Gds Holdings Ltd. · HKEX:9698
Gds — Q1 2019 Earnings Presentation
39 slides from Gds's earnings presentation, May 14, 2019
Slide 1: 1Q19 Earnings Call
1Q19 Earnings Call 14 May 2019 NASDAQ: GDS © GDS 2016 0
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
Slide 3: Business Strategy & Performance Highlights
Business Strategy & Performance Highlights William Huang, Chairman & CEO © GDS 2016
Slide 4: 1Q19 Highlights
1Q19 HIGHLIGHTS Sales Momentum • Net additional total area committed of +16,088 sqm • Total area committed increased by 62.7% y/y to 199,831 sqm Capacity Expansion • Total capacity (in service + under construction) grew by 65.0% y/y to 237,251 sqm • Invested Rmb 834.4 mn ($124.3 mn) of capex for cap
Slide 5: Sales Achievement
Sales Achievement Net Additional Area Committed (Sqm) Total Area Committed by Customer Segment FSI & Large Enterprises Cloud Service Providers 81,215 12.4% Large 14.9% Internet 604 41,485 Customers +9.6% Y/Y 25,125 72.7% 14,933 16,088 1Q FY15 FY16 FY17 FY18 1Q19 © GDS 2016 4
Slide 6: Resource Progress
Resource Progress Capacity Expansion – 1Q19 & Recent Developments 22,509 12,507 11,972 (1) Recent 65,201 65,736 Developments SZ6 BJ5 Phase 2 BJ8 GZ3 Phase 2 SH9 LF1 GZ4 GZ6 (2) Area Under Construction Projects Initiated Projects In Service Area Under Construction Projects Initiated 31/12/18 1Q19 1Q1
Slide 7: Beijing
Beijing Capacity Commitment Rate Status (Sqm) (%) BJ6 BJ5 Beijing BJ1 In Service 2,435 99.8% BJ2 In Service 5,816 99.8% BJ4 BJ3 In Service 3,144 100% BJ4 Under Construction 4,500 0% BJ5 In Service 13,366 96.6% BJ6 Under Construction 5,167 0% BJ7 Under Construction 11,116 100% BJ1, 2, 3 BJ8 (1) Under
Slide 8: Guangzhou
Guangzhou Capacity Commitment Rate Status (Sqm) (%) GZ1 In Service 6,521 100% GZ2 In Service 6,131 100% GZ3 Phase 1 In Service 7,648 100% GZ Land GZ3 Phase 2 Under Construction 3,441 100% GZ3 Phase 3 Held for Future Development 3,441 N/A GZ1, 2, 3, 6 GZ4 Under Construction 7,000 0% GZ5 Held for Futu
Slide 9: New Data Centers
New Data Centers In Service – SH9 Under Construction – BJ7 & BJ8 © GDS 2016 8
Slide 10: Synchronized Sales & Capacity Growth
Synchronized Sales & Capacity Growth Commitments vs. Capacity (Sqm) Commitment & Pre-Commitment Rates Area Committed Commitment Rate Pre-Commitment Rate Area Pre-Committed 237,251 Area In Service 225,557 Area Under Construction 199,831 96.3% 191,060 95.6% 96.1% 183,743 94.9% 169,007 161,799 93.8% 14
Slide 11: Financial & Operating Review
Financial & Operating Review Dan Newman, CFO © GDS 2016
Slide 12: 1Q19 P&L Analysis
1Q19 P&L Analysis Quarterly Financial Review Rmb‘000 (unless indicated) 1Q18 4Q18 1Q19 Y/Y Q/Q Service Revenue 551,473 829,050 890,946 61.6% 7.5% Equipment Sales 10,752 471 895 （91.7%） 90.0% Total Net Revenue 562,225 829,521 891,841 58.6% 7.5% Cost of Revenue (439,308) (639,383) (679,832) 54.8% 6.3%
Slide 13: 1Q19 Underlying Trends
1Q19 Underlying Trends Quarterly Financial Review Rmb‘000 (unless indicated) 1Q18 4Q18 1Q19 Y/Y Q/Q Total Net Revenue 562,225 829,521 891,841 58.6% 7.5% Less: Equipment Sales 10,752 471 895 (91.7%) 90.0% Service Revenue 551,473 829,050 890,946 61.6% 7.5% Adjusted NOI 252,007 412,859 457,332 81.5% 10
Slide 14: Revenue & Area Utilized
Revenue & Area Utilized Revenue (Rmb Mn) Area Utilized (Sqm) & MSR (Rmb / Sqm / Month) Service Revenue Equipment Sales 118,050 108,326 100,679 86,665 0.9 66,905 0.5 10.2 11.2 10.8 1Q18 2Q18 3Q18 4Q18 1Q19 890.9 829.1 752.6 Average MSR 626.3 551.5 2,858 2,719 2,678 2,644 2,624 1Q18 2Q18 3Q18 4Q18 1Q1
Slide 15: Underlying Adjusted NOI & EBITDA
Underlying Adjusted NOI & EBITDA Underlying Adjusted NOI (Rmb Mn) & Margin Underlying Adjusted EBITDA (Rmb Mn) & Margin 45.3% 46.2% 48.5% 49.8% 51.3% 33.0% 35.3% 38.0% 40.0% 42.5% 457.3 412.8 378.4 365.2 331.4 289.5 286.1 249.8 221.1 182.3 1Q18 2Q18 3Q18 4Q18 1Q19 1Q18 2Q18 3Q18 4Q18 1Q19 © GDS 2016
