The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from Business Wire

Interxion Reports Q4 and Full Year 2012 Results

Wednesday, February 27, 2013

Interxion Reports Q4 and Full Year 2012 Results07:00 EST Wednesday, February 27, 2013 AMSTERDAM (Business Wire) -- Interxion Holding NV (NYSE: INXN), a leading European provider of carrier-neutral colocation data centre services, announced its results today for the three months and year ended 31 December 2012. Financial Highlights Revenue for the fourth quarter and full year increased by 13% to €72.9 million and €277.1 million, respectively (4Q 2011: €64.4 million; FY 2011: €244.3 million) Adjusted EBITDA for the fourth quarter and full year increased by 15% and 18% to €31.2 million and €115.0 million, respectively (4Q 2011: €27.1 million; FY 2011: €97.6 million) Adjusted EBITDA margin for the fourth quarter and full year increased to 42.8% and 41.5%, respectively (4Q 2011: 42.1%; FY 2011: 40.0%) Net profit for the fourth quarter and full year was €5.6 million and €31.6 million, respectively (4Q 2011: €10.6 million; FY 2011: €25.6 million) Capital Expenditures, including intangible assets1, were €178.3 million Operating Highlights Equipped Space increased by 4,400 square metres in the fourth quarter and 11,200 square metres for the year to 74,000 square metres Revenue Generating Space increased by 5,000 square metres in the fourth quarter and 9,100 square metres for the full year to 56,200 square metres Utilisation Rate increased to 76% at the end of the year (FY 2011: 75%) Announced expansion projects remain on schedule Interxion Chief Executive Officer, David Ruberg, stated: “Interxion continued to execute in 2012, delivering strong financial results, despite a difficult macro environment. We added record amounts of equipped space and revenue generating square metres, while increasing our utilisation rate. Both revenue and adjusted EBITDA exhibited double digit growth, while positioning ourselves for continued growth into the future.” “In the fourth quarter, we continued our momentum by adding a record quarterly amount of revenue generating square metres. Compared to our third quarter, recurring revenue increased by 6% and adjusted EBITDA margins grew by 200 basis points,” continued Ruberg. Quarterly Review Revenue for the fourth quarter of 2012 was €72.9 million, a 13% increase over the fourth quarter of 2011 and a 3% increase over the third quarter of 2012. Recurring revenue was €69.0 million, a 16% increase over the fourth quarter of 2011 and a 6% increase over the third quarter of 2012. Recurring revenue in the quarter was 95% of total revenue. Cost of sales in the fourth quarter 2012 was €29.0 million, a 14% increase over the fourth quarter of 2011 and a 2% decrease over the third quarter of 2012. Gross profit was €43.9 million in the fourth quarter 2012, a 13% increase over the fourth quarter 2011 and a 7% increase over the third quarter of 2012. Sales and marketing costs in the fourth quarter were €5.5 million, up 19% compared to the prior year quarter. Other general and administrative costs2 were €7.2 million, an increase of 1% compared to the prior year quarter. Adjusted EBITDA for the fourth quarter of 2012 was €31.2 million, up 15% year over year and 9% over the prior quarter. Adjusted EBITDA margin expanded to 42.8% compared to 42.1% in the fourth quarter 2011 and 40.8% in the third quarter 2012. Depreciation, amortisation, and impairments in the fourth quarter 2012 was €13.1 million, an increase of 56% compared to the prior year quarter and consistent with the company's data centre investment program. Quarterly operating profit was adversely impacted by two one-time cost items. During the fourth quarter, the company reassessed its onerous contract provision and recognised an additional onerous