Interxion Reports First Quarter 2013 Results

Interxion Reports First Quarter 2013 Results

AMSTERDAM--(BUSINESS WIRE)-- Interxion Holding NV (NYS: INXN) , a leading European provider of carrier and cloud neutral colocation data centre services, today announced its results for the three months ended 31 March 2013.

Financial Highlights

  • Revenue increased by 13% to €74.4 million (Q1 2012: €65.8 million)

  • Adjusted EBITDA increased by 16% to €31.7 million (Q1 2012: €27.3 million)

  • Adjusted EBITDA margin increased to 42.6% (Q1 2012: 41.5%)

  • Net profit was €7.0 million (Q1 2012: €8.7 million)

  • Capital expenditure, including intangible assets, was €32.8 million


Operating Highlights

  • Expansion projects in Frankfurt, London, Madrid, and Paris completed

  • Equipped Space increased by 4,100 square metres in Q1 2013 to 78,100 square metres

  • Revenue Generating Space increased by 800 square metres in Q1 2013 to 57,000 square metres

  • Utilisation Rate at the end of the quarter was 73%

"Interxion delivered another quarter of solid financial and operating results in an unfavourable macroeconomic environment," said Interxion Chief Executive Officer, David Ruberg. "We believe that our focus on implementing our market strategy of building communities of interest in our data centres, combined with our commitment to providing high quality sales, marketing, and customer support, continues to foster sustainable and profitable growth."

Quarterly Review

Revenue in the first quarter of 2013 was €74.4 million, a 13% increase over the first quarter of 2012 and 2% up on the fourth quarter of 2012. Recurring revenue, which was 95% of total revenue, was €71.0 million, a 14% increase over the first quarter of 2012 and 3% up on the fourth quarter of 2012.

Cost of sales in the first quarter of 2013 was €29.6 million, a 12% increase over the first quarter of 2012 and 2% up on the fourth quarter of 2012.

Gross profit was €44.8 million in the first quarter 2013, a 14% increase over the first quarter of 2012 and 2% up on the fourth quarter of 2012. Gross profit margin in the first quarter of 2013 was 60.2%, compared with 59.7% in the same quarter of 2012 and 60.3% in the fourth quarter of 2012.

Sales and marketing costs in the first quarter 2013 were €5.5 million, a 13% increase over the first quarter of 2012 and in line with the fourth quarter of 2012.

General and administrative costs1 in the first quarter 2013 were €7.6 million, an increase of 7% compared with the first quarter of 2012 and 5% up on the fourth quarter of 2012. Depreciation and amortisation in the first quarter 2013 was €14.0 million, a 45% increase over the first quarter of 2012 and 7% up on the fourth quarter of 2012.

Net financing costs in the first quarter of 2013 were €6.5 million, an increase of 45% compared with the first quarter of 2012, and was primarily the result of a reduction in capitalised interest in the quarter.

Net profit was €7.0 million in the first quarter 2013, a decrease of 20% compared with the first quarter of 2012, while earnings per share were €0.10 on a weighted average of 69.1 million diluted shares, compared with €0.13 on a weighted average of 67.4 million diluted shares in the first quarter of 2012.

Adjusted EBITDA in the first quarter of 2013 was €31.7 million, up 16% year-on-year. Adjusted EBITDA margin increased to 42.6%, compared with 41.5% in the first quarter of 2012.

Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €23.6 million in the first quarter 2013 compared to €25.4 million in the first quarter 2012. Capital expenditure, including intangible assets, was €32.8 million in the first quarter of 2013, compared to €61.1 million in the first quarter 2012.

Cash and cash equivalents were €60.5 million at 31 March 2013, down from €68.7 million at year-end 2012. Total borrowings were €298.0 million at the end of the first quarter 2013 compared with €288.1 million at the end of 2012. During the quarter, the company entered into a €10 million mortgage in connection with two of its data centres in Paris. The company's €60.0 million revolving credit facility remains undrawn.

