IRM - Earnings call transcript Q3 2019 | Iron Mountain Incorporated

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Operator

Good day and welcome to the Iron Mountain Q3 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Greer Aviv. ahead. go Please

Greer Aviv

available Good earnings XXXX Chuck. that welcome our supplemental to remarks, to be along information. Relations Thank a financial release, with conference morning and call. quarter link are prepared today’s earnings today, webcast, slides our The third Investor referred website the you, today’s in and on press user will full controlled the

and discuss then Project our Iron call, the Mountain’s Bill President of third we’ll quarter our who CEO, CFO, financial the today’s announced performance On program remainder and Meaney, will Summit, Brown, transformation for this cover hear and Stuart the outlook year. results from morning. additional will

the prepared the our slide open up call, operating remarks, information Referring presentation Project lines and our expectations supplemental now XXXX contain for we’ll performance notably, today’s X most presentation, and forward-looking statements, from financial earnings Q&A. After and of financial will outlook for to Slide Summit.

subject uncertainties. differ slide a and those financial the Report forward-looking Harbor factors in of this report, on to supplemental cause risk All Form statements. actual could XX-K language our on risks forward-looking that the presentation, major to are Please today’s our to release, call and discussion statements Safe earnings press results for refer our Annual from

information. to financial measures required supplemental by as use In are results and in addition, non-GAAP several the measures these we the Reg when financial presenting reconciliations our included G

With that, Bill, would please you begin?

William Meaney

call, Thank topics. two would cover taking to like main Greer, time join us. you, thank I On today’s you and for all to

building the well demonstrating strong and X% we growth EBITDA adjusted currency and year. First, year-over-year consistent as in quarter-over-quarter X% basis, quarter organic we constant delivered showing solid progression the as in of another on businesses continued the a further growth are

simpler a structure, future. is which supporting better Summit, us a our with in will are Project commencing program transformation more announced we dynamic and November that we leave Second, management

first of address a discussion transformation I on the level, Project this focuses our QX will program At high results, areas. into get we Before Summit. key three

our Information structure combining eliminating simplify leader, RIM will rebalancing and whilst by we operations core Records in our work or First, resources. unnecessary global under one also global Management

Second, global more levels will we streamline of our dynamic the X current organization. number whereby and condense will support our layers our structure, by of agile organization, will from X This to levels, we a create simplifying reporting average levels. down

an we solutions new lines, will product third, between global regional efficiently alignment creating core resources And more in our across digital leverage experience. and enhanced better customer resulting in our customer-facing business, RIM

is rate Summit million expected complete benefits deliver to annual by all Project all, end expected in in XXXX. run be with $XXX of All actions the adjusted to EBITDA

We during restructuring a of million. cost with being in expect $XXX course the recognized million fourth to cost the restructuring will total $XX the of achieve benefit, December, these total be Of to implemented approximately and November of incur benefits million quarter. $XX

our normal in in be Whilst there on no quarter top flowing the growth. benefit Summit to expected are first of will of start to this phase XXXX our of results, first through from benefits XXXX little

context. diving on detail provide Before me into more some let Summit,

Mountain’s Over we trust history, nearly the course Iron and scale. of developed X have unmatched decade

feet of the and in the XX% today, XXXX. including with Management nearly Records player relationships, We of customer Information million XXX have deep global built storing business extremely cubic Fortune the records

in as our large accountability, other such organization. decision in in part certain executed has business areas lines This across been global growth, resulted making redundancies complexities IT of systems, processes, through acquisitions, and which has

evolving to needs. react most quickly customer compete any to industry be able flexible, be must today, be of effectively communication and in you have lines to To efficient able

the systems internal to streamline simplify continue processes. customers approach This to necessary teams our tearing our solving better their down tools standardize, our from have our with to We customer and we and means, offering, needs more across business and problems. our equipping in heard be to need that integrated meet our silos,

But we and fully efficient so more in fully need order to align model. take opportunity, also operating this – a resources capabilities, our better we to have of and simplified take to advantage and significant

Whilst the by so that on X% revenue underlying us solid the Summit more year-on-year, organic the future health can of efficiently. is storage and to as business capitalize faster continue growth allow believe opportunities we momentum, demonstrated will we

we grow position Summit also Records investment generating in continued expect to on both for and as better scale Management can industry, in free solutions to We financial and our so digital to revenue results more in our customers cash execute create profit, our further the enable come whilst will This as improvement us furthering strategy, continue leverage. reducing leader the centers and to build as Information whilst in global from well flow. data

whilst serve view Summit, a with simplifying Moreover, identifying highest pursuing undertake In to so, through vigorously we dynamic steps our we provide a opportunities affect work which are the in and to global customers. are we to to our all able pace where change. structure will of people our efficiency and workplace, environment the the can at potential improve increase doing operations an

And to we will growth positioned relationships to and the strong enterprise. can investors solid across enhance have our that our us already returns the operations enable customer sharpen us cost higher our structure areas be focus to better allowing and provide on

earlier, EVP our a I global a lead Ernie all leader. Manager, under as operations in will proud As place efficiency key is RIM new standpoint this General mentioned this operating customer To change, an announce RIM for end, global are now our viewpoint service International and single structure. that of to Cloutier, well catalyst from we as to both

as through and in to beginning several assisting into is EVP morning’s had Patrick announcement, Ernie, provide mentioned who Manager a Mountain the his North retiring Patrick role, XXXX. the and years will Iron and executive Keddy during As he take markets be for role on will and consultative transition of this new support seasoned a we led Europe. America developed General of Western

are a extremely position Ernie grateful sustained both Patrick to RIM and leadership structure. the success for and united for business efforts their We to under

will taking establishing expanded this Strategic a for be by leading Ernie is he potential as some area Accounts McIntosh, role, who on and grow charged ability to relatively Accounts. Greg with new along our and Strategic Mountain Iron addition highest In operations we service our is with to commercial now our supported upgrade of customers.

