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Press Release -- May 17th, 2011
Source: InterXion
Tags: Colocation, Earnings, Equipment, Exchange, Expansion

Interxion Reports Q1 2011 Results

AMSTERDAM, May 17, 2011 (BUSINESS WIRE) --

Interxion Holding NV (INXN:NYSE), a leading European provider of carrier-neutral colocation data centre services, announced its results today for the three months ended 31 March 2011.

Highlights

  • Revenue increased by 21% to EUR 57.9 million (Q1 2010: EUR 47.8 million)
  • Adjusted EBITDA increased by 27% to EUR 22.2 million (Q1 2010: EUR 17.4 million)
  • Adjusted EBITDA margin increased to 38.4% (Q1 2010: 36.5%)
  • Net profit of EUR 2.8 million (Q1 2010: EUR 4.7 million loss)
  • Capital Expenditures of EUR 19.1 million during the quarter
  • 2011 annual guidance reaffirmed

"The first quarter of 2011 was Interxion's 18th consecutive quarter of sequential quarterly growth in revenue and Adjusted EBITDA," said Chief Executive Officer David Ruberg. "These results are in line with our plans and attributable to the execution of our market segmentation strategy and providing our targeted communities of interest with the excellent products and quality of service that they require."

Quarterly Highlights

Revenue for the first quarter was EUR 57.9 million, a 21% increase over the first quarter of 2010 and a 4.2% increase from the fourth quarter 2010. Recurring revenue was 94% of total revenue.

Cost of sales for the first quarter increased by 14% to EUR 24.8 million, leading to an increased gross profit margin of 57.2%. Sales and marketing costs in the first quarter were EUR 4.2 million, up 27% as a result of our continued investment in the company's market segmentation strategy. General and administrative costs, excluding depreciation, amortisation, exceptional general and administrative costs, and share-based payments of EUR 6.7 million, increased by 27% and were adversely impacted by the onset of public company costs. Depreciation and amortisation increased by 19% to EUR 8.5 million.

Net financing costs were EUR 6.6 million, down from EUR 13.5 million in the first quarter 2010. First quarter 2010 costs included a non-recurring charge of EUR 10.2 million related to the debt refinancing in February 2010.

Adjusted EBITDA was EUR 22.2 million, up 27% year over year. Adjusted EBITDA margin expanded to 38.4% as the company's increased scale provided greater operating leverage.

Net profit was EUR 2.8 million in the first quarter 2011.

Cash generated from operations, defined as cash generated from operating activities before interest and tax payments and receipts, was EUR 20.7 million. Net cash used in investing activities was EUR 19.5 million, including EUR 19.1 million of capital expenditures. Cash generated from financing activities was EUR 141.4 million, reflecting the proceeds from the IPO.

Cash and equivalents were EUR 229.3 million, up from EUR 99.1 million at year end.

Equipped space at the end of the period was 61,000 square metres. Utilisation rate, the ratio of revenue-generating space to equipped space, was 73%, up from 72% in the first quarter 2010.

Business Outlook

The company's outlook for 2011 is reaffirmed:

Revenue EUR 239 million - EUR 245 million
Adjusted EBITDA EUR 91 million - EUR 95 million
Capital Expenditures EUR 140 million - EUR 160 million

Conference Call to Discuss Results

The Company will host a conference call at 8:30 a.m. EDT (1:30 p.m. BST) on 17 May to discuss the results.

To participate on this call, U.S. callers may dial toll free 1-866-926-5708; callers outside the U.S. may dial direct +44 (0) 1452 560 304. The conference ID for this call is 66158917. 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 through 23 May. 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 66158917#.

-ends-

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.

Adjusted EBITDA

EBITDA is defined as operating profit plus depreciation, amortisation and impairment of assets. We define Adjusted EBITDA as EBITDA adjusted to exclude share-based payments and exceptional and non-recurring items, and to include share of profits (losses) of non-group companies. We present EBITDA and Adjusted EBITDA 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 EUR 50 million revolving credit facility and EUR 260 million 9.50% Senior Secured Notes due 2017. However, other companies may present EBITDA and Adjusted EBITDA differently than we do. EBITDA and Adjusted EBITDA 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 of Adjusted EBITDA to operating profit is provided in the Notes to the Consolidated Income Statement: Group Metrics.

About Interxion

Interxion (NYSE:INXN, news) is a leading provider of carrier-neutral colocation data centre services in Europe, serving over 1,200 customers through 28 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 350 carriers and ISPs and 20 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.

