Digital Realty Trust, Inc. · NYSE:DLR
Digital Realty Trust — Investor Presentation (November 2022)
61 slides from Digital Realty Trust's investor presentation, November 2022
Slide 1: Global. Connected. Sustainable.
Global. Connected. Sustainable. INVESTOR PRESENTATION NOVEMBER 2022
Slide 2: Digital Realty Overview
Digital Realty Overview Introduction 2
Slide 3: A Global Platform Supporting our Customers' Critical IT Architecture Requirements
A Global Platform Supporting our Customers’ Critical IT Architecture Requirements 4,000+ (1) 188,000+ (1) 50+ 300+ Customers Cross connects Metros (1) Data Centers (1) EQUITY & ENTERPRISE VALUE TOP 10 PUBLICLY TRADED U.S. REIT $29 Bn $45 Bn 8th 2016 EQUITY MARKET ENTERPRISE LARGEST MAY 2016 CAPITALI
Slide 4: Consistent Execution
Consistent Execution Progress Against Strategic Priorities 1 Customer Focus 2 Innovation & Differentiation 3 Go-to-Market Platform As of September 30, 2022 METROS (1) • Record bookings • ServiceFabric™ launch • Enabling Hybrid IT • Full spectrum product • Expansion of • Developing Connected 54 +18 o
Slide 5: Offering a Global Data Center Platform with Local Expertise
Offering a Global Data Center Platform with Local Expertise Stockholm Seattle Copenhagen Portland Minneapolis / St. Paul Toronto Amsterdam Boston Brussels Düsseldorf Dublin San Francisco New York Metro London Silicon Valley Frankfurt Seoul Chicago Northern Zurich Vienna Tokyo Virginia Paris Osaka Za
Slide 6: Sustainability Focus and Performance
Sustainability Focus and Performance Delivering Sustainable Growth for All Stakeholders Environmental Social Governance Appointed Mary Hogan Preusse as Chairman of the Board, which Solar Panel Pic 1st in GRESB Funded philanthropic organizations to support 2022 aligns with Digital Realty’s In the U.S
Slide 7: PlatformDIGITAL Designed for an Accelerating Digital Economy
PlatformDIGITAL® Designed for an Accelerating Digital Economy Enabling Enterprises to Harness Data Growth 7
Slide 8: Digital Economy and Digital Transformation
Digital Economy and Digital Transformation Driving Data Center Demand Growing and emerging demand drivers that have further accelerated over the past year are driving the need for digital infrastructure globally Digital Economy & Transformation Accelerated Digital Trends Digital Infrastructure Deman
Slide 9: PlatformDIGITAL 2.0
PlatformDIGITAL® 2.0 Customer Use Case Tailored Solutions Any-To-Any Interconnection Self-Service Enterprise Experience Capacity 9
Slide 10: Connected Campus Strategy
Connected Campus Strategy Solving for the Complete Deployment: Land and Expand 10
Slide 11: Multi-Tiered Cloud Architectures
Multi-Tiered Cloud Architectures Solving for the Complete Deployment: Land and Expand Connected Campus Colo Network Access Nodes Higher Connectivity High network requirements to efficiently distribute and aggregate traffic Applications: network connectivity, network peering and WAN optimization
Slide 12: The Connected Campus: Digital Ashburn
The Connected Campus: Digital Ashburn #1 The world’s largest Data Center market (1) 500+ existing capacities on our Northern Virginia campuses MW 500+ of land holdings that will support the build-out of another 1000+ MW Acres 25 largest provider in the world’s largest Data Center market Data Centers
Slide 13: Power Exposure by Region
Power Exposure by Region 2,166MW (1) 86% Pass Thru Impact of Higher Energy 94% Hedged (2) Prices Mitigated By Lease Structures and Hedging 1,263MW (1) 85% Pass Thru 87% Hedged 124MW (1) North America EMEA 100% Pass Thru APAC 576MW (1) 84% Pass Thru 95% Hedged Latin America 203MW (1) 96% Pass Thru 10
Slide 14: 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 FRANKFURT CAMPUS 350 E. CERMAK 111 8th AVENUE 2323 BRYAN STREET HANAUER LANDSTRABE Connect@Scale suites, Connect@Scale suites, Connect@Scale suites, Connect@Scale suites, Powere
Slide 15: Digital Realty is the Edge
Digital Realty is the Edge Network Density that Promotes Innovation and Collaboration Amsterdam Atlanta Chicago 24 188K* Science Park 56 Marietta St. 350 E. Cermak Metros CROSS-CONNECTS Globally Where Our GLOBALLY Internet Gateways Are *Excludes 22K from Teraco Located Johannesburg London Marseille