Slide 16: Stabilized vs. Ramping-Up Data Centers
Stabilized vs. Ramping-Up Data Centers Breakdown of Area In Service as at 1Q19 Stabilized Data Centers Ramping-Up Data Centers Area In Service Net Floor Area Commitment Utilization Net Floor Area Commitment Utilization (Sqm) Rate Rate (Sqm) Rate Rate KS1 6,546 96.3% 91.5% SH4 8,415 95.5% 67.1% SH1 6
Slide 17: Cost Breakdown & Operating Leverage
Cost Breakdown & Operating Leverage 1Q19 Cost Breakdown & Operating Leverage (Rmb Mn) % of Service Revenue Service Revenue 890.9 1Q18 2Q18 3Q18 4Q18 1Q19 Utility Cost 202.8 22.9% 24.1% 24.8% 23.1% 22.8% Rent, Labour & Other (1) 230.9 31.8% 29.7% 26.7% 27.1% 25.9% Underlying Adjusted NOI 457.3 45.3%
Slide 18: Capex & On-Going Investment
Capex & On-Going Investment Capex Paid & Capex Incurred Construction Program 1Q19 Capex Paid (Rmb Mn) (1) Net Floor Area Pre-Commitment RFS Date (Sqm) Rate (%) 1,692.7 BJ4 2Q19 4,500 0% 1,157.5 1,076.1 SZ5 Phase 3 2H19 6,821 80.1% 806.8 834.4 SH10 2H19 3,491 0% BJ6 2H19 5,167 0% SH7 2H19 7,071 0% 1Q
Slide 19: Financing Obligations & Liquidity
Financing Obligations & Liquidity Debt & Cash Outstanding Loan Maturity Schedule as at 31/03/19 (Rmb Mn) 31/03/18 31/12/18 31/03/19 Working Capital Loan Project Loan Convertible Bond / LQA Adjusted Rmb Mn Rmb Mn Rmb Mn EBITDA 2,781 Total Loan 5,150.4 6,487.0 7,442.7 4.9 Convertible Bond 0 2,004.7 1,
Slide 20: Contract Backlog Build-Up
Contract Backlog Build-Up Backlog Build-Up 1Q19 (Sqm) Total Area Committed & Area Utilized (Sqm) Net Additional Area Committed Total Area Committed Area Utilized Net Additional Area Utilized 199,831 16,088 9,724 183,743 81,781 75,417 161,799 143,065 122,819 118,050 108,326 100,679 86,665 66,905 Back
Slide 21: Questions & Answers
Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016
Slide 22: Appendix
Appendix © GDS 2016
Slide 23: Our Data Center Portfolio – Beijing & Shanghai
Our Data Center Portfolio – Beijing & Shanghai Self-Developed Data Centers in Tier 1 Markets Beijing Shanghai KM SH9, 10 KM 2 BJ5 SH1, 2, 3, 4 2 BJ6 13 SH8, SH12 5 54 61 58 BJ4 SH5 43 30 SH6, 7 & SH11 BJ7, 8 50 KS1, 2, 3 BJ1, 2, 3 LF1 © GDS 2016 22
Slide 24: Our Data Center Portfolio – Shenzhen, Guangzhou & Chengdu
Our Data Center Portfolio – Shenzhen, Guangzhou & Chengdu Self-Developed Data Centers in Tier 1 Markets Chengdu Guangzhou Shenzhen CD1, 2 GZ1, 2, 3, 6 GZ4 SZ5 SZ1, 2, 3 SZ6 SZ4 25 KM 38 45 © GDS 2016 23
Slide 25: Key Operating KPIs
Key Operating KPIs Last 8 Quarters As At: 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 Area In Service (Sqm) 71,577 77,832 101,258 103,475 127,984 147,342 160,356 171,515 Area Under Construction (Sqm) 38,028 37,478 24,505 40,357 41,023 43,718 65,201 65,736 Total Capacity (Sqm) 109,605 115,310 125,763 143
Slide 26: Data Center Summary By Market
Data Center Summary By Market As at 31/03/19 (Sqm, Unless Indicated) Pre- Area in Area Under Area Area Pre- Total Area Commitment Utilization Total Capacity Area Utilized Commitment Service Construction Committed Committed Committed Rate Rate Market Rate (1) (2) (1 + 2) (3) (4) (3 + 4) (5) (3 / 1) (
Slide 27: Self-Developed Data Centers In Service – Shanghai / Kunshan
Self-Developed Data Centers In Service – Shanghai / Kunshan As at 31/03/19 (Sqm, Unless Indicated) Data Center Ready For Service Type Tenure Area in Service Area Committed Commitment Rate Area Utilized Utilization Rate KS1 2H10 Purpose-Built Owned 6,546 6,302 96.3% 5,988 91.5% SH1 2H11 Purpose-Built
Slide 28: Self-Developed Data Centers In Service – Shenzhen / Guangzhou
Self-Developed Data Centers In Service – Shenzhen / Guangzhou As at 31/03/19 (Sqm, Unless Indicated) Data Center Ready For Service Type Tenure Area in Service Area Committed Commitment Rate Area Utilized Utilization Rate SZ1 2H14 Converted Leased 4,286 4,222 98.5% 4,222 98.5% SZ2 1H16 Converted Leas