the who addition In Deirdre supported Ernie leads will to American business. Greg, RIM by be Evens, North

me, development leading Deirdre Additionally, MakeSpace. which our report storage, to partnership continued of consumer includes the with will

during benefit VP dynamic the expected approximately and is In next of transforming of approximately of layers to to reporting the the impact terms of to positions customers, levels of and which employees be more and will agile will and condense our the number number company by these which reductions, reduce above months. be the actioned level XX%, of two the XX% including we

by next colleagues. program reduce many goodbye managerial over and The should workforce years. administrative XXX expected to the Summit positions total our say friends be us It noted that two to and to is is causing

in in are senior if fewer to now a a serve our far way. we situation need customers responsive that We leaders more are we

outplacement impacted employees right support to including We severance that negatively it these support. the providing are appropriate and to committed

a Mountain is Iron close-knit community.

continue evolve long team, term. our ways organization, over part with business prove never team be and the realignment will our value-enhancing for this members, customers shareholders needs and our it is easy to So to but of the to our

Turning currency X% this and in X.X% has basis of EBITDA as adjusted now year-over-year performance, of offsetting the year, our points as recycled well This reflecting revenue paper and delivered revenue lower a constant management respectively. we the positive adjusted to resulted began benefits of the costs, growth from overhead QX XX.X%, XXX margin prices. to on we expansion efficiency and earlier EBITDA initiatives work impact lower

Global volume This trends in be more basis whilst new the continue XX organic Turning to X volume was were driven over positive with with modest by cubic than QX to net feet by last in business sales, points months. or increasing Management destructions performance, million line levels. improvement XX Records

by volume quarter, Western basis in specifically, In with while down cubic XX grew points. million in America or line prior about feet declined by organically markets, X.X%. Europe volume developed X.X%, are RIM More X.X organic declines North volume

feet growth as previous net International X.X destructions moderated. or volume a by acceleration Other sales and million quarters cubic strong from X.X%, organic was new increased modest

encouraged durability unifying organization remain in management beyond. unlocking opportunity incremental core the business, RIM and and X our the by the believe records of in will business result resilience core We structure and under global

records will management and We offering. better globalized the core to organization reach to both align RIM resources experience, bolster across our extend beyond our customer our processes

other team than storage feet in opportunities For area has services grow X to our North such library contributing year-to-date consumer, leveraging cubic RIM channel non-core to as American example, storage portfolio. assets relationships been our and the the more million and successful

government. including penetrating some in North progress to unvended continue of markets the make federal the American segments We good of historically the

federal wins across with had lines, we and or the yet culture solid sell in revenue driving multiple double-digits data best Governance IGDS great with its center. all and storage, Digital product team This Information including shred, Our core Solutions a is example quarter of QX year-over-year growing are toward.

enabling strong showing across their our addressing more us growth solutions on a multiple with solution meets a revenue a level, success product we customers of the needs. engage is that on contribution the business with increasing allowing business different good increasingly from revenues, year-over-year IGDS Our digital seen to opportunities have with focus evolving recurring pull-through lines other when comprehensive

customer was this million a capabilities. cubic win, which some with feet insight where digitization this unique including our of recent XXX,XXX this offering, engineering platform we X $X us. Just of was our combined example scanning documents, compelled choose to It

very turnkey optimistic the Phoenix, online Data markets QX key Center Finally, center trajectory about Amsterdam in capacity brought quarter across our we growth busy new our with be to including was world, continue London, platform. around a Singapore. data and Global

Virginia lease to early enterprise encouraged are retail-focused the the growing hyperscale the Northern we critical as we by a QX, demand addition by evidenced in market in pipeline. signed we In see

Virginia. new QX activity leasing expansion the and X lease we of primarily center data at by Northern more signed driven leases, megawatts in specifically, in Looking

megawatts enterprise logos driven our center and of the end to the leased target Excluding platform. to attributable of the of to nearly entirely quarter, a data high-end XX of demand XX.X to XXXX Through Iron expect the the we achieve third with total by XX% continue that of we megawatts. Mountain signed megawatts have kilowatts to XX new X

for to space relationships quarters, Iron shared customer sales previous have recognition data of of our in our force. As on differentiator clear center we is our you Mountain power and a traditional the strong the leverage brand with ability

a priorities businesses. markets simplify business Once strategic our through and durability demonstrating of growth Information enable a our nimble implemented, opportunities was and available us and the operations whilst enhances to execute faster In QX all customers Management summary, stronger, our Records solid in quarter, us faster more growing continued day-to-day the the will building capture that to move which and for to Summit service to core solid ability highlights and opportunities Project and and growth stakeholders. stated organization generate our returns on stability ease

I announced should in share our we to on add an a X.X% annual per basis. also $X.XX increase today, dividend

our modest well pipeline at albeit opportunities We term. both we a Summit, ahead as center are more data grow of near Stuart? and details dividend to XXXX. more impact investment provide the longer of Durable given QX solid as in the Project continuing space financial for see