Slide 16: Diversifying Product Offerings
Diversifying Product Offerings ServiceFabric™ Removes Complexity from Enterprise Hybrid IT Environments INTERFACE APIs1 Portal Orchestration Layer Removes complexity Connect seamlessly to open partner Interconnection Layer ecosystem services built on global backbone Implemented on best-of-breed Data
Slide 17: ServiceFabric Connect Use Cases
ServiceFabric™ Connect Use Cases: Multi-Cloud Connectivity and Beyond Multi-Cloud Redundant Inter-metro/ Connectivity Disaster Service-chain Connectivity Cloud Inter-region to ecosystems Recovery Multiple Connectivity Connectivity in 3rd party Set-up Services facilities One port to Redundant Connect
Slide 18: ServiceFabric Connect
ServiceFabric™ Connect Launched in 30+ global metros North America Europe APAC 14 Metros 13 Metros 5 Metros Regional • 10G / 100G native ServiceFabric™ • 10G native ServiceFabric™ ports • 10G / 100G native Launch ports • 100G backbone ServiceFabric™ ports Capabilities • 100G backbone • Available fro
Slide 19: Prudent Capital Allocation
Prudent Capital Allocation Disciplined Investment Criteria Guided by Return on Invested Capital 19
Slide 20: Stringent Acquisition Criteria
Stringent Acquisition Criteria Prudently Financing Strategic M&A 2015 2016 2017 2018 2019 2022 European Telx DuPont Fabros Ascenty Interxion Teraco Portfolio Acquisition 12 assets and six 54 assets and 78 MW 20 assets in 13 metro areas Eight assets and six Eight assets in Europe development projects
Slide 21: Digital Core REIT
Digital Core REIT Listed on Singapore Stock Exchange, Sponsored and Managed by Digital Realty Rationale for Digital Realty Investors Externally-managed, perpetual capital partner for stabilized, core assets Perpetual capital source Seeded with 10 North American data centers totaling 1.2 millio
Slide 22: Flexible Financial Strategy
Flexible Financial Strategy Investment Grade Balance Sheet Supported by Multiple Funding Sources 22
Slide 23: Prudent Financial Management
Prudent Financial Management Positioning for Growth INVESTMENT GRADE BALANCE SHEET Consistently maintain balance sheet positioned for growth ORGANIC GROWTH Focus on driving higher same-capital cash NOI growth RISK-ADJUSTED RETURNS Leverage our full product suite and global footprint to drive premium
Slide 24: Proven Track Record of Sustainable Growth
Proven Track Record of Sustainable Growth Disciplined Financial Management 2018 3Q22 Better/ Worse Change Properties / Data Centers (1) 214 316 48% Total Enterprise Value (2) $35 billion $45 billion 29% SIZE & DIVERSIFICATION RMZ Rank 5th 8th (3) -3 places IG-equivalent AAA-rated Fortune 50 To
Slide 25: Consistent Access to Capital
Consistent Access to Capital Portfolio Growth Financed by Match-Funding Access to Capital in Multiple Currencies Enables Digital Realty to Match-Fund across its Global Portfolio FULL MENU OF $27 BILLION OF WELL-KNOWN, SEASONED ISSUER CAPITAL OPTIONS EQUITY RAISED SINCE ACROSS MULTIPLE CURRENCIES Amo
Slide 26: Committed to Conservative Capital Structure
Committed to Conservative Capital Structure Growing Enterprise Value While Maintaining Target Credit Metrics CREDIT METRICS CAPITAL STRUCTURE Net Debt (1) / LQA Adjusted EBITDA (2) Fixed Charge Coverage (2)(3) 35% 6.4x 6.1x 6.0x 6.2x 5.6x 5.6x 5.7x 5.9x 5.8x 5.8x 5.9x 5.7x 5.7x 5.7x 5.4x 5.4x 5.1x 5
Slide 27: Committed to a Secure and Growing Dividend
Committed to a Secure and Growing Dividend Seventeen Consecutive Years of Dividend Increases Cash Dividend /Common Share AFFO Payout Ratio(1) $4.88 4.9% $4.64 $4.48 $4.32 $4.04 $3.72 $3.52 $3.32 $3.40 $3.12 Dividend Yield (3) $2.92 $2.72 10% $2.02 $1.47 $1.17 $1.26 $1.00 $1.08 (2) 93% 95% 84% 84% 86
Slide 28: Financial Results
Financial Results 3Q22 Financial Results 28 Note: Certain data in this section was originally posted to the Company’s Website on October 26, 2022 and has not been updated to reflect changes occurring after that date.
