Gds Holdings Ltd. · HKEX:9698

Gds — Q2 2017 Earnings Presentation

31 slides from Gds's earnings presentation, Aug 8, 2017

  1. Slide 1: 2Q17 Earnings Presentation

    2Q17 Earnings Presentation 8th Aug, 2017 NASDAQ: GDS © 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: Strategic & Operational Highlights

    Strategic & Operational Highlights William Huang, Chairman & CEO © GDS 2016

  4. Slide 4: 2Q17 Performance Overview – Financial

    2Q17 Performance Overview – Financial Financial Highlights Total Revenue & Adjusted NOI (Rmb Mn) Total Net Revenue 400 336.2 n Grew total revenue to Rmb 336.2 mn, 300 +42.4% Y/Y 200 n Grew adjusted NOI to Rmb 156.3 mn, 100 +45.7% Y/Y 0 (1) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 n Grew adj

  5. Slide 5: 2Q17 Performance Overview – Operational

    2Q17 Performance Overview – Operational Operational Highlights Total Area Committed & Area Utilized (Sqm) n Continued strong sales growth momentum Total Area Committed Area Utilized n Total area committed increased by 8,228 76,541 sqm (net) to 76,541 sqm, +71.6% Y/Y n Bookings in 1H17 worth over $75

  6. Slide 6: Biggest Data Center Opportunity in the World

    Biggest Data Center Opportunity in the World Cloud Adoption in China Highlights n Cloud is potentially a $20~30 bn market in China n Cloud and Internet platforms driving 70%+ of incremental demand for data center resource n CSPs looking to outsource their performance- sensitive requirement in Tier 1

  7. Slide 7: Serving the Customers Who Matter

    Serving the Customers Who Matter Total Area Committed by Customer Segment as at 30/06/17 Total Area Committed by Top 2 Customers (Sqm) FSI & Large Enterprises Cloud Service Providers 38,831 24.1% 455 Customers 51.1% +5% Q/Q 24.8% Large Internet 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 © GDS 2016 6

  8. Slide 8: Secured Resource Supply to Sustain Leadership

    Secured Resource Supply to Sustain Leadership Resource Development (Sqm) Highlights 61,092 10,485 71,577 19,655 91,232 18,373 n Successfully brought 3 projects into service n SZ5 Phase 1 completed one quarter ahead of schedule n Area in service increase by 10,485 sqm BJ3 SZ5 Phase 2 SH5 Phase 1 n Co

  9. Slide 9: Our Data Center Portfolio – Beijing & Shanghai

    Our Data Center Portfolio – Beijing & Shanghai Self- built Data Centers in Tier 1 Cities – Beijing & Shanghai Beijing Shanghai KM KM SH1, 2, 3, 4 BJ1, 3 4.9 12.8 SH6 2.2 61.3 SH5 BJ2 KS1 © GDS 2016 8

  10. Slide 10: Our Data Center Portfolio – Shenzhen, Guangzhou & Chengdu

    Our Data Center Portfolio – Shenzhen, Guangzhou & Chengdu Self- built Data Centers in Tier 1 Cities – Shenzhen, Guangzhou & Chengdu Area Chengdu Guangzhou Shenzhen CD1 GZ1 SZ5 SZ3 SZ1, 2 SZ4 1.2 45.2 KM 37.9 © GDS 2016 9

  11. Slide 11: Financial & Operating Review

    Financial & Operating Review Dan Newman, CFO © GDS 2016

  12. Slide 12: 2Q17 P&L Analysis

    2Q17 P&L Analysis Quarterly Financial Review 1Q17 Q/Q Rmb ‘000 2Q16 1Q17 2Q17 Y/Y Pro Forma (1) (Over Pro Forma 1Q17) RMB RMB RMB RMB % % Net Revenue Service Revenue 234,010 343,665 299,602 331,490 41.7% 10.6% Equipment Sales 2,026 6,378 6,378 4,724 133.2% (25.9%) Total Net Revenue 236,036 350,043 3

