Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — J.P. Morgan 6th Annual U.S. All Stars Conference 2015
29 slides from Iron Mountain Incorporated (delaware)'s conference presentation, Sep 10, 2015
Slide 1: Iron Mountain Investor Update
Iron Mountain Investor Update J.P. Morgan 6th Annual U.S. All Stars Conference September 2015
Slide 2: Forward Looking Statements
Forward Looking Statements 2 Certain statements contained in this communication may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, the projections, the synergies and statements rega
Slide 3: Strong Growth in Standalone Cash Flow Plus Opportunity from Recall Acquisition
Strong Growth in Standalone Cash Flow Plus Opportunity from Recall Acquisition 3 Continuing to strengthen cash available for distribution and growth investment (CAD) 2015 CAD covers dividend with excess cash to deliver organic Records Management growth of 2% Transformation (frmr. Speed & Agility) pr
Slide 4: Strategy to Extend Durability of Business
Strategy to Extend Durability of Business 4 Transformation Simplification, Process Automation and Efficiency t Developed Markets Drive Profitable Revenue Growth; Grow Tape and Cube Volume Strategic Plan Emerging Markets Expand and Leverage Emerging Businesses (EBOs) Identify, Incubate, Scale or Scra
Slide 5: Consistent Incoming Storage Volume
Consistent Incoming Storage Volume 5 6-7% new volume from existing customers globally Cut sheet paper demand growth trending negative, but documents still being produced and stored, driving growth in both developed and developing markets Records becoming more archival in nature Developed Markets Eme
Slide 6: Three-Year Plan Progress
Three-Year Plan Progress 6 Achieved 2 million cubic feet of net volume growth in North America in 2014, prior to acquisitions and improved customer retention Organizational realignment to further align customer service and enhance efficiencies Strengthened core storage with launch of new products in
Slide 7: Compelling Discretionary Investment Opportunities
Compelling Discretionary Investment Opportunities 7 Business Acquisitions – typically include customer contracts, inventory, storage facilities and personnel Customer Acquisitions -- include customer contracts and associated inventory; generally do not include personnel or storage facilities on a pe
Slide 8: Service Margin Improvement Initiative Underway
Service Margin Improvement Initiative Underway 8 Decline in Service Gross Margins Moderating Service revenue declines have begun to moderate – specifically in the Records Management business, resulting in lesser impact on overall business Implementing plan to align service cost structure with activi
Slide 9: Transformation Plan Already Showing Significant Savings
Transformation Plan Already Showing Significant Savings While Records Management Investments Generate Strong Returns Evolve from SG&A representing 28% of revenues to mid-twenties Expect to realize a minimum of $100 million in savings by the end of 2018, incremental to current strategic plan Actions
Slide 10: IRM Standalone Cash Flow Supports Current Distribution and Growth
IRM Standalone Cash Flow Supports Current Distribution and Funds Both Growth in DPS and Investment for Growth 10 C$ basis, cash flow information is for illustrative purposes only and does not represent guidance, which is to be provided in October 2015 Discretionary investments are expected to be deb
Slide 11: Recall Acquisition Unlocks Shareholder Value
Compelling acquisition with significant synergy and accretion performance Net synergies of $155M with upside potential Fully synergized adjusted EPS accretion of 26% prior to impact of non-cash U.S GAAP purchase price adjustments Fully synergized AFFO accretion of 13% Expected 0.8X debt multiple tur
Slide 12: Expands Global Footprint
Expands Global Footprint Only Recall Only IRM Both 12
Slide 13: Durable Fundamentals Support Organic Volume Growth and Acquisitions
Durable Fundamentals Support both Organic Records Management Volume Growth and Growth from Acquisitions 13 Iron Mountain Recall Note: Charts represent year-over-year change in volume as of the end of each period presented. The percentages are calculated by dividing the trailing twelve month total ac
Slide 14: Synergy Components and Costs to Achieve
Synergy Components and Costs to Achieve 14 Net synergies do not reflect impact of costs to achieve and integrate. Synergy estimates are preliminary and may increase as ongoing analysis and integration planning progresses. Cost to achieve and integrate includes moving, racking, severance costs, Facil
Slide 15: Highly Accretive Transaction
Highly Accretive Transaction 15 Note: Assumes IRM weighted average shares outstanding of 272 million, and exchange ratio of 0.1722x. Accretion estimates do not include operating and capital expenditures related to integration, as these are one time in nature and will be excluded from our Adj. EPS, N
