Interxion Reports Third Quarter 2012 Results
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 Ended | Nine Months Ended | |||||||||||
30-Sep | 30-Sep | 30-Sep | 30-Sep | |||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Revenue | 70,425 | 62,005 | 204,241 | 179,920 | ||||||||
Cost of sales | (29,400 | ) | (25,969 | ) | (84,129 | ) | (76,271 | ) | ||||
Gross profit | 41,025 | 36,036 | 120,112 | 103,649 | ||||||||
Other income | 111 | 99 | 343 | 341 | ||||||||
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 profit | 16,610 | 15,307 | 50,401 | 40,564 | ||||||||
Net finance expense | (3,778 | ) | (5,255 | ) | (12,089 | ) | (17,829 | ) | ||||
Profit before taxation | 12,832 | 10,052 | 38,312 | 22,735 | ||||||||
Income tax expense | (4,270 | ) | (3,161 | ) | (12,330 | ) | (7,812 | ) | ||||
Net profit | 8,562 | 6,891 | 25,982 | 14,923 | ||||||||
Basic earnings per share: (€) | 0.13 | 0.10 | 0.39 | 0.23 | ||||||||
Diluted earnings per share: (€) | 0.12 | 0.10 | 0.38 | 0.23 | ||||||||
Number of shares outstanding at the end of the period (shares in thousands) | 67,950 | 65,823 | 67,950 | 65,823 | ||||||||
Weighted average number of shares for Basic EPS (shares in thousands) | 67,776 | 65,742 | 67,069 | 63,528 | ||||||||
Weighted average number of shares for Diluted EPS (shares in thousands) | 68,659 | 67,488 | 67,936 | 65,223 | ||||||||
Capacity Metrics | ||||||||||||
Equipped space (in square meters) | 69,600 | 62,200 | 69,600 | 62,200 | ||||||||
Revenue generating space (in square meters) | 51,200 | 46,100 | 51,200 | 46,100 | ||||||||
Utilisation rate | 74 | % | 74 | % | 74 | % | 74 | % | ||||
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 | |||||||||
2012 | 2011 | 2012 | 2011 | |||||||||
Consolidated | ||||||||||||
Recurring revenue | 65,101 | 58,225 | 190,247 | 168,611 | ||||||||
Non-recurring Revenue | 5,324 | 3,780 | 13,994 | 11,309 | ||||||||
Revenue | 70,425 | 62,005 | 204,241 | 179,920 | ||||||||
Adjusted EBITDA | 28,726 | 25,005 | 83,828 | 70,536 | ||||||||
Gross Margin | 58.3 | % | 58.1 | % | 58.8 | % | 57.6 | % | ||||
Adjusted EBITDA Margin | 40.8 | % | 40.3 | % | 41.0 | % | 39.2 | % | ||||
Total assets | 769,644 | 708,410 | 769,644 | 708,410 | ||||||||
Total liabilities | 400,504 | 392,391 | 400,504 | 392,391 | ||||||||
Capital expenditure, including intangible assets (i) | (46,468 | ) | (54,943 | ) | (150,140 | ) | (93,413 | ) | ||||
France, Germany, Netherlands, and UK | ||||||||||||
Recurring revenue | 39,828 | 34,470 | 116,287 | 100,276 | ||||||||
Non-recurring Revenue | 3,950 | 1,950 | 10,149 | 6,912 | ||||||||
Revenue | 43,778 | 36,420 | 126,436 | 107,188 | ||||||||
Adjusted EBITDA | 22,395 | 18,473 | 65,800 | 53,216 | ||||||||
Gross Margin | 60.1 | % | 59.9 | % | 60.9 | % | 59.0 | % | ||||
Adjusted EBITDA Margin | 51.2 | % | 50.7 | % | 52.0 | % | 49.6 | % | ||||
Total assets | 518,004 | 335,727 | 518,004 | 335,727 | ||||||||
Total liabilities | 90,654 | 86,705 | 90,654 | 86,705 | ||||||||
Capital expenditure, including intangible assets (i) | (37,935 | ) | (41,008 | ) | (124,990 | ) | (62,827 | ) | ||||
Rest of Europe | ||||||||||||
Recurring revenue | 25,273 | 23,755 | 73,960 | 68,335 | ||||||||
Non-recurring Revenue | 1,374 | 1,830 | 3,845 | 4,397 | ||||||||
Revenue | 26,647 | 25,585 | 77,805 | 72,732 | ||||||||
Adjusted EBITDA | 13,805 | 13,162 | 40,689 | 37,423 | ||||||||
Gross Margin | 60.8 | % | 60.7 | % | 61.2 | % | 60.9 | % | ||||
Adjusted EBITDA Margin | 51.8 | % | 51.4 | % | 52.3 | % | 51.5 | % | ||||
Total assets | 192,261 | 174,732 | 192,261 | 174,732 | ||||||||
Total liabilities | 41,141 | 38,812 | 41,141 | 38,812 | ||||||||
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 assets | 59,379 | 197,951 | 59,379 | 197,951 | ||||||||
Total liabilities | 268,709 | 266,874 | 268,709 | 266,874 | ||||||||
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. | ||||||||||||
