Gds Holdings Ltd. · HKEX:9698
Gds — Q1 2018 Earnings Presentation
34 slides from Gds's earnings presentation, May 10, 2018
Slide 1: 1Q18 Earnings Call
1Q18 Earnings Call 10 May 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: 1Q18 Highlights
1Q18 HIGHLIGHTS Sales Momentum • Net additional total area committed of 20,291 sqm • Total area committed increased by 19.8% q/q to 122,819 sqm Capacity Expansion • Added SH8, HB2 & HB3 in 1Q18 + GZ3, BJ4, BJ5 Phase 1 & SH9 in 2Q18 • Invested Rmb 807 mn ($129 mn) of capex for capacity expansion Fina
Slide 5: Sales Achievement
Sales Achievement Net Additional Area Committed (Sqm) Total Area Committed by Customer Segment 41,485 FSI & Large Enterprises Cloud Service Providers 18.6% Q4 25,125 551 Customers 20,291 18.3% +27.3% Y/Y Q3 63.1% 14,933 Q2 Large Internet Q1 FY15 FY16 FY17 1Q18 © GDS 2016 4
Slide 6: Resource Progress
Resource Progress Area Under Construction (Sqm) 20,116 60,473 17,894 2,042 40,357 SZ5 Phase 2 (1) SH5 Phase 1 GZ3 Phase 1 BJ4 24,505 BJ5 Phase 1 SH9 SH8 HB2 HB3 Area Under Construction Projects Initiated Projects In Service Area Under Construction Projects Initiated Area Under Construction 31/12/17
Slide 7: Synchronized Sales & Capacity Growth
Synchronized Sales & Capacity Growth Capacity vs. Commitments (Sqm) Commitment & Pre-Commitment Rates Area Committed Area Pre-Committed Commitment Rate Pre-Commitment Rate Area In Service 143,832 Area Under Construction 125,763 122,819 115,310 109,605 102,528 92.2% 91.8% 93.8% 96,147 90.0% 89.8% 82,
Slide 8: Data center sites: BJ3, SZ4 Phase 1, SH4
BJ3 SZ4 Phase 1 SH4 GZ3 GZ2 SH5 Phase 1 © GDS 2016 7
Slide 9: Financial & Operating Review
Financial & Operating Review Dan Newman, CFO © GDS 2016
Slide 10: Financial Highlights
Financial Highlights 1 Record level of new customer commitments and growing backlog 2 Track record of delivering backlog, driving revenue growth 3 Realizing operating leverage at the data center and corporate levels 4 Sufficient capital to maintain a fully funded business plan 5 High visibility into
Slide 11: 1Q18 P&L Analysis
1Q18 P&L Analysis Quarterly Financial Review 1Q17 Y/Y Rmb ‘000 (unless indicated) 1Q17 4Q17 1Q18 Q/Q Pro Forma (2) Pro Forma (2) Rmb Rmb Rmb Rmb % % Net Revenue Service Revenue 343,665 299,602 493,663 551,473 84.1% 11.7% Equipment Sales 6,378 6,378 11,813 10,752 68.6% (9.0%) Total Net Revenue 350,04
Slide 12: Underlying Trends
Underlying Trends Quarterly Financial Review Rmb ‘000 (unless indicated) 1Q17 4Q17 1Q18 Y/Y Q/Q Total Net Revenue 350,043 505,476 562,225 60.6% 11.2% Less: Termination Fee 44,063 Less: Equipment Sales 6,378 11,813 10,752 68.6% (9.0%) Service Revenue 299,602 493,663 551,473 84.1% 11.7% Adjusted NOI 1
Slide 13: Revenue & Area Utilized
Revenue & Area Utilized Revenue (Rmb Mn) Area Utilized (Sqm) & MSR (Rmb / Sqm / Month) Service Revenue Equipment Sales 1 66,905 61,713 50,579 10.8 42,470 37,898 11.8 1.4 6.4 4.7 44.1 Termination Fee 1Q17 2Q17 3Q17 4Q17 1Q18 551.5 493.7 423.0 Average MSR 3,031 331.5 2,931 299.6 2,858 2,750 2,708 (1)
Slide 14: Underlying Adjusted NOI & EBITDA
