Investor Presentation May 2020
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Global. Connected. Sustainable. INVESTOR PRESENTATION MAY 2020 Digital Realty the trusted foundation | powering your digital ambitions Business Highlights 1 Digital Realty Overview Introduction 2 Introduction to Data Centers Data center 101 3 Global Platform Growing world-wide demand from a diversified customer base 4 Connected Campus Strategy Solving for the complete deployment; land and expand 5 Attractive Growth Prospects Organic growth combined with lease-up opportunity 6 Prudent Capital Allocation Disciplined investment criteria guided by Return on Invested Capital 7 Conservative Financial Strategy Committed to maintaining a flexible balance sheet 8 Recent Results First Quarter 2020 highlights DIGITAL REALTY | 2 Digital Realty Overview INTRODUCTION DIGITAL REALTY | 3 GLOBAL provider dedicated to the full customer spectrum from ENTERPRISE colocation to HYPERSCALE GLOBAL 275 ~145k CUSTOMER BASE DATA CENTERS (1) TOTAL CROSS CONNECTS 2,000+ 2,000+ Digital Realty Interxion ~80k ~55k ~10k CUSTOMERS CUSTOMERS Digital Realty Interxion Westin Exchange INTERCONNECTION COLOCATION SCALE HYPERSCALE EQUITY & ENTERPRISE VALUE TOP 10 PUBLICLY TRADED U.S. REIT INVESTMENT GRADE RATINGS EQUITY MARKET th LARGEST PUBLICLY BBB $38 Bn CAPITALIZATION 5 TRADED U.S. REIT (3) Baa2 ENTERPRISE ADDED TO THE Bn VALUE (2) 2016 $52 MAY S&P 500 INDEX BBB These credit ratings may not reflect the potential impact of risks relating to the structure or trading of the Company’s securities and are provided solely for informational purposes. Credit ratings are not recommendations to buy, sell or hold any security, and may be revised or withdrawn at any time by the issuing organization in its sole discretion. The Company does not undertake any obligation to maintain the ratings or to advise of any change in ratings. Each agency’s rating should be evaluated independently of any other agency’s rating. An explanation of the significance of the ratings may be obtained from each of the rating agencies. Note: Data as of March 31, 2020 for Digital Realty and Interxion, unless otherwise noted. 1) Includes consummation of the Interxion combination, Westin transaction and the sale of certain properties to Mapletree. Includes 40 data centers held as investments in unconsolidated joint ventures. 2) Total enterprise value calculated as the market value of common equity, plus liquidation value of preferred equity and total debt at balance sheet carrying value. 3) U.S. REITs within the RMZ. Ranked by market cap as of May 7, 2020. Source: Bank of America. DIGITAL REALTY | 4 Navigating the Future Sustainable Growth for Customers, Shareholders and Employees GLOBAL CONNECTED SUSTAINABLE DIGITAL REALTY | 5 Prioritizing Health and Safety amid Global Pandemic Maintaining Resiliency Employees and Vendors • Minimized on-site data center staffing and increased safety protocols, i.e. sanitation efforts, training • Coordination with suppliers to confirm their response plans and service continuity capacity • Consistent, robust communications cadence Customers • Increased communications with customers and partners re: screening efforts • Increased remote data center monitoring and management efforts to keep customer service strong • Equipped all data centers with sufficient supplies for full operations should remote operations become necessary Communities • $1M global philanthropic effort to help combat the COVID-19 pandemic • Disaster recovery assistance and community reinvestment programs • Committed to the health, safety and well-being of employees, customers, vendors, and communities DIGITAL REALTY | 6 Serving a Social Purpose Delivering Sustainable Growth for All Stakeholders ENVIRONMENTAL SOCIAL GOVERNANCE Enhanced Board Named 2020 EPA $1,000,000 philanthropic effort diversity with the ENERGY STAR® put forth to help combat the addition of three new Partner of the Year 2020 COVID-19 pandemic Directors Issued €1.4 Billion Euro-Denominated Employee gift-matching program Provided shareholders Green Bonds in and paid time off for volunteering 2019 with proxy access January 2020 Received 2019 NAREIT Provided shareholders Disaster recovery assistance and with the ability to Leader in the Light community reinvestment Award for Data 2018 propose amendments Centers programs to the bylaws Partnered with Citi Committed to enhancing the well- Minimum stock to Supply being of our stockholders, ownership requirements Renewable Energy customers, employees, vendors, 2015 instituted for directors for Texas Portfolio and communities and management DIGITAL REALTY | 7 OUR STRATEGY Become the only GLOBAL provider dedicated to the full customer spectrum from ENTERPRISE to HYPERSCALE WHY WHY WHY GLOBAL? ENTERPRISE? HYPERSCALE? . Rapidly growing