Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Colony Capital — Q2 2020 Earnings Presentation
38 slides from Digitalbridge's earnings presentation, Aug 7, 2020
Slide 1: Q2 2020 Earnings Presentation
Q2 2020 EARNINGS PRESENTATION August 7, 2020
Slide 2: Disclaimer
Disclaimer 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 ar
Slide 3: Agenda
Agenda # Section 1 Current State of Digital Infrastructure 2 Delivering On Our Commitments 3 Q2 Financial Results 4 Executing The Digital Playbook 5 Why Own CLNY Today 6 Q&A Session 3
Slide 4: Current State Of Digital Infrastructure
1 Current State Of Digital Infrastructure
Slide 5: Global Connectivity After COVID
Global Connectivity After COVID . Our personal and professional lives were already migrating to digital On-demand Services platforms…then COVID-19 hit (Uber Eats / Apps) Virtual Events Telecommuting Conferences . Unprecedented demand for MORE, BETTER, FASTER connectivity Digital Fitness Online Enter
Slide 6: Increased Demand For Digital Infrastructure
Increased Demand For Digital Infrastructure Infrastructure supply remains insufficient Entertainment & Remote Access E-Commerce Health & Wellness Fitness . 5G digital infrastructure investments will + support 5 billion $89 billion 15.8M 65% increased Record Single Day Meeting Amazon Q2 Revenue +40%
Slide 7: Network Demand Is Mission Critical
Network Demand Is Mission Critical High capacity workloads require more bandwidth and digital infrastructure . No more off-peak… companies must be online all the time % . Evolving demands 169 50M+ YoY Revenue $ Growth, active users since the require new Q1 2020 start of the pandemic architecture: ne
Slide 8: Digital Infrastructure Total Addressable Market
Digital Infrastructure Total Addressable Market Digital Colony’s projected deployment of $2.5B per year represents 1% of Digital Infrastructure TAM $179.2 New Fiber Route Miles 39M Deployed1 $ $21.3 241B New Towers $13.5 87K Built Digital Infrastructure Equity Activity ($378B total TAM) $10.2 (USD i
Slide 9: $1 Trillion Opportunity in Global Mobile Capex
$1 Trillion Opportunity in Global Mobile Capex Without technology, “social distancing” would have meant isolation. Mobile is keeping us connected Global Mobile Data Usage Global Mobile Capex $1.1 trillion Global Mobile Capex is projected worldwide between 2020 Global mobile data usage expected to gr
Slide 10: CLNY's Differentiated End-to-End Converged Vision for 5G
CLNY’s Differentiated End-to-End Converged Vision for 5G Colony Capital is delivering customers the next-generation of mobile and internet connectivity solutions Traditional Siloed Digital Infrastructure Approach Hyper-Converged Digital Architecture Data Centers Small Cells Optic Fiber Macro Site To
Slide 11: Delivering On Our Commitments
2 Delivering On Our Commitments
Slide 12: CLNY Q2 2020: Promises Made, Promises Kept
CLNY Q2 2020: Promises Made, Promises Kept Addressed All Near- Committed Significant Sharp Focus on Costs Best in Class Team Delivering on Core Term Corporate Debt Capital Towards Digital and Streamlining the Driving Change — One Digital Growth Maturities and Infrastructure Growth Organization Team,
Slide 13: Summary Business Update
Summary Business Update Credit Facility Amended to $500M: 18 months of runway with flexibility to execute digital transformation Issued $300M: 5.75% with a 25% conversion premium and 5-year term used to address $403M Jan. 2021 convertible debt, Convertible Notes extending maturities Overall G&A Exec
Slide 14: Colony's Capital Stack Has Responded
Colony’s Capital Stack Has Responded March/April % Performance July 31, 2020 Colony’s decisive steps to Trough Increase stabilize liquidity have been recognized on the credit side 2021 Convertible Notes 82 99 Back at Par Need to stabilize top of the stack to build foundation for 2023 Convertible Not
Slide 15: Q2 Financial Results
ColonyCapital Q2 Financial Results
Slide 16: 2nd Quarter Results
2nd Quarter Results ($ millions except per share & AUM) 2Q19 1Q20 2Q20 Y/Y% Revenues $573.4 $507.5 $372.4 -35.1% Core FFO (ex Gains/Loss) $69.5 $2.3 ($19.3) nm per share $0.13 $0.00 ($0.04) nm Net Income (CLNY Shareholder) ($468.9) ($361.6) ($2,042.8) nm per share ($0.98) ($0.73) ($4.33) nm AUM ($B)
Slide 17: Core FFO and Digital Core FFO
Core FFO and Digital Core FFO Total Core FFO (ex Gains / Loss) Digital Core FFO $69M $21M $2M ($19M) $8M $3M 2Q19 1Q20 2Q20 2Q19 1Q20 2Q20 Decline in total Core FFO driven nearly entirely by Hotels Digital Core FFO was $21M in 2Q20, +$18M Y/Y . Digital contributed $21M of Core FFO in 2Q20 . $6M incr
Slide 18: Rapid Expansion of Digital AUM and FEEUM
Rapid Expansion of Digital AUM and FEEUM Assets Under Management (AUM) Fee Earning Equity Under Management (FEEUM) 2Q19 PF 2Q20 2Q19 PF 2Q20 Digital Digital 5% 13% +$21B Digital Y/Y Digital Legacy +$8B Digital Y/Y Digital Legacy 48% $47B 52% 49% $17B 51% Legacy Legacy 95% 87% Digital now accounts fo
Slide 19: Extending Maturities, Maximizing Liquidity
Extending Maturities, Maximizing Liquidity Next Corporate Debt Maturity 2023(1) Significant Liquidity for Digital Transformation Strategic investments, capital structure transactions and legacy monetizations have positioned the Company for long-term digital growth +$290M -$190M Vantage 2025 Stabiliz
Slide 20: Executing The Digital Playbook
4 Executing The Digital Playbook
Slide 21: Digital Transformation
