Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Investor Day (September 2022)
70 slides from Iron Mountain Incorporated (delaware)'s investor day presentation, Sep 20, 2022
Slide 1: Investor Event & Site Tour 2022
INVESTOR EVENT & SITE TOUR 2022 INVESTOR EVENT & SITE TOUR SEPTEMBER 20, 2022
Slide 2: Welcome & Opening Remarks
INVESTOR EVENT & SITE TOUR 2022 Gillian Tiltman SVP & HEAD OF INVESTOR RELATIONS WELCOME & OPENING REMARKS
Slide 3: Today's Agenda
INVESTOR EVENT & SITE TOUR 2022 TODAY’S AGENDA WELCOME & OPENING REMARKS Gillian Tiltman | SVP & Head of Investor Relations CLIMB ON! COMPANY OVERVIEW & STRATEGIC DIRECTION Bill Meaney | President & CEO INTRODUCTION TO PROJECT MATTERHORN AND OVERVIEW OF OUR OPERATING MODEL Barry Hytinen | EVP & CFO
Slide 4: Forward-Looking Statements
INVESTOR EVENT & SITE TOUR 2022 FORWARD-LOOKING STATEMENTS We have made statements in this presentation 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
Slide 5: Climb On! Company Overview & Strategic Direction
INVESTOR EVENT & SITE TOUR 2022 CLIMB ON! COMPANY OVERVIEW & STRATEGIC DIRECTION Bill Meaney PRESIDENT & CEO
Slide 6: Key Messages
INVESTOR EVENT & SITE TOUR 2022 KEY MESSAGES 1 Synergistic business model with unmatched customer base and significant cross-selling opportunity Introducing Project Matterhorn Building off key strengths to drive a ~10% CAGR to ~$7.3B in revenue in 2026 2 3 6
Slide 7: Iron Mountain Snapshot
INVESTOR EVENT & SITE TOUR 2022 IRON MOUNTAIN SNAPSHOT (NYSE: IRM) Note: All figures as of 1H22 unless otherwise noted. 1 As of 9/16/2022. 2021 Revenue BreakdownGlobal Presence Market-cap1 ~$16B Mountaineers ~25,000 Customers Served ~225,000 Countries Served 59 Facilities ~1,380 ~95M Sq. Ft. | ~730M
Slide 8: Our Purpose and Values
INVESTOR EVENT & SITE TOUR 2022 OUR PURPOSE AND VALUES We protect and elevate the power of our customers’ work VALUES PURPOSE Build Customer Value Take Ownership Promote Inclusion & Teamwork Own Safety & Security Act with Integrity 8
Slide 9: Our Multi-Phase Journey to Climb On!
INVESTOR EVENT & SITE TOUR 2022 OUR MULTI-PHASE JOURNEY TO CLIMB ON! Strong Global Leadership Positions in Multiple Businesses World-class OperationsClimb On! 9 ~$7.3B 2026E Revenue $4.2B 2019 Revenue 70 Years of Success $4.5B 2021 Revenue Summit Growth Foundation $5.125B - $5.275B 2022E Revenue MAT
Slide 10: Sustainable Competitive Advantages
INVESTOR EVENT & SITE TOUR 2022 SUSTAINABLE COMPETITIVE ADVANTAGES Synergistic Global Business Long-tenured Customer Relationships with Institutional Expertise Cash-generative and Highly Profitable Model with Durable Revenue Stream Comprehensive Information Management and Data Storage Solutions Lead
Slide 11: Significant Opportunity to Further Scale and Capture Market Share
INVESTOR EVENT & SITE TOUR 2022 Significant Opportunity to Further Scale and Capture Market Share LARGE AND GROWING TOTAL ADDRESSABLE MARKET $10B 2015 $130B+ 2022 Source: Management estimates. 11 DATA CENTER ASSET LIFECYCLE MANAGEMENT DIGITAL SOLUTIONS Expanded TAM Driven by Fast Growing Categories
Slide 12: Well-Positioned to Benefit from Key Secular Trends