Stuart Brown

Bill. you, Thank

lot in. a me let cover have We so to today, jump

in cash our and Project a increasing the structural more our storage long perspective we I create to some on expand framework the on outlook, give helping significant The physical want showing expected Before over announced performance framework, to value next fund reviewing our the opportunities and impact you this morning to and flow benefits an to dividend our fund both investments transformation to financial are in years, generate growth data investing businesses. center several over plan longer-term to Summit of by term. business the

new exhibit while storage should durable declining organic nature, business customer flattish to as see consistent more services data and offset storage Looking are out, as characteristics, in rental and resulting low-single-digit growth. for expect our solutions. in Service lumpy strong we continue core by demand center revenue, annual remain capacity revenue to

ongoing around or $XX more X% improvement continue will organically grow to revenue per generating consistently drive million increasingly continues EBITDA Summit flow. help and cash The initiatives higher and growth adjusted should year. approximately AFFO, Project

continued data Bill to simplifying in with we how of we including Summit Project operate. while scaling development higher opportunities As international noted, our and intend operations, growth center invest

leadership priorities to plans and as we strategic allocation management information enterprise well capital governance remain unchanged, as and our and our global continue Our as leverage relationships. records

solutions We for shareholders, our to will very continue more balancing be create decisions, capital our in investments customers. disciplined allocation providing XXX,XXX value while that for

the fund in and free leverage. to of demonstrates growth reduced framework flow, The commitment majority cash our our to robust turn,

in to operate line plan the ratio the X dividend As adjusted our [EBITDAR] range and we depending [ph], more cycle X.X growing leverage where to REITs. and payout times faster data with we in upon of we with center are lease other AFFO, in with grow

QX. turning points to billion we revenues in results, of revenue the or X.X% dollar. Total quarterly excluding basis Now stronger reported nearly $X.X grew generated XX impact of the

were you total by management revenue trends revenue More was from basis the constant specifically, reflecting for organic and X% that revenue growth. from currency storage storage X, consistent revenue and our volumes As QX see quarter, on Slide contributions volume revenue a driven can developed on storage organic reflecting growth global X.X% management QX. continuing markets with largely of X%, results increased in rental rental

growth to organic lower than QX, churn the In we of segment, we previous with had matching Other X.X% was of revenue quarters revenue messaged the little In storage X.X%. X.X% growth storage achieve in healthy center, organic quarter. data last a International expectations continue

Businesses growing organic the performing also quarter. Adjacent in Our storage were by well, revenue X.X%

revenue currencies to swing of growth in Total revenue This highs X.X% service paper recent to our levels. is than revenue year ago. a last the revenue we down half mainly constant change and XX If of international back with points currently project in X.X% those reflects have declined lower due were service quarter prices, mainly lower X% the impact record prices, which which markets. organic are year-over-year organic $XX.X the QX, the in half in increased at paper million compared year less basis of in of would service below in trends exclude

expect revenue storage gross now XX%, X%. is of generating driver decline that key our increase service organic organic remains approximately of annual around expected generate growth – organic annual growth X.X% total We to revenue X.X%, to while resulting to about profitability. storage margins Remember the in

year you management As $XX about million on see ago. cost a year can SG&A lower declined X, as to compared well from as compensation actions Slide also third variable quarter reflecting ago, a

increased EBITDA million prices. X.X% the paper $XX million, lower or adjusted Our despite year-over-year to $XXX

Excluding increased the impact EBITDA changes, million adjusted X%. or $XX of currency

to quarter $XXX This including million million $X higher the to AFFO of a decrease year ago. to $XXX non-real is growth Slide In in adjusted the the basis investments, improve million shredding performance third maintenance XX XXX to reduce plant to by upgrades margins margin recent transportation number of costs points EBITDA compared was of year-over-year expanded estate attributable in primarily segment. adjusted details XX.X%. capacity. total, EBITDA completion business

Turning times lease to to Slide flat can that our of and REITs XX, you line adjusted QX. leverage in ratio remains other was see X.X with

Project by through leverage as rates held of our of to lower expect We paper the year. benefits next flattish the year exchange flowing cost end and the back as implementing ahead well remain of Summit prices

proceeds XX-year debt use billion pay have real net the we maturity to Importantly, proceeds the at Northern we purchase properties capital QX. a our of good credit We exceeding was market X $XXX bonds of sight borrowers closed sale this California $X having under turn Midwest portfolio extend times selling our in year from recycling September, facility, in estate opened Further, options and line X after years. on to X of average in an in crossover the raising to X.XXX%, of which offering that early oversubscribed. in down million

and a project But – the revenue which guidance. of management revenue we expected. year XXXX Slide only out They’ve these guidance service experienced impact to we records core course, not we’d anticipated for had on a some offset almost headwinds been have laid implemented XX, lower by EBITDA are strong, paper fully than we To in This will our while storage savings full has $XX partially has lesser includes, this that the successfully prices Turning of business project growth degree, number adjusted we year. million cost challenges. when initiatives.

in partly no quarter. QX slightly to up developed due previous Summit our the in results to service benefit from to below little in lower growth This from is We markets. EBITDA expect be performance Project QX with expectations

fully be through to between year X%. of of year-over-year This the or growth we expect low-end adjusted $X.XX X% result, range guidance billion, adjusted this EBITDA $X.XX change a to and constant AFFO a our of billion previous flowing now implies EPS. adjusted to to As with EBITDA currencies near

will important in help we components While provide given XXXX in with formal February earnings some the Summit, modeling. guidance impact to provide our size call, and QX want Project we to of

we million. expect half our million from taken in XXXX second EBITDA should normal Project in adjusted $XX growth, we actions million will of and to be growth in-year about taken $XX organic X% from approximately weighted. high-level, continue At of to see Summit which XXXX, or a adjusted actions year-over-year to Incremental benefit Summit organic $XX benefit EBITDA be

and In of to million results would we EBITDA this adjusted year-over-year Putting addition, to million $XX rates current altogether, of anticipated see paper indicate year million. exchange approximately prices $XXX increase to $XX a for in headwinds, expect XXXX. full relative

simplify cost implement customers. benefits which and Also, we to to to from program EBITDA treat will AFFO. plan adjusted is to significant yield to expected as our and value shareholders announced we today bringing To our conclude, we we that excluded Summit how do the business, as the restructuring, be Project transformation

strategic priorities, customers’ the helping as most Mountain’s years while program clear this is including for ensure flow its to to assets come. protected our of path precious Implementing guardian position to a Iron provides that generating delivery trusted our fund growth, of cash

line the We our call it look next you open you quarter over progress up turn I’ll forward early fourth year. Chuck, for that, back earnings Q&A. With with to sharing on to our to

session. begin We will the now question-and-answer

Operator

will go of And [Operator now from come will Berenberg. begin session. ahead. Nate question-and-answer our Instructions] Crossett question the first We Please

