Gds Holdings Ltd. · HKEX:9698
Gds — Q3 2017 Earnings Presentation
35 slides from Gds's earnings presentation, Nov 9, 2017
Slide 1: 3Q17 Earnings Call
3Q17 Earnings Call 9 November 2017 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: Strategic & Performance Highlights
Strategic & Performance Highlights William Huang, Chairman & CEO © GDS 2016
Slide 4: 3Q17 Highlights
3Q17 HIGHLIGHTS Revenue Growth • Service revenue grew by 58.5% y/y and 27.6% q/q • Total area utilized increased by 47.2% y/y and 19.1% q/q Operating Leverage • Adjusted EBITDA grew by 71.4% y/y and 33.8% q/q • Adjusted EBITDA margin increased to 31.5% vs. 26.2% in 3Q16 Sales Momentum • Rmb 202 mn (
Slide 5: Financial Highlights
Financial Highlights Service Revenue & Adjusted EBITDA (Rmb Mn) Highlights 423.0 n Service revenue grew by over 58% y/y n Total area utilized increased by over 47% y/y to 50,579 sqm 266.9 n Record addition of 8,109 sqm in 3Q17 n Adjusted EBITDA grew by over 71% y/y 133.7 n Adjusted EBITDA margin inc
Slide 6: Continued Sales Growth Momentum
Continued Sales Growth Momentum Total Area Committed (Sqm) Highlights n Total area committed increased by 6,309 sqm 82,850 (net) to 82,850 sqm, +41.3% Y/Y n Bookings in 3Q17 worth over $30 mn in terms of 58,627 annual recurring revenue n Over $100 mn achieved in 1Q17 - 3Q17 n ASP remains stable n Su
Slide 7: Serving Customers that Matter
Serving Customers that Matter Total Area Committed by Customer Segment Total Area Committed by Top 2 Customers (Sqm) FSI & Large Enterprises Cloud Service Providers 43,951 24.6% 496 Customers +9% Q/Q 58.8% 16.6% Large Internet 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 © GDS 2016 6
Slide 8: William Huang, The Computing Conference 2017
William Huang The Computing Conference 2017 Hosted by Alibaba © GDS 2016 7
Slide 9: Secured Resource Supply to Sustain Leadership
Secured Resource Supply to Sustain Leadership Resource Development (Sqm) Highlights 71,577 6,255 (1) 77,832 23,340 (2) 101,172 19,513 n Brought BJ2 project into service n Area in service increased by 6,255 sqm n Acquired GZ2 project in same campus as GZ1 n IT capacity of 5,375 sqm SZ5 Phase 2 SH5 Ph
Slide 10: Established Strategic Relationship with CyrusOne
Established Strategic Relationship with CyrusOne Investment Highlights Strategic Rationale n CyrusOne – market leader in the US Enhanced Ability to Serve Customers n Operates over 40 data centers totaling over Well-positioned to meet resource needs in US and China markets, creating value for both cu
Slide 11: Financial & Operating Review
Financial & Operating Review Dan Newman, CFO © GDS 2016
Slide 12: 3Q17 P&L Analysis
3Q17 P&L Analysis Quarterly Financial Review Rmb ‘000 (unless indicated) 3Q16 2Q17 3Q17 Y/Y Q/Q Rmb Rmb Rmb % % Net Revenue Service Revenue 266,890 331,490 423,042 58.5% 27.6% Equipment Sales 30,266 4,724 1,391 (95.4%) (70.6%) Total Net Revenue 297,156 336,214 424,433 42.8% 26.2% Cost of Revenue (22
Slide 13: Underlying Trends
Underlying Trends Quarterly Financial Review Rmb ‘000 (unless indicated) 3Q16 2Q17 3Q17 Y/Y Q/Q Total Net Revenue 297,156 336,214 424,433 42.8% 26.2% n Service revenue grew Less : Equipment Sales 30,266 4,724 1,391 (95.4%) (70.6%) Service Revenue 266,890 331,490 423,042 58.5% 27.6% 27.6% Q/Q n Under
Slide 14: Revenue & Area Utilized
Revenue & Area Utilized Revenue (Rmb Mn) Area Utilized (Sqm) & MSR (Rmb / Sqm / Month) 50,579 Service Revenue Equipment Sales 1 42,470 1.4 37,082 37,898 34,369 6.4 4.7 30.3 11.9 44.1 Termination Fee 3Q16 4Q16 1Q17 2Q17 3Q17 423.0 331.5 Average MSR 3,031 299.7 299.6 266.9 2,797 2,750 (1) 2,675 2,708
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% 26.4% 26.5% 27.1%(1) 30.3% 31.9% 47.6% Rmb Mn Rmb Mn 201.5 134.9 125.2 178.1 155.5 139.9 44.1 100.4 Termination 44.1 126.9 Fee Termination 79.3 Fee 70.6 134.0 81.2 3Q16 4Q
Slide 16: Total Data Center Portfolio Breakdown
Total Data Center Portfolio Breakdown Breakdown by Development Stage Area In Service Area In Service Area Under - Stabilized - Ramping-up Construction Area Under Area In Service - Construction Stabilized(1) 32.5% 29.7% Total Area (Sqm) 34,232 43,600 37,478 Area In Service - Commitment Rate 96.9% 84.