INVESTOR EVENT & SITE TOUR 2022 WELL-POSITIONED TO BENEFIT FROM KEY SECULAR TRENDS 12 Workplace and Digital Transformation Data Governance and Security Sustainability Digital Mailroom Solutions Content Services Platform Data Center Solutions Clean Start Asset Lifecycle Management Solutions Data Cent
Slide 13: Our Diverse Board of Directors
INVESTOR EVENT & SITE TOUR 2022 Strong Expertise to Support Our Strategy and Value Creation OUR DIVERSE BOARD OF DIRECTORS Skills Matrix 73% 82% 82% 91% 91% 100% 100% Global Expertise Capital Allocation / Strategy C-suite Leadership 1 Effective November 8, 2022. Monte Ford Principal Partner, CIOSE R
Slide 14: Experienced Leadership Team
INVESTOR EVENT & SITE TOUR 2022 Seasoned and Skilled Management Team with Deep Industry Experience EXPERIENCED LEADERSHIP TEAM Deirdre Evens 2015 EVP & GM, ALM1 Mark Kidd 2003 EVP & GM, Data Centers Barry Hytinen 2020 EVP & CFO Edward Greene 2020 EVP & CHRO Bill Meaney Joined: 2013 President & CEO D
Slide 15: Introducing Project Matterhorn
INVESTOR EVENT & SITE TOUR 2022 INTRODUCING PROJECT MATTERHORN Project Matterhorn Operating Model Investing to Accelerate Growth 15
Slide 16: Financial Targets (2021 – 2026)
INVESTOR EVENT & SITE TOUR 2022 FINANCIAL TARGETS (2021 – 2026) 16 ($B) 2021 2026 CAGR REVENUE $4.5 ~$7.3 ~10% ADJUSTED EBITDA $1.6 ~$2.5 ~10% AFFO $1.0 ~$1.5 ~8%
Slide 17: Iron Mountain Corporate Video
INVESTOR EVENT & SITE TOUR 2022 IRON MOUNTAIN CORPORATE VIDEO 17
Slide 18: Introduction to Project Matterhorn and Overview of Our Operating Model
INVESTOR EVENT & SITE TOUR 2022 INTRODUCTION TO PROJECT MATTERHORN AND OVERVIEW OF OUR OPERATING MODEL Barry Hytinen EVP & CFO
Slide 19: Introducing Project Matterhorn
INVESTOR EVENT & SITE TOUR 2022 Project Matterhorn Operating Model • Shifting from product to solution sale through new global enterprise-wide commercial platform • Migrating execution from businesses to new global enterprise-wide operational platform • Businesses benefitting from shared services an
Slide 20: Project Matterhorn Operating Model
INVESTOR EVENT & SITE TOUR 2022 PROJECT MATTERHORN OPERATING MODEL 1 Records and Information Management (RIM); includes physical and digital. Asset Lifecycle Management Global RIM1 Data Centers 20
Slide 21: Commercial Excellence
INVESTOR EVENT & SITE TOUR 2022 COMMERCIAL EXCELLENCE Greg McIntosh EVP & CHIEF COMMERCIAL OFFICER
Slide 22: Confident In At Least 5% Revenue Growth Rate
INVESTOR EVENT & SITE TOUR 2022 Confident In At Least 5% Revenue Growth Rate GLOBAL RIM AT A GLANCE GROWTH VECTORSSTRUCTURAL ADVANTAGES ▸ Integrated physical and digital information management offerings ▸Trusted by 95% of Fortune 1000 with 225K customers globally ▸Global footprint spanning 59 countr
Slide 23: A High-performance Commercial Organization
INVESTOR EVENT & SITE TOUR 2022 A High-performance Commercial Organization Trusted to Solve Customer Problems HOW WE SELL THE MOUNTAIN COMMERCIAL ORGANIZATION FOCUS Global Industries Growing wallet share with top global accounts in key industries 1 Regions Cross and up-sell existing and new customer
Slide 24: Accelerating Growth in our Largest Opportunity Accounts
