Interxion Reports Third Quarter 2012 Results

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Interxion Reports Third Quarter 2012 Results

AMSTERDAM--(BUSINESS WIRE)-- Interxion Holding NV (NYS: INXN) , a leading European provider of carrier-neutral colocation data centre services, announced its results today for the three months ended 30 September 2012.

Financial Highlights

  • Revenue increased by 14% to €70.4 million (Q3 2011: €62.0 million)
  • Adjusted EBITDA increased by 15% to €28.7 million (Q3 2011: €25.0 million)
  • Adjusted EBITDA margin increased to 40.8% (Q3 2011: 40.3%)
  • Net profit increased by 24% to €8.6 million (Q3 2011: €6.9 million)
  • Capital expenditure, including intangible assets, was €46.5 million

Operating Highlights

  • New data centres opened in Amsterdam and London
  • Equipped Space increased by 4,300 square metres in the third quarter to 69,600 square metres
  • Revenue Generating Space increased by 2,600 square metres in the third quarter to 51,200 square metres
  • Utilisation Rate was 74% at the end of the quarter
  • Announced expansion projects remain on schedule

"Interxion again delivered solid financial and operational results and significantly grew both equipped and revenue generating space," said Interxion Chief Executive Officer, David Ruberg. "Our market strategy that focuses on creating value for our customers by building communities of interest continues to pay off. We saw particular strength from cloud service providers and financial services segments who derive value in their own businesses from the rich, low latency connectivity and robust communities of interest available in our highly reliable data centres."

Quarterly Review

Revenue for the third quarter of 2012 was €70.4 million, a 14% increase over the third quarter of 2011 and a 4% increase over the second quarter of 2012. Recurring revenue was €65.1 million, a 12% increase over the third quarter of 2011 and a 4% increase over the second quarter of 2012. Recurring revenue was 92% of total revenue.

Cost of sales for the third quarter increased by 13% to €29.4 million, compared with the third quarter of 2011. Gross profit margin increased to 58.3%, compared with 58.1% in the same quarter of 2011. Sales and marketing costs in the third quarter were €5.1 million, up 20% compared with the same quarter in the previous year. General and administrative costs1, were €7.2 million, an increase of 6% compared with the third quarter of 2011. Depreciation, amortisation, and impairments increased by 21%, compared with the previous-year third quarter, to €11.0 million.

Net financing costs for the third quarter of 2012 were €3.8 million, compared with €5.3 million in the third quarter of 2011, primarily as a result of higher interest capitalization because of increased data centre construction.

Net profit was €8.6 million in the third quarter of 2012, up 24% from the third quarter of 2011. Earnings per share in the third quarter of 2012 were €0.12, an increase of 21%, on a weighted average of 68.7 million diluted shares compared to €0.10 on a weighted average of 67.5 million diluted shares in the third quarter of 2011.

Adjusted EBITDA for the third quarter of 2012 was €28.7 million, up 15% year-on-year. Adjusted EBITDA margin expanded to 40.8%, compared with 40.3% in the third quarter of the previous year.

Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €24.1 million. Capital Expenditure, including intangible assets, was €46.5 million in the third quarter 2012.

Cash and cash equivalents were €55.2 million at 30 September 2012, down from €142.7 million at year-end 2011. The Company's €60.0 million revolving credit facility remains undrawn.

Equipped space at the end of the third quarter 2012 was 69,600 square metres, compared with 62,200 square metres at the end of the third quarter of 2011 and 65,300 square metres at the end of the second quarter of 2012. Revenue generating space was 51,200 square metres at the end of the third quarter 2012, compared to 46,100 square metres at the end of the third quarter of 2011 and 48,600 square metres at the end of the second quarter of 2012. Utilisation rate, the ratio of revenue-generating space to equipped space, was 74% at the end of the quarter, the same as the third quarter of 2011 and the second quarter of 2012.

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

Business Outlook

The Company today reaffirmed its guidance for 2012:

Revenue  €275 million - €285 million
Adjusted EBITDA€112 million - €120 million
Capital Expenditure (including intangibles)€170 million - €190 million

Conference Call to Discuss Results

The Company will host a conference call today at 8:30am ET (1:30pm GMT, 2:30pm CET) to discuss the results.

To participate on this call, U.S. callers may dial toll free 1-866-295-3947; callers outside the U.S. may dial direct +44 (0) 1452 561 394. The conference ID for this call is 39820449. 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 November 2012. 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 39820449.

