Iron Mountain Inc at Berenberg US CEO Conference (Virtual) Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : So maybe just to start off, high level for you, Barry. Obviously, a very interesting/challenging year. Maybe you can just speak to some of the customer behavior changes in your business since the beginning of the pandemic, what you've seen since, I guess, the worst of it earlier in the spring and kind of where we're heading into the end of the year?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful. I guess, it sounds like you're pacing ahead of where business activity is. What do you think it takes to get back to kind of that run rate that you guys saw before the pandemic? Is it the vaccine where everybody is going back to work? Or how should we think about, if there's any true structural changes that are going to be permanent and kind of what that run rate is, I guess, once we normalize?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful. I think one of the questions we get, and I think investors think about right now is, obviously, there's more digital activity because we're all working from home. And some people ask me, how does that going to affect paper storage volumes going forward. So maybe you can just touch on the fact that because there's more digital, it's not necessarily at the expense of paper volumes. And how people should think about just going forward, the need for physical paper storage?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. Yes, I mean, I think the storage volume has held up really well. Maybe you can just talk about your ability to push price and how that has actually helped you continue to grow that revenue line despite structural changes to digital. So what are customers saying to you when you try and put through price increases? How should we think about what -- I don't want to get into 2021 yet, but what is your kind of indication of what 2021 could look like? And has the pandemic changed any pricing discussions on the storage side?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. And that's a good kind of segue to my next question is just thinking about future volumes globally, the U.S. versus international. Maybe it'd be helpful for you to try and give investors a sense of the unvended opportunity that remains out there. And then just also opportunities for roll-ups from your competitors that maybe are not as well capitalized. I don't know how they've been doing in the pandemic because there's really no public comps, but that would certainly be interesting for us to hear.

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. I mean, I guess, the question I would have, specifically, has there been an uptick of peers or competitors coming to you saying, we're looking to sell this year or has it been the same as previous years? And then also on the federal government, I mean, we -- I remember calls years ago, there was more questions on it. And there was that Freeze the Footprint campaign, and you guys had talked about deals you had done with the federal government. So I guess, it'd be good to hear kind of what the latest is there? Does the election change anything at all? I mean, what's the latest you're hearing from the government?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. What about cross-selling the federal government on data center as well as there have been parts of the government that have done business on the storage side that have decided to do business on the data center side? Or what's the liaison with the federal government on your -- and the data center business?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. And then just, not to belabor the point, but what about other governments in other jurisdictions? Are they willing to give you guys storage space? Or if you're a U.S. company, is that harder to kind of get that business?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. Maybe just switching to the data center business, now that we're on it. Obviously, the AGC announcement was kind of the biggest new news. I wanted to get your comments on what the deal means for you? What's AGC's appetite for further deals? I know Bill mentioned that they had already partnered with someone in the U.S. in the past. So they're open to a lot of things. So maybe you can just speak to what this means for kind of your data center business going forward?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. Maybe just a follow-up quickly. So the 20% now, are you -- is the intention to retain that 20% indefinitely or is that something that will be paired down? Maybe you can just speak to why you decided to go with AGC over other bidders? And maybe just comment on the depth of the pool of the other builders? And then whatever you can tell us on pricing that you're willing to disclose will be helpful.

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful. Maybe the data center business is still below 10% of EBITDA as a whole, but in the context of the data center space, you guys are a pretty large player. So I would be curious to hear what your thoughts are in terms of demand, just heading into next year because I think going into the quarter, there were some cross currents with some people saying that the hyperscale guys might be going through a digestion phase in the back half, but then we saw really good leasing numbers across the space in the third quarter and pretty much everybody kind of reiterated that things are quite good. So I'm just -- as one of the bigger players in the data center space, I'm just -- would be curious if you actually echo those comments.

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. That's helpful. The price thing, the stabilization that you've seen this year, I'm just curious why you think maybe that's recurring this year? Is it just there's less supply in certain markets? Or is it that these larger hyperscale players one, kind of proof of concept, if you will, somebody who has scale in many markets who can execute and so maybe there's less private competition. Like we know there's a lot of money that wants to be involved in this space, but not everybody can execute. So I'm just curious, your comments on why you think maybe pricing has kind of stabilized?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. Maybe just shifting focus a little bit to capital allocation, capital recycling. Obviously, we talked about the JV, but it sounds like, to me, then some of the newer news in the quarter was just your willingness to maybe do more sale leasebacks within your own portfolio. So I was just kind of -- if you can touch on how much of that are you willing to, I guess, give up ownership and do a sale leaseback with. And if there's any kind of numbers you can give us in terms of where you think your own portfolio is valued today so at least we can get a sense of how much capital potentially you could free up?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful. This is a question from the audience, and it is similar to the question I was about to ask. It says, where is the dividend today versus the taxable REIT payout requirement? And two, why not cut the dividend to pay down debt and make more acquisitions?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful. You mentioned Project Summit in the answer to that. So I think it would be helpful just to remind everybody, where do we stand in terms of Project Summit? How many cost saves have you done so far? What's left? And yes, I guess that's a good start.

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : No, my follow-up -- I mean, that's all, very helpful. I was curious, maybe on the other side, obviously, you're saving a lot of expenses. But are there material kind of permanent expenses that -- from the pandemic, in terms of how you do things that are going to be kind of a permanent expense going forward. I don't know, PPE, whatever, labor costs, what's that done over this year and then health care costs going forward? So I guess my question is, has the pandemic changed certain costs going the other way?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. That's helpful. We got about 2 minutes left. I was maybe going to ask to wrap up, is there anything else top of mind that we haven't touched on that maybe you've been getting questions on since you guys reported?

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Okay. There's one more question coming in, if you guys don't mind taking one more from the audience. It says, what does revenue mix of biz look like in 5 years legacy storage versus data center mix? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 13, 2020 / 6:00PM, IRM.N - Iron Mountain Inc at Berenberg US CEO Conference (Virtual)

Question: Nathan Daniel Crossett - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst : Yes. Thanks for coming. Stay safe, and have a good holiday season, everybody.