Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Q4 2022 Earnings Presentation
36 slides from Digitalbridge's earnings presentation, Feb 24, 2023
Slide 1: Earnings Presentation 4Q 2022
1 EARNINGS PRESENTATION 4Q 2022 February 24, 2023
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
2 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation may contain forward-looking statements within the meaning of the federal securities laws, including statements relating to (i) our strategy, outlook and growth prospects, (ii) our operational and financial targets and (iii
Slide 3: Agenda
3 AGENDA BUSINESS UPDATESE CT IO N 1 FINANCIAL RESULTSSE CT IO N 2 SE CT IO N 3 EXECUTING THE DIGITAL PLAYBOOK
Slide 4: Business Update
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Slide 5: 2022 – Delivered Growth in a Dynamic Macro Environment
5 2022 – DELIVERED GROWTH IN A DYNAMIC MACRO ENVIRONMENT DigitalBridge continued to be the Partner of Choice to top operating management teams and institutional investors allocating capital to this durable, growing asset class CAPITAL FORMATION 1 2 3 PORTFOLIO PERFORMED Established Asset Management
Slide 6: A Leading Global Investor in Digital Infrastructure
6 Scale “Full Stack” asset manager Organic – Successful launch of Core and Credit Strategies M&A – AMP (InfraBridge) acquisition added mid- market capability Consolidated ownership of IM platform Wafra transaction increased our exposure to our best business, 100% of IM earnings Continued simplificat
Slide 7: Strategic Capital Allocation While Maintaining Strong Liquidity
7 $578M $569M 12/31/22 STRATEGIC CAPITAL ALLOCATION WHILE MAINTAING STRONG LIQUIDITY DigitalBridge executed on its capital allocation priorities with four accretive transactions while maintaining strong liquidity and continuing to optimize its capital structure and de-lever. Prudent balance sheet ma
Slide 8: Capital Formation Update – DBRG Exceeded 2022 Target
8 CAPITAL FORMATION UPDATE – DBRG EXCEEDED 2022 TARGET 2022 total new capital formation of $8.5 billion, including $4.8 billion of FEEUM. 4Q FEEUM increase of ~$1.4 billion, resulted in DBRG exceeding 2022 midpoint target by 26% Non-Fee Earning Equity Fee Earning Equity FY 2022 $3.8B 2022 Target Mid
Slide 9: Scaled Fee-Earning Assets Under Management
9 $11.2 $6.5 $2.5 $1.2 $5.6 $0.8 Current(1) $27.8B (1) AMP (InfraBridge) acquisition closed in February 2023; Total FEEUM as of 12/31/22 and only adjusted for inclusion of acquired AMP FEEUM $11.2 $4.1 $2.1 $0.8 12/31/21 $18.3B ($ in Billions) FEEUM Core $0.8 InfraBridge(1) $5.6 Liquid $1.2 Permanen
Slide 10: 2022 – Actively Investing Globally
10 Note: Acquisition of AIMS has been agreed to in a definitive purchase agreement, but the transaction remains subject to customary closing conditions; there can be no assurance the transaction will reach a financial close. 2022 – ACTIVELY INVESTING GLOBALLY DigitalBridge continued to expand its gl
Slide 11: Portfolio Performance…Keep Delivering
11 PORTFOLIO PERFORMANCE…KEEP DELIVERING Our ability to deliver great performance across our global portfolio is the most fundamental driver of our business… WE BENEFIT FROM CONSERVATIVE PORTFOLIO DEBT METRICS WE STAY FOCUSED ON THE CONTROL VARIABLES IN OUR BUSINESSES (1) We define monthly recurring
Slide 12: Strong Portfolio Performance Drives Great Outcomes