lease expense of €0.8 million. Share based payments were €2.6 million in the quarter and were impacted by a €1.9 million provision relating to a one-time employment tax implemented as emergency legislation by the Dutch authorities. Operating profit during the fourth quarter of 2012 was €14.8 million, a decrease of 16% over the fourth quarter 2011 and a decrease of 11% compared to the third quarter 2012. The operating profit comparisons to prior periods are impacted by the two one-time costs mentioned above. Net financing costs for the fourth quarter of 2012 were €5.7 million, a 14% increase compared to the fourth quarter 2011, and a 50% increase compared to the third quarter 2012, due to lower capitalised interest as construction projects were completed. Income tax expense for the fourth quarter of 2012 was €3.5 million, an increase of 79% compared to the fourth quarter 2011. The comparison was negatively impacted by the recognition of a €2.7 million deferred tax asset in the prior year quarter. Net profit was €5.6 million in the fourth quarter of 2012, down 47% from the fourth quarter of 2011, and down 34% sequentially. Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €32.9 million, a 46% increase from the fourth quarter of 2011, and a 36% increase from the third quarter of 2012. Capital Expenditures, including intangible assets, were €28.2 million in the fourth quarter 2012. Cash and equivalents and short term investments were €68.7 million at 31 December 2012, compared to €142.7 million at year end 2011, as the company invested in additional data centre capacity. Equipped space at the end of the fourth quarter 2012 was 74,000 square metres compared to 62,800 square metres at the end of fourth quarter 2011 and 69,600 square metres at the end of the third quarter 2012. Utilisation rate, the ratio of revenue-generating space to equipped space, was 76%, up from 75% in the fourth quarter 2011, and up from 74% in the third quarter 2012. Annual Review Revenue for the full year 2012 was €277.1 million, a 13% increase over full year 2011. Recurring revenue for 2012 was €259.2 million, a 14% increase over 2011, and 94% of total revenue in 2012, up from 93% in 2011. Gross profit was €164.0 million, a 15% increase over full year 2011. Adjusted EBITDA for 2012 was €115.0 million, up 18% year over year. Adjusted EBITDA margin for full year 2012 expanded to 41.5% from 40.0% in 2011. Net profit was €31.6 million in 2012, up 24% from 2011. Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €111.7 million compared to €90.0 million in 2011. Capital Expenditures, including intangible assets, were €178.3 million in 2012 compared to €162.0 million in 2011. During 2012, Interxion opened new capacity in Frankfurt, Stockholm, Paris, London, Amsterdam, Madrid and Zurich representing approximately 11,200 square metres of equipped space. The company installed 9,100 revenue generating square metres in 2012. Utilisation was 76% at 31 December 2012 compared to 75% at 31 December 2011. Business Outlook The company today is providing guidance for full year 2013:     Revenue €307 million - €322 million Adjusted EBITDA €130 million - €140 million Capital Expenditures (including intangibles) €130 million - €150 million   The company will host a conference call at 8:30 a.m. ET (1:30 pm GMT, 2:30 pm CET) today to discuss the results. To participate on this call, U.S. callers may dial toll free 1-866-966-9439; callers outside the U.S. may dial direct +44 (0) 1452 555 566. The conference ID for this call is 95254723. This event also will be webcast live over the Internet in listen-only mode at investors.interxion.com. A replay of this call will be available shortly after the call concludes and will be available until 5 March 2013. To access the replay, U.S. callers may dial toll free 1-866-247-4222; callers