INTERXION HOLDING NV
CONSOLIDATED INCOME STATEMENTS

'(in EUR '000 - except per share data and where stated otherwise)
(unaudited)

Three Months Ended
31-Mar 31-Mar
2011 2010
Revenue 57,892 47,815
Cost of sales (24,780 ) (21,773 )
Gross profit 33,112 26,042
Other income 127 108
Sales and marketing costs (4,212 ) (3,325 )
General and administrative costs (17,299 ) (12,833 )
Operating profit 11,728 9,992
Finance income 513 79
Finance expense (7,101 ) (13,558 )
Profit before taxation 5,140 (3,487 )
Income tax (expense) / benefit (2,332 ) (1,247 )
Net profit 2,808 (4,734 )
Basic earnings per share: (EUR ) (i) 0.05 (0.11 )
Diluted earnings per share: (EUR ) (i) 0.05 (0.10 )
Number of shares outstanding at the end of the period (shares in thousands) 65,577 44,351
Weighted average number of shares for Basic EPS (shares in thousands) 59,146 44,351
Weighted average number of shares for Diluted EPS (shares in thousands) 61,477 47,567

(i) Number of shares have been adjusted to take account of the 1 for 5 reverse stock split which took place on 2 February 2011.

INTERXION HOLDING NV
NOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION
'(in EUR '000 - except where stated otherwise)
(unaudited)

Three Months Ended
31-Mar 31-Mar
2011 2010
Consolidated
Recurring revenue 54,142 44,729
Non-recurring Revenue 3,750 3,086
Revenue 57,892 47,815
Adjusted EBITDA 22,210 17,444
Gross Margin 57.2 % 54.5 %
Adjusted EBITDA Margin 38.4 % 36.5 %
Total assets 692,175 452,260
Total liabilities 392,682 321,705
Capital expenditures (iv) (19,124 ) (28,650 )
Depreciation and amortization (8,526 ) (7,187 )
France, Germany, Netherlands, and UK
Recurring revenue 32,245 26,482
Non-recurring Revenue 2,427 2,038
Revenue 34,672 28,520
Adjusted EBITDA 16,779 12,687
Gross Margin 58.5 % 54.4 %
Adjusted EBITDA Margin 48.4 % 44.5 %
Total assets 298,005 241,947
Total liabilities 88,922 108,078
Capital expenditures (iv) (12,340 ) (15,639 )
Depreciation and amortization (5,146 ) (4,511 )
Rest of Europe
Recurring revenue 21,897 18,247
Non-recurring Revenue 1,323 1,048
Revenue 23,220 19,295
Adjusted EBITDA 12,102 9,768
Gross Margin 61.1 % 60.2 %
Adjusted EBITDA Margin 52.1 % 50.6 %
Total assets 152,566 136,455
Total liabilities 35,768 50,749
Capital expenditures (iv) (6,264 ) (12,213 )
Depreciation and amortization (2,998 ) (2,368 )
Corporate and Other
Adjusted EBITDA (6,671 ) (5,011 )
Total assets 241,604 73,858
Total liabilities 267,992 162,878
Capital expenditures (iv) (520 ) (798 )
Depreciation and amortization (382 ) (308 )

(iv) Capital expenditures represent payments to acquire tangible fixed assets as recorded in the consolidated statement of cash flows as
' "Purchase of property, plant and equipment".

INTERXION HOLDING NV
NOTES TO CONSOLIDATED INCOME STATEMENT: GROUP METRICS
'(in EUR '000 - except where stated otherwise)
(unaudited)

Three Months Ended
31-Mar 31-Mar
2011 2010
1. Reconciliation of adjusted EBITDA
Adjusted EBITDA 22,210 17,444
Income from subleases on unused data centre sites 127 108
Exceptional income 127 108
(Increase)/decrease in provision for onerous lease contracts (18 ) (108 )
IPO transaction costs (v) (1,725 ) -
Share based payments (340 ) (265 )
Exceptional general and adminsitrative costs (2,083 ) (373 )
EBITDA 20,254 17,179
Depreciation and amortization (8,526 ) (7,187 )
Operating profit 11,728 9,992
2. Capacity Metrics
Equiped space (in sqm) 61,000 55,800
Revenue generating space (in sqm) 44,600 40,100
Utilization rate 73 % 72 %

(v) The IPO transaction costs represent the write off of the proportion of the IPO costs allocated to the selling shareholders at the Initial Public Offering.