Slide 29: High-Quality, Diversified Customer Base
High-Quality, TOP 20 CUSTOMERS Customer Rank Locations % of Customer Rank Locations % of Diversified ARR (1) ARR (1) Customer Base Fortune 50 1. Software Company 60 10.1% 11. 15 1.8% 2. 38 3.8% 12. Social Media Platform 8 1.8% Fortune 25 Tech 3. 33 3.6% 13. Company 44 1.8% • Top customers have a 4.
Slide 30: Record Interconnection Revenue
Connected Data Communities Record Interconnection Revenue 103 new logos Defense Contractor Luxury Jewelry Retailer $42 million total 3Q bookings from 0-1 MW + Interconnection 45% of 0-1 MW + Interconnection bookings were outside the Americas Insurance Provider Pharmacy Note: As of September 30, 2022
Slide 31: Top-Line Step Function
Top-Line Step Function BACKLOG ROLL-FORWARD (1) $ in millions COMMENCEMENT TIMING (2) $ in millions Record Leasing Drives $163M $90M Record Backlog $79M $466M $146M $466M $153M $393M $144M • 25% of backlog will $204M commence in 4Q22 $173M $424M • 45% of backlog will $351M $424M commence in 2023 $11
Slide 32: Lease Expiration Schedule
Evenly-Staggered % of Lease Expirations by Annualized Base Rent (1) Lease Expiration 23.8% >1 MW 0-1 MW Other Schedule 20% 2% - 4% Annual cash rental rate 15% increases(2) with a • Stable >1 MW Roll-Over 11.7% 12.0% growing number linked to CPI Reflects Longer Term 10% 9.6% 9.7% Leases 9.0% 5% 5.8%
Slide 33: Improving Pricing Environment
Improving Pricing 3Q22 RE-LEASING SPREADS Environment 2022E Renewal Spreads 0-1 MW > 1 MW OTHER (1) TOTAL Remain Slightly Positive RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE RENTAL RATE CHANGE 3.1% (8.8)% 3.6% (0.5)% CASH CASH CASH CASH 4.0% (2.2)% 13.3% 2.3% • Consistent growth in GAA
Slide 34: High Utilization Provides Downside Protection
High Utilization Provides Historical Retention on Rentable Square Feet (1)(2) Downside $15 - $30 Trailing Twelve-Month Tenant Retention Long-Term Historical Average Protection 100% million approximate cost of a 90% new 1.125 MW data center deployment (3) • Significant Investment by Customers Helps t
Slide 35: Economic Risk Mitigation Strategies
EXPOSURE BY REVENUE (1) Economic Risk 56% USD 21% EURO SGD 6% GBP 5% BRL 3% ZAR 2% JPY 2% CHF 1% AUD 1% CAD <1% SEK <1% <1% DKK <1% HKD KES <1% <1% HRK MZN <1% Mitigation Strategies <1% 5% < 1% < 1% Strong Dollar Weighs 21% 1% < 1% 2% 56% < 1% < 1% 6% • Local operations funded in local currencies ac
Slide 36: Constant-Currency Analysis
Constant- As Reported Constant Currency Currency Analysis 11.2% Double-Digit Top-Line 10.3% Growth 6.8% 5.2% • CC same capital data 5.6% center revenue 3.0% growth turns positive 0.1% • Demonstrates improving organic 3Q22 / 3Q21 (2.4%) FY22E / FY21 FY22E / FY21 Core FFO per Share trajectory Revenue
Slide 37: 2022 Quarterly Cadence
2022 Quarterly 2022E CORE FFO PER SHARE Cadence Backlog Supportive Though Interest and FX Weigh • Higher NOI growth offsets higher interest expense and stiff FX headwinds 1Q22 2Q22 3Q22 NOI Interest FX 4Q22 Note: Based on management estimates; actual performance may differ materially. Core FFO and N
Slide 38: Committed to Conservative Capital Structure
