Gds Holdings Ltd. · HKEX:9698

Gds — Q1 2017 Earnings Presentation

29 slides from Gds's earnings presentation, May 9, 2017

  1. Slide 1: 1Q17 Earnings Presentation

    1Q17 Earnings Presentation 9th May, 2017 NASDAQ: GDS © GDS 2016 0

  2. 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

  3. Slide 3: Strategic & Operational Highlights

    Strategic & Operational Highlights William Huang, Chairman & CEO © GDS 2016

  4. Slide 4: 1Q17 Performance Overview

    1Q17 Performance Overview Financial Highlights Operational Highlights n Grew total revenue to Rmb 350.0 mn, n Grew total area committed by 7,270 sqm (net) +65.8% Y/Y to 68,313 sqm at quarter end, +84.8% Y/Y n Grew adjusted NOI to Rmb 179.4 mn, n Churn area fully re-committed +88.6% Y/Y n Commitment

  5. Slide 5: Consistent Track Record of Delivery

    Consistent Track Record of Delivery Total Net Revenue & Adjusted NOI (Rmb Mn) Total Area Committed & Area Utilized (Sqm) 400 Total Net Revenue 350.0 Total Area Committed Area Utilized 300 68,313 70,000 200 60,000 100 0 50,000 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 40,000 37,898 200 Adjusted NO

  6. Slide 6: Biggest Data Center Opportunity in the World

    Biggest Data Center Opportunity in the World Cloud Adoption in China Market Overview & Trends Cloud IaaS Revenues in China ($ Bn) n Data center market in China growing at over 7.8 25% per annum n Cloud and Internet platforms driving around 70% of incremental demand n CSPs looking to outsource their

  7. Slide 7: GDS is Best Positioned to Capture this Opportunity

    GDS is Best Positioned to Capture this Opportunity Total Area Committed by Customer Segment as at 31/03/17 Highlights FSI & Large Enterprises Cloud Service Providers n Significant new commitments from 3 of the leading Cloud service providers in China n Cloud now accounts for over 50% of our total 32

  8. Slide 8: Secured Resource Supply to Sustain Leadership

    Secured Resource Supply to Sustain Leadership Resource Development (Sqm) Highlights 61,092 10,668 19,387 91,147 5,000 n Acquisition in Shenzhen (SZ5) adds 10,000 sqm under construction, with Phase I of 5,000 sqm ready for service in 2H17 SZ5 Phase 2 n 35,055 sqm of area under construction at quarter

  9. Slide 9: Our Data Center Portfolio

    Our Data Center Portfolio Self-Built Data Centers in Tier 1 Markets SH1&2 BJ1 Beijing BJ2 Shanghai SH3&4 KS1 BJ3 Chengdu CD1 SZ1, SZ2, SZ3 Guangzhou Shenzhen GZ1 SZ4, SZ5 © GDS 2016 8

  10. Slide 10: Financial & Operating Review

    Financial & Operating Review Dan Newman, CFO © GDS 2016

  11. Slide 11: 1Q17 P&L Analysis

    1Q17 P&L Analysis Quarterly Financial Review 1Q17 Q/Q Rmb ‘000 1Q16 4Q16 1Q17 Y/Y Q/Q (3) (3) Pro Forma Pro Forma RMB RMB RMB % % RMB % Net Revenue Service Revenue 202,384 299,731 343,665 69.8% 14.7% 299,602 (0.0%) Equipment Sales 8,715 11,938 6,378 (26.8%) (46.6%) 6,378 (46.6%) Total Net Revenue 21

  12. Slide 12: Underlying Trends

    Underlying Trends Quarterly Financial Review Rmb ‘000 1Q16 4Q16 1Q17 Y/Y Q/Q Total Net Revenue 211,099 311,669 350,043 65.8% 12.3% n Pro Forma service revenue Less: Termination Fee 44,063 grew 48.0% Y/Y and stayed Less : Equipment Sales 8,715 11,938 6,378 (26.8%) (46.6%) Pro Forma Service Revenue 20

  13. Slide 13: Revenue & Area Utilized

    Revenue & Area Utilized Revenue (Rmb Mn) Area Utilized (Sqm) & MSR (Rmb / Sqm / Month) 37,082 37,898 Service Revenue Equipment Sales 34,369 32,152 6.4 23,957 11.9 44.1 Termination Fee 30.3 2.0 8.7 343.7 1Q16 2Q16 3Q16 4Q16 1Q17 299.6 299.7 Average MSR 266.9 234.0 202.4 2,913 2,675 (1) 2,797 2,708 2,

  14. Slide 14: Underlying Adjusted EBITDA & Margin

    Underlying Adjusted EBITDA & Margin Underlying Adjusted EBITDA & Margin 1Q17 Pro Forma Cost Breakdown & Operating Leverage (Rmb Mn) % of Pro Forma 26.7% 17.8% 26.4% 26.5% 27.1% Service Revenue Pro Forma Service Revenue 299.6 1Q17 4Q16 Rmb Mn 81.2 Utility Cost 71.2 23.8% 23.2% 79.3 70.6 Rent, Labour

  15. Slide 15: Capex & On-Going Investment

    Capex & On-Going Investment Capex Paid (Rmb Mn) (1) Capex & On-Going Investment Capex Breakdown (1) Rmb Mn Cost to Date Cost to Complete 386.9 380.0 Area In Service 3,025.9 266.6 (2) 283.3 Area Under Construction 497.3 1,837.8 263.6 213.3 Current Construction Program (3) Area Under Pre- RFS Date Con