  13. Slide 13: Underlying Trends

    Underlying Trends Quarterly Financial Review 1Q17 Q/Q Rmb ‘000 2Q16 2Q17 Y/Y (Pro Forma) (Over Pro Forma 1Q17) Total Net Revenue 236,036 305,980 336,214 42.4% 9.9% n Service revenue grew 41.7% Less : Equipment Sales 2,026 6,378 4,724 133.2% (25.9%) Y/Y and 10.6% Q/Q Service Revenue 234,010 299,602 3

  14. Slide 14: Revenue & Area Utilized

    Revenue & Area Utilized Revenue (Rmb Mn) Area Utilized (Sqm) & MSR (Rmb / Sqm / Month) Service Revenue Equipment Sales 1 42,470 37,082 37,898 6.4 34,369 4.7 32,152 44.1 11.9 44.1 30.3 Termination Fee 2.0 331.5 2Q16 3Q16 4Q16 1Q17 2Q17 299.7 299.6 266.9 234.0 Average MSR 2,797 2,750 2,780 2,708 (1) 2

  15. Slide 15: Underlying Adjusted NOI & EBITDA

    Underlying Adjusted NOI & EBITDA Underlying Adjusted NOI & Margin Underlying Adjust EBITDA & Margin 45.8% 46.7% 44.7% (1) 46.9% 17.8% 26.4% 26.5% 27.1% (1) 30.3% 47.6% 178.1 Rmb Mn Rmb Mn 125.2 155.5 44.1 139.9 Termination Fee 44.1 100.4 126.9 Termination Fee 107.2 79.3 70.6 134.0 41.7 81.2 2Q16 3Q1

  16. Slide 16: Cost Breakdown & Operating Leverage

    Cost Breakdown & Operating Leverage 2Q17 Cost Breakdown & Operating Leverage (Rmb Mn) % of Service Revenue Service Revenue 331.5 1Q17 2Q17 (Pro Forma) Utility Cost 77.8 23.8% 23.5% Rent, Labour (1) & Other (1) 98.2 31.5% 29.6% Underlying Adjusted NOI 155.5 44.7% 46.9% SG&A(2) 56.2 17.9% 16.9% Other

  17. Slide 17: Capex & On-Going Investment

    Capex & On-Going Investment Capex Paid & Capex Incurred (Rmb Mn) Current Construction Program Capex Paid (1) 386.9 405.7 380.0 Area Under Pre- 283.3 RFS Date Construction Commitment 263.6 (Sqm) Rate (%) BJ2 2H17 6,177 33.6% SZ4 Phase 1 2H17 5,268 19.2% 2Q16 3Q16 4Q16 1Q17 2Q17 SH4 2H17 8,210 0% BJ3

  18. Slide 18: Financing Obligation & Liquidity

    Financing Obligation & Liquidity Debt & Cash Outstanding Loan Maturity Schedule as at 30/06/17 (Rmb Mn) 31/12/16 31/03/17 30/06/17 / LQA Adjusted Rmb Mn Rmb Mn Rmb Mn EBITDA Loan 1,483.4 Wo rking Capital & Project Loan Working Capital 239.8 262.1 329.6 0.8x Convertible Bond Project Loan 1,698.8 2,03

  19. Slide 19: Contract Backlog Build-up

    Contract Backlog Build-up Backlog Build-up for 2Q17 (Sqm) Total Area Committed & Area Utilized (Sqm) Total Area Committed 76,541 4,572 34,071 8,228 30,415 34,071 42,470 Backl og at 31/03 /1 7 Ne t Add ition al Total Area Ne t Add ition al Area U ti lize d Backl og at 30/06 /1 7 1Q15 2Q15 3Q15 4Q15 1

