Company Reports Strong Results, Announces Expansions and Reaffirms Guidance
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 and nine months ended 30 September 2011.
Highlights
- Revenue increased by 13% to €62.0 million (Q3 2010: €54.6 million)
- Recurring Revenue increased by 17% to €58.2 million (Q3 2010: €49.6 million) and 4% over Q2 2011 (€56.2 million)
- Adjusted EBITDA increased by 20% to €25.0 million (Q3 2010: €20.8 million)
- Adjusted EBITDA margin increased to 40.3% (Q3 2010: 38.1%)
- Net profit increased to €6.9 million (Q3 2010: €5.9 million)
- Capital Expenditures were €53.8 million in the third quarter
- Reaffirmed full year 2011 guidance
“Interxion showed growth in all key performance metrics during the third quarter. As a result of customer demand, we announced the construction of our seventh data centre in Paris during the third quarter, and since the end of the third quarter we have announced the construction of three major new data centres, Frankfurt 7, London 2, and today, Amsterdam 6,” said Chief Executive Officer David Ruberg. “Despite the economic uncertainty across Europe, we continue to see strong demand trends in our targeted segments, especially cloud computing, digital media, and financial services.”
Quarterly Review
Revenue for the third quarter of 2011 was €62.0 million, a 13% increase over the third quarter of 2010 and a 3% increase from the second quarter of 2011. Recurring revenue was €58.2 million, a 17% increase over the third quarter of 2010 and a 4% increase from the second quarter of 2011. Recurring revenue was 94% of total revenue.
Cost of sales for the third quarter increased by 8% to €26.0 million compared to the third quarter 2010, producing an increased gross profit margin of 58.1% compared to 56.2% in the same quarter of 2010. Sales and marketing costs in the third quarter were €4.2 million, down 3% compared to the prior year quarter. General and administrative costs, excluding depreciation, amortisation, impairments, exceptional general and administrative costs, and share-based payments were €6.8 million, an increase of 24% compared to the prior year quarter and were impacted by public company costs. Depreciation, amortisation, and impairments increased by 16% compared to the prior year quarter to €9.1 million.
Net financing costs for the third quarter of 2011 were €5.3 million, compared to €5.1 million in the third quarter of 2010.
Net profit was €6.9 million in the third quarter of 2011, up 16% from the third quarter of 2010.
Adjusted EBITDA for the third quarter of 2011 was €25.0 million, up 20% year over year. Adjusted EBITDA margin expanded to 40.3% compared to 38.1% in the prior year quarter as the company’s increased scale provided greater operating leverage.
Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €23.8 million. Net cash used in investing activities was €4.9 million, reflecting €53.8 million of capital expenditures largely offset by €50.0 million liquidated from short term investments.
Cash and equivalents and short term investments were €189.5 million at 30 September 2011, up from €99.1 million at year end 2010.
Equipped space at the end of the third quarter 2011 was 62,200 square metres compared to 61,500 square metres in the second quarter 2011 and 59,600 square metres in the third quarter 2010. Utilisation rate, the ratio of revenue-generating space to equipped space, was 74%, the same as the second quarter 2011 and up from 71% in the third quarter 2010.
Business Outlook
The company today also reaffirmed its guidance for 2011:
| Revenue | €239 million – €245 million | |||
| Adjusted EBITDA | €91 million – €95 million | |||
| Capital Expenditures | €140 million – €160 million |
Conference Call to Discuss Results
The company will host a conference call at 8:30 a.m. ET (1:30 p.m. GMT) today to discuss results for the third quarter 2011.
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 19681993. 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 21 November 2011. 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 19681993#.
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 Adjusted EBITDA as additional information because we understand that they are measures used by certain investors and because it is used in our financial covenants in our €50 million revolving credit facility and €260 million 9.50% Senior Secured Notes due 2017. However, other companies may present Adjusted EBITDA differently than we do. Adjusted EBITDA is not a measure 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 EBITDA and operating profit is provided in the Notes to Consolidated Income Statement: Group Metrics.