outside the U.S. may dial direct +44 (0) 1452 55 00 00. The replay access number is 95254723. Forward Looking Statements This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the difficulty of reducing operating expenses in the short term, inability to utilise the capacity of newly planned data centres and data centre expansions, significant competition, the cost and supply of electrical power, data centre industry over-capacity, performance under service level agreements and other risks described from time to time in Interxion's filings with the Securities and Exchange Commission. Interxion does not assume any obligation to update the forward-looking information contained in this press release. Use of Non-IFRS Information EBITDA is defined as operating profit plus depreciation, amortization and impairment of assets. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based payments, increase/decrease in provision for onerous lease contracts, IPO transaction costs, and income from sub-leases on unused data centre sites. Adjusted EBITDA margin is defined as Adjusted EBITDA as a percentage of revenue. We present EBITDA, Adjusted EBITDA and Adjusted EBITDA margin as additional information because we understand that they are measures used by certain investors and because they are used in our financial covenants in our €60 million revolving credit facility and €260 million 9.50% Senior Secured Notes due 2017. However, other companies may present EBITDA, Adjusted EBITDA and Adjusted EBITDA margin differently than we do. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance under IFRS and should not be considered as an alternative to operating profit or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measure of performance derived in accordance with IFRS. A reconciliation from Operating Profit to EBITDA and EBITDA to Adjusted EBITDA is provided in the notes to our Consolidated Income Statement included elsewhere in this press release. Interxion does not provide forward-looking estimates of Operating Profit, Depreciation, amortisation, and impairments, Share-based Payments, or Increase/decrease in provision for onerous lease contracts, IPO transaction costs, and Income from sub-leases on unused data centre sites which it uses to reconcile to Adjusted EBITDA. The Company is, therefore, unable to provide forward-looking reconciling information for Adjusted EBITDA. About Interxion Interxion (NYSE: INXN) is a leading provider of carrier-neutral collocation data centre services in Europe, serving a wide range of customers through 33 data centres in 11 European countries. Interxion's uniformly designed, energy-efficient data centres offer customers extensive security and uptime for their mission-critical applications. With connectivity provided by over 400 carriers and ISPs and 18 European Internet exchanges across its footprint, Interxion has created content and connectivity hubs that foster growing customer communities of interest. For more information, please visit www.interxion.com. 1 Capital expenditures, including intangible assets, represent payments to acquire property, plant, and equipment and intangible assets, as recorded in the consolidated statement of cash flows as "Purchase of property, plant and equipment" and "Purchase of intangible assets" respectively. 2 Other general administrative costs represents General and administrative costs excluding depreciation, amortisation, impairments, share-based payments and increase/(decrease) in provision for onerous lease contracts.   