Nate Crossett

get viewing in will how million I’m terms centers your uses? of $XXX the what’s how cost kind sense morning. the projects you’re annual I say, versus, deleveraging, guess, good curious growth like just in data to be allocated, of Hi, of of breakout saves

William Meaney

all, customer of to with that Project is so we’re the with standpoint it first quicker company, work our from simpler totally more obstacles internally. less the and of in terms the So Summit work efficiently allows mountaineers reorganizing driven to and

the we’re it’s rather businesses things conducting. do than about way really that reorganizing So we

in they’re that separate quite So sense.

over if be feeling project the kind So be the And of months. big will when the $XX change the company. million X the think the as overall of company the in in we terms hierarchy change terms leadership actioned next said of you in that about is that’s – we way will of the of

more So that the us as way our first getting above. of to a to top is of call interact terms XX% their make really to as at internally us in action of XX% customers changes both $XX things that’s million, about what would of house getting way XX that’s because and well in VPs our structured I efficient reduction going on – behalf, or looking really in the XX% with the the

first benefit what in-year $XX about the worth really the million million top on about of million program. the $XXX guidance. of of that’s we And action That $XX was to change. equates So talked million $XX the million for of then of that XXXX $XX

be will cost million So of improvement to by the around a XXXX $XXX program. of $XXX million of end up

continue see data as they’re center. both strong Data our Stuart So we separate that’s sequence. from center, growth to highlighted. and how investment things very I the But

up capacity. is the this about XX% year since leased it terms we’re beginning of you in the think year of If about

over quarter we’ve then we look that of growth up in was is – And be brought we IO; into on And up quarter then third to we would actioned year. talked And XX XX for mid-teens terms churn XXXX in terms leases if bought we’re book in you about which known gave going this would of XX of online. megawatts. that end if up we’re you guidance that the we that when a the and the forward in year-on-year at about little we’re call, last normalize the megawatts

data we a continue center with – consistent to able guidance year. XX% quite to again, XX% be our So and that expect to between yeah, grow

– So it, is separate but Project effective. about so Project Summit. very be reorganizing more from Summit we it’s really can

Nate Crossett

DCs maybe in just a Okay, of of terms chatter And that’s helpful. been talked There the lot on in about lot. obviously space you M&A. since is this a then, it

on time a from time whether overall to what you look your the Just of DC and build-out higher curious guys to the get maybe is at to accelerate as opportunities is continue because your to a appetite that company, area. growth of EBITDA it thoughts percent

William Meaney

are allocation needs bulking with pricy. looking a earnings at be these both And well needs basis. fundamentally, capital on AFFO good an you, to per up. EPS lot share as But be also accretive about capital I of Nate. it and a pretty when can’t acquisitions be It we’re or agree an just allocation, as it to of

But feel which about So been acquisitions the to platform building it’s now up we’re ones, that. larger have Obviously, the we talent the much platform. looking we to attract We good disciplined the pretty the on and a of at build the that able really really need that. think done being lead was IO about today. we I about –

bulk we So give did there smaller out, same cost up. think which where you cost types cost is So be we that. with I as economics are it, the acquisitions. into us the build, But there any will right? is of action quicker the doing to like building Amsterdam, do to or similar as an of acquisitions, cost market, I mean, acquisition near major see acquisitions it close close we them to just a us EvoSwitch allow doing us don’t would to if would are call anticipate I don’t what to in any pencil I acquisitions – what those would major when us

Nate Crossett

since just quick growth that’s one like storage been X%, XQ last one, Okay. highest looks it’s XXXX. And the organic then, maybe

forward? in have how do market put forward. X% on initiative Just are wanted it that and in going runway sustainable of that you place much going you to far piece you get your is of along management that how revenue How sense

William Meaney

And Yeah, good it’s the rolled we the drivers, question. We is it. great feel now feel revenue – two management a globally. really about exactly, really out is one

we business there management continuing of also globally I lines. rolled out some revenue we’re are out all still of of it runway And But see get other terms So to expanding of to lines would some across it’s RIM. more in our that is of business aren’t. But more the and and the those storage terms for some those non-RIM. in – say of

the of I to American other think international I volume aspect what where encourage the slightly we terms business. in would and in in records headwinds the terms we in of call continuing see markets, management in volume, in we’re even that of market, growth terms the North traditional negative see

I think team date, about highlighted similar in in returns remarks million Deirdre brought as of have non-traditional and my storage, actually year that box which her has business. I $X to our

So new we of see areas of also storage. the some

organic revenue comfortable in kind maintaining of kind we put is it of storage be to net-net, really feel for you this growth. our altogether, zip-code So

Nate Crossett

Thanks, guys. Okay.

