Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Investor Presentation (March 2021)
63 slides from Digital Realty Trust's investor presentation, March 2021
Slide 1: Global. Connected. Sustainable. Investor Presentation March 2021
Global. Connected. Sustainable. INVESTOR PRESENTATION MARCH 2021 Digital Realty the trusted foundation | powering your digital ambitions
Slide 2: Business Highlights
Business Highlights 1 Digital Realty Overview Introduction 2 Introduction to Data Centers Data center 101 3 Global Platform Growing world-wide demand from a diversified customer base 4 Connected Campus Strategy Solving for the complete deployment; land and expand 5 Attractive Growth Prospects Organi
Slide 3: Digital Realty Overview
Digital Realty Overview INTRODUCTION DIGITAL REALTY | 3
Slide 4: Global provider dedicated to the full customer spectrum
GLOBAL provider dedicated to the full customer spectrum from ENTERPRISE colocation to HYPERSCALE 4,000+ 291 164,000 GLOBAL CUSTOMERS DATA CENTERS (1) CROSS CONNECTS INTERCONNECTION COLOCATION SCALE HYPERSCALE EQUITY & ENTERPRISE VALUE TOP 10 PUBLICLY TRADED U.S. REIT INVESTMENT GRADE RATINGS (4) $38
Slide 5: Our Strategy
Our Strategy Become the only GLOBAL provider dedicated to the full customer spectrum from SERVICE PROVIDERS to ENTERPRISES WHY WHY WHY GLOBAL? SERVICE ENTERPRISE? PROVIDERS? Rapidly growing globalization Focused on hyperscale and magnetic Focused on Forbes Global 2000 of businesses and consumers cus
Slide 6: Diverse Set of Customers Solving Digital Transformation Use Cases
Diverse Set of Customers Solving Multiple Digital Transformation Infrastructure Use Cases Across Multi-Metro Deployments RATIONALIZE REWIRE THE IMPLEMENT OPTIMIZE DATA INTERCONNECT THE PORTFOLIO NETWORK HYBRID IT EXCHANGE GLOBAL CONTROLS WORKFLOWS Lower data center Reduce latency Reduce Incr
Slide 7: Three Steps to Accelerate Global Customer Adoption
Three Steps to Accelerate Global Customer Adoption as They Solve Digital Transformation of Their Infrastructure Architecture Platform Roadmap Step by step strategy to deploy A global datacenter platform Platform roadmap organized a decentralized IT architecture experience. Productizing fit for aroun
Slide 8: PlatformDIGITAL Customer Use Case Tailored Solutions
PlatformDIGITAL® Customer Use Case Tailored Solutions 4 1 2 3 ® NETWORK HUB: consolidates and localizes traffic into DATA HUB: localizes data aggregation, staging, analytics, streaming 1 ingress/egress points to optimize network performance and 3 and data management to optimize data exchange and mai
Slide 9: Introduction to Data Centers
Introduction to Data Centers DATA CENTER 101 DIGITAL REALTY | 9
Slide 10: Data Center 101: What is a Data Center?
Data Center 101 What is a Data Center? 1 Building Shell 2 Electrical Systems Data Center Layout 3 HVAC / Mechanical Systems Building Shell 4 Building Fit-Out / Site Work Data Centers HVAC Data centers are designed to Electrical Utility Service (Not Shown in Image) house servers and network Mechanica
Slide 11: What Goes into Building a Data Center?
Data Center 101 What Goes into Building a Data Center? 1 BUILDING SHELL 2 ELECTRICAL SYSTEMS Approximate Data Center Cost Distribution • Building Shell Building • Generator • Raised Floor • Batteries Shell • Power Distribution Unit (PDU) 25% • Uninterruptible Power Supplies Electrical Systems (UPS)
Slide 12: Interconnection: What is a Cross-Connect?