INVESTOR EVENT & SITE TOUR 2022 Accelerating Growth in our Largest Opportunity Accounts GLOBAL INDUSTRIES 24 Global approach to account management Salesforce comprised of industry SMEs Growing wallet share in key industries Salesforce Coverage Model Features • Focus efforts on 3 – 5 global accounts
Slide 25: Case Study: Global Industries
INVESTOR EVENT & SITE TOUR 2022 • 1M New Cubic Feet • 50 TB of Digital Data • 10M Microfilms Imaged $15M Total Contract Value with Significant Recurring Revenue • Substantial geographical cross-sell result • Expanded solution to 95 Other Financial Institutions in Global Industries Scaling Solutions
Slide 26: Regions: Local-Oriented Sales & Service Support Model
INVESTOR EVENT & SITE TOUR 2022 REGIONS: LOCAL-ORIENTED SALES & SERVICE SUPPORT MODEL Enterprise • Focusing on regional enterprise sales with segmentation of global industry accounts • Adding ~100 new front-line salespeople over next 3 years • Recent wins: Germany, Australia, Philippines Small/Mediu
Slide 27: Case Study: Public Sector
INVESTOR EVENT & SITE TOUR 2022 30% Reduction in Costs through AI/ML Enabled Platform ~$20M Contract Additional Opportunities within Agency and Other Departments Continued Momentum in Public Sector for Large Digital Transformation Initiatives CASE STUDY: PUBLIC SECTOR Unique IRM Solution ResultsBack
Slide 28: Data Center Excellence
INVESTOR EVENT & SITE TOUR 2022 DATA CENTER EXCELLENCE Mark Kidd EVP & GM, DATA CENTERS
Slide 29: Data Center at a Glance
INVESTOR EVENT & SITE TOUR 2022 Market Segments Data Center Footprint Confident in Greater than 20% Revenue Growth Rate DATA CENTER AT A GLANCE GROWTH VECTORS 29 • Hyperscale • Colocation • Selective Tier I market expansion • Tier II/III (edge) entry • Hyperscale-only land and power STRUCTURAL ADVAN
Slide 30: Data Center Acceleration
INVESTOR EVENT & SITE TOUR 2022 Building Business at Scale DATA CENTER ACCELERATION Megawatts Under Contract Scale Interconnected, Global Platform 30 9 22 99 108 159 207 323 2016 2017 2018 2019 2020 2021 1H22 Enter Data Center Market through Growth Adjacencies Pre-leased 147 Megawatts
Slide 31: Data Center: Globally Connected Platform of ~665 Megawatts
INVESTOR EVENT & SITE TOUR 2022 DATA CENTER: GLOBALLY CONNECTED PLATFORM OF ~665 MEGAWATTS Includes ~340 Megawatts of Capacity to Sell To Be Sold Northern Virginia 156 Phoenix 53 Chicago 37 Mumbai 28 Amsterdam 20 New Jersey 6 Frankfurt 6 All Other ~35 Sub-total: To Be Sold ~340 Under Contract, Lease
Slide 32: Unconstrained Market with Significant Opportunity
INVESTOR EVENT & SITE TOUR 2022 Unconstrained Market with Significant Opportunity GLOBAL DATA CENTER MARKET TAILWINDS Market Expected to Grow ~$40B Over Next 5 Years1 Global Data Center Colocation Market Size by Region 1 Source: Structure Research. Data Center Market Size Projections1 2021 2022E 202
Slide 33: Case Study: Data Center Hyperscale
INVESTOR EVENT & SITE TOUR 2022 35+ Megawatts Contracted with More in Pipeline Sold 3 Product Types across 4 Locations and 2 Continents Solution Flexibility and Broad Data Center Footprint Enables Rapid Growth CASE STUDY: DATA CENTER HYPERSCALE Background Unique IRM Solution Delivered customized dat
Slide 34: Case Study: Enterprise Data Center