globalization of . Largest addressable market . Fastest growing addressable market businesses and consumers (1) . Robust value-add customer opportunity . Long-term future proofing of business . Highest growth markets and further differentiates our value proposition . Leverages our core competencies . Leverages our core competencies . Leverages our core competencies 1) 2019 Forbes Global 2000; FactSet; D&B Avention; Gartner 2019 Worldwide IT Spend Forecast; Gartner Analyst Inquiry Calls. DIGITAL REALTY | 8 Expanding Global Platform Supporting Customer Growth Manchester| 38k NRSF Stockholm| Dublin| 12MW 22MW Copenhagen| London| 9MW 108MW Brussels| Amsterdam| 9MW Paris| 99MW 35MW Dusseldorf| Marseille| 4MW 15MW Frankfurt| 86MW Vienna| Madrid| Geneva| Zurich| 26MW 12MW 59k NRSF 5MW Strategic Combination with Interxion Enhanced Presence in Major European Metro Areas ~440 MW 103 11 15 Equipped Capacity Data Centers Countries Metro Areas DIGITAL REALTY | 9 Combining Two Leading Platforms in EMEA Further Solidifying Global Connection with Customers Customers Communities of Interest Growth Collaborated on customer proposals Assessing fiber connectivity between Leveraging investment grade balance for Paris, Amsterdam, Brussels, and a data centers in overlapping metros sheet to examine expansion joint multi-location proposal across 6 opportunities metros globally DIGITAL REALTY | 10 Digital Transformation Driving Data Center Demand PlatformDIGITAL Poised to Capitalize Digital Transformation Driving Data Center Demand Global Data Center Leader (3) 1.9x Leaders 66 Equinix Digital Realty NTT 34 Interxion x CoreSite Cyxtera 27 8 Major Rackspace CyrusOne (1) Players All Countries CLOUD POINTS OF CAPABILITIES Telehouse (2) (2) Traditional Interactions SERVICES PRESENCE Contenders Digitally-enabled interactions Importance of digitally-enabled Average # Average # #X interactions vs traditional Enterprise Use Enterprise Use Participants STRATEGIES 1) McKinsey B2B Decision Maker Pulse Survey April 2020 (see Page 23). 2) Intricately Cloud Market Share Report 2019; Intricately State of Datacenter, Cloud and Applications Market Report 2019. 3) IDC MarketSpace: Worldwide Colocation & Interconnection Services 2019-2020 Vendor Assessment. DIGITAL REALTY | 11 Diverse Set of Customers Solving Multiple Digital Transformation Infrastructure Use Cases Across Multi-location Deployments* RATIONALIZE REWIRE THE IMPLEMENT OPTIMIZE DATA INTERCONNECT THE PORTFOLIO NETWORK HYBRID IT EXCHANGE GLOBAL CONTROLS WORKFLOWS . Lower data center . Reduce latency . Reduce . Increase data . Accelerate SDN costs . Increase vulnerability performance rollout . Faster time to throughput . Improve security . Maintain data . Enable Digital deploy . Performant multi- posture compliance Ecosystems . Increase flexibility cloud . Reduce complexity . Solve data gravity . Secure B2B workflow Analyzing customer … we find consistent VALUE OUTCOMES are achieved … IT deployments * 2019 Digital Realty Customer Deployment Benchmarking by CTO Organization DIGITAL REALTY | 12 Three Steps to Accelerate Global Customer Adoption as They Solve Digital Transformation of Their Infrastructure Architecture Platform Roadmap Step by step strategy to deploy A global datacenter platform Platform roadmap organized a decentralized IT architecture experience. Productizing fit for around four c’s – coverage, enabling distributed workflows purpose footprints of space, connectivity, capacity and at centers of data exchange. power, cross-connect and control. Underpinned by R&D management controls. innovation funnel & sustainability commitment. DIGITAL REALTY | 13 PlatformDIGITAL™ Customer Use Case Tailored Solutions 4 1 2 3 NETWORK HUB: consolidates and localizes traffic into DATA HUB: localizes data aggregation, staging, analytics, streaming and 1 ingress/egress points to optimize network performance and cost 3 data management to optimize data exchange and maintain data compliance CONTROL HUB: hosts adjacent Security and IT controls to 2 improve security posture and IT operations SX FABRIC: adds SDN overlay to service chain multi-cloud and B2B 4 application ecosystems. Connects hubs across metros and regions to enable secure and performant distributed workflows DIGITAL REALTY | 14 PlatformDIGITAL™ Robust Recognition by Customers & Industry Analysts Global Data Center Leader Market Report (1) “PlatformDIGITAL puts DLR in a position as a much more strategic partner to enterprises” Eric Hanselman Chief Analyst Research Report “Deploying Data Hubs will be an essential strategy to enterprise IT” Kelly Morgan VP, Datacenter Services & Infrastructure Solution Comparison for Colocation Provider “DLR Ranked Second to EQIX” Matthew Brisse VP, Technology & Communications Technical Note- Cloud & Edge Infrastructure “Deploy routing and SD-WAN at DLR” Padraig