Interconnection What is a Cross-Connect? INTERCONNECTION CONTENT NETWORK CONNECTING PARTNERS AND NETWORKS A cross-connect is a physical layer network connection between two parties. The cross-connect is enabled by the installation of patch cord(s) between ports of the respective parties’ interconnec
Slide 13: Home to the Hybrid Multi-Cloud Solution
Home to the Hybrid Multi-Cloud Solution Customers’ Desired IT End State The majority of companies deploy some form of hybrid cloud solution to run and manage their IT needs PRIVATE PUBLIC CLOUD SOLUTIONS CLOUD SOLUTIONS Single organization, Service providers, dedicated environment many customers 3%
Slide 14: Global Platform
Global Platform GROWING WORLD-WIDE DEMAND FROM A DIVERSIFIED CUSTOMER BASE DIGITAL REALTY | 14
Slide 15: Covering the Waterfront: Over 290 Data Centers across 49 Metro Areas
Covering the Waterfront Over 290 Data Centers across 49 Metro Areas Stockholm Seattle Portland Minneapolis / Toronto Copenhagen St. Paul Boston Manchester San Francisco New York Metro Amsterdam Silicon Valley Brussels Düsseldorf Chicago Dublin Seoul Northern London Virginia Frankfurt Tokyo Zurich Vi
Slide 16: High-Quality, Diversified Customer Base
High-Quality, Diversified Customer Base Numerous Customers with Multiple Locations Across the Portfolio TOP 20 CUSTOMERS CUSTOMER TYPE (% by ARR) (1) Customer Rank Locations % of ARR (1) Customer Rank Locations % of ARR (1) Content Fortune 50 Financial 1 53 9.5% 11 19 1.9% 15% 10% Software Company E
Slide 17: Global Service Infrastructure Platform
Global Service Infrastructure Platform Deliver Basic Services, Enable Partners Digital Realty is Focused on Providing the Real Estate Foundation to Enable Customers & Partners to Service Thousands of Their Customers Focused on Real Estate Foundation Funnel Approach Towards Customers CLOUD SERVICES T
Slide 18: Connected Campus Strategy
Connected Campus Strategy SOLVING FOR THE COMPLETE DEPLOYMENT; LAND AND EXPAND DIGITAL REALTY | 18
Slide 19: Multi-Tiered Cloud Architectures
Multi-Tiered Cloud Architectures Solving for the Complete Deployment; Land and Expand Connected Campus Network Access Nodes Higher COLO • High network requirements to efficiently distribute and aggregate Performance traffic • Applications: network connectivity, network peering and WAN optimization •
Slide 20: The Connected Campus: Digital Ashburn
The Connected Campus Digital Ashburn 70% 70% of the world’s web traffic flows through Loudoun County (1) 440+ MW Digital Realty has over 400 MW of capacity on our existing Northern Virginia campuses… 600+ acres 370 …in addition to 672 W holdings acres of land that will support the build-out of anoth
Slide 21: Density at Scale and at Hubs
Density at Scale and at Hubs Expand, Tether, and Densify Data Center Campuses CHICAGO CAMPUS NEW YORK CAMPUS DALLAS CAMPUS LONDON CAMPUS 350 E. CERMAK 111 8th AVENUE 2323 BRYAN STREET SOVEREIGN HOUSE Connect@Scale suites, Connect@Scale suites, Connect@Scale suites, Connect@Scale suites, Powered Base
Slide 22: Digital Realty is the Edge: Network Density
Digital Realty is the Edge Network Density that Promotes Innovation and Collaboration 24 CITIES 164k 2,400 38 ASSETS Globally Where Our CROSS-CONNECTS NETWORK INSTANCES With Over 1,000 Internet Gateways Cross-Connects GLOBALLY GLOBALLY Are Located Each ATLANTA CHICAGO NEW YORK SEATTLE AMSTERDAM FRAN
Slide 23: Diversifying Product Offerings
Diversifying Product Offerings Facilitating Secure Connections to Multiple Service Providers METRO AREAS ACROSS NORTH AMERICA, EMEA & APAC 24 + 5 CURRENT ROADMAP A software-defined network (SDN) that allows a 60+ customer to establish direct, private connections to multiple cloud service providers,
Slide 24: Attractive Growth Prospects
Attractive Growth Prospects ORGANIC GROWTH COMBINED WITH LEASE-UP OPPORTUNITY DIGITAL REALTY | 24
Slide 25: High Utilization Provides Downside Protection