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 Adjusted EBITDA is provided in the Notes to Consolidated Income Statement: Adjusted EBITDA reconciliation later 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, abandoned transaction costs, income from sub-leases on unused data centre sites and net insurance compensation benefit, which it uses to reconcile to Adjusted EBITDA. The Company is, therefore, unable to provide reconciling information for Adjusted EBITDA.

About Interxion

Interxion (NYS: INXN) is a leading provider of carrier-neutral colocation data centre services in Europe, serving a wide range of customers through 32 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.

    
INTERXION HOLDING NV
CONSOLIDATED INCOME STATEMENT
(in €'000 - except per share data and where stated otherwise)
(unaudited)
 
Three Months EndedNine Months Ended
30-Sep30-Sep30-Sep30-Sep
2012201120122011
 
Revenue70,42562,005204,241179,920
Cost of sales(29,400)(25,969)(84,129)(76,271)
Gross profit41,02536,036120,112103,649
Other income11199343341
Sales and marketing costs(5,083)(4,234)(14,597)(13,037)
General and administrative costs(19,443)(16,594)(55,457)(50,389)
Operating profit16,61015,30750,40140,564
Net finance expense(3,778)(5,255)(12,089)(17,829)
Profit before taxation12,83210,05238,31222,735
Income tax expense(4,270)(3,161)(12,330)(7,812)
Net profit8,562 6,891 25,982 14,923 
 
Basic earnings per share: (€)0.130.100.390.23
Diluted earnings per share: (€)0.120.100.380.23
 
 
Number of shares outstanding at the end of the period (shares in thousands)67,95065,82367,95065,823
Weighted average number of shares for Basic EPS (shares in thousands)67,77665,74267,06963,528
Weighted average number of shares for Diluted EPS (shares in thousands)68,65967,48867,93665,223
 
 
 

Capacity Metrics

Equipped space (in square meters)69,60062,20069,60062,200
Revenue generating space (in square meters)51,20046,10051,20046,100
Utilisation rate74%74%74%74%
 
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INTERXION HOLDING NV
NOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION
(in €'000 - except where stated otherwise)
(unaudited)
 
Three Months EndedNine Months Ended
30-Sep30-Sep30-Sep30-Sep
2012201120122011

Consolidated

 
Recurring revenue65,10158,225190,247168,611
Non-recurring Revenue5,324 3,780 13,994 11,309 
Revenue70,425 62,005 204,241 179,920 
Adjusted EBITDA28,726 25,005 83,828 70,536 
Gross Margin58.3%58.1%58.8%57.6%
Adjusted EBITDA Margin40.8%40.3%41.0%39.2%
 
Total assets769,644708,410769,644708,410
Total liabilities400,504392,391400,504392,391
Capital expenditure, including intangible assets (i)(46,468)(54,943)(150,140)(93,413)
 

France, Germany, Netherlands, and UK

 
Recurring revenue39,82834,470116,287100,276
Non-recurring Revenue3,950 1,950 10,149 6,912 
Revenue43,778 36,420 126,436 107,188 
Adjusted EBITDA22,395 18,473 65,800 53,216 
Gross Margin60.1%59.9%60.9%59.0%
Adjusted EBITDA Margin51.2%50.7%52.0%49.6%
 
Total assets518,004335,727518,004335,727
Total liabilities90,65486,70590,65486,705
Capital expenditure, including intangible assets (i)(37,935)(41,008)(124,990)(62,827)
 

Rest of Europe

 
Recurring revenue25,27323,75573,96068,335
Non-recurring Revenue1,374 1,830 3,845 4,397 
Revenue26,647 25,585 77,805 72,732 
Adjusted EBITDA13,805 13,162 40,689 37,423 
Gross Margin60.8%60.7%61.2%60.9%
Adjusted EBITDA Margin51.8%51.4%52.3%51.5%
 
Total assets192,261174,732192,261174,732
Total liabilities41,14138,81241,14138,812
Capital expenditure, including intangible assets (i)(7,047)(13,650)(21,818)(28,453)
 

Corporate and Other

    
Adjusted EBITDA(7,474)(6,630)(22,661)(20,103)
 
Total assets59,379197,95159,379197,951
Total liabilities268,709266,874268,709266,874
Capital expenditure, including intangible assets (i)(1,486)(285)(3,332)(2,133)
 
 
(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 intangibleassets" respectively.