Slide 17: Cost Breakdown & Operating Leverage
Cost Breakdown & Operating Leverage 3Q17 Cost Breakdown & Operating Leverage (Rmb Mn) % of Service Revenue Service Revenue 423.0 2Q17 3Q17 Utility Cost 97.7 23.5% 23.1% Rent, Labour & Other (1) 123.8 29.6% 29.3% Underlying Adjusted NOI 201.5 46.9% 47.6% SG&A (2) 67.5 16.9% 15.9% Other Income (Expens
Slide 18: Capex & On-Going Investment
Capex & On-Going Investment Capex Paid & Capex Incurred (Rmb Mn) Current Construction Program Capex Paid (1) 443.7 405.7 Area Under Pre- 386.9 380.0 RFS Date Construction Commitment (Sqm) Rate (%) 283.3 SZ4 Phase 1 4Q17 5,268 19.2% SH4 4Q17 8,437 53.3% 3Q16 4Q16 1Q17 2Q17 3Q17 BJ3 4Q17 4,260 100% SZ
Slide 19: Financing Obligations & Liquidity
Financing Obligations & Liquidity Debt & Cash Outstanding Loan Maturity Schedule as at 30/09/17 (Rmb Mn) 31/12/16 30/06/17 30/09/17 / LQA Adjusted Rmb Mn Rmb Mn Rmb Mn EBITDA Wo rking Capital & Project Loan Loan Working Capital 239.8 329.6 321.5 0.6x 1,442.0 Convertible Bond Project Loan 1,698.8 2,6
Slide 20: Contract Backlog Build-up
Contract Backlog Build-up Backlog Build-up for 3Q17 (Sqm) Total Area Committed & Area Utilized (Sqm) Total Area Committed Area Utilized 82,850 6,309 8,109 34,071 32,271 32,271 50,579 Backlog at 30/06/17 Net Additional Total Area Net Additional Area Backlog at 30/09/17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3
Slide 21: Updated Business Outlook
Updated Business Outlook FY17 Guidance FY17 FY17 Implied Y/Y Rmb Mn FY16 Previous Guidance Revised Guidance - Revised Service Revenue 1,003.0 1,475 – 1,575 1,525 – 1,575 +52% – 57% Adjusted EBITDA 270.5 465 – 495 480 – 495 +77% – 83% Capex 1,147.1 ~1,800 ~2,300 ~ +101% © 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 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: 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Area In Service (Sqm) 37,869 37,869 48,548 48,822 60,982 61,092 71,577 77,832 Area Under Construction (Sqm) 35,525 35,525 31,794 37,194 25,055 35,055 38,028 37,478 Area Committed (Sqm) 33,140 33,629 44,06
Slide 27: Self-Developed Data Centers In Service
Self-Developed Data Centers In Service As At 30/09/17 Shanghai Shenzhen Guangzhou Beijing Chengdu KS1 SH1 SH2 SH3 SZ1 SZ2 SZ3 SZ5 Phase 1 GZ1 BJ1 BJ2 CD1 Ready For Service 2H10 2H11 2H15 2H16 2H14 1H16 2H16 1H17 1H16 2H15 2H17 1H17 Type Purpose-Built Purpose-Built Purpose-Built Purpose-Built Convert
Slide 28: Self-Developed Data Centers Under Construction
Self-Developed Data Centers Under Construction As At 30/09/17 Shanghai Shenzhen Beijing Chengdu SH5 SZ4 SZ5 CD2 SH4 SH6 BJ3 Phase 1 Phase 1 Phase 2 Phase 1 Ready For Service 2H17 1H18 2H18 2H17 1H18 2H17 2H18 Type Purpose-Built Converted Purpose-Built Converted Converted Converted Purpose-Built Tenu
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 3Q17 Revenue Data Centers Internet / Cloud Service Provider 30.7% 27.9% 8 Internet / Cloud Service Provider 22.4% 12.1% 8 (1) Internet 6.9% 7.2% 1 Cloud Service Provider 4.6% 2.7% 2 Int
Slide 30: Shares Outstanding
Shares Outstanding As At 30/09/17 Shares Outstanding as at 30/09/17(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 Ord
Slide 31: Historical Financial Results – Statements of Operations
Historical Financial Results Condensed Consolidated Statements of Operations Amounts in thousands Three Months Ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 RMB RMB RMB RMB RMB RMB RMB RMB USD Net Revenue Service revenue 193,373 202,384
Slide 32: Historical Financial Results – Balance Sheets
Historical Financial Results Condensed Consolidated Balance Sheets Dec 31, Dec 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Amounts in thousands. As of Sep 30, 2017 2014 2015 2016 2016 2016 2017 2017 RMB RMB RMB RMB RMB RMB RMB RMB USD Cash 606,758 924,498 834,477 798,732 1,811,319 1,527,318 1,466,01
Slide 33: Historical Financial Results – Statements of Cash Flows
Historical Financial Results Condensed Consolidated Statements of Cash Flows Six Months Amounts in thousands Year Ended Three Months Ended Ended Dec 31, 2014 Dec 31, 2015 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 RMB RMB RMB RMB RMB RMB RMB RMB USD Net cash provid
Slide 34: 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 Jun 30, 2017 Sep 30, 2017 RMB RMB RMB RMB RMB RMB RMB RMB USD Gross profit 54,525 54,203 60,898 74,642 75,931 106,198 81
Slide 35: Reconciliation from Net Loss to Adjusted EBITDA
Reconciliation from Net Loss to Adjusted EBITDA Adjusted EBITDA Amounts in thousands Three Months Ended Dec 31, 2015 Mar 31, 2016 Jun 30, 2016 Sep 30, 2016 Dec 31, 2016 Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 RMB RMB RMB RMB RMB RMB RMB RMB USD Net loss (28,175) (38,778) (115,419) (52,576) (69,639) (