High Utilization Provides Downside Protection Significant Customer Investment Drives Stable Retention Historical Retention on Rentable Square Feet (1)(2) Trailing Twelve-Month Tenant Retention Long-Term Historical Average $15 – $30 100% million approximate cost of a new 1.125 MW data center deployme
Slide 26: Data Center Migration Projected Costs
Data Center Migration Projected Costs Assumptions: 1.5 – 2 yrs • 1 MW / 10,000 s.f. data center with 2,000 devices • Hyperconverged: 100% new hardware, factory built cabinets with compute, storage & networking 1 - 1.5 yrs • Hybrid: Build new network, replace 33%-50% of the existing hardware, mig
Slide 27: Evenly-Staggered Lease Expiration Schedule
Evenly-Staggered Lease Expiration Schedule Consistent, Modest Roll-Over Exposure in Any One Year % of Lease Expirations by Annualized Base Rent (1) Scale Colocation 2% - 4% Annual cash rental rate increases (2) 28.9% 4.7 years 16.0% 10.8% 9.6% 10.4% 8.1% 5.2% Weighted avg. 3.8% 2.8% 2.7% remaining l
Slide 28: Committed to a Secure and Growing Dividend
Committed to a Secure and Growing Dividend Fourteen Consecutive Years of Dividend Increases (1) Cash Dividend / Common Share AFFO Payout Ratio $4.64 $4.48 $4.32 3.5% $4.04 $3.72 $3.52 $3.32 $3.40 $3.12 DIVIDEND YIELD (3) $2.92 $2.72 $2.02 $1.00 $1.08 $1.17 $1.26 $1.47 10% DIVIDEND CAGR 93% 95% (2005
Slide 29: Exceptional Risk-Adjusted Growth Track Record
Exceptional Risk-Adjusted Growth Track Record Strong Growth, Moderate Volatility Consistently Delivered Healthy Growth in FFO and Dividends per Share 15-Year FFO / Share Risk-Adjusted Growth (1) 15-Year Dividend / Share Risk-Adjusted Growth (2) 30.0% 30.0% Median REIT Median REIT 20.0% 20.0% Above-a
Slide 30: Graham's Golden Rules
Graham’s Golden Rules Defensive Requirements for the Intelligent Investor (1) 1 Adequate Size of the Enterprise $54 Bn ENTERPRISE VALUE (2) 2 Sufficiently Strong Financial Condition BBB / Baa2 / BBB INVESTMENT GRADE BALANCE SHEET GFC CONSISTENT GROWTH 3 Earnings Stability IN CORE FFO / SH (3) 10% 4
Slide 31: Prudent Capital Allocation
Prudent Capital Allocation DISCIPLINED INVESTMENT CRITERIA GUIDED BY RETURN ON INVESTED CAPITAL DIGITAL REALTY | 31
Slide 32: Stringent Acquisition Criteria: Strategic M&A
Stringent Acquisition Criteria Never Putting Balance Sheet at Risk Through Strategic M&A 2012 2015 2016 2017 2018 2019 Sentrum European DuPont Fabros Portfolio Telx Acquisition Portfolio Technology Ascenty Interxion Three assets in London 20 assets in 13 metro Eight assets in Europe 12 assets and si
Slide 33: Stringent Acquisition Criteria: Key Elements of Underwriting
Stringent Acquisition Criteria Market Fundamentals, Accessibility, Stability and Risk KEY ELEMENTS OF INVESTMENT UNDERWRITING Market Fundamentals Accessibility / Business-Friendly / Internet Proximity Stable Locations Core metro areas / major Access to fiber Accommodative local utility central
Slide 34: Conservative Financial Strategy
Conservative Financial Strategy COMMITTED TO MAINTAINING A FLEXIBLE BALANCE SHEET DIGITAL REALTY | 34
Slide 35: Prudent Financial Management Positioning for Growth
Prudent Financial Management Positioning for Growth INVESTMENT GRADE BALANCE SHEET Consistently maintain balance sheet positioned for new investment opportunities ORGANIC GROWTH Focus on driving higher same-capital cash NOI growth RISK-ADJUSTED RETURNS Earn higher risk-adjusted returns on our tradit
Slide 36: Industry-Leading Sustainability
Industry-Leading Sustainability Track Record and Commitment to Best Practices Management and Award-Winning Track Record of Industry-Leading Thought Leadership Organizational Data Center Designs Sustainable Project Clean Energy and Innovation in Commitment to and Third-Party Investment Solutions Ener
Slide 37: Credit Metrics Compare Favorably To Blue Chip REITs
Credit Metrics Compare Favorably To Blue Chip REITs Committed to a Conservative Capital Structure Net Debt / LQA Adjusted EBITDA(1) Net Debt + Preferred / LQA Adjusted EBITDA(1) 10x 10x 8.1x 8.2x 7.9x 8x 7.3x 8x 7.1x 6.8x 6.5x 6.3x 6.3x 6.1x 5.8x 5.4x 5.8x 5.4x 6x 5.3x 6x 5.3x 4.5x 4.5x 4x 4x 2x 2x