INVESTOR EVENT & SITE TOUR 2022 Global Accounts Expanding Customer Relationship to New Product Area 100% Auditable Carbon Offset for Client Differentiated Data Center Solutions as Part of Larger Client Relationship Accelerates Digital Transformation CASE STUDY: ENTERPRISE DATA CENTER Background Uniq
Slide 35: INVESTOR EVENT & SITE TOUR 2022 35
INVESTOR EVENT & SITE TOUR 2022 35
Slide 36: Break
INVESTOR EVENT & SITE TOUR 2022 BREAK
Slide 37: Introduction to Asset Lifecycle Management
INVESTOR EVENT & SITE TOUR 2022 INTRODUCTION TO ASSET LIFECYCLE MANAGEMENT Barry Hytinen EVP & CFO
Slide 38: Asset Lifecycle Management at a Glance
INVESTOR EVENT & SITE TOUR 2022 Significant Structural Advantages and Growth Vectors in a Massive, Fragmented Market ASSET LIFECYCLE MANAGEMENT AT A GLANCE 38 GROWTH VECTORS • Hyperscale and Enterprise Data Center • Corporate End-user Devices • Leverage client relationships built on 70 years of trus
Slide 39: Asset Lifecycle Management: A Large, Fragmented, and Growing Market
INVESTOR EVENT & SITE TOUR 2022 Iron Mountain is a Leader in the Segment and Expanding Our Reach ASSET LIFECYCLE MANAGEMENT: A LARGE, FRAGMENTED, AND GROWING MARKET 39 Standardizing Services and Customer Experience Expanding Offerings Across the Globe Developing Scale and Structural Advantages Addre
Slide 40: Case Study: ALM Hyperscale
INVESTOR EVENT & SITE TOUR 2022 Exclusive Remarketing 100% Effective for Data Erasure Primary Provider of Onsite Services for Client Global Footprint Innovation Partner for Sustainable Solutions Unique Iron Mountain Solution Results Exclusive Provider of Secure and Efficient Decommissioning Services
Slide 41: Case Study: ALM Corporate
INVESTOR EVENT & SITE TOUR 2022 In Compliance with the Bank’s Exacting Standards and Timeline 13,000 Hard Drives Removed and Shredded On-site ~1,300 Servers De-racked and Processed across 15 Data Centers Customized Workflow Based on Complex Governance and Risk Mitigation Requirements CASE STUDY: ALM
Slide 42: Asset Lifecycle Management Video
INVESTOR EVENT & SITE TOUR 2022 ASSET LIFECYCLE MANAGEMENT VIDEO 42
Slide 43: Operational Excellence
INVESTOR EVENT & SITE TOUR 2022 OPERATIONAL EXCELLENCE JT Tomovcsik EVP & CHIEF OPERATING OFFICER
Slide 44: Improving Operations Across Iron Mountain Globally
INVESTOR EVENT & SITE TOUR 2022 Driving Productivity and a Continuous Improvement Mindset to Climb On! IMPROVING OPERATIONS ACROSS IRON MOUNTAIN GLOBALLY Restructured cost base • Enabling and broadening commercial offerings • Driving productivity • Ensuring commitment to safety and quality Matterhor
Slide 45: Continuous Operations Improvement
INVESTOR EVENT & SITE TOUR 2022 Invest and Enable • Invested globally in data capture, standardized activity reporting, and worked hours tracking system Engineered Targets • Created global engineered productivity targets • Implemented a standard routing system outside North America Active Leadership
Slide 46: Key Global Investments Enabling Continuous Improvement and Scale
INVESTOR EVENT & SITE TOUR 2022 Efficiently Managing Overhead KEY GLOBAL INVESTMENTS ENABLING CONTINUOUS IMPROVEMENT AND SCALE 18.5% 16.8% 1H19 1H22 Driving Scale Efficiency of G&A CostsInvest in Global Business Services • Strategic business partner to create scalability • Including shared services
