Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q4 2020 Earnings Presentation
34 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Feb 3, 2021
Slide 1: Q4 2020 Earnings Call
Q4 2020 Earnings Call February 24, 2021
Slide 2: Forward Looking Statements
2 Forward Looking Statements We have made statements in this presentation lease that constitute "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements concern our operations, economic pe
Slide 3: 2020 accomplishments
3 2020 accomplishments We managed the crisis, the crisis did not manage us We continued to serve our customers We maintained our focus on Project Summit We accelerated our growth in data center leasing We continued our investment in new products and innovation We are seeing good returns from our Glo
Slide 4: Reflecting on our resilience
4 Reflecting on our resilience COVID-19 PROVIDED INVESTED IN ESSENTIAL INNOVATION AND SERVICES CULTURE EXPANDED AND ADOPTED A MOUNTAINEERS ARE SCALED OUR SOLUTION-DRIVEN MORE CONNECTED DIGITAL SOLUTIONS MINDSET TO OVERCOME THAN EVER BEFORE OLD BARRIERS
Slide 5: Emerging from 2020 stronger than ever
5 EMERGING FROM 2020 STRONGER THAN EVER
Slide 6: Momentum to GO BEYOND
6 Momentum to GO BEYOND 2020 2021 THE YEAR THE YEAR OF MOMENTUM OF RESILIENCE GROWTH BUILT ON A SOLID FOUNDATION ● Investments in innovation, culture, I&D70- years powered by Project Summit of longevity Customer trust in our brand ● Business growth in IMDC, Fine Art & Entertainment Strength Services
Slide 7: Our exciting growth opportunities
7 Our exciting growth opportunities THE YEAR OF RESILIENCE Content Service Small & Medium Secure Offline Secure IT Asset Platform Business Storage Disposition (SITAD) Fine Art & Consumer Data Centers Entertainment Services Storage
Slide 8: Five-year growth momentum
8 Five-year growth momentum (2015-2020) Data Centers Fine Art & IMES • Expansion to 15 facilities in 3 • Entertainment Services TAM: continents since 2017 ~$1B • Total Addressable Market • Fine Art TAM: ~$1B (TAM): $20B Consumer SITAD • Joint venture with Makespace • Media destruction, E-waste in 20
Slide 9: Our Total Addressable Market (TAM)
9 Our Total Addressable Market (TAM) 2020 2015 $10B $80B+ ~ low-single % ~ 13% Global RIM TAM TAM and revenue growth rate of and revenue growth rate Data Centers, Fine Art & Entertainment Services, Consumer, SITAD, CSP, SMB
Slide 10: Durable global physical storage portfolio
10 Durable global physical storage portfolio
Slide 11: Data center trends positive
11 Data center trends positive Commercial success(1) Development activity(1) Geographic expansion(2) 58+ MW leased 10+ MW commissioned 15 operating data 73 new logos centers 13 markets across 1,300+ customers 3 continents (1) As of 12/31/20 (2) Subject to the closing of our investment in Web Werks
Slide 12: Strong 2020 in challenging environment
12 Strong 2020 in challenging environment ($ in millions, except per share data) Full-Year Ended 12/31/2020 12/31/2019 Y/Y % Change Storage Rental Revenue $2,754 $2,681 3% Service Revenue $1,393 $1,581 (12)% Total Revenue $4,147 $4,263 (3)% Adjusted EBITDA(1) $1,476 $1,469 0% Adjusted EBITDA margin
Slide 13: Non-GAAP methodology changes
13 Non-GAAP methodology changes Change with New Q4 2020 Full-Year 2020 Method? $s in millions, Prior New New vs. Prior New New vs. Unconsolidated Stock-Based Growth Except Per Share Data Method Method Prior Method Method Prior Joint Ventures Compensation Capital Adjusted EBITDA $374 $374 - $1,450 $1
