Digitalbridge Group, Inc. · NYSE:DBRG
Digitalbridge — Colony Capital — Q3 2020 Earnings Presentation
29 slides from Digitalbridge's earnings presentation, Nov 6, 2020
Slide 1: Third Quarter 2020 Earnings Presentation
THIRD QUARTER 2020 EARNINGS PRESENTATION November 6, 2020 1
Slide 2: Disclaimer
Disclaimer This presentation may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that ar
Slide 3: Agenda
Agenda # Section 1 Business Update 2 3Q20 Financial Results 3 Executing The Digital Playbook 4 Q&A 3 3
Slide 4: Business Update
ColonyCapital Business Update
Slide 5: Digital Transformation
Digital Transformation Executing a strategic plan to rotate the balance sheet and redeploy capital into digital infrastructure Where We Were Where We Are Today Where We’re Going Legacy Colony Transitioning into Digital Digital Infrastructure Diversified REIT managing industrial, healthcare and hospi
Slide 6: Continuing Progress On Rotation: Key 3Q Highlights
Continuing Progress On Rotation Key 3Q Highlights Demonstrates Ability to Deliver The Digital Transformation Landmark sale of Hospitality Business DataBank Acquisition of zColo INVEST IN DIGITAL . $2.8B transaction value . $1.4B acquisition led by Colony Capital . Reduces consolidated debt by $2.7B
Slide 7: Hospitality Sale Simplifies Business Profile
Hospitality Sale Simplifies Business Profile Key Milestone in Digital Transformation Significant Decrease in Debt and Leverage Ratio(1) TOTAL DEBT (CLNY Share) Agreement to sell hospitality portfolios in $2.8B transaction 67% . $67.5M of gross consolidated proceeds to CLNY Debt/Assets (1) . Represen
Slide 8: DataBank + zColo: Transformative Acquisition
DataBank + zColo: Transformative Acquisition zColo is Highly Complementary to the DataBank Platform Scaled Pro Forma Footprint . DataBank emerges as a leading U.S. EDGE colocation operator for hyperscale, Pro Forma technology and content customers Combined . zColo adds a diverse mix of strategically
Slide 9: CLNY 3Q20: Promises Made, Promises Kept
CLNY 3Q20: Promises Made, Promises Kept Finalized key corporate initiatives and continued to deliver on digital transformation Finalized Key Corporate Investing in High-Quality Harvest Legacy – Delivering on Initiatives: De-lever Digital Assets Streamline the Organization Core Digital Growth . Paid
Slide 10: 3Q20 Financial Results
ColonyCapital 3Q20 Financial Results
Slide 11: 3Q20 Summary Results
3Q20 Summary Results ($ millions except per share & AUM) 3Q19 2Q20 3Q20 Q/Q% Total Company Consolidated Revenues $359.0 $286.7 $316.7 +10% Core FFO (ex Gains/Loss) $106.0 ($19.3) $4.8 Nm per share $0.20 ($0.04) $0.01 Net Income (CLNY Shareholder) ($555.0) ($2,042.8) ($205.8) Nm per share ($1.16) ($4
Slide 12: Expanding Digital Disclosures
Expanding Digital Disclosures Prior Segmentation TRANSFORMATION New Segmentation As we continue to 1 Digital Investment Management Expanded streamline and simplify Digital 1 Digital Operating Disclosure 2 our businesses and 3 Digital Other further the Digital transformation, we are also streamlining
Slide 13: 3Q20 – Return to Positive Core FFO
3Q20 – Return to Positive Core FFO Continued Execution of Strategic Plan Driving Q/Q Improvements While Advancing an All-Digital Future +$16M $4.8M +$3M +$2M +$3M ($19.3M) 2Q20 Digital Acquisitions and G&A Reduction Lower Interest Expense Improved Legacy 3Q20 Growth . Acquisition of Vantage . Reduct
Slide 14: Digital Earnings Summary
Digital Earnings Summary Core Digital Revenues(1) Consolidated Digital FRE / Adjusted EBITDA(1) ($ in millions) ($ in millions) Digital Operating Digital IM Digital Operating Digital FRE Combined Margin $118.7 $54.5 $20.1 $8.9 Q/Q Q/Q $62.7 $25.9 $20.7 $98.6 $9.3 $45.6 46% $10.1 41% $14.5 $42.0 $$16
Slide 15: Progress Towards 2023 Targets
Progress Towards 2023 Targets Investment Management Digital Fee Revenues1 Digital IM FRE1 20-30% 30-40% $110M Digital IM revenue and FRE is $200M ANNUAL GROWTH ANNUAL GROWTH anticipated to grow rapidly as Colony $80M $150M RANGE expands the magnitude and scope of its RANGE investment products Invest