Slide 38: Recent Results
Recent Results Note: The slides in this section were originally posted to the Company's website on February 11, 2021 and have not been updated to reflect changes occurring after that date. DIGITAL REALTY | 38
Slide 39: Navigating the Future
Navigating the Future Sustainable Growth for Customers, Shareholders and Employees GLOBAL CONNECTED SUSTAINABLE Selling GLOBALLY… Supporting LOCALLY AMERICAS EMEA APAC A Digital Realty and Brookfield Infrastructure JV DIGITAL REALTY | 39
Slide 40: Serving a Social Purpose
Serving a Social Purpose Delivering Sustainable Growth for All Stakeholders ENVIRONMENTAL SOCIAL GOVERNANCE Demonstrated senior leadership and Earned 2020 Nareit employee commitment to Diversity, Enhanced Board diversity Leader in the Light award for fourth Equity & Inclusion; signed CEO Action Pled
Slide 41: Expanding Global Platform Supporting Customer Growth
Athens Expanding Global Platform Supporting Customer Growth Stockholm Copenhagen Dublin Manchester Amsterdam London Dusseldorf Brussels Frankfurt Paris Zurich Vienna Copenhagen Vienna Zurich Geneva Zagreb Marseille Madrid Athens European Platform 88,000+ 700+ 17 Cross-Connects Connectivity Providers
Slide 42: Combining Leading Platforms in EMEA
Combining Leading Platforms in EMEA Further Solidifying Global Connection with Customers Amsterdam Dublin Marseille Paris Customers Communities of Interest Growth EMEA London Data Gravity Score (1) 167.1 Two-way traffic, with numerous referral Capitalizing on investment grade balance sheet wins on b
Slide 43: Data Gravity Driving Data Center Demand
Data Gravity Driving Data Center Demand PlatformDIGITAL® Poised to Capitalize Tokyo Data Gravity Score New York 80.3 Data Gravity Score 79.6 London Data Gravity Score 167.1 Singapore Data Gravity Score 118.2 ™ Enterprise Data Growth Driving Data Localization Global MTDC Leader 80% By 2025, 80% of da
Slide 44: Digital Transformation Driving Steady Demand
Digital Transformation Driving Steady Demand Global Full-Product Spectrum Provides Broadest Solutions HISTORICAL BOOKINGS ANNUALIZED GAAP BASE RENT $ in millions Space & Power Interconnection #1 $150 #2 #3 $100 $50 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 4Q20 BOOKINGS 0-1 MW > 1 MW
Slide 45: Communities of Interest Attracting New Logos
Cloud-Based Travel Communities of Interest Cyber Provider Retail Attracting New Logos 120 new logos Digital Telecom Video Game Provider Developer 33% of total bookings from 0-1 MW + interconnection Global Exchange Financial Operator Services 74% of total bookings outside North America Note: For quar
Slide 46: Top-Line Step Function: Healthy Backlog
Top-Line Step Function Healthy Backlog Sets a Solid Foundation BACKLOG ROLL-FORWARD (1) COMMENCEMENT TIMING (2) $ in millions $ in millions Digital Realty Backlog Unconsolidated Joint Venture Backlog Digital Realty Backlog Unconsolidated Joint Venture Backlog $6M $4M $74M $112M $2M $15M $15M $1M $51
Slide 47: Cycling Through Peak Vintage Renewals
Cycling Through Peak Vintage Renewals Narrowing the Gap on Cash Re-Leasing Spreads 4Q20 RE-LEASING SPREADS 0-1 MW > 1 MW OTHER (1) TOTAL RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 0.8% 2.0% -4.6% 1.0% CASH CASH CASH CASH 1.3% 8.1% 6.1% 3.4% GAAP GAAP GAAP GAAP Signed
Slide 48: Effective Economic Risk Mitigation Strategies
Effective Economic Risk Mitigation Strategies Benefits of Scale and Diversification on Display EXPOSURE BY REVENUE (1) CUSTOMER CONCENTRATION BY REVENUE (2) USD CAD GBP EURO JPY HKD SGD AUD BRL SEK DKK CHF KES Content Potential At-Risk 2% 16% 1% Financial Enterprise 11% 2% 4% 2% 11% 14% 2% Cloud 61%
Slide 49: Four Quarter Two-Step
Four Quarter Two-Step Beat, Dip, Shuffle, Bounce 2021E CORE FFO PER SHARE 4Q20 NOI Growth Asset Sales Down-Time 1Q21 2Q21 3Q21 4Q21 on Vacancy Note: Based on management estimates; actual performance may differ materially. Core FFO and NOI are non-GAAP financial measures. For descriptions and reconci