12 71 Data centers 26 Edge U.S. markets served FULL REALIZATION Exit Date: November 2022 3,137 Total panels 3 Markets served U.K .IRELAND NETHERLANDS 83,100 Total Macro Sites 10 Markets served FULL REALIZATION Exit Date: September 2022 RECAPITALIZATION First Close Date: August 2022 STRONG PORTFOLIO
Slide 13: Financial Results
13 2 FINANCIAL RESULTS
Slide 14: 4Q 2022 Financial Overview
14 4Q 2022 FINANCIAL OVERVIEW Note: All $ in millions except per share & AUM TOTAL COMPANY 4Q21 4Q22 % Change YoY 2021 2022 % Change YoY Consolidated Revenues $255.9 $301.1 +18% $965.8 $1,144.6 +19% DBRG OP Share of Revenues $77.9 $91.6 +18% $272.2 $358.9 +32% Net Income (DBRG Shareholder) ($20.7) (
Slide 15: Fourth Quarter 2022 Highlights & KPIs
15 FOURTH QUARTER 2022 HIGHLIGHTS & KPIs Financial Highlights DBRG shareholder pro-rata metrics for the quarter ending December 31, 2022, Fee Revenue in the investment management segment was $47.1 million, up 18% YoY. Excluding $13.8 million in one-time catch-up and incentive fees in the prior yea
Slide 16: 4Q 2022 Segment Earnings – Investment Management
16 INVESTMENT MANAGEMENT 4Q21 4Q22 % Change from 4Q21 2021 2022 % Change YoY Consolidated Revenues $59.9 $47.1 (21%) $191.7 $182.0 (5%) Fee Related Earnings (FRE) $34.8 $24.2 (30%) $116.3 $95.8 (18%) DBRG OP Share Revenue $39.9 $47.1 +18% $131.8 $159.5 +21% FRE $23.8 $24.2 +2% $79.7 $83.5 +5% FRE Ma
Slide 17: 4Q 2022 Segment Earnings – Operating Segment
17 4Q 2022 SEGMENT EARNINGS – OPERATING SEGMENT Note: All $ in millions Operating Segment revenue and earnings growth was driven principally by the addition of Houston data centers at DataBank. Lower initial utilization levels at the acquired data centers impacted margins YoY. Successful DataBank re
Slide 18: Consistent Investment Management Growth
18 CONSISTENT INVESTMENT MANAGEMENT GROWTH Investment Management continue to grow consistently with ‘lower left to upper right trajectory’ Note: There can be no assurance that actual amounts will not be materially higher or lower than these expectations. Readers should refer to the discussion in the
Slide 19: Guidance Update – 2023 & 2025
19 2023 2025 Base Case W/M&A or Deployment1 Base Case Run Rate Investment Mgmt Fee Revenue $290 - 330M $315 - 400M $430 - 480M Run Rate Investment Mgmt FRE (earnings) $165 - 205M $180 - 250M $250 - 300M Ending FEEUM (Implied) $33 - 36B $35 - 41B $47 - 51B Operating Revenue (DBRG Share)1 $90 - 100M N
Slide 20: Positive Recurring Earnings With More to Come
20 ($28) $66 $108 $210 $265 ($118) ($20) $37 $140 $200 $130 $205 $60 $140 POSITIVE RECURRING EARNINGS WITH MORE TO COME Our completed business rotation has driven positive recurring earnings and now allows incremental fundraising to drive bottom-line growth 2020 2021 2022 2023 2025 Growth into 2023
Slide 21: Strong Corporate Liquidity
21 STRONG CORPORATE LIQUIDITY During 4Q, the return of capital from warehoused credit and core (Telenet) investments and additional proceeds from the DataBank recapitalization generated additional liquidity for the DBRG balance sheet, offsetting capital calls, our previously announced common stock r
Slide 22: Continuing to De-Lever the Balance Sheet
22 $578M $775M $578M $569M Leverage Ratio Total Debt/Adj. EBITDA 10.9x 9.9x 2.1x(1) CONTINUING TO DE-LEVER THE BALANCE SHEET In 4Q, DigitalBridge reduced its pro-rata debt through the transfer of warehoused investments and the DataBank recapitalization. With the planned future deconsolidation of the
Slide 23: Executing the Digital Playbook
23 3 EXECUTING THE DIGITAL PLAYBOOK