Operator

next Our question will McGrath go of from Sheila Please Evercore ISI. ahead. come

Sheila McGrath

savings consultants analysis? bit you give a How have did that? good project engage Bill, Yes, the I description on you After wondering did the initiative. to for compare significant us this was Recall Summit. outside if morning. little does acquisition, could Project more you And cost

William Meaney

Okay. It’s great a question.

think point, our at – management looked that. that for under the knew we at of all, – the let other of records catalyst timing when question me all I business bring of we is back some wanted for me so your So kind right single the up first question, – is this. let in And a Is think that the globally. unit we of the – – to I terms first

catalyst. was the that primary So

say, story company a as a sales those our were And timing following years is journey, management why only started now? six you emerging or is of been and markets this well, when approaching of the together while, into seven for a we now to records on XX% it’s who’ve bring ago, business this you XX%. unit right single For

our We set to to originally goal that be get XX%.

sure important out capital XX%. footprint. able feel separate, a allocating make separate And wanted Now, to it’s acquisitions getting well is are We approaching in we acquisition. was thoughtful that good. a it Recall as we we And a if have as leadership both near to the really needed we as returns built be to through way one-off the in that

all, of effectively we doubled those of in markets. the size footprint our First

we Duale feel and really what been terms point in team So one. Ernie able do. Marc and That’s of his good now to has

more the, for sure we do actually is On been and now we separate So would hearing talked I execute internationally, top is scale have again focus both to we and so and that, necessary. the having and this that call, siloed we earlier what about more our year what’s from today, of customers, have talked internal external.

on us setting also, to behalf difficult looking And accounts started earlier it things this get sometimes But customer. in. the customers year. done of for We up up strategic operate with integrated have solutions us show McIntosh we Greg a is – our they employees geographies across internally how to telling under a organization are seamlessly are

that knew with different together, thought organizations you we costs units. time have to X organizations to is X had of together functions, because don’t leadership. supporting the business organization The bunch brought put being first just we X because out, early those naturally a the We intention Patrick’s now those organization that by all, flows was onto We together. X two Ernie’s timing bringing support together. there single a quite to We good, bring XXXX. of simplify, retire those in Patrick’s When

business now unit. a serving have support function You single X

how of sure that the especially service completely, part took we to to wanted differently. look the we business opportunity make operate organization could And we organization actually through the on

to amalgamation which the think, us it the So and group, the team January, change, we smaller now. more above and are be XX% and gave numbers starting was a as we relook result It we the who in a terms, than at catalyst bigger of This the be taking out executive before. can people this in the will opportunity but and will inclusive vice have if around organization. of presidents of leadership be an

strategic – be ability can we our customers intent get can communicate we table on actually will execute. So to more to single get much action faster, people request right a around because into the

And that’s standpoint, of from the that benefits when really there’s a shareholder flow do thing that’s of efficiency, organizational it. the a through. So kind news that then, good you lot behind

is I’ll in actioning, the and of I’ll is last management basically question Summit, project end of year, backend the advisers to The thing, by of is Summit about really – about cadre your so the come of XX% the be will of place. reduction end this the talk that front

As through the X capabilities over of a that years, it the organization, IT-led. which building we start systems to is is that that will lot we support go allow new next program

Last way did on in thing of that on this executing to actually months, middle Actually, that advisers got something and a we that working but sure August speed. were when been bring advisers. a was we your the closer we question we’ve execution the consistent make to is to for phase, with number of in

of So bring towards and advisers in the we did the end project. tail

Sheila McGrath

quick of couple follow-ups. A Great. Okay.

where approach? be in have Stuart, you cost see You more your to it margins? it Or driven, this savings? And any these make customer will for do G&A? sales we meaningful mentioned changes Is to segment was will corporate in maybe

William Meaney

question. on take your I’ll then, sales, Sheila, the Stuart follow-on can and Okay. follow

hear the I On from the customer. the right. that one we mean, absolutely, sales, things of you’re

a our project product a the in approach cubic some remove box to selling feet. more are cubic a product them. much Our be a really may them just project, where they storage. of to wanted out probably where I out the engineering might won oriented them highlighted we turned It solution an wanted. with digitize that had digitization, than And we and they for industry, consisting case be XXX,XXX rather and asking a us started understood a product customers it be be XXX,XXX and And where they customers is to what feet this might lot company Europe, of

then as they and insight we said, platform – their automate digitize create be well of combination the digitized everything the we boxes And actually will realize destroyed. We want more of to actually the boxes. the to creation metadata

facility. These sales our that’s boxes engaging set in broad them more So Mountain a win to a and better project it’s having bigger actually with from But unvended And actually actually of able were we different Iron a customers. result, a as do stored solutions, by opportunity. standpoint. an their for an were team

we’re So sales that marketing you’re a collapse lot be and RIM all this who under actually so us that customers. accounts our sales will absolutely is enablement right, is enablement, of that Greg – actually Ernie’s sales in well, strategic delivering McIntosh, operations, to organization, allows

the is there go about terms, way part big it, in changing we So market. a of to

Stuart Brown

flow improvement line XXXX And is cost SG&A be where you’ll in here continued Sheila, so the sales And terms taking will that action flow more then of we’ve in as that. the we’re around quarter, some well. benefits fourth about that people we actions through, are SG&A the will see talked that to taking how are of are in mostly the about we through actions the talked mostly

get And flow that the the sort our back you And so that, tools, flow terms more have services about in as going from shredding we rollout in so customers fewer that then tools think we customer our or through touch of you’ll of half customers, enable mobile things mobile been XXXX. more ordering like when customers points or of on there, for the through for. asking our impact boxes or see we’re between right, like things to

a of for well as easy the it’s billings, them. that that as lot manual that always frustrates our billing processes things creates customers, a We’ve of done. not well of And around our of number for internally inefficiencies got M&A which actually and simplify through like number some acquisitions we’ve

will that through those in So and various continue within through lines later will flow to flow years. the

Sheila McGrath

Thank Okay. you.

