Ntt Inc · TSE:9432
Ntt — Investor Day (2023)
37 slides from Ntt's investor day presentation, 2023
Slide 1: Growth Strategy of NTT Global Data Centers
Growth Strategy of NTT Global Data Centers IR DAY 2023
Slide 2: Forward-looking statements disclaimer
The forward-looking statements and projected figures concerning the future performance of NTT and its subsidiaries and affiliates contained or referred to herein are based on a series of assumptions, projections, estimates, judgments and beliefs of the management of NTT in light of information curre
Slide 3: Data Center Briefing Team
Data Center Briefing Team Ken Katsuyama Doug Adams Will Innes Senior Vice President, CEO & President, NTT Global Senior Vice President and Global Head of Global Business, NTT Data Centers and Submarine Investment Officer, NTT Global Data Cable, NTT Ltd. Centers, NTT Ltd. Copyright NTT CORPORATION 20
Slide 4: Data Center Business as a Growth Engine
Data Center Business as a Growth Engine NTT has committed to invest at least JPY1.5 trillion into data centers until the end of FY2027 as one of the pillars of our new medium-term strategy, aiming to double EBITDA during this period by leveraging our proven operational and technological capabilities
Slide 5: Global Data Centers Presentation Overview
Global Data Centers Presentation Overview The data center business continues to grow as a highly stable and profitable offering with trends towards decreasing vacancies and increased pricing. NTT’s Global Data Center Business is rapidly expanding to meet client requirements, resulting in significant
Slide 6: Contents
Contents 01 02 03 04 05 Priorities GDC Existing Global Ranking Growth Plan Expansion Footprint and Positioning Strategy 06 07 08 09 10 Sustainability DC Market Competitive Financial Capital Tailwinds Advantage Highlights Strategy Copyright NTT CORPORATION 2023 5
Slide 7: Strategic Priorities
Strategic Priorities
Slide 8: NTT GDC Priorities
NTT GDC Priorities Accelerate Revenue GDC Transformation and Increase Profit • True portfolio management • Significant pre-leasing • Third-party capital investment • Full-stack NTT solutions • Sustainable client • Drive economies of scale relationships and UX GTM For Generative AI Employee Engagemen
Slide 9: GDC Existing Footprint
GDC Existing Footprint
Slide 10: NTT Global Data Centers Footprint
NTT Global Data Centers Footprint 98 Sites, 148 buildings 1,209 MW IT Power +772 MW (Launched) (Planned) APAC EMEA Japan Tokyo | Osaka | Kyoto Americas UK | London Germany Frankfurt | Munich China Hong Kong, Shanghai US Malaysia | Cyberjaya Berlin | Hamburg | Bonn Singapore Hillsboro | Sacramento Ne
Slide 11: Global Ranking and Positioning
Global Ranking and Positioning
Slide 12: NTT's Position In The Global Market
NTT’s Position In The Global Market NTT GDC is currently ranked as 3rd largest data center operator in the market Global IDC MarketScape Vendor Assessment 2 12% 9% 6% 3% 3% NTT is named as a “Leader” due to it broad service offering and global reach 2. IDC MarketScape: Worldwide Datacenter Colocatio
Slide 13: Growth Plan
Growth Plan
Slide 14: Global Data Centers: Investing globally to meet local needs
Global Data Centers: Investing globally to meet local needs NTT has significant capital to transform the data center landscape globally. FY2023 FY2024 FY2025 FY2026 As of September 2023, NTT Ltd. group and NTT Communications group including JV with 3rd party. The above plans are subject to change. C
Slide 15: Expansion Strategy
Expansion Strategy
Slide 16: Expansion Strategy
Expansion Strategy Remain top global data center operator, to provide exceptional value to our customers, drive technology initiatives and maintain leadership with the most influential companies in the world Growth Strategy: organic expansion, land acquisition, and explore M&A to drive GDC platform
Slide 17: Sustainability
Sustainability
Slide 18: Sustainability: Beyond Renewable Energy
Sustainability: Beyond Renewable Energy NTT is committed to sustainability • Established Green Bond to fund sustainability projects - $7.8B USD since Oct ‘21 • Commitment of 1 million hours of annual employee volunteering • 100% renewable energy by 2030 (reached over 1 million MWh already) Baseline
Slide 19: DC Market Tailwinds
DC Market Tailwinds
Slide 20: Data Center GTM - Demand
Data Center GTM - Demand Data Center market is expected to grow from $50.8bn to $136.8bn in 2028 Global DC Colocation Market Size ($B) $160.0 Total $136.8B Global data center demand is growing $140.0 significantly (13.5% through 2028) $6.1 $120.0 $4.8 $3.8 $51.8 $100.0 $3.0 $46.3 $41.4 This growth i
Slide 21: Top Data Center Market Conditions
