5th March 2014
Revenue for the full year increased by 11% to €307.1 million
Very strong bookings in the fourth quarter
AMSTERDAM 5 March 2014 – Interxion Holding NV (NYSE: INXN), a leading European provider of cloud and carrier-neutral colocation data centre services, announced its results today for the three months and year ended 31 December 2013.
“Interxion delivered a good performance in the fourth quarter and solid financial and operating results in 2013 with the Big 4 segment, which comprises our four largest countries, recording organic recurring revenue growth of 14%”, said David Ruberg, Interxion’s Chief Executive Officer. “In addition, we had a very strong level of bookings in the fourth quarter of 2013, with momentum continuing into the first quarter of 2014 as certain market segments continue to improve. We obtained orders from multiple cloud infrastructure providers across multiple locations, including Amsterdam, Frankfurt, Stockholm, and Vienna. As a result, nearly 70% of our announced capital expenditure for 2014 is dedicated to satisfying these orders.”
Financial Highlights
- Revenue for the fourth quarter and full year increased by 7% and 11% to €78.2 million and €307.1 million, respectively (4Q 2012: €72.9 million; FY 2012: €277.1 million)
- Adjusted EBITDA for the fourth quarter and full year increased by 8% and 15% to €33.8 million and €131.8 million, respectively (4Q 2012: €31.2 million; FY 2012: €115.0 million)
- Adjusted EBITDA margin for the fourth quarter and full year increased to 43.2% and 42.9%, respectively (4Q 2012: 42.8%; FY 2012: 41.5%)
- Net profit for the fourth quarter increased by 73% to €9.8 million. Full year 2013 net profit was €6.8 million (4Q 2012: €5.6 million; FY 2012: €31.6 million)
- Earnings per diluted share for the fourth quarter increased by 72% to €0.14. Full year 2013 earnings per diluted share were €0.10 (4Q 2012: €0.08; FY 2012: €0.46)
- Capital Expenditures, including intangible assets1 , were €55.3 million in the fourth quarter and €143.4 million in the full year 2013.
Operating Highlights
- Equipped Space increased by 800 square metres in the fourth quarter and 6,100 square metres for the year to 80,100 square metres
- Revenue Generating Space increased by 600 square metres in the fourth quarter and 3,500 square metres for the full year to 59,700 square metres
- Utilisation Rate was 75% at the end of the year (Year end 2012: 76%)
- Expansion projects in Zurich and Vienna were completed in 4Q 2013
- New data centres in Stockholm and Vienna announced.
Quarterly Review
Revenue for the fourth quarter of 2013 was €78.2 million, a 7% increase over the fourth quarter of 2012 and a slight increase over the third quarter of 2013. Recurring revenue was €74.4 million, an 8% increase over the fourth quarter of 2012 and a 1% increase over the third quarter of 2013. Recurring revenue in the quarter was 95% of total revenue.
- Cost of sales in the fourth quarter of 2013 was €31.4 million, an 8% increase over the fourth quarter of 2012 and a 2% decrease over the third quarter of 2013.
- Gross profit was €46.8 million in the fourth quarter of 2013, a 6% increase over the fourth quarter of 2012 and a 1% increase over the third quarter of 2013.
- Sales and marketing costs in the fourth quarter were €6.4 million, up 16% compared to both the prior year quarter and the third quarter of 2013, partly due to increased sales commissions. Other general and administrative2 costs were €6.7 million, a decrease of 8% compared to the fourth quarter of 2012 and a 6% decrease compared to the third quarter of 2013.
Adjusted EBITDA for the fourth quarter of 2013 was €33.8 million, up 8% compared to the fourth quarter of 2012 and a slight increase compared to the third quarter of 2013. Adjusted EBITDA margin grew to 43.2% compared to 42.8% in the fourth quarter of 2012 and 43.1% in the third quarter 2013.
Depreciation, amortisation, and impairments in the fourth quarter of 2013 was €13.5 million, an increase of 4% compared to the fourth quarter of 2012 and a decrease of 11% from the third quarter of 2013. Beginning with the fourth quarter of 2013,
Interxion adjusted the estimated useful lives of certain assets to more accurately reflect their useful lives based on the company’s experience of operating and maintaining data centre assets for the last 15 years. This change of estimated useful lives has reduced the depreciation charge in the fourth quarter by €2.0 million.
Operating profit during the fourth quarter of 2013 was €19.0 million, an increase of 29% over the fourth quarter of 2012 and an increase of 9% compared to the third quarter of 2013.