  16. Slide 16: Financing Obligation & Liquidity

    Financing Obligation & Liquidity Debt & Cash Outstanding Loan Maturity Schedule as at 31/03/17 (Rmb Mn) Rmb Mn 31/12/15 31/12/16 31/03/17 1,415.5 Wo rking Capital & Project Loan Loan Convertible Bond Working Capital 309.8 239.8 262.1 Project Loan 876.9 1,698.8 2,032.3 1,034.9 663.8 Mezzanine Debt 19

  17. Slide 17: Contract Backlog Build-up

    Contract Backlog Build-up Total Area Committed & Area Utilized (Sqm) Highlights 7,270 816 30,415 n 30,415 sqm of contract backlog at the end of Churn 1Q17 23,961 Churn 17,112 sqm relates to Area In Service 13,303 sqm relates to Area Under Construction n Backlog delivery expected to accelerate in sec

  18. Slide 18: Questions & Answers

    Questions & Answers www.gds-services.com ir@gds-services.com © GDS 2016

  19. Slide 19: Appendix

    Appendix © GDS 2016

  20. Slide 20: Key Operating KPIs

    Key Operating KPIs Key Operating KPIs As at the end of: 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Area In Service (Sqm) 27,589 27,589 37,645 37,869 37,869 48,548 48,822 60,982 61,092 Area Under Construction (Sqm) 14,364 14,364 13,163 35,525 35,525 31,794 37,194 25,055 35,055 Area Committed (Sqm)

  21. Slide 21: Self-Developed Data Centers In Service

    Self-Developed Data Centers In Service As At 31/03/17 Shanghai Shenzhen Guangzhou Beijing Chengdu CD1 KS1 SH1 SH2 SH3 SZ1 SZ2 SZ3 GZ1 BJ1 Phase 1 & 2 Ready For Service 2H10 2H11 2H15 2H16 2H14 1H16 2H16 1H16 2H15 1H11 / 2H16 Type Purpose-Built Purpose-Built Purpose-Built Purpose-Built Converted Conv

  22. Slide 22: Self-Developed Data Centers Under Construction

    Self-Developed Data Centers Under Construction As At 31/03/17 Shanghai Shenzhen Beijing Chengdu SZ4 CD1 SH4 SZ5 BJ2 Phase 1 Phase 3 Ready For Service 2H17 1H17 2H17 2H17 1H17 Type Purpose-Built Converted Converted Converted Purpose-Built Tenure Leased Leased Leased Leased Owned Area Under Constructi

  23. Slide 23: Top 5 Customers

    Top 5 Customers Top 5 Customers in terms of Total Area Committed Number of End User % of Total Area Committed % of 1Q17 Revenue (1) Data Centers Internet / Cloud Service Provider 26.5% 8.0% 8 (2) Internet / Cloud Service Provider 24.4% 26.3% 6 Internet 8.4% 12.9% 1 Cloud Service Provider 4.8% 0% 2 I

  24. Slide 24: Shares Outstanding

    Shares Outstanding As At 31/03/17 Shares Outstanding as at 31/03/17 (1) Ordinary Shares from before IPO 217,987,922 Ordinary Shares Converted from Preferred Shares 349,087,677 Ordinary Shares Issued for Preferred Dividends 31,490,164 Ordinary Shares Issued in IPO (Including Greenshoe) 160,565,880 Or

  25. Slide 25: Historical Financial Results

    Historical Financial Results Condensed Consolidated Statement of Operations Amounts in thousands For the Three Months Ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 RMB RMB RMB RMB RMB RMB USD Net Revenue Service revenue 193,373 202,384 234,010 266,890 299,731 34

  26. Slide 26: Historical Financial Results

    Historical Financial Results Condensed Consolidated Balance Sheets As of Dec 31, As of Dec 31, As of Jun 30, As of Sep 30, As of Dec 31, Amounts in thousands As of Mar 31, 2017 2014 2015 2016 2016 2016 RMB RMB RMB RMB RMB RMB USD Cash 606,758 924,498 834,477 798,732 1,811,319 1,527,318 221,891 Accou

  27. Slide 27: Historical Financial Results

    Historical Financial Results Cash Flow Statement Six Months Amounts in thousands Year Ended Three Months Ended Year Ended Three Months Ended Ended Dec 31, 2014 Dec 31, 2015 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Dec 31, 2016 Mar 31, 2017 RMB RMB RMB RMB RMB RMB RMB USD Net cash provided by (used in)

  28. Slide 28: Reconciliation from Gross Profit to Adjusted NOI

    Reconciliation from Gross Profit to Adjusted NOI Adjusted NOI Amounts in thousands Three months ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 RMB RMB RMB RMB RMB RMB USD Gross profit 54,525 54,203 60,898 74,642 75,931 106,198 15,429 Depreciation and amortization

  29. Slide 29: Reconciliation from Net Loss to Adjusted EBITDA

    Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands For the Three Months Ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 RMB RMB RMB RMB RMB RMB USD Net loss (28,175) (38,778) (115,419) (52,576) (69,639) (44,305) (6,436) Net intere

GDS Holdings — Q1 2017 Earnings Presentation on 6ix