Slide 16: Improving Leverage Profile
Improving Leverage Profile 16 Pro Forma Forecasted Lease Adjusted Leverage (IRM Standalone vs. Combined, Constant Currency, Includes SG&A Savings of $100MM by 2018) Most Restrictive Covenant Maximum Leverage 6.50x Recall transaction will enhance our de-leveraging plan due to its material synergies a
Slide 17: Regulatory and Timing
Regulatory and Timing 17 As expected regulatory review is underway in US, Australia, Canada and the UK We are confident of achieving a satisfactory outcome Anticipated closing in early 2016 The Records and Information Management industry is large, fragmented and dynamic: Digital information manageme
Slide 18: Combined Cash Flow Supports Further Dividend Growth and Discretionary Investment
Combined Cash Flow Supports Further Dividend Growth and Discretionary Investment 18 Recall acquisition costs to achieve and integrate of $105 million in each of 2016 and 2017 are excluded from this table and will be debt financed as incurred. Discretionary investments are expected to be debt finance
Slide 19: Investment Summary: Strong Cash Flow Generation
Investment Summary: Strong Cash Flow Generation – on a Standalone Basis and Further Enhanced with Recall Acquisition 19 Cash available for distribution and discretionary investment (CAD) for IRM on a standalone basis is strong and supports growing dividend Supports current dividend plus investment n
Slide 20: We Store & Manage Information Assets
We Store & Manage Information Assets 21 75% 17% 8% Records & Information Management (2) Data Management(2) Shredding(2) Storage: 70% Service: 30% Storage: 60% Service: 40% Service: 100% Diversified Global Business (1) $3.1 billion annual revenue 155,000+ customers Serving 92% of Fortune 1000 68 mill
Slide 21: Leading Global Presence
Leading Global Presence 22 36 Countries 5 Continents Solid track record of enhancing shareholder value Share buybacks, pursuing REIT conversion, dividend enhancement Most expansive global platform Strong international expansion opportunity Attractive real estate characteristics Low turnover costs Lo
Slide 22: Storage Rental Growth is Durable with High Returns
Storage Rental Growth is Durable with High Returns 23 2014 $1,860 IRM Storage Rental ($MM) Large & growing 60% of revenues ($1.9B) 4% - 5% constant dollar growth 2012-2014 Inflation hedged Source: Company filings. Illustrative IRM North America RM Storage Annual Economics (1) (per square foot, excep
Slide 23: Enterprise Storage Compares Favorably
“Enterprise Storage” Compares Favorably 24 Iron Mountain Actual Self-Storage Industrial North America annual rental revenue/SF $27.56 $13.80 $5.50 Tenant Improvements/SF N/A N/A $1.96 Maintenance CapEx(1) 3.0% 5% 12% Average lease term Large customers: 3 Yrs. Small customers: 1 Yr. Average Box Age :
Slide 24: Relative Trading Valuation – IRM vs. REIT Sectors
Relative Trading Valuation – IRM vs. REIT Sectors 25 EV / 2015E EBITDA P / 2015E FFO Dividend Yield1 Sources: IBES, Capital IQ, and SNL estimates Note: Market data as of August-28-2015. 1 Annualized dividend yield. 11.6 x 22.6 x 18.1 x 17.8 x 15.7 x 12.4 x 11.5 x IRM Storage Cell Tower Industrial Da
Slide 25: Adj. OIBDA Growth Since 2013 Consistent with Strategic Plan
C$ Adj. OIBDA Growth Since 2013 Consistent with Strategic Plan 26 932 -2.0% +4.6% +3.8% 2015 Estimate 2014 898 2013 858 2012 876 -3.8% 2011 910 C$ -0.3% 2015 – Guidance Midpoint 925 2014 928 2013 919 2012 912 2011 950 +0.8% -4.0% +1.0% R$
Slide 26: Demonstrated High Returns on Investment in Storage
Demonstrated High Returns on Investment in Storage Partially Offset by Service Margin Decline Core business is growing strongly and providing a 13.5%+ return on investment Working to address the service margin decline – gross margin approximately flat in 2015 Service Margin Decline FX Storage Growth
Slide 27: Pro Forma 2014A Revenue by Geography and Business
Iron Mountain Recall Pro Forma 2014A Revenue by Geography 2014A Revenue by Business Combination Increases Exposure to Higher Growth Emerging Markets North America 71% Europe 18% Americas 42% Europe 27% North America 63% Europe 20% Data Management 17% Shredding 8% Secure Destruction 13% Data Protecti
Slide 28: Creates Expansive Global Enterprise Storage Real Estate Portfolio
Creates Expansive Global Enterprise Storage Real Estate Portfolio IRM REC Total/Wtd. Average Owned (SF) 24MM 2MM 26MM Leased (SF) 44MM 18MM 62MM Total (SF) 68MM 20MM 88MM Average Size (SF) 62K 58K 61K Buyout Option (SF) 3.5MM N/A Owned/Controlled(1) 40% 9% 34% Weighted Avg. Lease Obligation 5.6 yrs.
Slide 29: Financing of the Transaction
Financing of the Transaction 30 (In Millions, except for shares) Source: IRM & Recall public filings (1) Based upon an IRM closing price as of 6/3/15 of US$34.28 (2) Paid in 2016, assuming a 13.5x multiple Source: IRM & Recall public filings Assumptions Assumes an all stock deal based on share excha
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