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Press release from Business Wire

Interxion Reports First Quarter 2013 Results

Wednesday, May 08, 2013

Interxion Reports First Quarter 2013 Results

07:00 EDT Wednesday, May 08, 2013

AMSTERDAM (Business Wire) -- Interxion Holding NV (NYSE: INXN), a leading European provider of carrier and cloud neutral colocation data centre services, today announced its results for the three months ended 31 March 2013.

Financial Highlights

  • Revenue increased by 13% to €74.4 million (Q1 2012: €65.8 million)
  • Adjusted EBITDA increased by 16% to €31.7 million (Q1 2012: €27.3 million)
  • Adjusted EBITDA margin increased to 42.6% (Q1 2012: 41.5%)
  • Net profit was €7.0 million (Q1 2012: €8.7 million)
  • Capital expenditure, including intangible assets, was €32.8 million

Operating Highlights

  • Expansion projects in Frankfurt, London, Madrid, and Paris completed
  • Equipped Space increased by 4,100 square metres in Q1 2013 to 78,100 square metres
  • Revenue Generating Space increased by 800 square metres in Q1 2013 to 57,000 square metres
  • Utilisation Rate at the end of the quarter was 73%

“Interxion delivered another quarter of solid financial and operating results in an unfavourable macroeconomic environment,” said Interxion Chief Executive Officer, David Ruberg. “We believe that our focus on implementing our market strategy of building communities of interest in our data centres, combined with our commitment to providing high quality sales, marketing, and customer support, continues to foster sustainable and profitable growth.”

Quarterly Review

Revenue in the first quarter of 2013 was €74.4 million, a 13% increase over the first quarter of 2012 and 2% up on the fourth quarter of 2012. Recurring revenue, which was 95% of total revenue, was €71.0 million, a 14% increase over the first quarter of 2012 and 3% up on the fourth quarter of 2012.

Cost of sales in the first quarter of 2013 was €29.6 million, a 12% increase over the first quarter of 2012 and 2% up on the fourth quarter of 2012.

Gross profit was €44.8 million in the first quarter 2013, a 14% increase over the first quarter of 2012 and 2% up on the fourth quarter of 2012. Gross profit margin in the first quarter of 2013 was 60.2%, compared with 59.7% in the same quarter of 2012 and 60.3% in the fourth quarter of 2012.

Sales and marketing costs in the first quarter 2013 were €5.5 million, a 13% increase over the first quarter of 2012 and in line with the fourth quarter of 2012.

General and administrative costs1 in the first quarter 2013 were €7.6 million, an increase of 7% compared with the first quarter of 2012 and 5% up on the fourth quarter of 2012. Depreciation and amortisation in the first quarter 2013 was €14.0 million, a 45% increase over the first quarter of 2012 and 7% up on the fourth quarter of 2012.

Net financing costs in the first quarter of 2013 were €6.5 million, an increase of 45% compared with the first quarter of 2012, and was primarily the result of a reduction in capitalised interest in the quarter.

Net profit was €7.0 million in the first quarter 2013, a decrease of 20% compared with the first quarter of 2012, while earnings per share were €0.10 on a weighted average of 69.1 million diluted shares, compared with €0.13 on a weighted average of 67.4 million diluted shares in the first quarter of 2012.

Adjusted EBITDA in the first quarter of 2013 was €31.7 million, up 16% year-on-year. Adjusted EBITDA margin increased to 42.6%, compared with 41.5% in the first quarter of 2012.

Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €23.6 million in the first quarter 2013 compared to €25.4 million in the first quarter 2012. Capital expenditure, including intangible assets, was €32.8 million in the first quarter of 2013, compared to €61.1 million in the first quarter 2012.

Cash and cash equivalents were €60.5 million at 31 March 2013, down from €68.7 million at year-end 2012. Total borrowings were €298.0 million at the end of the first quarter 2013 compared with €288.1 million at the end of 2012. During the quarter, the company entered into a €10 million mortgage in connection with two of its data centres in Paris. The company's €60.0 million revolving credit facility remains undrawn.

