS $ 2.3 B DBRG has continued to deliver on its commitments to our shareholders, proving out our business model and creating returns In 2022 1st Exit in DBP I(2)1.9x MOIC for Balance Sheet(1) DBP II over 90% Committed(3) YTD FEEUM Ahead of Schedule
Slide 31: DigitalBridge: Infrastructure Partner to the Digital Economy
31 DigitalBridge (NYSE: DBRG) is the leading global digital infrastructure investor, managing and operating assets across five key verticals: data centers, cell towers, fiber networks, small cells, and edge infrastructure DigitalBridge is the infrastructure partner to the Digital Economy Miami, FL
Slide 32: Q&A Session
32 4 Q&A SESSION
Slide 33: Appendix
33Strictly Private and Confidential 5 APPENDIX
Slide 34: Non-GAAP Reconciliations
34 NON-GAAP RECONCILIATIONS ($ in thousands) 2Q22 LTM 2Q22 1Q22 4Q21 3Q21 2Q21 LTM 2Q21 1Q21 4Q20 3Q20 Net income (loss) attributable to common stockholders $ (279,287) $ (37,321) $ (262,316) $ (20,686) $ 41,036 $ (752,425) $ (141,260) $ (264,806) $ (140,575) $ (205,784) Net income (loss) attributab
Slide 35: Non-GAAP Reconciliations
35 NON-GAAP RECONCILIATIONS ($ in thousands) 2Q22 LTM 2Q22 1Q22 4Q21 3Q21 2Q21 LTM 2Q21 1Q21 4Q20 3Q20 Digi tal IM net income ( loss ) $ 126,318 $ 67,995 $ (9,143) $ 28,194 $ 39,272 $ 29,950 $ 15,786 $ 7,663 $ 2,702 $ 3,799 Adjustments: Interest expense (income) 10,020 2,771 2,500 2,499 2,250 (4) -
Slide 36: Important Note Regarding Non-GAAP Financial Measures
36 IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES This presentation includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles, or GAAP, including the financial metrics defined below, of which the calculations may from methodologies utili
Slide 37: DigitalBridge
DIGITALBRIDGE