About Interxion
Interxion 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 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 visitwww.interxion.com.
| INTERXION HOLDING NV | ||||||||||||
| CONSOLIDATED INCOME STATEMENTS | ||||||||||||
| (in €’000 – except per share data and where stated otherwise) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| 30-Sep | 30-Sep | 30-Sep | 30-Sep | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||
| Revenue | 62,005 | 54,646 | 179,920 | 152,824 | ||||||||
| Cost of sales | (25,969 | ) | (23,945 | ) | (76,271 | ) | (67,867 | ) | ||||
| Gross profit | 36,036 | 30,701 | 103,649 | 84,957 | ||||||||
| Other income | 99 | 67 | 341 | 293 | ||||||||
| Sales and marketing costs | (4,234 | ) | (4,380 | ) | (13,037 | ) | (11,262 | ) | ||||
| General and administrative costs | (16,594 | ) | (13,781 | ) | (50,389 | ) | (39,717 | ) | ||||
| Operating profit | 15,307 | 12,607 | 40,564 | 34,271 | ||||||||
| Finance income | 1,114 | 101 | 2,324 | 366 | ||||||||
| Finance expense | (6,369 | ) | (5,167 | ) | (20,153 | ) | (23,687 | ) | ||||
| Profit before taxation | 10,052 | 7,541 | 22,735 | 10,950 | ||||||||
| Income tax expense | (3,161 | ) | (1,606 | ) | (7,812 | ) | (5,782 | ) | ||||
| Net profit | 6,891 | 5,935 | 14,923 | 5,168 | ||||||||
| Basic earnings per share: (€) (i) | 0.10 | 0.13 | 0.23 | 0.12 | ||||||||
| Diluted earnings per share: (€) (i) | 0.10 | 0.12 | 0.23 | 0.11 | ||||||||
| Number of shares outstanding at the end of the period (shares in thousands) | 65,823 | 44,351 | 65,823 | 44,351 | ||||||||
| Weighted average number of shares for Basic EPS (shares in thousands) | 65,742 | 44,351 | 63,528 | 44,351 | ||||||||
| Weighted average number of shares for Diluted EPS (shares in thousands) | 67,488 | 47,676 | 65,223 | 47,574 | ||||||||
| (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 €’000 – except where stated otherwise) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| 30-Sep | 30-Sep | 30-Sep | 30-Sep | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||
| Consolidated | ||||||||||||
| Recurring revenue | 58,225 | 49,633 | 168,611 | 141,551 | ||||||||
| Non-recurring Revenue | 3,780 | 5,013 | 11,309 | 11,273 | ||||||||
| Revenue | 62,005 | 54,646 | 179,920 | 152,824 | ||||||||
| Adjusted EBITDA | 25,005 | 20,818 | 70,536 | 57,823 | ||||||||
| Gross Margin | 58.1 | % | 56.2 | % | 57.6 | % | 55.6 | % | ||||
| Adjusted EBITDA Margin | 40.3 | % | 38.1 | % | 39.2 | % | 37.8 | % | ||||
| Total assets | 708,410 | 464,663 | 708,410 | 464,663 | ||||||||
| Total liabilities | 392,391 | 321,365 | 392,391 | 321,365 | ||||||||
| Capital expenditures (iv) | (53,763 | ) | (25,516 | ) | (89,127 | ) | (79,113 | ) | ||||
| Depreciation, amortization and impairments | (9,087 | ) | (7,802 | ) | (27,181 | ) | (22,483 | ) | ||||
| France, Germany, Netherlands, and UK | ||||||||||||
| Recurring revenue | 34,470 | 29,429 | 100,276 | 84,188 | ||||||||
| Non-recurring Revenue | 1,950 | 3,371 | 6,912 | 7,592 | ||||||||
| Revenue | 36,420 | 32,800 | 107,188 | 91,780 | ||||||||
| Adjusted EBITDA | 18,473 | 14,725 | 53,216 | 42,126 | ||||||||
| Gross Margin | 59.9 | % | 56.0 | % | 59.0 | % | 56.1 | % | ||||
| Adjusted EBITDA Margin | 50.7 | % | 44.9 | % | 49.6 | % | 45.9 | % | ||||