Equipped Space at the end of the first quarter 2013 was 78,100 square metres, compared with 64,800 square metres at the end of the first quarter of 2012 and 74,000 square metres at the end of the fourth quarter of 2012. Revenue Generating Space at the end of the first quarter 2013 was 57,000 square metres, compared with 47,500 square metres at the end of the first quarter of 2012 and 56,200 square metres at the end of the fourth quarter of 2012. Utilisation rate, the ratio of Revenue Generating Space to Equipped Space, was 73% at the end of the quarter, the same as the first quarter of 2012 and compared with 76% at the end of the fourth quarter of 2012.

Business Outlook

Interxion today reaffirmed its guidance for 2013:

   
Revenue €307 million - €322 million
Adjusted EBITDA €130 million - €140 million
Capital expenditure (including intangibles) €130 million - €150 million

Conference Call to Discuss Results

The company will host a conference call today at 8:30am ET (1:30pm BST, 2:30pm CET) 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 32692134. 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 14 May 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 32692134.

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, 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 Net 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 Net profit, Operating profit, depreciation, amortisation, and impairments, share-based payments, or increase/decrease in provision for onerous lease contracts, 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 cloud and carrier-neutral colocation 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 450 fixed and mobile carriers and ISPs and 18 European Internet exchanges, Interxion has created cloud, content, finance and connectivity hubs that foster growing customer communities of interest. For more information, please visit www.interxion.com.

1 excluding depreciation, amortisation, impairments, increase/(decrease) in provision for onerous lease contracts, and share-based payments

INTERXION HOLDING NV
CONSOLIDATED INCOME STATEMENT
(in €'000 ― except per share data and where stated otherwise)
(unaudited)
       
Three Months Ended
Mar-31 Mar-31
2013   2012  
 
Revenue 74,379 65,812
Cost of sales (29,615 ) (26,499 )
Gross profit 44,764 39,313
Other income 123 118
Sales and marketing costs (5,495 ) (4,850 )
General and administrative costs (22,616 ) (17,521 )
   
Operating profit 16,776 17,060
Net finance expense (6,451 ) (4,435 )
   
Profit before taxation 10,325 12,625
Income tax expense (3,355 ) (3,929 )
Net profit 6,970   8,696  
 
Basic earnings per share: (€) 0.10 0.13
Diluted earnings per share: (€) 0.10 0.13
 
 
Number of shares outstanding at the end of the period (shares in thousands) 68,411 66,902
Weighted average number of shares for Basic EPS (shares in thousands) 68,225 66,335
Weighted average number of shares for Diluted EPS (shares in thousands) 69,109 67,439
 
 
Capacity metrics
Equipped space (in square meters) 78,100 64,800
Revenue generating space (in square meters) 57,000 47,500
Utilisation rate 73 % 73 %

INTERXION HOLDING NV
NOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION
(in €'000 ― except where stated otherwise)
(unaudited)
           
Three Months Ended
Mar-31 Mar-31
2013 2012

Consolidated

 
Recurring revenue 70,956 62,279
Non-recurring revenue 3,423   3,533  
Revenue 74,379   65,812  
Adjusted EBITDA 31,673   27,336  
Gross margin 60.2 % 59.7 %
Adjusted EBITDA margin 42.6 % 41.5 %
 
Total assets 822,527 754,854
Total liabilities 439,639 411,854
Capital expenditure, including intangible assets (i) (32,789 ) (61,100 )
 

France, Germany, the Netherlands, and the UK

 
Recurring revenue 44,448 38,013
Non-recurring revenue 2,138   2,292  
Revenue 46,586   40,305  
Adjusted EBITDA 25,167   21,577  
Gross margin 63.2 % 62.6 %
Adjusted EBITDA margin 54.0 % 53.5 %
 
