Iron Mountain Incorporated (delaware) · NYSE:IRM
Iron Mountain Incorporated (delaware) — Iron Mountain — Q4 2017 Earnings Presentation
18 slides from Iron Mountain Incorporated (delaware)'s earnings presentation, Feb 16, 2018
Slide 1: Q4 and Full Year 2017 Financial Results
Q4 and Full Year 2017 Financial Results February 16, 2018
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: Data Center Growth Enhances 2020 Plan and Accelerates Long-term Growth
Data Center Growth Enhances 2020 Plan and Accelerates Long-term Growth 3 80% Developed Portfolio Includes North America And Western Europe 20% Growth Portfolio Emerging Markets = 18% Data Center = 1% Adjacent Businesses = 1% 2% 10% 3.5%+ Average Internal Adj. EBITDA Growth Q4’17 2020 Revenue Mix Adj
Slide 4: Full Year in Line with Expectations and Q4 Demonstrating Solid Momentum
Full Year in Line with Expectations and Q4 Demonstrating Solid Momentum 4 2017 performance supported by storage rental durability and margin growth • 2017 Revenue, Adjusted EBITDA and AFFO in line with expectations • 2017 Adjusted EBITDA up 16% and 180 bps margin improvement, driven by Recall synerg
Slide 5: Continued Execution of Strategic Plan Driving Growth and Enhancing Margins
5 Continued Execution of Strategic Plan Driving Growth and Enhancing Margins in Developed Markets • Achieved 3.4% internal storage rental revenue growth in Q4 with modest net internal volume growth • Enhanced revenue management efforts yielding higher margin Continued Strong Internal Growth in Emerg
Slide 6: Accelerating Growth through Data Center Expansion
Accelerating Growth through Data Center Expansion 6 Transformative Transaction: IO Data Centers Snapshot • 62.4 MW of capacity (90% leased) with expansion potential of 77 MW • Purchase price of $1.34B at closing, which includes $25mm of earn out for customer expansion • ~15x Adjusted EBITDA multiple
Slide 7: Disciplined Capital Allocation Designed to Maximize Returns
Disciplined Capital Allocation Designed to Maximize Returns Lease Adjusted Net Debt to EBITDAR(1) 7 Dividend as % of AFFO 6.0X 4.0X 4.5X 5.0X 85% 65% 70%75% Optimal Range(2) Sources of capital: • Growth in operating cash flow • Secured and unsecured borrowings • Real estate capital recycling • ATM
Slide 8: Strong 2017 Performance
Strong 2017 Performance 8 $ in Millions 2017 Guidance Ranges R$ 2017 Actuals R$ 2017 Actuals C$(1) Revenue $3,750 - $3,840 $3,846 $3,788 Adjusted EBITDA(1) $1,250 - $1,280 $1,260 $1,240 AFFO(1) $715 - $760 $752 $740 • Revenue, Adjusted EBITDA and AFFO results in-line with guidance • ~0.5% FX benefit
Slide 9: Solid Worldwide Financial Performance
Solid Worldwide Financial Performance 9 $ in MM (R$) Q4-16 Q4-17 R$ C$ Internal Growth FY 2016 FY 2017 R$ C$ Internal Growth Revenue $934 $991 6.1% 4.1% 2.5% $3,511 $3,846 9.5% 9.0% 2.3% Storage $567 $614 8.4% 6.5% 4.2% $2,143 $2,378 11.0% 10.5% 3.9% Service $368 $377 2.6% 0.4% (0.1)% $1,369 $1,468
Slide 10: Steady Internal Growth in Q4
Steady Internal Growth in Q4 Developed Markets(1) Other International(2) Total Internal Growth Storage 3.4% 6.8% 4.2% Service 0.1% 0.2% (0.1)% Total 2.1% 4.2% 2.5% % of Total Revenue by Segment Storage 46.1% 12.9% 61.9% Service 29.7% 7.6% 38.1% 10 (1) Represents North America Records and Information
Slide 11: Solid Adjusted EBITDA Margin Performance Across Segments
Solid Adjusted EBITDA Margin Performance Across Segments 11 Adjusted EBITDA Q4 2016 Q4 2017 Change in bps North America RIM 41.7% 44.1% 240 North America DM 56.3% 56.2% (10) Western Europe 29.1% 34.8% 570 Other International 27.4% 27.4% 0 Global Data Center 18.6% 21.0% 240 Total 31.7% 32.9% 120 Reco
Slide 12: 2018 Guidance Drives Strong Cash Flow and Dividend Coverage
2018 Guidance Demonstrates Drives Strong Cash Flow and Dividend Coverage 12 • Expected internal storage rental revenue growth of 3% - 3.5% and total internal revenue growth of 2% - 3% • Revenue recognition standards: expect to benefit Revenue by $7 mm and Adjusted EBITDA by $25 mm to $30 mm. No bene
Slide 13: Increasing Cash Available for Dividends and Discretionary Investments
Increasing Cash Available for Dividends and Discretionary Investments 13 $155 $185 $100 $100 $490 $150 Real Estate, Growth, and Innovation(2) Data Center Growth Credit Suisse Incremental Capital for Discretionary Investments Growth Investments(3) Sources(3) (1) Customer inducements and acquisitions
Slide 14: 2020 Plan: Profitable, Sustainable Growth
2020 Plan(1): Profitable, Sustainable Growth 14 (1) Updated to reflect 2017 actuals and 2018 Guidance, including adoption of revenue recognition standards and expansion of data center business. 2020 ranges at 2018 C$ rates. (2) Assumes Real Estate and Non-Real Estate Maintenance CapEx and Non-Real E
Slide 15: Key Takeaways
Key Takeaways 15 Quarter punctuated by strong total revenue growth and 4.2% internal storage rental revenue growth Driving continued improvement in Adjusted EBITDA margins Continuing to execute against our strategic plan to shift revenue mix to faster growing businesses On track with deleveraging an
Slide 16: a Oo Cc ro) (an ol <x
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Slide 17: Storage Continues to Drive Growth
Storage Continues to Drive Growth 17 10.5% 1.2% 0.5% 49.1% 0.6% 18.7% 9.5% 0.4% 4.9% 0.1% 4.5% Records Management Secure Shredding Adjacent Businesses Data Management Data Center Digital Solutions Q4’17 Service Revenue 38% of total revenues 28% gross profit margin Q4’17 Storage Revenue 62% of total
Slide 18: Developed and Other International RM Volume
Developed and Other International RM Volume Developed Markets 18 Other International (1) Q2-17 cube growth has been adjusted to reflect required regulatory divestments in IRM’s legacy Australian business. (2) Represents CuFt acquired at close. CuFt activity post close flows through new sales, new vo