| Total assets | 335,727 | 267,259 | 335,727 | 267,259 | ||||||||
| Total liabilities | 86,705 | 83,750 | 86,705 | 83,750 | ||||||||
| Capital expenditures (iv) | (39,828 | ) | (14,027 | ) | (59,258 | ) | (46,110 | ) | ||||
| Depreciation, amortization and impairments | (5,118 | ) | (4,676 | ) | (16,017 | ) | (13,657 | ) | ||||
| Rest of Europe | ||||||||||||
| Recurring revenue | 23,755 | 20,204 | 68,335 | 57,363 | ||||||||
| Non-recurring Revenue | 1,830 | 1,642 | 4,397 | 3,681 | ||||||||
| Revenue | 25,585 | 21,846 | 72,732 | 61,044 | ||||||||
| Adjusted EBITDA | 13,162 | 11,517 | 37,423 | 30,893 | ||||||||
| Gross Margin | 60.7 | % | 62.2 | % | 60.9 | % | 60.4 | % | ||||
| Adjusted EBITDA Margin | 51.4 | % | 52.7 | % | 51.5 | % | 50.6 | % | ||||
| Total assets | 174,732 | 147,435 | 174,732 | 147,435 | ||||||||
| Total liabilities | 38,812 | 35,718 | 38,812 | 35,718 | ||||||||
| Capital expenditures (iv) | (13,650 | ) | (8,378 | ) | (28,342 | ) | (29,065 | ) | ||||
| Depreciation, amortization and impairments | (3,411 | ) | (2,843 | ) | (9,698 | ) | (7,831 | ) | ||||
| Corporate and Other | ||||||||||||
| Adjusted EBITDA | (6,630 | ) | (5,424 | ) | (20,103 | ) | (15,196 | ) | ||||
| Total assets | 197,951 | 49,969 | 197,951 | 49,969 | ||||||||
| Total liabilities | 266,874 | 201,897 | 266,874 | 201,897 | ||||||||
| Capital expenditures (iv) | (285 | ) | (3,111 | ) | (1,527 | ) | (3,938 | ) | ||||
| Depreciation, amortization and impairments | (558 | ) | (283 | ) | (1,466 | ) | (995 | ) | ||||
(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 €’000 – except where stated otherwise) | ||||||||||||
| (unaudited) | ||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||
| 30-Sep | 30-Sep | 30-Sep | 30-Sep | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||
| 1. Reconciliation of adjusted EBITDA | ||||||||||||
| Adjusted EBITDA | 25,005 | 20,818 | 70,536 | 57,823 | ||||||||
| Income from subleases on unused data center sites | 99 | 67 | 341 | 293 | ||||||||
| Exceptional income | 99 | 67 | 341 | 293 | ||||||||
| (Increase)/decrease in provision for onerous lease contracts | – | (67 | ) | (18 | ) | (293 | ) | |||||
| IPO transaction costs (v) | – | – | (1,725 | ) | – | |||||||
| Share-based payments | (710 | ) | (409 | ) | (1,389 | ) | (1,069 | ) | ||||
| Exceptional general and administrative costs | (710 | ) | (476 | ) | (3,132 | ) | (1,362 | ) | ||||
| EBITDA | 24,394 | 20,409 | 67,745 | 56,754 | ||||||||
| Depreciation, amortization and impairments | (9,087 | ) | (7,802 | ) | (27,181 | ) | (22,483 | ) | ||||
| Operating profit | 15,307 | 12,607 | 40,564 | 34,271 | ||||||||
| 2. Capacity Metrics | ||||||||||||
| Equipped space (in sqm) | 62,200 | 59,600 | 62,200 | 59,600 | ||||||||
| Revenue generating space (in sqm) | 46,100 | 42,400 | 46,100 | 42,400 | ||||||||
| Utilisation rate | 74 | % | 71 | % | 74 | % | 71 | % | ||||
| (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 €’000 – except where stated otherwise) | ||||||
| (unaudited) | ||||||
| As at | ||||||
| 30-Sep | 31-Dec | |||||
| 2011 | 2010 | |||||
| Non-current assets | ||||||
| Property, plant and equipment | 402,606 | 342,420 | ||||
| Intangible assets | 9,699 | 6,005 | ||||
| Deferred tax assets | 39,378 | 39,841 | ||||
| Other non-current assets | 3,654 | 3,709 | ||||