Underlying Adjusted NOI & EBITDA Underlying Adjusted NOI & Margin Underlying Adjusted EBITDA & Margin 44.7%(1) 46.9% 47.6% 45.5% 45.3% 27.1%(1) 30.3% 31.9% 32.2% 33.0% Rmb Mn Rmb Mn 249.8 182.3 224.6 159.1 201.5 134.9 178.1 125.2 155.5 44.1 Termination 100.4 44.1 Fee Termination Fee 134.0 81.2 1Q17
Slide 15: Stabilized vs. Ramping-Up Data Centers
Stabilized vs. Ramping-Up Data Centers Breakdown of Area In Service as at 1Q18 Stabilized Data Centers Net Floor Area % Ramping-Up Data Centers Net Floor Commitment Utilization Net Floor Commitment Utilization Area Rate Rate Area Rate Rate KS1 SH3 % SH1 SH4 SH2 %% SH5 Phase 1 SZ1 4,286 99.8% 99.8% S
Slide 16: Cost Breakdown & Operating Leverage
Cost Breakdown & Operating Leverage 1Q18 Cost Breakdown & Operating Leverage (Rmb Mn) % of Service Revenue Service Revenue 551.5 4Q17 1Q18 Utility Cost 126.4 23.6% 22.9% Rent, Labour & Other (1) 175.3 30.9% 31.8% Underlying Adjusted NOI 249.8 45.5% 45.3% SG&A (2) 68.1 13.4% 12.4% Other Income (Expen
Slide 17: Capex & On-Going Investment
Capex & On-Going Investment Capex Paid & Capex Incurred Current Construction Program N et Floor A rea Pre-C om m itm ent Capex Paid (Rmb Mn) (1) R FS D ate (Sqm ) R ate (% ) 779.3 806.8 A rea U nder C onstruction as at 1Q18 SZ5 Phase 2 2Q18 7,858 (1) 0% H B1 2Q18 4,992 100% 402.1 443.7 380.0 H B2 2H
Slide 18: Financing Obligations & Liquidity
Financing Obligations & Liquidity Debt & Cash Outstanding Loan Maturity Schedule as at 31/03/18 (Rmb Mn) 31/03/17 31/12/17 31/03/18 Rmb Mn Rmb Mn Rmb Mn / LQA Adjusted 1,228.5 EBITDA Loan 1,050.4 Working Capital 262.1 630.2 859.3 1.2x 940.4 Project Loan 2,032.3 3,620.0 4,291.1 5.9x 728.1 Total Loan
Slide 19: Contract Backlog Build-up
Contract Backlog Build-up Backlog Build-up (Sqm) Total Area Committed & Area Utilized (Sqm) Net Additional Area Committed Total Area Committed Area Utilized Net Additional Area Utilized 122,819 41,485 24,631 20,291 5,192 102,528 55,914 82,850 76,541 40,815 68,313 66,905 61,713 50,579 23,961 42,470 3
Slide 20: Questions & Answers
Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016
Slide 21: Appendix
Appendix © GDS 2016
Slide 22: Our Data Center Portfolio – Beijing & Shanghai
Our Data Center Portfolio – Beijing & Shanghai Self-Developed Data Centers in Tier 1 Markets KM Beijing Shanghai KM BJ5 SH9 2 SH1, 2, 3, 4 BJ4 54 2 43 13 SH8 5 61 BJ1, 3 2 SH5 (1) SH6, (7) BJ2 KS1 Note: 1. SH7 is the 2nd building to be constructed next to SH6 which is currently held for future devel
Slide 23: 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 SZ5 SZ3 SZ1, 2 SZ4 1.2 45.2 KM 37.9 © GDS 2016 22
Slide 24: Key Operating KPIs
Key Operating KPIs Key Operating KPIs As at the end of: 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Area In Service (Sqm) 37,869 48,548 48,822 60,982 61,092 71,577 77,832 101,258 103,475 Area Under Construction (Sqm) 35,525 31,794 37,194 25,055 35,055 38,028 37,478 24,505 40,357 Area Committed (Sqm
Slide 25: Self-Developed Data Centers In Service
Self-Developed Data Centers In Service As at 31/03/18 Shanghai Shenzhen Guangzhou Beijing Chengdu SH5 SZ4 SZ5 KS1 SH1 SH2 SH3 SH4 SZ1 SZ2 SZ3 GZ1 GZ2 BJ1 BJ2 BJ3 CD1 Phase 1 Phase 1 Phase 1 Ready For Service 2H10 2H11 2H15 2H16 2H17 1H18 2H14 1H16 2H16 2H17 1H17 1H16 2H17 2H15 2H17 2H17 1H17 Purpose