Committed to Conservative Capital Structure Net Debt to Adjusted EBITDA (1) Fixed Charge Coverage Ratio (2) Diverse Menu Options, 6.7x Minimizing Cost 6.4x (0.3x) 5.7x 5.5x 0.2x • Drew $400M of equity forward, leaving $540M 20% 17% Floating outstanding Rate Debt (3) Floating Rate Debt (3) • Fully fu
Slide 39: Matching the Duration of Assets and Liabilities
Matching the Duration of Assets and Liabilities Modest Near-Term Maturities, Well-Laddered Debt Schedule DEBT PROFILE DEBT MATURITY SCHEDULE AS OF September 30, 2022 (1)(2) (U.S. $ in billions) $3.4 Unsecured 5.4 YEARS 2.4 % 97% Unsecured Secured Weighted Avg. Weighted Avg. Coupon (1)(3) Maturity (1
Slide 40: Digital Transformation Driving Steady Demand
Digital HISTORICAL BOOKINGS Transformation ANNUALIZED GAAP BASE RENT $ in millions Driving Steady $150 Demand Global Full-Product Spectrum Provides $100 Broadest Solutions $50 • Record leasing driven by >1 MW segment $0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 3Q22 BOOKINGS 0-1 MW INTE
Slide 41: Consistent Execution on Strategic Vision
Consistent Execution on Strategic Vision Delivering Current Results, Seeding Future Growth SUCCESSFUL 3Q22 INITIATIVES 1. Strengthening Connections with Customers Booked $176 million of new business and landed 103 new logos 2. Enhancing our Global Platform Closed Teraco Investment on August 1st 3. E
Slide 42: Appendix
Presenter Name 15/09/22 Appendix
Slide 43: 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 44: 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 45: Reconciliation of Non-GAAP Items
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) Reconciliation of Three Months Ended September 30, 2022 September 30, 2021 Non-GAAP Items Net income ava
Slide 46: Reconciliation of Non-GAAP Items
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 Three Months Ended Three Mont
Slide 47: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items 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 To Their Closest GAAP EBITDA (in thousands) Equivalent (unaudited) Three
Slide 48: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Items Digital Realty Trust, Inc. and Subsidiaries Reconciliation of Same Capital Cash Net Operating Income To Their Closest GAAP (in thousands) (unaudited) Equivalent Three Months Ended September 30, 2022 September 30, 2021 Rental revenues $ 574,898 $ 610,471 Tenant reimbu
Slide 49: Reconciliation of Non-GAAP Items
Total Debt/Total Enterprise Value QE 9/30/22 Reconciliation of Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge facility (i) Market value of common equity $ 29,139,454 fees) (ii) Liquidation value of preferred equity 755,000 Total GAAP interest
Slide 50: Reconciliation of Non-GAAP Items
Reconciliation of Total Debt/Total Enterprise Value QE 6/30/22 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge Market value of common equity(i) $ 37,784,866 facility fees) Non-GAAP Items Liquidation value of preferred equity(ii) 755,000 Total G
Slide 51: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Net Debt/LQA Adjusted EBITDA Net Debt/LQA Adjusted EBITDA - As Adjusted in 000’s QE 3/31/20 QE 3/31/20 Total debt at balance sheet carrying value $ 12,251,332 Net Debt as of March 31, 2020 $ 12,780,796 Items Add: DLR share of unconsolidated joint venture debt 558,507 Less:
Slide 52: Reconciliation of Non-GAAP Items
Reconciliation of Non-GAAP Net Debt/LQA Adjusted EBITDA Net Debt/LQA Adjusted EBITDA - As Adjusted Items in 000’s QE 6/30/20 QE 6/30/20 Total debt at balance sheet carrying value $ 12,371,621 Net Debt as of June 30, 2020 $ 12,643,652 Add: DLR share of unconsolidated joint venture debt 558,049 Less:
Slide 53: Reconciliation of Non-GAAP Items
Net Debt/LQA Adjusted EBITDA QE 9/30/20 Total debt at balance sheet carrying value $ 12,874,760 Reconciliation Add: DLR share of unconsolidated joint venture debt 568,757 Add: Capital lease obligations 228,486 Less: Unrestricted cash (971,305) Net Debt as of September 30, 2020 $ 12,700,698 of Non-GA
Slide 54: Reconciliation of Non-GAAP Items
Reconciliation Total Debt/Total Enterprise Value in 000’s QE 12/31/20 of Non-GAAP (i) Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge Market value of common equity $ 40,225,753 (ii) facility fees) Liquidation value of preferred equity 956,250 T
Slide 55: Reconciliation of Non-GAAP Items
Reconciliation Total Debt/Total Enterprise Value in 000’s Market value of common equity (i) $ 40,718,757 QE 3/31/21 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge facility fees) of Non-GAAP Liquidation value of preferred equity(ii) 956,250 Tot
Slide 56: Reconciliation of Non-GAAP Items
Reconciliation Total Debt/Total Enterprise Value in 000’s Market value of common equity (i) $ 43,582,029 QE 6/30/21 Debt Service Ratio (LQA Adjusted EBITDA/GAAP interest expense plus capitalized interest and less bridge facility fees) of Non-GAAP Liquidation value of preferred equity(ii) 755,000 Tot
Slide 57: Reconciliation of Non-GAAP Items
Reconciliation Net Debt/LQA Adjusted EBITDA in 000’s QE 9/30/21 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 9/30/21 of Non-GAAP Total debt at balance sheet carrying value Add: DLR share of unconsolidated joint venture debt $14,087,539 684,666 Net Debt as of September 30, 2021 $ 14,714,905 Items Ad
Slide 58: Reconciliation of Non-GAAP Items
Reconciliation Net Debt/LQA Adjusted EBITDA in 000’s QE 12/31/21 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 12/31/21 of Non-GAAP Total debt at balance sheet carrying value $ 13,448,210 Net Debt as of Dceember 31, 2021 $ 14,194,189 Add: DLR share of unconsolidated joint venture debt 826,799 Less:
Slide 59: Reconciliation of Non-GAAP Items
Reconciliation Net Debt/LQA Adjusted EBITDA in 000’s QE 3/31/22 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 3/31/22 of Non-GAAP Net Debt as of March 31, 2022 $ 15,184,306 Total debt at balance sheet carrying value $ 14,388,215 Less: Gross Proceeds from Forward Equity (947,405) Add: DLR share of un
Slide 60: Reconciliation of Non-GAAP Items
Reconciliation Net Debt/LQA Adjusted EBITDA in 000’s QE 6/30/22 Net Debt/LQA Adjusted EBITDA - As Adjusted QE 6/30/22 of Non-GAAP Total debt at balance sheet carrying value $ 14,294,307 Net Debt as of June 30, 2022 $ 15,104,319 Less: Gross Proceeds from Forward Equity (939,787) Add: DLR share of unc
Slide 61: Thank you
r Thank you FN DIGITAL Lv REALTY.
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