Slide 47: Financial Overview & Outlook
INVESTOR EVENT & SITE TOUR 2022 FINANCIAL OVERVIEW & OUTLOOK Barry Hytinen EVP & CFO
Slide 48: Key Messages
INVESTOR EVENT & SITE TOUR 2022 5 1 2 3 4 KEY MESSAGES Leading from a position of strength to further grow with innovative solutions Uniquely durable business model Exceptional track record of financial execution and operational excellence globally Creating value through a disciplined capital alloca
Slide 49: Strong Operating Performance
INVESTOR EVENT & SITE TOUR 2022 STRONG OPERATING PERFORMANCE 1 Non-GAAP measure, please see Appendix for reconciliation. 2 Iron Mountain financial guidance for 2022. 49 $4,263 $4,147 $4,492 2019 2020 2021 2022E $1,469 $1,476 $1,635 2019 2020 2021 2022E $867 $888 $1,012 2019 2020 2021 2022E Revenue (
Slide 50: Reaffirming 2022 Guidance
INVESTOR EVENT & SITE TOUR 2022 Strong Growth Despite Foreign Exchange Headwinds REAFFIRMING 2022 GUIDANCE 50 ($M, Except Share Data) 2022 Guidance YoY % Change Total Revenue $5,125 - $5,275 14% - 17% Adjusted EBITDA $1,800 - $1,850 10% - 13% AFFO $1,085 - $1,120 7% - 11%
Slide 51: Capital Allocation Priorities
INVESTOR EVENT & SITE TOUR 2022 CAPITAL ALLOCATION PRIORITIES 51 INVESTING TO ACCELERATE GROWTH CAPITAL RETURN PRUDENT LEVERAGE
Slide 52: Capital Allocation Priorities: Investing to Accelerate Growth
INVESTOR EVENT & SITE TOUR 2022 Growth-oriented Capex as a % of Revenue CAPITAL ALLOCATION PRIORITIES: INVESTING TO ACCELERATE GROWTH 52 ~12% ~16% 2019-2022E 2023E-2026E • Growth Capex: planning to deploy ~$4B in growth-oriented capital over next 4 years (2023 – 2026), which fully funds our growth p
Slide 53: Capital Allocation Priorities: Capital Return
INVESTOR EVENT & SITE TOUR 2022 Dividend Payout Ratio CAPITAL ALLOCATION PRIORITIES: CAPITAL RETURN 53 • Dividend policy: Target AFFO payout ratio of low to mid-60s • With strong operating performance, we are approaching our long-term target range 81% 80% 71% 66% 2019 2020 2021 2022E
Slide 54: Capital Allocation Priorities: Prudent Leverage
INVESTOR EVENT & SITE TOUR 2022 5.5x 4.5x 6.1x 5.7x 5.3x 5.3x 5.3x 5.3x 4 4.5 5 5.5 6 6.5 J.P. Morgan REIT Composite 2019 2020 2021 Q2'22 2022E Net Lease Adjusted Leverage CAPITAL ALLOCATION PRIORITIES: PRUDENT LEVERAGE 54 • Leverage target: long-term net lease adjusted leverage ratio of 4.5x – 5.5x
Slide 55: Financial Targets (2021 – 2026)
INVESTOR EVENT & SITE TOUR 2022 ($B) 2021 2026 CAGR REVENUE $4.5 ~$7.3 ~10% ADJUSTED EBITDA $1.6 ~$2.5 ~10% AFFO $1.0 ~$1.5 ~8% FINANCIAL TARGETS (2021 – 2026) 55
Slide 56: Revenue Target Drivers
INVESTOR EVENT & SITE TOUR 2022 REVENUE TARGET DRIVERS ($B) 2021 2026 $ Growth CAGR REVENUE $4.5 ~$7.3 ~$2.8 ~10% Global RIM $4.0 $5.2 +$1.2 ~5% Data Center $0.3 $0.9 +$0.6 ~23% Asset Lifecycle Management <$0.1 $0.9 +$0.8 ~80% Other $0.1 $0.3 +$0.2 ~23% 56 • Global RIM: Benefit from revenue manageme
Slide 57: Adjusted EBITDA Target Drivers