Slide 16: Rapid Expansion of Digital AUM and FEEUM
Rapid Expansion of Digital AUM and FEEUM Digital - Assets Under Management (AUM) Fee Earning Equity Under Management (FEEUM) 55% 50% 51% Digital as % of Total Company AUM 47% Digital as % of Total Company FEEUM 48% 49% 43% 42% 35% 32% $25.4B $23.3B $8.6B $9.1B $20.6B $21.6B $7.7B $7.7B $6.8B $13.5B
Slide 17: Investment Management FEEUM Growth
Investment Management FEEUM Growth 33% growth in digital FEEUM in first 10 months of 2020…far exceeding our 15% guidance for the year High Quality Relationships and Fees Exceeding Expectations . Leveraging long-standing relationships built on success . Zayo (1Q20): Landmark $14.3B take-private added
Slide 18: Extending Maturities, Maximizing Liquidity
Extending Maturities, Maximizing Liquidity Managing Corporate Liabilities Significant Liquidity for Digital Transformation . No corporate debt maturities until 2023(1) Year end liquidity forecasted to increase from a range of $625-$725M to $650-$750M on . 3.8 years of weighted average maturity(1) fa
Slide 19: Executing The Digital Playbook
Executing The Digital Playbook 3 Colony Grows At The Edge 19
Slide 20: The Emerging Edge Opportunity
The Emerging Edge Opportunity Exponential Growth in New & Emerging Use Cases… …Pushes Demand Back to The EDGE… ADOPTION SCALE AI/Big Data IOT COST EFFICIENCY AR/VR The next users of cloud-scale compute are machines, not people… Secular use cases enabled by 5G set CLOUD to takeoff 1940s-1960s 1960s-1
Slide 21: DataBank + zColo Value Creation
DataBank + zColo Value Creation zColo acquisition is highly accretive to the DataBank investment zColo Transaction Overview zColo’s Accretive Impact Peer Strong collocation . Purchase Price: $1.4B EBITDA leasing & new Multiple(1) DataBank greenfield locations . Equity Investment of $720M Acq. EBITDA
Slide 22: A History of Digital Colony Value Add
A History of Digital Colony Value Add Since acquisition in 2016, DataBank has transformed from a regional midwestern business to a scaled national data center operator, benefiting from Digital Colony’s alpha creation strategies . Digital Colony Operating Partner, Raul Martynek, appointed CEO of Data
Slide 23: DataBank Executing On Converged Networks Strategy
DataBank Executing On Converged Networks Strategic investments enable DataBank customers access to Edge connectivity and the entire Colony digital ecosystem From a scaled national footprint with onramps …to the “far Edge” with modular data centers at to global internet traffic… the foot of cell towe
Slide 24: Continuing to Deliver on Our Commitments
Continuing to Deliver on Our Commitments Commitment YTD Highlights Future Paid down 2021 converts, issued $300M Address Near-Term Corporate Debt of new 2025 converts. Amended revolver to COMPLETED Maturities and Enhance Liquidity clear Path-to-Digital Another significant balance sheet Commit Signifi
Slide 25: Q&A Session
ya ColonyCapital Li ies Es A awe ill 4 Q&A Session — = - lS
Slide 26: Digital Colony Universe
Digital Colony Universe Our companies operate and manage ~350,000 sites, >140,000 route miles of dense metro fiber, >40,000 small cell nodes and >95 data centers globally ( ) EUROPE 2016 2016 2013 2014 2015 2017 2018 2018 2019 2019 2019 2020 2020 2020 2020 /2017 /2020 ~32,300 13 2 operating (3) ~5,0
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Total CLNY for the Three Months Ended Core Digital Segments(7) for the Three Months Ended Hospitality for the Three Months Ended Core Funds from Operations (in thousands, except per share) September 30, 2020 June 30, 2020 September 30, 2019 September 30, 2020 June 30, 2020 S
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Three Months Ended Three Months Ended (In thousands) September 30, 2020 June 30, 2020 September 30, 2019 (In thousands) September 30, 2020 June 30, 2020 CLNY Share of Consolidated Revenues Digital Operating Adjusted EBITDA Determined as Follows Total Revenues $316,677 $286,7
Slide 29: Important Note Regarding Non-GAAP Financial Measures
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 utilized