Top Data Center Market Conditions Key data center markets are showing high demand and rising lease rates Northern Virginia Frankfurt Tokyo Vacancy Vacancy Vacancy 0.88% 4.8% 8% (↘ 17% YoY) (↘ 44% YoY) (↘ 33% YoY) Lease Rates1 Lease Rates1 Lease Rates1 $145 $150 $185 (↗ 32% YoY) (↗ 23% YoY) (↗ 21% Yo
Slide 22: Data Center Demand: Generative AI Impact
Data Center Demand: Generative AI Impact Demand from Generative AI is expected to increase current projections by over 20% Global Generative AI Growth CAGR growth for Generative AI data center demand expected from 17% – 44%. (NTT Consensus 20%) 20% Ave Data center market size with AI expected to be
Slide 23: Data Center Market Driven by Generative AI
Data Center Market Driven by Generative AI Generative AI is estimated to be game changer for data center demand in the coming years NTT is poised to see success given our clients, our product and commitments AI Computing Requirements / Characteristics What NTT is providing our AI clients AI Requires
Slide 24: Competitive Advantage and Differentiators
Competitive Advantage and Differentiators
Slide 25: Why Clients Choose NTT GDC
Why Clients Choose NTT GDC Clients trust us because we provide premium solutions with a proven track record of building and operating technologically advanced, high-quality data centers Key Client Flexible data Global Platform Sustainability is relationships driving center solutions with aggressive
Slide 26: Global Collaboration Case Studies
Global Collaboration Case Studies RBL Bank Fortune 100 Insurance PhonePe Commercial Bank with a Network Top tier digital payment app in the of 250 branches Group Indian market • A multi-location DC landscape, • Multi-market DC solutions • Deployment of Liquid Immersion comprising: primary, near-DR (
Slide 27: NTT's Major Cable Network
NTT’s Major Cable Network Oregon California Tokyo Osaka Hong Kong Mumbai Chennai Malaysia Legend APG ASE PC-1 JUPITER Singapore MIST APRICOT Jakarta JUNO In Operation Under Construction 26 Copyright NTT CORPORATION 2023
Slide 28: NTT has established a strong eco-system in India
NTT has established a strong eco-system in India NTT has the largest market share in India and has capitalized on its market leading position delivering sustained growth underpinned by its broad customer base Data Center Location in Mumbai Area Mumbai Campus Expansion • Hyperscalers tend to have DCs
Slide 29: JKT2 Data Center – Affiliate Synergies in Action
JKT2 Data Center – Affiliate Synergies in Action NTT provides a wide range of value-add & managed services 1 Enterprise Clients: >50 enterprise clients customers including NTT Data partnered solutions 2 Hyperscale Clients & Cloud Access: Private connect with multiple cloud providers 3 Managed Servic
Slide 30: Financial Snapshot
Financial Snapshot
Slide 31: NTT GDC Financial Snapshot
NTT GDC Financial Snapshot Sustained Investment in data center expansion continues to yield above market growth Global Financials ($M) *1 NTT has delivered above market revenue growth at a 26% CAGR 2,797 2,014 Uptick in capex as NTT seeks to capture insatiable customer demand Once-off 1,250 item 1,1
Slide 32: Bookings and Capacity Evolution
Bookings and Capacity Evolution Leasing momentum continues with bookings significantly outstripping capacity Total Bookings vs Installed Capacity (MW) *1 Installed Capacity has grown at a 23% CAGR due to sustained 1,210 investment program 916 Total Booked Capacity growth has 358 outpaced capacity gr
Slide 33: Customer Mix and Revenue Distribution
Customer Mix and Revenue Distribution Balanced customer base and broad geographic exposure underpin diversified revenue base Global Revenue Share Global Revenue Share by Service by Region NTT GDC serves over 1,700 (FY2022) *1*2 (FY2022) *1*2 customers across its global portfolio 8% Balanced mix of h
Slide 34: Capital Strategy
Capital Strategy
Slide 35: Capital Recycling and Funding Strategy
Capital Recycling and Funding Strategy NTT GDC to bolster and diversify capital structure to deliver on growth prospects Commitment to Investment NTT Balance Sheet Joint Ventures Development JV’s Long Long Term Term Capital Capital Recycling Recycling • NTT has committed JPY 1.5 • NTT continues to e
Slide 36: Reduction of Financing Costs
Reduction of Financing Costs NTT continues to develop funding methods to reduce financing costs amid a rising interest rate environment Illustration of Yen-Carry Trading Conversion from Yen to Foreign Currencies Japan • Procure funding in low-interest Domestic Procured in Yen Companies yen and inves
Slide 37: ROIC and Value Creation
ROIC and Value Creation • The ROIC of each data center will steadily improve in the long term • EV/EBITDA multiple for public data center peer group is currently around 20x ROIC*1 Forecast of Sample DCs Historical Multiple (EV/EBITDA) Ratio of accumulated depreciation to costs in PPE*2 Accumulated D