Slide 14: Non-GAAP metrics methodology change
14 Non-GAAP metrics methodology change ● Over the last year, we have evaluated feedback as to our non-GAAP metrics, considered the impact of certain recent developments in our business, and how these should be presented to best represent our underlying performance ● After a comprehensive review, we
Slide 15: Balance sheet remains well positioned
15 Balance sheet remains well positioned Balance Sheet Highlights as of Net Lease Adjusted Leverage 12/31/20 • ~$2 billion of liquidity • ~87% Fixed Rate Debt 1 • 4.7% weighted average 5.5x ~ 5.3x interest rate • 7.6 years weighted-average maturity (1) Excluding the approximately $260 million of pro
Slide 16: Capital allocation strategy has not changed
16 Capital allocation strategy has not changed • Sustain the dividend at current level • Long-term target AFFO payout ratio of low to mid-60s • Long-term target leverage ratio of 4.5x – 5.5x • Reinvest in the business through growth Capital Expenditures • Invest in accretive M&A • Growth capital fro
Slide 17: 2021 Guidance
17 2021 Guidance ($ in millions, except per share data) 2020 Results 2021 Guidance(1) Y/Y % Change Total Revenue $4,147 $4,325 - $4,475 4% - 8% Adjusted EBITDA $1,476 $1,575 - $1,625 7% - 10% AFFO $888 $945 - $995 7% - 12% AFFO Per Share $3.07 $3.25 - $3.42 6% - 11% 2021 Guidance assumes: ● Organic
Slide 18: Key takeaways
18 Key takeaways ● Investments in innovation and new products provide opportunity for accelerated growth on both top and bottom line ● Deliberate focus on shifting our culture as part of Project Summit, with increased commitments to Diversity & Inclusion ● Continued drive towards carbon neutrality ●
Slide 19: Appendix
Appendix IRON MOUNTAIN®
Slide 20: Q4 2020 financial performance
20 Q4 2020 financial performance Organic In millions, except per-share data Q4-20 Q4-19 Y/Y % Constant Currency Y/Y% Growth(1) Revenue $1,060 $1,080 -1.8% -2.2% -3.4% Storage $697 $676 3.2% 2.9% 1.7% Service $362 $404 -10.3% -10.8% -12.1% Gross Profit $610 $620 -1.6% -1.9% Gross Profit Margin 57.6%
Slide 21: Full-year 2020 financial performance
21 Full-year 2020 financial performance Organic In millions, except per-share data 2020 2019 Y/Y % Constant Currency Y/Y% Growth(1) Revenue $4,147 $4,263 -2.7% -1.7% -3.3% Storage $2,754 $2,681 2.7% 3.8% 2.4% Service $1,393 $1,581 -11.9% -11.0% -12.8% Gross Profit(2) $2,390 $2,429 -1.6% -0.7% Gross
Slide 22: Historical Non-GAAP Metrics | New vs. Prior Method Reconciliations
Historical Non-GAAP Metrics | New vs. Prior Method Reconciliations
Slide 23: Adjusted EBITDA Methodology Changes
23 Adjusted EBITDA Methodology Changes $s in millions FY2020 FY2019 Prior Definition Adjusted EBITDA $1,450 $1,438 Unconsolidated Joint Ventures (9) (5) Stock-Based Compensation 34 36 Growth Capital - - New Definition Adjusted EBITDA $1,476 $1,469 Increase / Decrease from Definition Change $26 $31
Slide 24: Income to Adjusted EBITDA (Prior Methodology)
24 g Income to Adjusted EBITDA Prior Methodology : R : : 4 FY2020 FY2019 Q4 2020 Q32020 Q22020 Q12020 Q42019 Q32019 Q22019 Q1 2019 Income (Loss) from Continuing Operations $343.1 $268.2 $246.8 $38.6 ($7.1) $64.9 $37.1 $108.3 $92.3 $30.5 Add / (Deduct): Intangible Impairments 23.0 - - - - 23.0 - - -
Slide 25: Income to Adjusted EBITDA (New Methodology)
