Gds Holdings Ltd. · HKEX:9698
Gds — FY2017 Earnings Presentation
35 slides from Gds's earnings presentation, Mar 13, 2018
Slide 1: 4Q17 & FY17 Earnings Call
4Q17 & FY17 Earnings Call 13 March 2018 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 a
Slide 3: Business Strategy & Performance Highlights
Business Strategy & Performance Highlights William Huang, Chairman & CEO © GDS 2016
Slide 4: FY17 Highlights
FY17 HIGHLIGHTS Sales Momentum • Net addition to contract portfolio worth over $200 mn in ARR • Total area committed increased by 68.0% y/y to 102,528 sqm Capacity Expansion • 20 DCs in service or under construction at year end with 7 added • Invested Rmb 2.0 bn ($313 mn) of capex for capacity expan
Slide 5: 4Q17 Highlights
4Q17 HIGHLIGHTS Sales Momentum • Net addition to contract portfolio worth nearly $80 mn in ARR • Total area committed increased by 23.8% q/q to 102,528 sqm Capacity Expansion • 4 additional DCs in service – BJ3, SZ4 Phase 1, SH4 and GZ2 • Invested Rmb 806 mn ($124 mn) of capex for capacity expansion
Slide 6: Booming Digital Economy
Booming Digital Economy Benchmarking China vs. US ($ Bn) New Technologies Driving Demand US China Retail e-Commerce 24 IoT Transaction Value (1) 42 74 AI 5G Mobile Payments (1) 790 Public Cloud 23 (IaaS) Revenue (2) 3 4 AI and ML VC Investment (1) 1 Hybrid Cloud Notes : 1. McKinsey “Digital China: P
Slide 7: Serving Customers Who Matter
Serving Customers Who Matter Net Additional Area Committed (Sqm) Total Area Committed by Customer Segment FSI & Large Enterprises Cloud Service Providers 41,485 20.9% 25,125 19,678 Q4 531 Customers 21.2% +28.9% Y/Y 57.9% 14,933 6,309 Q3 Large Internet 8,228 Q2 7,270 Q1 FY15 FY16 FY17 © GDS 2016 6
Slide 8: Secured Resource Supply to Sustain Leadership
Secured Resource Supply to Sustain Leadership Resource Development 60,982 16,850 (1) 77,832 23,426 (2) 101,258 39,505 (3) 15,000 24,505 SH5 Phase 1 SZ5 Phase 2 HB1 GZ2 CD2 Phase 1 SZ4 Phase 1 SZ5 Phase1 SH6 SH4 CD1 Phase 3 BJ3 BJ2 In Service by 31/12/16 RFS 9M17 In Service by 30/09/17 RFS 4Q17 In Se
Slide 9: Our Strategy
Our Strategy Strategic Priorities for 2018 Scale-Up Resource Supply n Keep up with accelerating demand from existing hyper-scale customers Add Strategic Customers n Use resource advantage to win new strategic customers Cloud Connect n Enhance Cloud Connect hub to grow enterprise customer base Lower
Slide 10: Financial & Operating Review
Financial & Operating Review Dan Newman, CFO © GDS 2016
Slide 11: Financial Highlights
Financial Highlights 1 Record level of new customer commitments and growing backlog 2 Track record of delivering backlog, driving revenue growth 3 Realized operating leverage at the data center and corporate levels 4 Raised capital to maintain a fully funded business plan 5 High visibility into cont
Slide 12: 4Q17 & FY17 P&L Analysis
4Q17 & FY17 P&L Analysis Quarterly and Yearly Financial Review Rmb ‘000 (unless indicated) 3Q17 4Q17 Q/Q FY16 FY17 Y/Y Rmb Rmb % Rmb Rmb % Net Revenue Service Revenue 423,042 493,663 16.7% 1,003,015 1,591,860 58.7% Equipment Sales 1,391 11,813 749.2% 52,945 24,306 (54.1%) Total Net Revenue 424,433 5
Slide 13: Underlying Trends