| 455,337 | 391,975 | |||||
| Current assets | ||||||
| Trade and other current assets | 63,534 | 55,672 | ||||
| Short-term investments | 40,000 | – | ||||
| Cash and cash equivalents | 149,539 | 99,115 | ||||
| 253,073 | 154,787 | |||||
| Total assets | 708,410 | 546,762 | ||||
| Shareholders’ equity | ||||||
| Share capital | 6,582 | 4,434 | ||||
| Share premium | 464,398 | 321,078 | ||||
| Foreign currency translation reserve | 5,292 | 4,933 | ||||
| Accumulated deficit | (160,253 | ) | (175,176 | ) | ||
| 316,019 | 155,269 | |||||
| Non-current liabilities | ||||||
| Trade payables and other liabilities | 9,455 | 7,795 | ||||
| Deferred tax liabilities | 1,596 | 660 | ||||
| Provision for onerous lease contracts | 11,984 | 13,260 | ||||
| Borrowings | 257,301 | 257,403 | ||||
| 280,336 | 279,118 | |||||
| Current liabilities | ||||||
| Trade payables and other liabilities | 106,365 | 106,038 | ||||
| Current tax liabilities | 1,831 | 868 | ||||
| Provision for onerous lease contracts | 3,149 | 3,073 | ||||
| Borrowings | 710 | 2,396 | ||||
| 112,055 | 112,375 | |||||
| Total liabilities | 392,391 | 391,493 | ||||
| Total liabilities and shareholders’ equity | 708,410 | 546,762 | ||||
| INTERXION HOLDING NV | |||||||
| NOTES TO THE CONSOLIDATED BALANCE SHEET: BORROWINGS | |||||||
| (in €’000 – except where stated otherwise) | |||||||
| (unaudited) | |||||||
| As at | |||||||
| 30-Sep | 31-Dec | ||||||
| 2011 | 2010 | ||||||
| 3. Borrowings net of cash and cash equivalents and short-term investments | |||||||
| Cash and cash equivalents (vi) and Short-term investments (vii) | 189,539 | 99,115 | |||||
| 9.5% Senior Secured Notes due 2017 (viii) | 255,402 | 254,924 | |||||
| Financial Leases | 437 | 765 | |||||
| Other Borrowings | 2,172 | 4,110 | |||||
| Borrowings excluding revolving credit facility deferred financing costs | 258,011 | 259,799 | |||||
| Revolving credit facility deferred financing costs (ix) | (821 | ) | (1,283 | ) | |||
| Total Borrowings | 257,190 | 258,516 | |||||
| Borrowings net of cash and cash equivalents and short-term investments | 67,651 | 159,401 | |||||
(vi) Cash and cash equivalents includes €3.5 million as of September 30, 2011 and €4.2 million as of 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) Short-term investments relate to six and nine months deposits. | |||||||
(viii) €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. | |||||||
(ix) We reported deferred financing costs of €0.8 million in connection with entering into our €50 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 | Nine Months Ended | |||||||||||
| 30-Sep | 30-Sep | 30-Sep | 30-Sep | |||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||
| Profit for the period | 6,891 | 5,935 | 14,923 | 5,168 | ||||||||
| Depreciation, amortization and impairments | 9,087 | 7,802 | 27,181 | 22,483 | ||||||||
| IPO transaction costs | – | – | 1,725 | – | ||||||||
| Provision for onerous lease contracts | (750 | ) | (288 | ) | (2,303 | ) | (1,828 | ) | ||||
| Share-based payments | 710 | 409 | 1,389 | 1,069 | ||||||||
| Net finance expense | 5,255 | 4,777 | 17,829 | 23,032 | ||||||||
| Income tax expense | 3,161 | 1,606 | 7,812 | 5,782 | ||||||||
| 24,354 | 20,241 | 68,556 | 55,706 | |||||||||