Slide 50: Matching the Duration of Assets and Liabilities
Matching the Duration of Assets and Liabilities Clear Runway on the Left, No Bar Too Tall on the Right DEBT MATURITY SCHEDULE AS OF DECEMBER 31, 2020 (1)(2) DEBT PROFILE (U.S. $ in billions) 98% Unsecured 6.9 2.3 % Unsecured Secured YEARS Weighted Avg. Weighted Avg. Maturity (1)(2) Coupon (1) $1.8 9
Slide 51: Consistent Execution on Strategic Vision
Consistent Execution on Strategic Vision Delivering Current Results, Seeding Future Growth SUCCESSFUL 4Q20 INITIATIVES 1. Strengthening Connections with Customers Delivered bookings with high-quality product mix, geographic split, new logos and volume 120 New Logos 2. Extending Our Global Platform E
Slide 52: Appendix
Appendix fi DIGITAL REALTY | 52
Slide 53: Digital Transformation Driving Steady Demand
Digital Transformation Driving Steady Demand Global Full-Product Spectrum Provides Broadest Solutions HISTORICAL BOOKINGS TRAILING FOUR-QUARTER AVERAGE ANNUALIZED GAAP BASE RENT $ in millions Space & Power Interconnection $125 $100 $75 $50 $25 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 202
Slide 54: Firm Fundamentals: Robust Demand, Rational Supply
Firm Fundamentals Robust Demand, Rational Supply NORTH AMERICA EMEA APAC 1,513 1,272 1,171 987 3Q19 3Q20 4Q19 4Q20 4Q19 4Q20 3Q19 3Q20 MEGAWATTS COMMISSIONED(1)(2) MEGAWATTS COMMISSIONED(1)(2) MEGAWATTS COMMISSIONED(1)(2) 90% 88% 91% 77% 91% 89% DIGITAL DIGITAL REGION DIGITAL REGION REGION REALTY RE
Slide 55: Management Statements on Non-GAAP Measures
Appendix Management Statements on Non-GAAP Measures The information included in this presentation contains certain non-GAAP financial measures that management believes are helpful in understanding our business, as further described below. Our definition and calculation of non-GAAP financial measures
Slide 56: Management Statements on Non-GAAP Measures
Appendix Management Statements on Non-GAAP Measures EBITDA and Adjusted EBITDA: We believe that earnings before interest, loss from early extinguishment of debt, income taxes, and depreciation and amortization, or EBITDA, and Adjusted EBITDA (as defined below), are useful supplemental performance me
Slide 57: Forward-Looking Statements
Appendix Forward-Looking Statements This information in this presentation contains forward-looking statements within the meaning of the federal securities laws, which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes an
Slide 58: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Reconciliation of non-GAAP items to their closest GAAP equivalents. Funds from operations (1) Q320 Q220 Q120 FY 2019 FY 2018 FY 2017 FY 2016 FY2015 FY2014 FY2013 FY2012 FY2011 FY2010 FY2009 FY2008 FY2007 FY2006 FY2005 Net income (loss
Slide 59: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Funds From Operations (FFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended Twelve Months Ended
Slide 60: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Funds From Operations (FFO) to Core Funds From Operations (CFFO) (in thousands, except per share and unit data) (unaudited) Three Months Ended Twelve Months Ended December
Slide 61: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Net Income Available to Common Stockholders to Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and Adjusted EBITDA (in thousands) (unaudited) Three
Slide 62: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income (in thousands) (unaudited) Three Months Ended Twelve Months Ended December 31, 2020 December 31, 2019 December 31, 2020 December 31,
Slide 63: Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent
Reconciliation of Non-GAAP Items To Their Closest GAAP Equivalent Total Debt/Total Enterprise Value QE 12/31/20 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less Market value of common equity(i) $ 40,225,753 bridge facility fees) Liquidation value of pr
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