  20. Slide 20: Questions & Answers

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

  21. Slide 21: Appendix

    Appendix © GDS 2016

  22. Slide 22: Key Operating KPIs

    Key Operating KPIs Key Operating KPIs As at the end of: 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Area In Service (Sqm) 27,589 27,589 37,645 37,869 37,869 48,548 48,822 60,982 61,092 71,577 Area Under Construction (Sqm) 14,364 14,364 13,163 35,525 35,525 31,794 37,194 25,055 35,055 38,028 Ar

  23. Slide 23: Self-Developed Data Centers In Service

    Self-Developed Data Centers In Service As At 30/06/17 Shanghai Shenzhen Guangzhou Beijing Chengdu KS1 SH1 SH2 SH3 SZ1 SZ2 SZ3 SZ5 Phase 1 GZ1 BJ1 CD1 Ready For Service 2H10 2H11 2H15 2H16 2H14 1H16 2H16 1H17 1H16 2H15 1H17 Type Purpose-Built Purpose-Built Purpose-Built Purpose-Built Converted Conver

  24. Slide 24: Self-Developed Data Centers Under Construction

    Self-Developed Data Centers Under Construction As At 30/06/17 Shanghai Shenzhen Beijing SH5 SZ4 SZ5 SH4 SH6 BJ2 BJ3 Phase 1 Phase 1 Phase 2 Ready For Service 2H17 1H18 2H18 2H17 1H18 2H17 1H18 Type Purpose-Built Converted Purpose-Built Converted Converted Converted Converted Tenure Leased Leased Lea

  25. Slide 25: Top 5 Customers

    Top 5 Customers Top 5 Customers in terms of Total Area Committed Number of End User % of Total Area Committed % of 2Q17 Revenue Data Centers Internet / Cloud Service Provider 27.1% 27.5% 7 Internet / Cloud Service Provider 23.6% 8.3% 8 (2) Internet 7.5% 11.7% 1 Internet 4.2% 0% 1 Cloud Service Provi

  26. Slide 26: Shares Outstanding

    Shares Outstanding As At 30/06/17 Shares Outstanding as at 30/06/17 (1) Ordinary Shares from before IPO 217,987,922 Ordinary Shares Converted from Preferred Shares 349,087,677 Ordinary Shares Issued for Preferred Dividends 31,490,164 Ordinary Shares Issued in IPO (Including Greenshoe) 160,565,880 Or

  27. Slide 27: Historical Financial Results – Statements of Operations

    Historical Financial Results Condensed Consolidated Statements of Operations Amounts in thousands Three Months Ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 RMB RMB RMB RMB RMB RMB RMB USD Net Revenue Service revenue 193,373 202,384 234,010 266,890

  28. Slide 28: Historical Financial Results – Balance Sheets

    Historical Financial Results Condensed Consolidated Balance Sheets As of Dec 31, As of Dec 31, As of Jun 30, As of Sep 30, As of Dec 31, As of Mar 31, Amounts in thousands As of Jun 30, 2017 2014 2015 2016 2016 2016 2017 RMB RMB RMB RMB RMB RMB RMB USD Cash 606,758 924,498 834,477 798,732 1,811,319

  29. Slide 29: Historical Financial Results – Cash Flows

    Historical Financial Results Condensed Consolidated Statements of Cash Flows Six Months Amounts in thousands Year Ended Three Months Ended Ended Dec 31, 2014 Dec 31, 2015 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 RMB RMB RMB RMB RMB RMB RMB USD Net cash provided by (used in) o

  30. Slide 30: Reconciliation from Gross Profit to Adjusted NOI

    Reconciliation from Gross Profit to Adjusted NOI Adjusted NOI Amounts in thousands Three months ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 RMB RMB RMB RMB RMB RMB RMB USD Gross profit 54,525 54,203 60,898 74,642 75,931 106,198 81,361 12,001 Depre

  31. Slide 31: Reconciliation from Net Loss to Adjusted EBITDA

    Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 RMB RMB RMB RMB RMB RMB RMB USD Net loss (28,175) (38,778) (115,419) (52,576) (69,639) (44,305) (75,723)

GDS Holdings — Q2 2017 Earnings Presentation on 6ix