Slide 29: Self-Developed Data Centers In Service – Beijing, Chengdu & Hebei
Self-Developed Data Centers In Service – Beijing, Chengdu & Hebei As at 31/03/19 (Sqm, Unless Indicated) Ready For Commitment Market Data Center Type Tenure Area in Service Area Committed Area Utilized Utilization Rate Service Rate BJ1 2H15 Converted Leased 2,435 2,431 99.8% 2,367 97.2% BJ2 2H17 Con
Slide 30: Self-Developed Data Centers Under Construction
Self-Developed Data Centers Under Construction As at 31/03/19 (Sqm, Unless Indicated) Area Under Pre-Commitment Market Data Center Ready For Service Type Tenure Area Pre-Committed Construction Rate SH10 2H19 Converted Leased 3,491 0 0% SH7 2H19 Purpose-Built Leased 7,071 0 0% Shanghai / Kunshan SH12
Slide 31: Top Customers
Top 5 Customers In terms of Total Area Committed End User % of Total Area Committed % of 1Q19 Service Revenue Number of Data Centers (1) Internet / Cloud Service Provider 26.6% 19.8% 13 Internet / Cloud Service Provider 25.4% 26.9% 17 Cloud Service Provider 11.6% 0.6% 5 Internet 9.5% 11.6% 5 Interne
Slide 32: Principal Shareholders
Principal Shareholders As at 31/03/19 (1) Pro Forma Ordinary Shares Equivalent ADS Equivalent ADS % of Total ADS Change (3) William Huang (2) 67,915,944 8,489,493 8,489,493 5.9% Directors & Officers 12,374,791 1,546,848 1,546,848 1.1% STT 405,922,804 50,740,350 50,740,350 35.4% Ping An 63,369,856 7,
Slide 33: Working Capital Management
Working Capital Management Accounts Receivable Turnover Days (# of Days) Days Payable Outstanding (DPO) (1) 71 69 67 64 63 # of Days FY16 FY17 FY18 1H18 3Q18 4Q18 1Q19 DPO – Opex 96 96 78 79 80 80 82 DPO – Capex 112 133 125 154 196 75 162 Total DPO 106 122 113 133 153 76 136 Total DPO (Excl. 104 108
Slide 34: Historical Financial Results
Historical Financial Results Condensed Consolidated Statements of Operations Amounts in thousands Three Months Ended Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 RMB RMB RMB RMB RMB USD Net Revenue Service revenue 551,473 626,347 752,620 829,050 890,946 132,755 Equipment sales 10
Slide 35: Historical Financial Results
Historical Financial Results Condensed Consolidated Balance Sheets (1) Amounts in thousands. As of Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 RMB RMB RMB RMB RMB USD Cash 2,978,627 4,450,958 3,491,694 2,161,622 6,001,214 894,209 Accounts receivable, net of allowance for doubtfu
Slide 36: Historical Financial Results
Historical Financial Results Condensed Consolidated Statements of Cash Flows Amounts in thousands Three Months Ended Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 RMB RMB RMB RMB RMB USD Net cash (used in) provided by operating activities (143,429) (18,308) 37,460 111,367 (59,806)
Slide 37: Reconciliation from Net Loss to Adjusted NOI
Reconciliation from Net Loss to Adjusted NOI Adjusted NOI Amounts in thousands Three Months Ended Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 RMB RMB RMB RMB RMB USD Net loss (85,926) (102,077) (119,354) (122,911) (136,620) (20,356) Net interest expenses 115,054 137,274 182,152
Slide 38: Reconciliation from Net Loss to Adjusted EBITDA
Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Mar 31, 2018 Jun 30, 2018 Sep 30, 2018 Dec 31, 2018 Mar 31, 2019 RMB RMB RMB RMB RMB USD Net loss (85,926) (102,077) (119,354) (122,911) (136,620) (20,356) Net interest expenses 115,054 137,274 18
Slide 39: Definition of KPIs
Definition of KPIs Area In Service Net floor area of data centers in service for which one or more modules have been equipped and fitted out ready for utilizati on by customers Area Under Construction Net floor area of data centers which are under construction and not yet ready for service Area Comm