Total assets 550,804 461,638
Total liabilities 127,036 98,395
Capital expenditure, including intangible assets (i) (20,693 ) (52,493 )
 

Rest of Europe

 
Recurring revenue 26,508 24,266
Non-recurring revenue 1,285   1,241  
Revenue 27,793   25,507  
Adjusted EBITDA 14,464   13,408  
Gross margin 61.3 % 61.4 %
Adjusted EBITDA margin 52.0 % 52.6 %
 
Total assets 202,046 188,967
Total liabilities 41,166 42,723
Capital expenditure, including intangible assets (i) (11,249 ) (7,923 )
 

Corporate and other

   
Adjusted EBITDA (7,958 ) (7,649 )
 
Total assets 69,677 104,249
Total liabilities 271,437 270,736
Capital expenditure, including intangible assets (i) (847 ) (684 )
 
(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 NV
NOTES TO CONSOLIDATED INCOME STATEMENT: ADJUSTED EBITDA RECONCILIATION
(in €'000 ― except where stated otherwise)
(unaudited)
           
Three Months Ended
Mar-31 Mar-31
2013   2012  
 
 

Reconciliation to Adjusted EBITDA

 

Consolidated

 
Net profit 6,970 8,696
Income tax expense 3,355   3,929  
Profit before taxation 10,325 12,625
Net finance expense 6,451   4,435  
Operating profit 16,776 17,060
Depreciation, amortization and impairments 14,011   9,655  
EBITDA 30,787 26,715
Share-based payments 1,009 739
Income from sub-leases on unused data center sites (123 ) (118 )
Adjusted EBITDA 31,673   27,336  
 

France, Germany, the Netherlands, and the UK

 
Operating profit 15,912 16,209
Depreciation, amortization and impairments 9,123   5,325  
EBITDA 25,035 21,534
Share-based payments 255 161
Income from sub-leases on unused data center sites (123 ) (118 )
Adjusted EBITDA 25,167   21,577  
 

Rest of Europe

 
Operating profit 10,175 9,695
Depreciation, amortization and impairments 4,183   3,606  
EBITDA 14,358 13,301
Share-based payments 106   107  
Adjusted EBITDA 14,464   13,408  
 

Corporate and Other

 
Operating profit/(loss) (9,311 ) (8,844 )
Depreciation, amortization and impairments 705   724  
EBITDA (8,606 ) (8,120 )
Share-based payments 648   471  
Adjusted EBITDA (7,958 ) (7,649 )

INTERXION HOLDING NV
CONSOLIDATED BALANCE SHEET
(in €'000 ― except where stated otherwise)
(unaudited)
         
As at
31-Mar 31-Dec
2013 2012
Non-current assets
Property, plant and equipment 622,198 620,931
Intangible assets 18,520 18,638
Deferred tax assets 29,928 30,376
Financial fixed assets 774 774
Other non-current assets 4,827 4,959
676,247 675,678
Current assets
Trade and other current assets 85,754 74,854
Cash and cash equivalents 60,526 68,692
146,280 143,546
Total assets 822,527 819,224
 
Shareholders' equity
Share capital 6,841 6,818
Share premium 479,694 477,326
Foreign currency translation reserve 7,356 9,403
Accumulated deficit (111,003) (117,973)
382,888 375,574
Non-current liabilities
Trade payables and other liabilities 11,456 11,194
Deferred tax liabilities 2,620 2,414
Provision for onerous lease contracts 7,191 7,848
Borrowings 296,621 288,085
317,888 309,541
Current liabilities
Trade payables and other liabilities 112,562 127,778
Income tax liabilities 3,902 2,301
Provision for onerous lease contracts 3,901 3,978
Borrowings 1,386 52
121,751 134,109
Total liabilities 439,639 443,650
Total liabilities and shareholders' equity 822,527 819,224
 