Slide 26: Self-Developed Data Centers Under Construction
Self-Developed Data Centers Under Construction As at 31/03/18 Shanghai Shenzhen Chengdu Hebei SZ5 CD2 SH6 (1) SH8 HB1 HB2 HB3 Phase 2 Phase 1 Ready For Service 2H18 2H18 2Q18 2H18 2Q18 2H18 2H18 Type Purpose-Built Converted Converted Purpose-Built Built-to-Suit Built-to-Suit Built-to-Suit Tenure Lea
Slide 27: Top 5 Customers
Top 5 Customers Top 5 Customers in terms of Total Area Committed Number of End User % of Total Area Committed % of 1Q18 Service Revenue Data Centers Internet / Cloud Service Provider 39.3% 26.9% 14 Internet / Cloud Service Provider 19.2% 11.8% 10 (1) Internet 11.3% 7.3% 3 Cloud Service Provider 3.8%
Slide 28: Principal Shareholders
Principal Shareholders As at 31/03/18 Ordinary Shares ADS % of Total William Huang (1) 67,590,336 8,448,792 6.8% Directors & Officers (2) 10,507,671 1,313,458 1.1% SBCVC 72,492,246 9,061,531 7.3% STT 341,737,732 42,717,217 34.5% Ping An Insurance 63,369,856 7,921,232 6.4% CyrusOne 64,257,028 8,032,1
Slide 29: Historical Financial Results: Statements of Operations
Historical Financial Results Condensed Consolidated Statements of Operations Amounts in thousands Three Months Ended Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 RMB RMB RMB RMB RMB USD Net Revenue Service revenue 343,665 331,490 423,042 493,663 551,473 87,918 Equipment sales 6,3
Slide 30: Historical Financial Results: Balance Sheets
Historical Financial Results Condensed Consolidated Balance Sheets (1) Amounts in thousands. As of Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 RMB RMB RMB RMB RMB USD Cash 1,527,318 1,466,013 1,174,079 1,873,446 2,978,627 474,863 Accounts receivable, net of allowance for doubtfu
Slide 31: Historical Financial Results: Cash Flows
Historical Financial Results Condensed Consolidated Statements of Cash Flows (1) (2) Amounts in thousands Three Months Ended Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 RMB RMB RMB RMB RMB USD Net cash used in operating activities (23,691) (59,975) (55,528) (28,623) (143,429) (2
Slide 32: Reconciliation from Gross Profit to Adjusted NOI
Reconciliation from Gross Profit to Adjusted NOI Adjusted NOI Amounts in thousands Three months ended Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 RMB RMB RMB RMB RMB USD Gross profit 106,198 81,361 102,724 118,189 122,917 19,596 Depreciation and amortization 71,288 72,609 95,372
Slide 33: Reconciliation from Net Loss to Adjusted EBITDA
Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 RMB RMB RMB RMB RMB USD Net loss (44,305) (75,723) (90,329) (116,543) (85,926) (13,697) Net interest expenses 78,608 85,755 105,733
Slide 34: Definition of KPIs
Definition of KPIs Area In Service the net floor area of data centers in service for which one or more modules have been equipped and fitted out ready for utilization by customers Area Under Construction the net floor area of data centers which are under construction and are not yet ready for servic