INTERXION HOLDING NVCONSOLIDATED INCOME STATEMENT (in €'000 - except per share data and where stated otherwise) (unaudited)       Three Months Ended   Year Ended31-Dec2012   31-Dec2011 31-Dec2012   31-Dec2011   Revenue72,88064,390277,121244,310   Cost of sales (28,953 ) (25,495 ) (113,082 ) (101,766 ) Gross profit43,92738,895164,039142,544   Other income 120 146 463 487 Sales and marketing costs (5,503 ) (4,643 ) (20,100 ) (17,680 ) General and administrative costs (23,786 ) (16,869 ) (79,243 ) (67,258 ) Operating profit14,75817,52965,15958,093   Net finance expense (5,657 ) (4,955 ) (17,746 ) (22,784 ) Profit before taxation9,10112,57447,41335,309   Income tax expense (3,452 ) (1,925 ) (15,782 ) (9,737 ) Net profit5,649   10,649   31,631   25,572     Basic earnings per share: (€)0.080.160.470.40Diluted earnings per share: (€)0.080.160.460.39     Number of shares outstanding at the end of the period (shares in thousands) 68,176 66,129 68,176 66,129 Weighted average number of shares for Basic EPS (shares in thousands) 68,021 66,052 67,309 64,176 Weighted average number of shares for Diluted EPS (shares in thousands) 69,052 67,449 68,262 65,896       Capacity Metrics Equipped space (in square meters) 74,000 62,800 74,000 62,800 Revenue generating space (in square meters) 56,200 47,100 56,200 47,100 Utilisation rate 76 % 75 % 76 % 75 %       INTERXION HOLDING NVNOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION (in €'000 - except where stated otherwise) (unaudited)     Three Months Ended   Year Ended31-Dec2012   31-Dec2011 31-Dec2012   31-Dec2011 Consolidated   Recurring revenue 69,002 59,717 259,249 228,328 Non-recurring Revenue 3,878   4,673   17,872   15,982   Revenue72,880   64,390   277,121   244,310   Adjusted EBITDA31,187   27,101   115,015   97,637   Gross Margin60.3%60.4%59.2%58.3%   Adjusted EBITDA Margin42.8%42.1%41.5%40.0%   Total assets 819,224 744,281 819,224 744,281 Total liabilities 443,650 413,720 443,650 413,720 Capital expenditure, including intangible assets (i) (28,191 ) (68,543 ) (178,331 ) (161,956 )   France, Germany, Netherlands, and UK   Recurring revenue 42,849 36,184 159,136 136,460 Non-recurring Revenue 2,491   3,440   12,640   10,352   Revenue45,340   39,624   171,776   146,812   Adjusted EBITDA24,321   21,558   90,121   74,774   Gross Margin62.7%62.2%61.4%59.8%   Adjusted EBITDA Margin53.6%54.4%52.5%50.9%   Total assets 546,842 412,160 546,842 412,160 Total liabilities 139,576 97,779 139,576 97,779 Capital expenditure, including intangible assets (i) (20,090 ) (60,230 ) (145,080 ) (122,880 )   Rest of Europe   Recurring revenue 26,153 23,533 100,113 91,868 Non-recurring Revenue 1,387   1,233   5,232   5,630   Revenue27,540   24,766   105,345   97,498   Adjusted EBITDA14,379   13,253   55,068   50,676   Gross Margin62.4%62.7%61.5%61.4%   Adjusted EBITDA Margin52.2%53.5%52.3%52.0%   Total assets 197,802 181,186 197,802 181,186 Total liabilities 48,183 40,774 48,183 40,774 Capital expenditure, including intangible assets (i) (7,196 ) (6,913 ) (29,014 ) (35,366 )   Corporate and Other         Adjusted EBITDA(7,513)(7,710)(30,174)(27,813)   Total assets 74,580 150,935 74,580 150,935 Total liabilities 255,891 275,167 255,891 275,167 Capital expenditure, including intangible assets (i) (905 ) (1,400 ) (4,237 ) (3,710 )     (i) Capital expenditure, including intangible assets, represents payments to acquire property, plant and equipment and intangible assets, as recorded in the consolidated statement of cash flows as "Purchase of property, plant and equipment" and "Purchase of intangible assets" respectively.     