Operator

Our Please next ahead. come Luebchow Eric Wells question Fargo. of will from go

Eric Luebchow

X.X, lease X range. throughout of to taking times Curious, year, for mentioned wanted you adjusted your to kind ultimately flat thanks you get the leverage Stuart, that Hey, were question. down the net remain but

So the target? development of capital EBITDA how and could kind think And help long kind mix you it bridge you there give to kind take maybe a and of hit you of growth recycling us data and/or will how CapEx? that will get of for center

Stuart Brown

Eric. Thanks, Yeah.

grow what returns we generating to to which about flow you talked good really, our our free look think, is I data aim if were majority on opening in obviously, acquisitions investments, center. our the cash at and remarks, cover

And in so putting and capital work allocation there. really strategy changing, to we’re not are strategy capital deployment our where capital change – of terms the amounts there’s no in

a as is than we’re markets the agency leverage standpoint, REITs already higher other rated line actually rating treat with we credit From leverage today. if are. a standpoint, in from our And

offering. from in You results that can the bond see the

about flexibility And our is X so to optimizing really to to X.X time. over get times,

you if EBITDA those with us million, sort will leverage. that right, to Project Summit from, of look will themselves the X% leverage, allow come our of where to the it reduce benefits, should our and growth deleveraging at So in grow of $XXX right, reduce will around organic

data get projects, to and pipeline in at demand. Virginia, quarter and even and our we taken to Amsterdam strong see the bit fourth is demand actually look little projects up continue strong center We where today, in some what center data our this we’ve see a started, other particularly capital for

so will from start from our flat through benefits there. as And in down that we the to leverage XXXX flow Summit expect to be Project slightly

sort between to at term so And back optimizing of longer X.X X.X, and to financial X.X framework going obviously, X.

Eric Luebchow

thinking if business, more retail and that? could follow-up and just of thinner how And provide JV returns maybe hyperscale should your you’re traditional maybe you look a of mix slightly the I about has an about then, know the And data on process kind if pipeline, Great. Frankfurt enterprise update think you of of kind business. your how center, kind on the – we at the which

William Meaney

question, Eric. good a It’s Okay.

that I you towards that win the obviously quarter, July. at instance, it’s this if we where the hyperscale think for look biased – had in

I over time. think that smooths kind of out

we fully facility or it I in like at think that just of to XX-XX give which lend even be XX-XX XX% we cash-on-cash XX%. when like terms say blended around size us hyperscale Northern think, the will that themselves to still Virginia, anticipate, look out, built would I it’s hyperscale large that, returns would I that of a

the about what mix us, and of call, between speed in So we hyperscale fill for it’s all enterprise. terms normal of

is I hyperscale deploy is us, thing aspect other though which as hyperscale, they customers enterprise, edge-type that add lost returns some similar about the is on actually would have one deployment. not an we smaller have when The do deployment, so

segment say edge, are customer when So that even and hyperscale look is they which a they deployment. have large ones, for more other then but have call they enterprise, when us, some requirements hyperscale, pure within a like you there’s

returns. we So half we’ll be will XX%, – cash-on-cash but our think the still net-net and business about end of we XX% with of up hyperscale, kind

as continue our sold balance sheet XX or faster to In doing we or we’re we areas. to pretty stretch slow expand already megawatts other terms can we allows have of into with that, to And don’t and we’re that, the a with putting year-to-date, to that we venture. like want would pipeline because down. Frankfurt that critical of booked you – that pleased do us joint It’s absolutely about it do into discussions positive that, just is but not

Eric Luebchow

you. Great. Thank Okay.

Operator

of And from our Baird next question will & Co. Andy Please Robert go ahead. W. Wittmann come

Andrew Wittmann

going deploying this to wasn’t mentioned dividend, the my you’re taking data the about growth the considering going that I of dividend way otherwise centers. guys dividend right X% for increase here the to questions. these towards center guess, the continue Thanks into that putting you use investments? you’d you’re to of think Is rate have talked long-term the data to that kind about the great. Hi, proceeds probably

William Meaney

a great It’s Andy. question, Yeah.

I dividend is us that allows megawatts. we – if you’re rate, – to this to now X about have be or you the gives growing if the think is think by cash-on-cash think, or occupancy what you about it’s X cite, cash pipeline given X that about right we we’re – X data actually tight taking kind X pipeline based and is out X XX% we’ve X exchange to the – X it and center that – right or megawatts that our of And on because buying XX% on given at we’re the megawatts pretty the see definitely side. and return, or our can shareholders better building returns demand the

So kind to those of a have the then if say ratio of you to continue center kind AFFO mid-XXs lost are of as of peers trade-offs, go-forward a anyone, on most low-XXs. make our payout data on probably as not a we’ll percentage it’s – in basis,

demand on we we’re settle my that see is that’s center. So given guess the where probably data to going out just

Andrew Wittmann

as in reconcile just What likely quarter in techniques ask margins to that That’s I down with wanted management the to Got revenue good in North how pretty was the about the you the were are can North it. think, your helpful. American a business. management They wondering, core fed clearly there, the quarter. RIM I noted year-over-year, were also America things I the margin performance. revenue happened into Stuart, benefit that?

