Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q4 and FY2016 Earnings Presentation
17 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Feb 23, 2017
Slide 1: Q4 and FY 2016 Financial Results
Q4 and FY 2016 Financial Results February 23, 2017
Slide 2: Safe Harbor Language and Reconciliation of Non-GAAP Measures
Safe Harbor Language and Reconciliation of Non-GAAP Measures 2 This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws and is subject to the safe- harbor created by such Act. Forward-looking st
Slide 3: Q4 and FY 2016 on Track with Short and Long-Term Financial Objectives
Q4 and FY 2016 on Track with Short and Long-Term Financial Objectives 3 2016 key financial results in line with guidance • Supported by durability of storage rental business 2017 guidance updated based on January 2017 FX Rates • Business fundamentals remain strong Strong internal storage rental grow
Slide 4: 2016 Strategic Plan Highlights
4 2016 Strategic Plan Highlights Developed Markets – North America and Western Europe • +1.9 million cubic feet of net(1) new volume before acquisitions • Maintained strong customer retention and generated durable storage rental growth Emerging Markets • ~18% of total revenue; expanded presence thro
Slide 5: Shifting Revenue Mix to Higher Growth Portfolio
Shifting Revenue Mix to Higher Growth Portfolio 5 80.8% 17.6% 1.6% Q4 2016 84.3% 14.6% 1.1% Q4 2015 Revenue Mix 75% 20% 5% 2020 Goal
Slide 6: Achieving Recall Synergies Faster than Originally Expected
Achieving Recall Synergies Faster than Originally Expected 6 Strong collaboration across combined leadership teams Retained legacy Recall talent to lead key areas such as SMB sales Completed conversions to support REIT structure Completed all required divestitures Reviewed service offerings to deter
Slide 7: Investing in Transformation and Innovation for Long-Term Benefits
Investing in Transformation and Innovation for Long-Term Benefits • Transformation initiative benefits to fund investments in Adjacent Businesses, innovation initiatives and dividend growth • 2017 Transformation expenses higher than expected in-year benefits • Costs primarily related to centralizati
Slide 8: Performance on Track to Support Dividend Growth
Performance on Track to Support Dividend Growth 8 $in MM except Dividend/Share 2015 2016 R$ C$ Revenue $3,008 $3,511 16.7% 19.0% Adjusted EBITDA(1) $920 $1,087 18.2% 19.7% AFFO(1)(2) $530 $648 22.4% Fully Diluted Shares Outstanding 212 247 16.6% Q4 Annualized Dividend/Share $1.94 $2.20 13.4% (1) Rec
Slide 9: Rising Interest Rates and Inflation Create Potential Benefit
Rising Interest Rates and Inflation Create Potential Benefit • Historically benefited from inflation; resulted in higher pricing • Contracts typically linked to CPI index • Relative insensitivity to higher interest rates compared with other REITs • Customers’ storage needs largely unaffected – avg.
Slide 10: 2016 Performance In Line With Guidance
2016 Performance In Line With Guidance 10 $ in Millions Guidance Ranges R$ and C$ 2016 Actuals R$ 2016 Actuals C$(1) Revenue $3,450 – $3,550 $3,511 $3,481 Adjusted EBITDA(2) $1,075 – $1,110 $1,087 $1,077 AFFO(2) $610 – $650 $648 $645 • Delivered Revenue and Adjusted EBITDA results in-line with guida
Slide 11: Strong Worldwide Financial Performance
Strong Worldwide Financial Performance 11 $ in MM (R$) Q4-15 Q4-16 R$ C$ Internal Growth 2015 2016 R$ C$ Internal Growth Revenue $752 $934 24.2% 25.7% 1.4% $3,008 $3,511 16.7% 19.0% 1.2% Storage $458 $567 23.8% 25.2% 2.9% $1,838 $2,143 16.6% 18.7% 2.3% Service $295 $368 24.8% 26.4% (0.9)% $1,170 $1,
Slide 12: Storage Revenues Continue to Drive Growth
Storage Revenues Continue to Drive Growth 12 1.2% 31.8% 7.7% 7.8% 12.2% 3.7% 0.4% 5.1% 7.9% 22.1% NA DM Western Europe Other InternationalNA RIM Corporate and Other Storage is 81% of Total Gross Profits Q4-16 Service Revenue • 39% of total revenues • 27% gross profit margin Q4-16 Storage Revenue • 6
Slide 13: Profitability Mix and Foreign Debt Mitigate FX Headwinds
Profitability Mix and Foreign Debt Mitigate FX Headwinds 13 61% 39% Revenue 77% 23% Debt 69% 31% Adjusted EBITDA(1) Based on Q4 2016 reported dollar results (1) Excludes Adjusted EBITDA from Corporate & Other. Segment fourth quarter performance details can be found on Page 11 of the Supplemental Fin
Slide 14: 2017 Guidance
2017 Guidance 14 • Business fundamentals remain strong; expected internal storage rental revenue growth of 2.0% - 2.5% • Investing $20 million in operating expenditures related to back-office centralization and innovation initiatives • Expect structural tax rate of 18% - 20% in 2017 • Maintenance Ca
Slide 15: Increasing Cash Available for Dividends and Discretionary Investments
Increasing Cash Available for Dividends and Discretionary Investments 15 (1) Customer inducements and acquisitions of customer relationships are not deducted from AFFO as they represent discretionary growth investment (2) Includes core growth racking and excludes Northern Virginia Data Center develo
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Slide 17: AFFO Reconciliation: Old Method vs New Method
Old Method ## New Method Old Method ## New Method Full Year 2015 Full Year 2015 Full Year 2016 Full Year 2016 Net Income $125,203 $125,203 $107,233 $107,233 Add: Real Estate Depreciation 178,800 178,800 226,258 226,258 Gain on Sale of Real Estate, Net of Tax (850) (850) (2,180) (2,180) FFO (NAREIT)