INVESTOR EVENT & SITE TOUR 2022 ADJUSTED EBITDA TARGET DRIVERS 57 ($B) 2021 2026 CAGR ADJUSTED EBITDA $1.6 ~$2.5 ~10% Global RIM: Modeling consistent margin Data Center: Modest margin improvement Asset Lifecycle Management: Margin expansion with scale Other: Driving G&A efficiencies
Slide 58: AFFO Target Drivers
INVESTOR EVENT & SITE TOUR 2022 AFFO TARGET DRIVERS 58 EBITDA driving AFFO growth Conservative plan for cash interest and cash taxes Recurring capital expenditures growing modestly ($B) 2021 2026 CAGR AFFO $1.0 ~$1.5 ~8%
Slide 59: Key Takeaways
INVESTOR EVENT & SITE TOUR 2022 5 1 2 3 4 KEY TAKEAWAYS Leading from a position of strength to further grow with innovative solutions Uniquely durable business model Exceptional track record of financial execution and operational excellence globally Creating value through a disciplined capital alloc
Slide 60: Closing Remarks
INVESTOR EVENT & SITE TOUR 2022 CLOSING REMARKS Bill Meaney PRESIDENT & CEO
Slide 61: Closing Remarks
INVESTOR EVENT & SITE TOUR 2022 CLOSING REMARKS 1 Synergistic business model with unmatched customer base and significant cross-selling opportunity Introducing Project Matterhorn Building off key strengths to drive a ~10% CAGR to ~$7.3B in revenue in 2026 2 3 61
Slide 62: Q&A
INVESTOR EVENT & SITE TOUR 2022 Q&A BILL MEANEY | PRESIDENT & CEO BARRY HYTINEN | EVP & CFO
Slide 63: Appendix
INVESTOR EVENT & SITE TOUR 2022 APPENDIX
Slide 64: Reconciliation of Operating Income to Adjusted EBITDA
INVESTOR EVENT & SITE TOUR 2022 RECONCILIATION OF OPERATING INCOME TO ADJUSTED EBITDA 64
Slide 65: Reconciliation of Reported EPS to Adjusted EPS
INVESTOR EVENT & SITE TOUR 2022 RECONCILIATION OF REPORTED EPS TO ADJUSTED EPS 65 1 The difference between our effective tax rates and our structural tax rate (or adjusted effective tax rates) for the years ended December 31, 2021 and 2020, is primarily due to (i) the reconciling items above, which
Slide 66: Reconciliation of Net Income to FFO & AFFO
INVESTOR EVENT & SITE TOUR 2022 RECONCILIATION OF NET INCOME ATTRIBUTABLE TO IRON MOUNTAIN TO FFO & AFFO 66 1 Includes depreciation expense related to owned real estate assets (land improvements, buildings, building improvements, leasehold of improvements and racking), excluding depreciation related
Slide 67: Speaker Bios
INVESTOR EVENT & SITE TOUR 2022 SPEAKER BIOS
Slide 68: Speaker Bios
INVESTOR EVENT & SITE TOUR 2022 As Iron Mountain’s executive vice president and chief financial officer, Barry A. Hytinen has overall responsibility for the company’s financial management and financial operations. He has served as Iron Mountain’s CFO since January 1, 2020. Prior to joining Iron Moun
Slide 69: Speaker Bios
INVESTOR EVENT & SITE TOUR 2022 SPEAKER BIOS JT Tomovcsik is Iron Mountain's Executive Vice President and Chief Operating Officer, leading multiple functions on a global basis in addition to the company's "Summit" transformation journey, designed to increase overall agility and pace, to better innov
Slide 70: Speaker Bios
INVESTOR EVENT & SITE TOUR 2022 SPEAKER BIOS 70 Mark Kidd is executive vice president and general manager of Data Centers, and has been leading the data center organization since the spring of 2013. In this role, Mark is responsible for driving growth across Iron Mountain’s data center platform, inc