Stuart Brown

paper No. reason right. the price, is The obviously main

margins adjust the are quarter. up actually year-over-year for you paper if for So price

So driver. that’s really main the

Andrew Wittmann

in what you the I midpoint your them then moving as them change of in of of the numbers, guidance, were And a you could pieces understand – because if mean, there’s the paper, of lot key just of listed Okay. factors things. kind the was but always other Stuart, there’s well, one there? obviously, us just could help you some some

just bridge can the here, guide the maybe you to Just guide? new old help

Stuart Brown

midpoint of lower Yeah. range. paper about last down, is down $XX key of lowered to which drivers I million] the per so [ph]. mean, actually The the ton. million] [$X,XXX of now call, that the earnings even previous [$X,XXX just again, We old are the are, guide, the since midpoint [ph], prices our end

of bit. stronger price, lower given $X about of impacted the So the is is right a us, that that now, actually million itself also right, vary That’s or paper dollar and about little so that’s million dollar where in can has $X $X again, million.

offset negative America North profit management. other service core of partly lower destructions, in to due path part this have the actions of I is good been the headwind wanted a sort we we to with The lower comps, that’s services obviously the comes debt. the destructions. bit revenue that is for taken things records in bad also down, actually higher from due a clear the where range. are But global The that the for piece but and lower Those cost gross to it is think France, incentive But we little of we’ve be, and volume. which and it are or lower have to where of SG&A not UK

Andrew Wittmann

Okay.

– So Slide XX that paper out the separately. just on of kind calls

think, for, gave So I The actually reconciled you there biggest there. lower a was your said nominal just you paper chunk number little price than or you bit million guidance that so. is the $XX just

other that how factors, does go those in? all So

Stuart Brown

different There right. is Yeah. got, periods you’ve are what

they price what’s them from of XXXX paper at talked the look On you are where And in about spot price today ton XX, that if we impact. months ton. versus the changed average Paper guidance change is get about ago. call $XX is, that in per paper stayed one on average we’ve Slide in I’m about $X that last compared then million million every the $XX today per $XX you reconciling is to the where XXXX low X So of is down XXXX. recognized prices into price to compared

Andrew Wittmann

the thing the guide, that’s here. key on year-over-year the difference is period that Yeah, Cool. Okay.

I you. Okay. leave there. will Thank it

Operator

our question from Please of Goldman ahead. go will next Tong Sachs. George come And

George Tong

you’re seeing broadly performance. Good center strong be the pricing trends Once in growth growth? with of volume thanks. from discuss Can growth storage strip like up the morning. pricing you benefits Hi, dive to bit your you business. that seeing a you data the any I’d volume little deeper storage into very and changes and may

William Meaney

it the like X.X%, it’s including data Yeah. center, growth Thanks centers, said X% if we you Actually, Good morning, data George. question. strip X.X%. total, for out was

So it the and the on growth. growth, a center impact revenue EBITDA is bigger does on data

contribute of sales actually up fairly the coming does X% about growth, to said about but X/X, it XX%, our – on minimal. consolidated side to before, it’s company, a we’ve sales our it’s of XX% close As as EBITDA

George Tong

and support over financial around back helpful. your That’s leverage. such of growth around going help structurally the then like accelerates growth it. with Got to know, managing a I’d time. are generating EBITDA is term, translation definitely I CapEx But changing into strategies that your leverage increases go EBITDA, improving can strategy what your to leverage, Summit longer or Project gross to in

Stuart Brown

appreciate And multiplying you get Yeah. bit right. question, sort you a – that effect, of I of because little then asking

top organic get EBITDA Project growth. from EBITDA of on the normal increasing You’ll of the Summit results

today minus And time, a look grow that million of growth, right. from after or you allocation so will we’re standpoint, $XXX plus if cash over flow dividend capital well, generating fund to

So tax we million of after a of EBITDA free flow or cash of take Summit so little will end, bit about talked $XXX that.

So our will free to investment themselves cash available flow us for less. borrow growth allow

get we won’t of you higher And So – then be EBITDA, the borrowing growth. you get much won’t growth benefit you as to the itself. fund

off as work, So the to capital deleveraging. then accelerate of well the comes putting growth EBITDA comes we’re the data center the that will as acquisitions as off

of where you’ll because time. cost range X.X% it’s going, in X the X.X X where over will flywheel are we’ll a upon – to provide optimally long within continue see be starts won’t [ph] you our really to the And times live Summit, the flexibility times, depending leverage again, to to term, as [EBITDAR] XXXX, of cycle. X.X% to come in most see while, the we we want as X.X deleveraging – down. much So of

George Tong

Got it. That’s helpful. you. Thank

Operator

go next ahead. Rosenbaum Please And of Shlomo our will question come Stifel. from

Adam Parrington

volumes management developed in Hi, this this Adam trends again Shlomo. record with talk markets sequentially? the for particularly about more is declining on the volumes Could you in quarter,

William Meaney

question. – thanks the Actually Yeah. for

actually over very base. the America. I an North trend. pretty see quarter, recent actually this most think, you it’s a But is pleased, on large to have this decline you moderated in the if And improvement remember, we were actually

by it’s service drag destructions. Stuart it’s on driven said, seen what because Partly a the less side we’ve revenue, on other

new pointed negative out. some the the picked slightly up areas So – it we’re we’re about storage is feet. picking not And up X revenue there. volume is we picking cubic million so then which And up you as where on

difference. moderating. the Western terms North that’s positive negative at statuses, We North thing in that, markets. volume very can America, is it’s The driving the which similar of is is economic you Europe, and in could actually major slightly in very overall, look a actually look But don’t you – slightly at mature both trends see trend America which trends,

But really boxes not comes I whether the think or change incoming it or is rate age of aging volume and of average out inventory the down increasing. to are our of

to improvement, fairly is trend, So quarter steady not improvement. of not slight actually a an and much see degradation we but a continue a this much of

Adam Parrington

you. Thank okay. it, Got

Operator

of from come And next Andrew go Steinerman ahead. the Morgan. question Please J.P. will

Michael Cho

Andrew. Hi, This good for is morning. Michael Cho

in leasing ones part just you goals segment the Just the what provide commentary the you us of the terms center activity, on couple environment revenue well remind segment, as given you’re quick could of Thanks. of growth can the that is, pricing are? maybe second really healthy data just of some healthy activity, the And maybe seeing? data a