Underlying Trends Quarterly Financial Review Rmb ‘000 (unless indicated) 3Q17 4Q17 Q/Q FY16 FY17 Y/Y Total Net Revenue 424,433 505,476 19.1% 1,055,960 1,616,166 53.1% Less : Equipment Sales 1,391 11,813 749.2% 52,945 24,306 (54.1%) Service Revenue 423,042 493,663 16.7% 1,003,015 1,591,860 58.7% Adju
Slide 14: Revenue & Area Utilized
Revenue & Area Utilized Revenue (Rmb Mn) Area Utilized (Sqm) & MSR (Rmb / Sqm / Month) 61,713 Service Revenue Equipment Sales 1 50,579 42,470 37,082 37,898 11.8 1.4 6.4 11.9 4.7 44.1 Termination Fee 4Q16 1Q17 2Q17 3Q17 4Q17 493.7 423.0 Average MSR 3,031 331.5 2,931 299.7 299.6 2,797 2,750 2,708 (1)
Slide 15: Underlying Adjusted NOI & EBITDA
Underlying Adjusted NOI & EBITDA Underlying Adjusted NOI & Margin Underlying Adjusted EBITDA & Margin 46.7% 44.7%(1) 46.9% 47.6% 45.5% 26.5% 27.1%(1) 30.3% 31.9% 32.2% Rmb Mn Rmb Mn 224.6 159.1 201.5 134.9 178.1 125.2 155.5 139.9 44.1 Termination 44.1 100.4 Fee Termination Fee 79.3 134.0 81.2 4Q16 1
Slide 16: Total Data Center Portfolio Breakdown
Total Data Center Portfolio Breakdown Breakdown by Development Stage as at 4Q17 0 0.0% 0 0 0.0% Area In Service Area In Service Area Under 0.0% - Stabilized - Ramping-up Construction Area Under Area In Service Construction - Stabilized 19.5% 37.0% (1) Total Area (Sqm) 46,595 54,662 24,505 Area In Se
Slide 17: Cost Breakdown & Operating Leverage
Cost Breakdown & Operating Leverage 4Q17 Cost Breakdown & Operating Leverage (Rmb Mn) % of Service Revenue Service Revenue 493.7 3Q17 4Q17 Utility Cost 116.7 23.1% 23.6% Rent, Labour & Other (1) 152.4 29.3% 30.9% Underlying Adjusted NOI 224.6 47.6% 45.5% SG&A (2) 66.3 15.9% 13.4% Other Income (Expen
Slide 18: Capex & On-Going Investment
Capex & On-Going Investment Capex Paid & Capex Incurred Current Construction Program (1) Capex Paid (Rmb Mn) (1) 806.4 Area Under Pre- RFS Date Construction Commitment 443.7 (Sqm) Rate (%) 380.0 405.7 283.3 SH5 Phase 1 1H18 2,042 0% SZ5 Phase 2 1H18 5,000 0% 4Q16 1Q17 2Q17 3Q17 4Q17 HB1 1H18 4,992 1
Slide 19: Financing Obligations & Liquidity
Financing Obligations & Liquidity Debt & Cash Outstanding Loan Maturity Schedule as at 31/12/17 (Rmb Mn) 31/12/16 30/09/17 31/12/17 / LQA Adjusted Rmb Mn Rmb Mn Rmb Mn EBITDA Loan 1,045.6 Working Capital 239.8 321.5 630.2 1.0x Project Loan 1,698.8 2,873.1 3,620.0 5.8x 867.4 Mezzanine Debt 199.6 0 0
Slide 20: Contract Backlog Build-up
Contract Backlog Build-up Backlog Build-up for FY17 (Sqm) Total Area Committed & Area Utilized (Sqm) Net Additional Area Committed Total Area Committed Area Utilized Net Additional Area Utilized 102,528 19,678 11,134 21,807 13,497 82,850 40,815 76,541 68,313 32,271 61,043 61,713 50,579 23,961 42,470
Slide 21: Business Outlook
Business Outlook FY18 Guidance Rmb Mn FY17 Actual FY18 Guidance Implied Y/Y (1) Total Revenue 1,616.2 2,460 – 2,560 55.3% Adjusted EBITDA 512.3 905 – 935 79.6% Capex 2,035.8 2,600 – 3,000 37.5% Note 1. Based on the mid-point of the range © GDS 2016 20
Slide 22: Questions & Answers
Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016
Slide 23: Appendix
Appendix © GDS 2016
Slide 24: 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 SH8 2.4 KM SH1, 2, 3, 4 BJ1, 3 4.9 12.8 SH6 2.2 61.3 SH5 BJ2 KS1 © GDS 2016 23
Slide 25: 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 Chengdu Guangzhou Shenzhen CD1, 2 GZ1, 2 SZ5 SZ3 SZ1, 2 SZ4 1.2 45.2 KM 37.9 © GDS 2016 24
Slide 26: Key Operating KPIs