INTERXION HOLDING NV
CONSOLIDATED BALANCE SHEET

'(in EUR '000 - except where stated otherwise)
(unaudited)

As at
31-Mar 31-Dec
2011 2010
Non-current assets
Property, plant and equipment 352,541 342,420
Intangible assets 6,202 6,005
Deferred tax assets 41,738 39,841
Other non-current assets 3,538 3,709
404,019 391,975
Current assets
Trade and other current assets 58,897 55,672
Cash and cash equivalents 229,259 99,115
288,156 154,787
Total assets 692,175 546,762
Shareholders' equity
Share capital 6,558 4,434
Share premium 462,675 321,078
Foreign currency translation reserve 2,628 4,933
Accumulated deficit (172,368 ) (175,176 )
299,493 155,269
Non-current liabilities
Trade and other liabilities 8,956 7,795
Deferred tax liability 1,302 660
Provision for onerous lease contracts 12,609 13,260
Borrowings 257,534 257,403
280,401 279,118
Current liabilities
Trade and other liabilities 106,847 106,038
Current tax liabilities 661 868
Provision for onerous lease contracts 3,087 3,073
Borrowings 1,686 2,396
112,281 112,375
Total liabilities 392,682 391,493
Total liabilities and shareholders' equity 692,175 546,762

INTERXION HOLDING NV
NOTES TO THE CONSOLIDATED BALANCE SHEET: BORROWINGS
'(in EUR '000 - except where stated otherwise)
(unaudited)

As at
31-Mar 31-Dec
2011 2010
3. Borrowings net of cash and cash equivalents
Cash and cash equivalents (vi) 229,259 99,115
9.5% Senior Secured Notes due 2017 (vii) 255,083 254,924
Financial Leases 652 765
Other Borrowings 3,485 4,110
Borrowings excluding revolving credit facility deferred financing costs 259,220 259,799
Revolving credit facility deferred financing costs (viii) (1,129 ) (1,283 )
Total Borrowings 258,091 258,516
Borrowings net of cash and cash equivalents 28,832 159,401

(vi) Cash and cash equivalents includes EUR 4.2 million as of March 31, 2011 and December 31, 2010, which is restricted and held as collateral
' to support the issuance of bank guarantees on behalf of a number of subsidiary companies.

(vii) EUR 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.

(viii) We reported deferred financing costs of EUR 1.1 million in connection with entering into our EUR 50 million revolving credit facility which is
' currently undrawn.

INTERXION HOLDING NV
CONSOLIDATED STATEMENT OF CASH FLOWS

'(in EUR '000 - except where stated otherwise)
(unaudited)

Three Months Ended
31-Mar 31-Mar
2011 2010
Profit for the period 2,808 (4,734 )
Depreciation and amortization 8,526 7,187
IPO transaction costs (ix) 1,725 -
Provision for onerous lease contracts (774 ) (583 )
Share-based payments 340 265
Net finance expense 6,588 13,479
Income tax expense 2,332 1,247
21,545 16,861
Movements in trade and other current assets (7,283 ) 4,935
Movements in trade and other liabilities 6,415 2,331
Cash generated from operations 20,677 24,127
Interest paid (12,159 ) (721 )
Interest received 271 85
Income tax paid (687 ) (76 )
Net cash flows from operating activities 8,102 23,415
Cash flow from investing activities
Purchase of property, plant and equipment (19,124 ) (28,650 )
Purchase of intangible assets (394 ) (357 )
Net cash flows from investing activities (19,518 ) (29,007 )
Cash flow from financing activities
Proceeds from exercised options 2,324 -
Proceeds from issuance new shares 143,352 -
Repayment of 'Liquidation Price' to former preferred shareholders (3,055 ) -
Proceeds/(repayment) bank facilities - (159,046 )
Proceeds from Senior Secured Notes and RCF (439 ) 192,015
Other Borrowings (739 ) (1,046 )
Net cash flows from financing activities 141,443 31,923
Effect of exchange rate changes on cash 117 145
Net movement in cash and cash equivalents 130,144 26,476
Cash and cash equivalents, beginning of period 99,115 32,003
Cash and cash equivalents, end of period 229,259 58,479

(ix) The IPO transaction costs represent the write off of the proportion of the IPO costs allocated to the selling shareholders at the Initial Public Offering.

SOURCE: Interxion Holding

Investors:
Jim Huseby
Investor Relations +1-813-644-9399
or
Financial Dynamics
James Melville-Ross / Edward Bridges / Haya Herbert-Burns
SB: +44 (0)20 7831 3113
Email: Interxion@fd.com

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