INTERXION HOLDING NVNOTES TO CONSOLIDATED INCOME STATEMENT: Adjusted EBITDA reconciliation (in €'000 - except where stated otherwise) (unaudited)     Three Months Ended   Year Ended31-Dec2012   31-Dec2011 31-Dec2012   31-Dec2011     Reconciliation to Adjusted EBITDA   Consolidated   Operating profit14,75817,52965,15958,093 Depreciation, amortization and impairments 13,071   8,371   43,993   35,552   EBITDA27,82925,900109,15293,645 Share-based payments 2,640 1,347 5,488 2,736 Increase/(decrease) in provision for onerous lease contracts 838 - 838 18 IPO transaction costs (ii) - - - 1,725 Income from sub-leases on unused data center sites (120 ) (146 ) (463 ) (487 ) Adjusted EBITDA31,187   27,101   115,015   97,637     France, Germany, Netherlands, and UK   Operating profit15,32516,28663,33653,586 Depreciation, amortization and impairments 8,059   5,272   25,686   21,289   EBITDA23,38421,55889,02274,875 Share-based payments 219 146 724 368 Increase/(decrease) in provision for onerous lease contracts 838 - 838 18 Income from sub-leases on unused data center sites (120 ) (146 ) (463 ) (487 ) Adjusted EBITDA24,321   21,558   90,121   74,774     Rest of Europe   Operating profit9,99210,44838,96937,981 Depreciation, amortization and impairments 4,298   2,673   15,691   12,371   EBITDA14,29013,12154,66050,352   Share-based payments 89   132   408   324   Adjusted EBITDA14,379   13,253   55,068   50,676     Corporate and Other   Operating Profit/(Loss)(10,559)(9,205)(37,146)(33,474) Depreciation, amortization and impairments 714   426   2,616   1,892   EBITDA(9,845)(8,779)(34,530)(31,582) Share-based payments 2,332 1,069 4,356 2,044 IPO transaction costs (ii) -   -   -   1,725   Adjusted EBITDA(7,513)(7,710)(30,174)(27,813)   (ii) "IPO transaction costs" represent expenses associated with the write off of the proportion of the IPO costs allocated to the selling shareholders at the Initial Public Offering.     INTERXION HOLDING NVCONSOLIDATED BALANCE SHEET (in €'000 - except where stated otherwise) (unaudited)     As at31-Dec2012   31-Dec2011 Non-current Assets   Property, plant and equipment 620,931 477,798 Intangible assets 18,638 12,542 Deferred tax assets 30,376 39,557 Financial fixed assets 774 – Other non-current assets 4,959   3,841   675,678533,738Current Assets Trade and other current assets 74,854 67,874 Cash and cash equivalents 68,692   142,669   143,546   210,543   Total Assets819,224   744,281     Shareholders' Equity Share capital 6,818 6,613 Share premium 477,326 466,166 Foreign currency translation reserve 9,403 7,386 Accumulated deficit (117,973 ) (149,604 ) 375,574330,561Non-current Liabilities   Trade payables and other liabilities 11,194 10,294 Deferred tax liabilities 2,414 1,742 Provision for onerous lease contracts 7,848 10,618 Borrowings 288,085   257,267   309,541279,921Current Liabilities Trade payables and other liabilities 127,778 127,639 Income tax liabilities 2,301 2,249 Provision for onerous lease contracts 3,978 3,108 Borrowings 52   803   134,109   133,799   Total Liabilities443,650   413,720   Total Liabilities and Shareholders' Equity819,224   744,281       INTERXION HOLDING NVNOTES TO THE CONSOLIDATED BALANCE SHEET: BORROWINGS (in €'000 - except where stated otherwise) (unaudited)     As at31-Dec2012   31-Dec2011     Borrowings Net of Cash and Cash Equivalents   Cash and Cash Equivalents (iii)68,692   142,669     9.5% Senior Secured Notes due 2017 (iv) 256,268 255,560   Mortgage loans 9,903 -   Financial Leases 20,361 337   Other Borrowings 1,605   2,173   Borrowings Excluding Revolving Credit Facility Deferred Financing Costs288,137   258,070   Revolving credit facility deferred financing costs (v) (1,371 ) (667 ) Total Borrowings286,766   257,403       Borrowings Net of Cash and Cash Equivalents218,074   114,734       (iii) Cash and cash equivalents includes €5.0 million as of December 31, 2012 and €4.8 million as of December 31, 2011, which is restricted and held as collateral to support the issuance of bank guarantees on behalf of a number of subsidiary companies.(iv) €260 million 9.5% Senior Secured Notes due 2017 include premium on additional issue and are shown after deducting underwriting discounts and commissions, offering fees and expenses.(v) Deferred financing costs of €1.4 million incurred in connection with the €60 million revolving credit facility, which is currently undrawn.     