Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q4 2019 Earnings Presentation
16 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Feb 13, 2020
Slide 1: Q4 2019 Earnings Call
Q4 2019 Earnings Call February 13, 2020
Slide 2: Forward Looking Statements
2 Forward Looking Statement Forward Looking Statements Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and i
Slide 3: Successful Execution of Strategy
3 Successful Execution of Strategy • Accelerated total organic revenue growth • Increased scale to drive profitability and margin expansion • Revenue mix shift to faster-growing businesses • Grow and support deep and long-lasting customer relationships; 95% of Fortune 1000 • Invest in Innovation to
Slide 4: Project Summit – Key Goals
4 Project Summit – Key Goals Simplified Global Streamlined Managerial Enhancing Customer Structure Structure for the Future Experience United RIM operations under one leader – Consolidated the number of layers and • Aligning global and regional customer- Ernie Cloutier reporting levels facing re
Slide 5: Project Summit – Expected Financial Impact
5 Project Summit – Expected Financial Impact - Annual Adjusted EBITDA benefits of $200M by 2022 - $80M Adjusted EBITDA benefit in 2020 Financial Impact - $50M annualized benefit - $30M in-year benefit in 2H 2020 - ~$240M over next two years, inclusive of ~$50M charge incurred Total Cost to Implement
Slide 6: Q4 Performance
6 Q4 Performance Healthy organic Storage rental revenue growth • Total organic Storage rental revenue growth of 2.5% • Total organic Service revenue declined 0.7%, impacted by paper prices (organic Service up 2.9% ex. paper) • Volume continues to be steady, consistent with expectations Continue to e
Slide 7: Durable Global Storage Portfolio
7 Durable Global Storage Portfolio Worldwide Volume 700,000 680,000 660,000 Cubic Feet 640,000 620,000 600,000 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Records Management Data Protection Adjacent Businesses Consumer and other Businesses Note: Business acquisitions volu
Slide 8: Data Center Leasing on Track
8 Data Center Leasing on Track • 2MW of new and expansion leases signed Rendering of Future Frankfurt Data Center (FRA-1) in Q4; 17MW for the full year • Added over 100 new logos in 2019 • 2020 leasing target of 15-20 megawatts; strong and building pipeline • New turn-key data center capacity brough
Slide 9: Q4 Financial Performance
9 Q4 Financial Performance Constant Organic In millions, except per-share data Q4-19 Q4-18 Y/Y % Currency Y/Y% Growth(1) Revenue $1,080 $1,061 1.7% 2.7% 1.3% Storage $676 $659 2.5% 3.5% 2.5% Service $404 $403 0.4% 1.5% -0.7% Gross Profit $620 $611 1.5% Gross Profit Margin 57.4% 57.5% -10bps SG&A Exp
Slide 10: 2019 Financial Performance
10 2019 Financial Performance Constant Organic In millions, except per-share data FY-19 FY-18 Y/Y % Currency Y/Y % Growth(1) Revenue $4,263 $4,226 0.9% 3.0% 1.1% Storage $2,681 $2,622 2.2% 4.3% 2.5% Service $1,581 $1,603 -1.4% 0.9% -1.0% Gross Profit $2,429 $2,432 -0.1% Gross Profit Margin 57.0% 57.
Slide 11: Segment Growth and Margin Trends
11 Segment Growth and Margin Trends Q4 2019 FY2019 Global Data Corp and Global Data Corp and Y/Y% Total Total RIM Center Other RIM Center Other Organic Revenue 0.9% 7.8% 0.1% 1.3% 0.8% 4.8% 4.9% 1.1% Growth Adjusted EBITDA 3.4% 33.9% NM 7.5% -0.4% 22.0% NM 0.9% Growth % Adjusted EBITDA Margin % 42.3
Slide 12: Balance Sheet Remains Well Positioned
12 Balance Sheet Remains Well Positioned Balance Sheet Highlights as of 12/31/19 Net Lease Adjusted Leverage 5.7x 5.6x • ~80% Fixed Rate Debt • 4.8% weighted average interest rate • 5.8 years weighted average maturity • No significant maturities until 2023 J.P. Morgan Iron Mountain REIT Composite So
Slide 13: 2020 Guidance
13 2020 Guidance $ in MM 2020 Guidance(1) Y/Y % Change Revenue $4,375 - $4,475 3% - 5% Adjusted EBITDA $1,520 - $1,570 6% - 9% Adjusted EPS $1.15 - $1.25 13% - 23% AFFO $930 - $960 9% - 12% 2020 guidance assumes: • Total organic revenue growth of flat to +2%; organic storage rental revenue growth of
Slide 14: Key Items to Consider for Q1 Comparability
14 Key Items to Consider for Q1 Comparability Expected Q1 2020 year-over-year items worth noting: • $10 million related to Q1’19 labor overage • ~$13 million organic Adjusted EBITDA growth • ~$12.5 million Adjusted EBITDA benefit from Project Summit actions taken in Q4’19 • ~$20 million headwind fro
Slide 15: Capital Allocation Strategy
15 Capital Allocation Strategy • Sustainable dividend growth • Modest dividend growth • Reduce payout ratio as % of AFFO to mid-60% to low-70% range • Long-term target leverage ratio of 4.5x – 5.5x • Driven by accelerated Adjusted EBITDA growth and benefits from Project Summit • Reduce leverage grad
Slide 16: Key Takeaways
16 Key Takeaways Solid Q4 Performance – Adjusted EBITDA grew 8.4% year over year excluding FX Q4 total organic Storage rental revenue growth remains healthy at 2.5% Project Summit actions completed in Q4 expected to yield $50 million of annualized Adjusted EBITDA benefit beginning in Q1 2020 Data Ce