Digital Transformation Executing a strategic plan to rotate the balance sheet and recycle capital into digital infrastructure Where We Were Where We Are Today Where We’re Going Legacy Colony Transitioning into Digital Digital Infrastructure Diversified REIT managing industrial, healthcare and hospit
Slide 22: Executing on Our Strategy
Executing on Our Strategy Seven proprietary, transformative deals deploying nearly $20 billion, closing six financings accessing $12 billion in credit during unprecedented times $3.5B CLNY $358M DCP Colony-led investor $410M DCP group acquires $14.3B DCP Digital Colony majority stake in $117M DCP Di
Slide 23: FEEUM Growth Exceeding Expectations
FEEUM Growth Exceeding Expectations 22% growth in digital FEEUM in first 7 months of 2020…far exceeding our 15% annual budget by 50% High Quality Relationships And Fees Exceeding Expectations . Leveraging long-standing relationships built on success . Partnering with new sources of capital looking t
Slide 24: Case Study: Hyperscale Data Centers
Case Study: Hyperscale Data Centers In July 2020 we combined balance sheet investing and investment management to generate high quality excess return for shareholders with stable earnings from blue chip digital infrastructure assets and limited partners Rationale and Colony Advantage Accretive Acqui
Slide 25: Case Study: Edge Compute Provider
Case Study: Edge Compute Provider DataBank is well positioned for the migration to 5G and proliferation of low latency applications, which are pushing processing to the edge which is driving significant organic growth Rationale and Colony Advantage Accretive Acquisition Strategy High Quality Growth
Slide 26: Colony Capital ESG Initiatives
Colony Capital ESG Initiatives Colony Capital is committed to promoting ESG initiatives at the firm and portfolio company level Our Goals Initiatives Creating Impact Our Principles Efficiently Manage Resources June 2020 ENVIRONMENT Create a Positive Impact Vertical Bridge became the world’s first We
Slide 27: Why Own CLNY Today
Why Own CLNY Today 5 Investment Case
Slide 28: Investment Highlights
Investment Highlights Significant Opportunity Powerful secular tailwinds driving digital infrastructure investment. CLNY well in Digital Infrastructure positioned for emerging digital themes: convergence, international, edge Deep and Experienced Alignment with the premier investor and deal team in d
Slide 29: Proven Track Record of Success
Proven Track Record of Success REVAMP OF SENIOR MANAGEMENT Leading transformation to Donna L. Hansen Karren Fink Kevin Smithen Colony 2.0 Marc Ganzi Jacky Wu Ben Jenkins Justin Chang Chief Administrative Severin White Global Head of Global Head of Strategy Chief Executive CFO & Treasurer CIO, Digita
Slide 30: Colony's Differentiated Strategy
Colony’s Differentiated Strategy We operate across the digital A Converging Digital Ecosystem ecosystem FROM DEVICES THROUGH THE CORE TO THE CLOUD AND BACK . Digital infrastructure is converging IOT . Customer solution provider Cloud Data Center . Flexibility to evolve with opportunity set HEALTHCAR
Slide 31: Moving From: Sum-Of-The-Parts
Moving From: Sum-Of-The-Parts… Summary Pro Forma Book Value Historically, Colony has been Assets Liabilities Equity valued on Sum-Of-The-Parts basis Digital Operating Businesses $978 ($447) $531 (Databank, Vantage, DCP I and other GP Coinvest) . Diverse set of businesses Digital Investment Managemen
Slide 32: ...To An Earnings Driven Model
…To An Earnings Driven Model Digital IM Revenue1 Digital IM FRE1 Digital IM revenue and FRE will $110M 20-30% $200M 30-40% continue to grow rapidly as RANGE ANNUAL GROWTH ANNUAL GROWTH $80M Colony expands the magnitude $150M RANGE and scope of its investment products $83M $40$37MM Current 3 2023 Cur
Slide 33: A New Digital Pure Play
A New Digital Pure Play 2023 CLNY Profile Average Peer Trading Multiples Multiple of EBITDA Multiple of FFO Multiple of Digital Distributable 100% 26.1x 26.5x Earnings Towers Data Centers >$50B 17.8x AUM Small Cells Fiber Digital Infra Peers Digital Infra Peers Alt Asset Managers Business Profile %
Slide 34: Continuing to Deliver on Our Commitments
Continuing to Deliver on Our Commitments CLNY 1st Half 2020 CLNY 2nd Half 2020 Address Near-Term Corporate Debt Maturities and Enhanced Liquidity Committed Significant Capital Towards Digital Continue Adding High Quality Balance Sheet Assets Infrastructure Growth Implemented G&A Cost Program – Monet
Slide 35: Appendix
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Slide 36: Pro Forma Book Value Reconciliation
Pro Forma Book Value Reconciliation Net Book Value as of June 30, 2020 Notes: Total Stockholders' Equity $2,740 Noncontrolling Interests in Operating Company 188 less: Preferred Equity Liquidation Preference (1,034) Net Book Value: CLNY OP $1,894 deduct: Carrying value of debt discount (138) Differe
Slide 37: Important Note Regarding Non-GAAP Financial Measures
Important Note Regarding Non-GAAP Financial Measures This supplemental package 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
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Core Funds from Operations June 30, 2020 March 31, 2020 June 30, 2019 Three Months Ended Net loss attributable to common stockholders $ (2,042,790) $ (361,633) $ (468,890) (In thousands) June 30, 2020 March 31, 2020 Adjustments for FFO attributable to comm