 
INTERXION HOLDING NV
NOTES TO THE CONSOLIDATED BALANCE SHEET: BORROWINGS
(in €'000 ― except where stated otherwise)
(unaudited)
As at
31-Mar 31-Dec
2013 2012
Borrowings net of cash and cash equivalents
Cash and cash equivalents (iii) 60,526 68,692
9.50% Senior Secured Notes due 2017 (iv) 256,463 256,268
Mortgages 19,531 9,903
Financial leases 20,408 20,361
Other borrowings 1,605 1,605
Borrowings excluding Revolving Credit Facility deferred financing costs 298,007 288,137
Revolving credit facility deferred financing costs (v) (1,268) (1,371)
Total borrowings 296,739 286,766
Borrowings net of cash and cash equivalents 236,213 218,074
 
(iii) Cash and cash equivalents include €4.8 million as of March 31, 2013 and €5.0 million as of December 31, 2012, 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 9.50% 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 €1.3 million incurred in connection with the €60 million revolving credit facility, which is currently undrawn.
           
INTERXION HOLDING NV
CONSOLIDATED STATEMENT OF CASH FLOWS
(in €'000 ― except where stated otherwise)
(unaudited)
 
Three Months Ended
31-Mar 31-Mar
2013 2012
 
 
Profit for the period 6,970 8,696
Depreciation, amortization and impairments 14,011 9,655
Unwinding provision for onerous lease contracts (826 ) (785 )
Share-based payments 1,009 739
Net finance expense 6,451 4,435
Income tax expense 3,355   3,929  
30,970 26,669
Movements in trade and other current assets (6,787 ) (6,927 )
Movements in trade and other liabilities (588 ) 5,677  
Cash generated from operations 23,595 25,419
Interest paid (vi) (10,031 ) (9,974 )
Interest received 285 148
Income tax paid (436 ) (711 )
Net cash flows from operating activities 13,413 14,882
Cash flows from investing activities
Purchase of property, plant and equipment (30,920 ) (59,695 )
Purchase of intangible assets (1,869 ) (1,405 )
Acquisition of other investments   (774 )
Net cash flows from investing activities (32,789 ) (61,874 )
Cash flows from financing activities
Proceeds from exercised options 1,611 2,550
Secured bank loans 9,621
Other borrowings (13 ) (57 )
Net cash flows from financing activities 11,219 2,493
Effect of exchange rate changes on cash (9 ) 10  
Net movement in cash and cash equivalents (8,166 ) (44,489 )
Cash and cash equivalents, beginning of period 68,692   142,669  
Cash and cash equivalents, end of period 60,526   98,180  
 
(vi) Interest paid is reported net of cash interest capitalized, which is reported as part of “Purchase of property, plant and equipment".

  INTERXION HOLDING NV
Status of Announced Expansion Projects as at 8 May 2013
 
Market   Project  

Capital

Expenditure(a,b)

  Equipped   Target Opening

Space (a)

    (€ million) (Sqm)  
Paris PAR 7: Phase 1 New Build € 70 4,700 2Q 2012 (opened) (c)
London LON 2: New Build € 38 1,500 3Q 2012 (opened) (d)
Madrid MAD 2: Phase 1 New Build € 10 800 4Q 2012 (opened) (e)
Frankfurt FRA 6: Phase 3 Expansion € 5 600 1Q 2013 (opened)
Stockholm STO 2: Phase 1 New Build € 11 500 2Q 2013
Copenhagen CPH 1: Expansion € 2 300 2Q 2013
 
(a) Capital expenditure and Equipped Space are approximate and may change.
(b) Capital expenditure reflects the total cost 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 2700 sqm opened in 1Q 2013.
(d) Opened 1100 sqm in 3Q 2012; remaining 400 sqm opened in 1Q 2013.
(e) Opened 200 sqm in 4Q 2012; remaining 600 sqm opened in 1Q 2013.

Interxion
Jim Huseby, 813-644-9399
Investor Relations
IR@interxion.com

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