Key Operating KPIs Key Operating KPIs As at the end of: 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Area In Service (Sqm) 37,869 48,548 48,822 60,982 61,092 71,577 77,832 101,258 Area Under Construction (Sqm) 35,525 31,794 37,194 25,055 35,055 38,028 37,478 24,505 Area Committed (Sqm) 33,629 44,062 45,7
Slide 27: Self-Developed Data Centers In Service
Self-Developed Data Centers In Service (1) As At 31/12/17 Shanghai Shenzhen Guangzhou Beijing Chengdu SZ4 SZ5 KS1 SH1 SH2 SH3 SH4 SZ1 SZ2 SZ3 GZ1 GZ2 BJ1 BJ2 BJ3 CD1 Phase 1 Phase 1 Ready For Service 2H10 2H11 2H15 2H16 2H17 2H14 1H16 2H16 2H17 1H17 1H16 2H17 2H15 2H17 2H17 1H17 Purpose- Purpose- Pu
Slide 28: Self-Developed Data Centers Under Construction
Self-Developed Data Centers Under Construction As At 31/12/17 Shanghai Shenzhen Chengdu Hebei SH5 SZ5 CD2 SH6 HB1 Phase 1 Phase 2 Phase 1 Ready For Service 1H18 2H18 1H18 2H18 1H18 Type Converted Purpose-Built Converted Purpose-Built Built-to-Suit Tenure Leased Leased Leased Owned Leased Area Under
Slide 29: Top 5 Customers
Top 5 Customers Top 5 Customers in terms of Total Area Committed Number of End User % of Total Area Committed % of 4Q17 Service Revenue Data Centers Internet / Cloud Service Provider 34.9% 24.6% 11 Internet / Cloud Service Provider 17.7% 11.2% 9 (1) Internet 13.5% 10.3% 3 Cloud Service Provider 3.8%
Slide 30: Principal Shareholders
Principal Shareholders Post Follow-On Equity Offering (26/01/18) Pre-Offering Post Offering ADS % Total Offering ADS % Total William Huang (1) 8,448,792 7.3% 8,448,792 6.8% Directors & Officers (2) 1,305,219 1.1% 1,305,219 1.1% SBCVC 13,486,531 11.7% (4,425,000) 9,061,531 7.3% STT 39,707,360 34.3% 3
Slide 31: Historical Financial Results – Statements of Operations
Historical Financial Results Condensed Consolidated Statements of Operations Amounts in thousands Three Months Ended Year Ended Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Dec 31, 2016 Dec 31, 2017 RMB RMB RMB RMB RMB USD RMB RMB USD Net Revenue Service revenue 299,731 343,665 3
Slide 32: Historical Financial Results – Balance Sheets
Historical Financial Results Condensed Consolidated Balance Sheets Dec 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Amounts in thousands. As of Dec 31, 2017 2015 2016 2016 2016 2017 2017 2017 RMB RMB RMB RMB RMB RMB RMB RMB USD Cash 924,498 834,477 798,732 1,811,319 1,527,318 1,466,013 1,174,
Slide 33: Historical Financial Results – Cash Flows
Historical Financial Results Condensed Consolidated Statements of Cash Flows Amounts in thousands Three Months Ended Year Ended Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Dec 31, 2016 Dec 31, 2017 RMB RMB RMB RMB RMB USD RMB RMB USD Net cash provided used in operating activitie
Slide 34: Reconciliation from Gross Profit to Adjusted NOI
Reconciliation from Gross Profit to Adjusted NOI Adjusted NOI Amounts in thousands Three months ended Year Ended Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Dec 31, 2016 Dec 31, 2017 RMB RMB RMB RMB RMB USD RMB RMB USD Gross profit 75,931 106,198 81,361 102,724 118,189 18,166 26
Slide 35: Reconciliation from Net Loss to Adjusted EBITDA
Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Year Ended Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Dec 31, 2016 Dec 31, 2017 RMB RMB RMB RMB RMB USD RMB RMB USD Net loss (69,639) (44,305) (75,723) (90,329) (116,543) (17