Slide 24: Our Mission in 2023: The Things That Matter
24 OUR MISSION IN 2023: THE 3 THINGS THAT MATTER Our focus today remains clear – continue to deliver resilient performance through a turbulent macro environment FUNDRAISE Form Capital Around Great Companies and Strategies 1 2 3 DRIVE PORTCO PERFORMANCE Strong Asset Management Through The Cycle SIMPL
Slide 25: Fundraising – Our 2023 KPI
25 February 2023 2023E 2025E FUNDRAISING – OUR 2023 KPI Reiterate our commitment to delivering our near and medium-term targets. Expect to update and introduce new 2027 targets at Investor Day 2023 We continue to see strong interest in the digital infrastructure asset class by investors attracted to
Slide 26: DBRG to Advance Simplification of Corporate Profile
26 Unlock incremental capital to fuel growth/optimize capital structure Public markets understate intrinsic value of operating assets, which we estimate are worth >$700M in net equity at realized prices. DBRG expects $200M+ in additional proceeds from further stake sales Significantly Reduced Comple
Slide 27: Finalize Alt Asset Manager Profile
27 FINALIZE ALT ASSET MANAGER PROFILE Complete transitional phase of strategic roadmap, with clean, pure-play asset management profile. Aligns balance sheet with IM platform. Operating Investment Management Investment Management Operating Assets move to Investment Management in 2 Steps: 1. Ownership
Slide 28: Investment Management Financial Profile
28 DBRG AUM anticipated growth over the next three years manifests itself in strong financial performance $115 2025 Base Case2021 2022 2023 Base Case $120 $73 $181 $97 $290 $330 $430 $480 $300 RANGE RANGE RANGE Annualized Fee Revenues Annualized Fee Related Earnings (FRE) $205 $250 $165 2020 $69 $33
Slide 29: Strategic Capital Allocation Priorities
29 STRATEGIC CAPITAL ALLOCATION PRIORITIES As DBRG executes on a near/medium term focus on capital structure optimization, additional free cash flow will become available to invest and compound capital alongside LPs in our fund vehicles 1. COMPOUND CAPITAL ALONGSIDE LPS 2. ACCRETIVE DIGITAL IM M&A 3
Slide 30: 2023 CEO Priorities: Things That Matter
30 2023 CEO PRIORITIES: 3 THINGS THAT MATTER CEO 2023 Checklist Secular Tailwinds Around Connectivity – Big Growing TAM The Leading Management Team 25+ years Investing and Operating Digital Assets Converged Vision with Exposure to Entire Digital Ecosystem Focus on realization of high-growth digital
Slide 31: Q&A Session
Ul DIGITALBRIDGE Q&A SESSION
Slide 32: Appendix
32 5 APPENDIX
Slide 33: Non-GAAP Reconciliations
33 NON-GAAP RECONCILIATIONS ($ in thousands) FY 2022 4Q22 3Q22 2Q22 1Q22 FY 2021 4Q21 3Q21 2Q21 1Q21 Net income (loss) attributable to common stockholders ($382,266) ($19,356) ($63,273) ($37,321) ($262,316) ($385,716) ($20,686) $41,036 ($141,260) ($264,806) Net income (loss) attributable to noncontr
Slide 34: Non-GAAP Reconciliations
34 NON-GAAP RECONCILIATIONS ($ in thousands) FY 2022 4Q22 3Q22 2Q22 1Q22 FY 2021 4Q21 3Q21 2Q21 1Q21 IM net income (loss) $ 186,084 $ 81,167 $ 46,065 $ 67,995 $ (9,143)$ 90,915 $ 28,194 $ 39,272 $ 15,786 $ 7,663 Adjustments: Interest expense (income) 10,377 2,200 2,906 2,771 2,500 4,748 2,499 2,250
Slide 35: Important Note Regarding Non-GAAP Financial Measures
35 IMPORTANT NOTE REGARDING NON-GAAP FINANCIAL MEASURES This presentation 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 utili
Slide 36: DigitalBridge
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