| Movements in trade and other current assets | (2,316 | ) | (4,264 | ) | (7,995 | ) | (1,618 | ) | ||||
| Movements in trade and other liabilities | 1,723 | 3,388 | 6,913 | 4,211 | ||||||||
| Cash generated from operations | 23,761 | 19,365 | 67,474 | 58,299 | ||||||||
| Interest paid | (11,598 | ) | (8,200 | ) | (24,178 | ) | (9,178 | ) | ||||
| Interest received | 704 | 150 | 1,241 | 337 | ||||||||
| Income tax paid | (392 | ) | (724 | ) | (1,544 | ) | (950 | ) | ||||
| Net cash flows from operating activities | 12,475 | 10,591 | 42,993 | 48,508 | ||||||||
| Cash flow from investing activities | ||||||||||||
| Purchase of property, plant and equipment | (53,763 | ) | (25,516 | ) | (89,127 | ) | (79,113 | ) | ||||
| Disposals of property, plant and equipment | – | – | 945 | – | ||||||||
| Purchase of intangible assets | (1,180 | ) | (1,059 | ) | (4,286 | ) | (1,549 | ) | ||||
| Proceeds /(acquisition) short-term investments | 50,000 | – | (40,000 | ) | – | |||||||
| Net cash flows from investing activities | (4,943 | ) | (26,575 | ) | (132,468 | ) | (80,662 | ) | ||||
| Cash flow from financing activities | ||||||||||||
| Proceeds from exercised options | 698 | – | 3,022 | – | ||||||||
| Proceeds from issuance new shares | – | – | 142,952 | – | ||||||||
| Repayment of ‘Liquidation Price’ to former preferred shareholders | – | – | (3,055 | ) | – | |||||||
| Proceeds/(repayment) bank facilities | – | – | – | (159,046 | ) | |||||||
| Proceeds from Senior Secured Notes and RCF | – | (414 | ) | (645 | ) | 190,830 | ||||||
| Other Borrowings | (678 | ) | (6 | ) | (2,265 | ) | (1,176 | ) | ||||
| Net cash flows from financing activities | 20 | (420 | ) | 140,009 | 30,608 | |||||||
| Effect of exchange rate changes on cash | 16 | (125 | ) | (110 | ) | 135 | ||||||
| Net movement in cash and cash equivalents | 7,568 | (16,529 | ) | 50,424 | (1,411 | ) | ||||||
| Cash and cash equivalents, beginning of period | 141,971 | 47,121 | 99,115 | 32,003 | ||||||||
| Cash and cash equivalents, end of period | 149,539 | 30,592 | 149,539 | 30,592 | ||||||||
| INTERXION HOLDING NV | ||||
| Announced Expansion Projects 2011 | ||||
| Market | Project | CAPEX (a, b) | Equipped Space(a) | Target Completion |
| (€ million) | (Sqm) | |||
| Düsseldorf | DUS 1 : Phase 2 Power Upgrade | € 7 | 500 (c) | 2Q 2011 (completed) |
| London | LON 1 : Phase 9 Expansion | € 7 | 525 | 2Q 2011 (completed) |
| Vienna | VIE 1 : Phase 3 Expansion | € 5 | 600 (d) | 3Q 2011 (completed) |
| Dublin | DUB 2 : Phase 3 Expansion and Power Upgrade | € 8 | 640 | 4Q 2011 |
| Paris | PAR 7 : Phase 1 New Build | € 70 | 4,500 | 2Q 2012 |
| Subtotal | Announced through 30 September 2011 | € 97 | 6,765 | |
| Frankfurt | FRA 7: New Build | € 21 | 1,550 | 1Q 2012 |
| London | LON 2: New Build | € 38 | 1,700 | 2Q 2012 |
| Amsterdam | AMS 6: New Build | € 60 | 4,000 | 4Q 2012 |
| Subtotal | Announced since 30 September 2011 | € 119 | 7,250 | |
| (a) CAPEX and Equipped Space are approximate and may change after project completion. | ||||
| (b) CAPEX reflects the total for the listed project and may not be all invested in the current year. | ||||
| (c) Previously included in equipped space | ||||
| (d) Announced as a 2 phase project with 1300 sqm and €12 million capex | ||||
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