Net finance costs for the fourth quarter of 2013 were €5.6 million, a 1% decrease compared to the fourth quarter of 2012, and an 85% decrease compared to the third quarter of 2013 during which the company recognized a €31.0 million one-time charge related to its refinancing transaction. Excluding this one-time charge, net finance costs decreased 21% compared to the adjusted third quarter of 2013.
Income tax expense for the fourth quarter of 2013 was €3.7 million, an increase of 6% compared to the fourth quarter of 2012. Interxion had a €4.1 million income tax benefit in the third quarter of 2013 which was impacted by the one-time refinancing charge mentioned above.
Net profit was €9.8 million in the fourth quarter of 2013, up 73% from the fourth quarter of 2012. Interxion had a €16.5 million net loss in the third quarter of 2013 which was impacted by the €31.0 million one-time refinancing charge mentioned above. Earnings per share in the fourth quarter 2013 were €0.14 on a weighted average of 69.5 million diluted shares, compared with €0.08 on a weighted average of 69.1 million diluted shares in the fourth quarter of 2012.
Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €23.0 million, a 30% decrease from the fourth quarter of 2012, and a 28% decrease from the third quarter of 2013, both the result of changes in working capital.
Capital expenditures, including intangible assets, were €55.3 million in the fourth quarter 2012 compared to €28.2 million in the fourth quarter of 2012 and €26.5 million in the third quarter of 2013.
Cash and cash equivalents and short term investments were €45.7 million at 31 December 2013, compared to €68.7 million at year end 2012. Total borrowings were €364.0 million at year end 2013 compared to €288.1 million at year end 2012, as the company invested in additional data centre capacity, refinanced its debt with €65 million of incremental long term debt and €40 million additional revolving credit facility capacity, and entered into several property mortgages during the year. At 5 March 2014, an amount of €20 million is drawn under the revolving credit facility.
Equipped space at the end of the fourth quarter of 2013 was 80,100 square metres compared to 74,000 square metres at the end of fourth quarter of 2012 and 79,300 square metres at the end of the third quarter 2013. Utilisation rate, the ratio of revenue-generating space to equipped space, was 75% at year-end 2013 compared to 76% at year-end 2012 and 75% at the end of the third quarter 2013.
Annual Review
Revenue for the full year 2013 was €307.1 million, an 11% increase over full year 2012. Recurring revenue for 2013 was €291.3 million, a 12% increase over 2012, and accounted for 95% of total revenue in 2013, up from 94% in 2012.
Gross profit was €183.0 million in 2013, a 12% increase over 2012.
Sales and marketing costs for 2013 were 22.8 million, a 14% increase over 2012.
Adjusted EBITDA for 2013 was €131.8 million, a 15% increase over 2012. Adjusted EBITDA margin for 2013 expanded to 42.9% from 41.5% in 2012.
Net profit was €6.8 million in 2013 compared to €31.6 million in 2012. Diluted earnings per share in 2013 were €0.10 on a weighted average of 69.3 million diluted shares, compared with €0.46 on a weighted average of 68.3 million diluted shares in 2012. Net profit and earnings per share in 2013 were impacted by the €31.0 million pre-tax one-time charge mentioned above.
Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €102.7 million in 2013 compared to €111.7 million in 2012.
Capital expenditures, including intangible assets, were €143.4 million in 2013 compared to €178.3 million in 2012.
During 2013, Interxion opened new capacity in 8 of its 11 countries representing approximately 6,100 square metres of equipped space. The company installed 3,500 revenue generating square metres in 2013.
Business Outlook
The company today is providing guidance for full year 2014:
| Revenue | €334 million – €344 million |
| Adjusted EBITDA | €145 million – €152 million |
| Capital Expenditures (including intangibles) | €140 million – €160 million |
Conference Call to Discuss Results
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 42521897. 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 11 March 2014. 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 550 000. The replay access number is 42521897.
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, amortisation 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 €100 million revolving credit facility and €325 million 6.00% Senior Secured Notes due 2020. 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.
Adjusted diluted earnings per share amounts are determined on Adjusted Net Profit3 . A reconciliation from reported Net Profit to Adjusted Net Profit is 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, news) is a leading provider of carrier and cloud neutral colocation data centre services in Europe and serves a wide range of customers through 36 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 more than 500 connectivity providers and 19 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.
Contact information:
Interxion
Jim Huseby
Investor Relations
Tel: +1-813-644-9399
IR@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, increase/(decrease) in onerous lease cost.
3 We define Adjusted Net Profit as net profit excluding the impact of the refinancing charge, capitalized interest, change in asset useful lives, deferred tax adjustments, Dutch crisis tax, and the related corporate income tax effect
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