Income to Adjusted EBITD Reconc jon of Opera New Methodology FY2020 FY2019_ = Q42020 =. Q3. 2020 Q22020 = Q1 2020 25 Q42019 =Q32019 Q22019 Q12019 Income (Loss) from Continuing Operations $343.1 $268.2 $246.8 $38.6 ($7.1) $64.9 $37.1 $108.3 $92.3 $30.5 Add / (Deduct) Intangible Impairments 23.0 - - -
Slide 26: Adjusted EPS Methodology Changes
26 Adjusted EPS Methodology Changes FY2020 FY2019 Prior Definition Adjusted EPS $1.11 $1.02 Unconsolidated Joint Ventures (0.04) (0.04) Stock-Based Compensation 0.12 0.13 Growth Capital - - New Definition Adjusted EPS $1.19 $1.11 Increase / Decrease from Definition Change $0.08 $0.09
Slide 27: Reported EPS to Adjusted EPS (Prior Methodology)
27 Reported EPS - Fully Diluted from Continuing Operations Add / (Deduct): Intangible Impairments Other Expense (Income), Net (Gain) Loss on Disposal/Write-Down of PP&E, Net (Including Real Estate) Significant Acquisition Costs Restructuring Charges COVID-19 Costs Tax Impact of Reconciling Items and
Slide 28: Reported EPS to Adjusted EPS (New Methodology)
28 Reported EPS - Fully Diluted from Continuing Operations Add / (Deduct): Intangible Impairments Other Expense (Income), Net, Excluding our Share of Losses (Gains) from our Unconsolidated Joint Ventures (Gain) Loss on Disposal/Write-Down of PP&E, Net (Including Real Estate) Significant Acquisition
Slide 29: FFO (Normalized) Methodology Changes
29 FFO (Normalized) Methodology Changes FY2020 FY2019 $s in millions Prior Definition Normalized FFO $675 $659 Unconsolidated Joint Ventures (10) (7) Stock-Based Compensation(1) 33 33 Growth Capital - - New Definition Normalized FFO $698 $685 Increase / Decrease from Definition Change $23 $27 (1) Ne
Slide 30: Reconciliation of Net Income to FFO (Prior Methodology)
Reconc ion of Net Income to FFO (N Net Income Add / (Deduct) Real Estate Depreciation Gain on Sale of Real Estate, Net of Tax Data Center Lease-Based Intangible Asset Amortization FFO (Nareit) Add / (Deduct): Significant Acquisition Costs Restructuring Charges Intangible Impairments Loss (Gain) on D
Slide 31: Reconciliation of Net Income to FFO (New Methodology)
jation of Net Income to FFO (No ized) __New Methodology FY2020_ _FY2019 _Q4 2020 Q3 2020 Q22020 Q12020 Q42019 Q32019 Q22019 Q1 2019 Net Income $343.1 $268.3 $246.8 $38.6 ($7.1) $64.9 $37.1 $108.3 $92.5 $30.5 Add / (Deduct) Real Estate Depreciation 298.9 303.4 74.6 72.0 75.7 76.6 83.2 72.9 74.2 73.1
Slide 32: AFFO Methodology Changes
32 AFFO Methodology Changes $s in millions FY2020 FY2019 Prior Definition AFFO $881 $857 Unconsolidated Joint Ventures (9) (6) Stock-Based Compensation - - Growth Capital 16 16 New Definition AFFO $888 $867 Increase / Decrease from Definition Change $7 $10
Slide 33: Reconciliation of FFO (Normalized) to AFFO (Prior Methodology)
33 Reconciliation of FFO (Normalized) to AFFO FFO (Normalized) Add / (Deduct): Non-Real Estate Depreciation Amortization Expense Amortization of Deferred Financing Costs Revenue Reduction Associated with Amortization of Permanent Withdrawal Fees and Above - and Below-Market Leases Non-Cash Rent Expe
Slide 34: Reconciliation of FFO (Normalized) to AFFO (New Methodology)
FFO (Normalized) Add / (Deduct) Non-Real Estate Depreciation Amortization Expense Amortization of Deferred Financing Costs Revenue Reduction Associated with Amortization of Permanent Withdrawal Fees and Above - and Below-Market Leases Non-Cash Rent Expense (Income) Reconciliation to Normalized Cash