William Meaney

Okay. of first maintain Well, all, so we consistency.

you if correct called bought churn which knew mid-teens it about we for that. as right customer up activity. when we said, up the at the the to last now, if I year-to-date year going you for churn, And the that at terms XX% look If beginning quarter, correct we’re back you year, leased since this of IO, actually the up in we of out we’re

kind hit for going XX track XX%, the to that year. in this original is the of I so That our range. out target, of us XX again and megawatts next put think so upper-end XX% like look us to think bookings that I set to you XX%, to of year XX% on mid-teens – up if of to growth XX% at we’re

to mid-teens. So business data we center of to our the be growth continue see

that enterprise would that consistent. from the I deployment pricing, of an say getting of on XX% for fairly terms customer. words the we’re the if on cash to returns we’re enterprise, the still In In anywhere depending other size pricing cash at XX% is looking

And continuing X% an XX% to to get entire X% XX% returns, on deployments, cash-on-cash we’re over campus. site or blended the hyperscale to

pleased of pricing pretty returns. we kinds from with see and what those staying stable is So the we’re very

Michael Cho

just on Bill, with mentioned the Thanks. I more And then you you along one if AFFO. know squeeze dividend. I can dividend – comment the

right. want I just to make got it sure I So

dividend that the towards and you moderate track AFFO there? range you will from the that saying can you are of So growth mentioned AFFO

William Meaney

most likely. think I Yeah,

to at as I we our it year, think if So dividend grow the back for is get our capital X do example. look continue thing shareholders. this – say, X of kind – to if obviously you look is another to at versus the reasonable allocation, drives rate what equates at year we’re you dividend year, that or being between a I then, out But think to right? the we as to what want able megawatts center growing build this our last difference data an to

And you if of that, as on are of the is look high if think as to all in proxy AFFO. a center in if kind right now. guess of you’re mid-XXs you percentage the peers, think to a payout kind trying my – XXs data of they at So XXs a low we’re

opportunities of the see. probably range with So pipeline that my our settle given we guess somewhere center is in out data we’ll peers,

Michael Cho

you. Thank great. Okay,

Operator

question next Pereiro go Please come of of Lynch. from Our Marlane ahead. Merrill Bank will America

Marlane Pereiro

Hi. Thank you for question. my taking

in a in quick how growth you storage MakeSpace of feet one, year? in much discuss other Just cubic for can terms volumes this and accounted consumer

William Meaney

or called of call million about storage. a had It’s right. about X.X of out we all Thanks. million. I kind And X it’s couple new million. Yeah, what I other would of of

million million cubic expect year X X.X the full We from coming MakeSpace. feet be to to about

really small but and we a growing partnership pleased have we’re with with So MakeSpace. the

Marlane Pereiro

Great. Thank you.

Operator

Credit go question Please Kevin of McVeigh our Suisse. And come next ahead. will

Kevin McVeigh

sizeable long you And decision to it it’s the you’re you wonder aspect that in and determine put had kind place when the folks going pretty did clear. restructuring, I do Hey, of take design it happen? it? kind one, structure of But thanks. then, Great, then to are kind number pretty – the announce did how of, of it, make to to

William Meaney

it looking Well, should our do months. because the we for we make that discussions these this how want do them. tackle with things sure be, been We to we’ve week at But it full before you obviously, lightly. don’t this literally decision Board to making was to had

we’ve for pretty since you winter mean, that looking this at I much the So, can the that been time. imagine –

Kevin McVeigh

side, ultimately, think free the thoughts it’s slippage And – flow from just or the then, there there primarily does to in frame cash that? revenue where it the then, cash on perspective, is to a is on think flow any XXXX XXXX, guess, to EBITDA maybe you about cost way way sit storage assume any the impact, going there like framework us was helpful what it were on or – service? a I the is if about no to is Stuart, help And

seems like and the I these it again, revenue continues pretty like, know a is thoughts cash kind of not actions it’s flow there would on there range impact is trend? any there. kind any formal what guidance, revenue EBITDA But is from or – it but of is on just that

William Meaney

the the what atypical in our the part. company nor about doing or at not be changing manage up about – for frontline people picking the the with what lead a really and of actually the is about the This things most Kevin, top. to we’re delivering clear probably every and just this we on who from way day This customers is are the restructure. lot you is that is coalface hear this people

That’s of above the coming main that But of going of organizational now why if from is and XX% for difficult it’s that, realignments of you a is to company. these which are imagine benefit question, – painful people a – impacted, close us. so because kinds feeling coming so change, Vice and revenue all knit President from your are back it’s to can people year through this, it is you

structure, and lines – that are allows in on with of them behalf storage from the specific agile with have leadership scanning, relationship can have them are artificial data year nimbler either our competitors solutions, or are our because none quite action to and we’re a customers intelligence a giving our in much But integrated None of now, doing of doing business storage, which of most the that’s which going us scanning. customers do, them to have competitors frankly global. quicker a center

this speed. So really is about

we’ll doing what see, we’re we expect tell into we haven’t saying, impact this, So revenue because haven’t because a don’t to we that we’re much something the our we we we that when on in, we But more side. don’t it, positive promise see guidance, built have any of built see. you that but

is from both ease, actually job with with outlined But and the them. cost laid we this interact what now, that right way flows program and us. naturally the their about out our So, by company, customers speed we all changing well to easier, impact the internal as the for mountaineers, operate as we’ve lead our make

Kevin McVeigh

Understood.

Operator

concluded. The you conference Thank for presentation. has today’s now attending

may disconnect. You now

Iron Mountain (IRM) 31 Oct 192019 Q3 Earnings call transcript