INTERXION HOLDING NVCONSOLIDATED STATEMENT OF CASH FLOWS (in €'000 - except where stated otherwise) (unaudited)     Three Months Ended   Year Ended31-Dec2012   31-Dec2011 31-Dec2012   31-Dec2011     Profit for the period 5,649 10,649 31,631 25,572 Depreciation, amortization and impairments 13,071 8,371 43,993 35,552 IPO transaction costs - - - 1,725 Unwinding provision for onerous lease contracts 44 (822 ) (2,328 ) (3,125 ) Share-based payments 2,640 1,347 5,488 2,736 Net finance expense 5,657 4,955 17,746 22,784 Income tax expense 3,452   1,925   15,782   9,737   30,513 26,425 112,312 94,981 Movements in trade and other current assets (78 ) (8,947 ) (7,154 ) (16,942 ) Movements in trade and other liabilities 2,415   5,096   6,543   12,009   Cash Generated from Operations32,85022,574111,70190,048 Interest paid (vi) (474 ) (294 ) (18,081 ) (24,472 ) Interest received 273 1,010 1,007 2,251 Income tax paid (1,923 ) (2,240 ) (5,545 ) (3,784 ) Net Cash Flows from Operating Activities30,72621,05089,08264,043Cash Flows from Investing Activities Purchase of property, plant and equipment (26,990 ) (65,432 ) (172,036 ) (154,559 ) Disposals of property, plant and equipment - - - 945 Purchase of intangible assets (1,201 ) (3,111 ) (6,295 ) (7,397 ) Acquisition financial fixed assets - - (774 ) - Movement in short-term investments -   40,000   -   -   Net Cash Flows from Investing Activities(28,191)(28,543)(179,105)(161,011)Cash Flows from Financing Activities Proceeds from exercised options 1,231 452 7,956 3,474 Proceeds from issuance of new shares at IPO - - - 142,952 Repayment of "Liquidation Price" to former preferred shareholders - - - (3,055 ) Secured bank loans 9,890 - 9,890 - Senior Secured Notes and RCF - - (1,159 ) (645 ) Other Borrowings (64 ) (131 ) (804 ) (2,396 ) Net Cash Flows from Financing Activities11,05732115,883140,330 Effect of exchange rate changes on cash (52 ) 302   163   192   Net Movement in Cash and Cash Equivalents13,540(6,870)(73,977)43,554 Cash and cash equivalents, beginning of period 55,152   149,539   142,669   99,115   Cash and Cash Equivalents, End of Period68,692   142,669   68,692   142,669     (vi) Interest paid is reported net of cash interest capitalized which is reported as part of “Purchase of property, plant and equipment".     INTERXION HOLDING NVStatus of Announced Expansion Projects as at 27 February 2013with Target Open Dates in 2012 & 2013     Market   Project   CAPEX (a, b)(€ million)   EquippedSpace (a)(Sqm)   Target Opening         Frankfurt FRA 7: New Build € 21 1,500 1Q 2012 (opened)   Stockholm STO 1: Phase 4 Expansion € 5 500 1Q 2012 (opened)   Paris PAR 7 : Phase 1 New Build € 70 4,500 2Q 2012 (opened) (c)   Amsterdam AMS 6: New Build € 60 4,400 3Q 2012 (opened) (d)   London LON 2: New Build € 38 1,500 3Q 2012 (opened) (e)   Amsterdam AMS 5: Phase 4 Expansion € 12 1,000 4Q 2012 (opened)   Zurich ZUR 1: Phase 3 Expansion € 4 600 4Q 2012 (opened)   Madrid MAD 2: Phase 1 New Build € 10 800 4Q 2012 (opened) (f)   Frankfurt FRA 6: Phase 3 Expansion € 5 600 1Q 2013   Stockholm STO 2: Phase 1 New Build € 11 500 2Q 2013   Copenhagen CPH 1: Expansion € 2 300 2Q 2013   Total€ 23816,200   (a) CAPEX and Equipped Space are approximate and may change.(b) CAPEX reflects the total for the listed project at full power and capacity and may not be all invested in the current year.(c) Opened 500 sqm in 2Q 2012 and 1500 sqm in 3Q 2012; remaining 2500 sqm scheduled to open in 1Q 2013.(d) Opened 1700 sqm in 3Q 2012 for early customer access; 2700 sqm opened in 4Q 2012.(e) 1100 sqm opened in 3Q 2012; 400 sqm opened in 1Q 2013.(f) Opened 200 sqm in 4Q 2012; remaining 600 sqm scheduled to open in 1Q 2013.   InterxionJim Huseby, +1-813-644-9399Investor RelationsIR@interxion.com