Equipped Space at the end of the first quarter 2013 was 78,100 square metres, compared with 64,800 square metres at the end of the first quarter of 2012 and 74,000 square metres at the end of the fourth quarter of 2012. Revenue Generating Space at the end of the first quarter 2013 was 57,000 square metres, compared with 47,500 square metres at the end of the first quarter of 2012 and 56,200 square metres at the end of the fourth quarter of 2012. Utilisation rate, the ratio of Revenue Generating Space to Equipped Space, was 73% at the end of the quarter, the same as the first quarter of 2012 and compared with 76% at the end of the fourth quarter of 2012.

Business Outlook

Interxion today reaffirmed its guidance for 2013:

Revenue

€307 million - €322 million

Adjusted EBITDA

€130 million - €140 million

Capital expenditure (including intangibles)

€130 million - €150 million

Conference Call to Discuss Results

The company will host a conference call today at 8:30am ET (1:30pm BST, 2:30pm CET) 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 32692134. 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 May 2013. 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 32692134.

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, 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 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.

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 (NYS: INXN) is a leading provider of cloud and carrier-neutral colocation data centre services in Europe, serving a wide range of customers through 33 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 450 fixed and mobile carriers and ISPs and 18 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.

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

INTERXION HOLDING NV

CONSOLIDATED INCOME STATEMENT

(in €'000 ― except per share data and where stated otherwise)

(unaudited)

Three Months Ended

Mar-31

Mar-31

2013

2012

Revenue

74,379

65,812

Cost of sales

(29,615

)

(26,499

)

Gross profit

44,764

39,313

Other income

123

118

Sales and marketing costs

(5,495

)

(4,850

)

General and administrative costs

(22,616

)

(17,521

)

Operating profit

16,776

17,060

Net finance expense

(6,451

)

(4,435

)

Profit before taxation

10,325

12,625

Income tax expense

(3,355

)

(3,929

)

Net profit

6,970

8,696

Basic earnings per share: (€)

0.10

0.13

Diluted earnings per share: (€)

0.10

0.13

Number of shares outstanding at the end of the period (shares in thousands)

68,411

66,902

Weighted average number of shares for Basic EPS (shares in thousands)

68,225

66,335

Weighted average number of shares for Diluted EPS (shares in thousands)

69,109

67,439

Capacity metrics

Equipped space (in square meters)

78,100

64,800

Revenue generating space (in square meters)

57,000

47,500

Utilisation rate

73

%

73

%

INTERXION HOLDING NV

NOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION

(in €'000 ― except where stated otherwise)

(unaudited)

Three Months Ended

Mar-31

Mar-31

2013

2012

Consolidated

Recurring revenue

70,956

62,279

Non-recurring revenue

3,423

3,533

Revenue

74,379

65,812

Adjusted EBITDA

31,673

27,336

Gross margin

60.2

%

59.7

%

Adjusted EBITDA margin

42.6

%

41.5

%

Total assets

822,527

754,854

Total liabilities

439,639

411,854

Capital expenditure, including intangible assets (i)

(32,789

)

(61,100

)

France, Germany, the Netherlands, and the UK

Recurring revenue

44,448

38,013

Non-recurring revenue

2,138

2,292

Revenue

46,586

40,305

Adjusted EBITDA

25,167

21,577

Gross margin

63.2

%

62.6

%

Adjusted EBITDA margin

54.0

%

53.5

%

Total assets

550,804

461,638

Total liabilities

127,036

98,395

Capital expenditure, including intangible assets (i)

(20,693

)

(52,493

)

Rest of Europe

Recurring revenue

26,508

24,266

Non-recurring revenue

1,285

1,241

Revenue

27,793

25,507

Adjusted EBITDA

14,464

13,408

Gross margin

61.3

%

61.4

%

Adjusted EBITDA margin

52.0

%

52.6

%

Total assets

202,046

188,967

Total liabilities

41,166

42,723

Capital expenditure, including intangible assets (i)

(11,249

)

(7,923

)

Corporate and other

Adjusted EBITDA

(7,958

)

(7,649

)

Total assets

69,677

104,249

Total liabilities

271,437

270,736

Capital expenditure, including intangible assets (i)

(847

)

(684

)

(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.

INTERXION HOLDING NV

NOTES TO CONSOLIDATED INCOME STATEMENT: ADJUSTED EBITDA RECONCILIATION

(in €'000 ― except where stated otherwise)

(unaudited)

Three Months Ended

Mar-31

Mar-31

2013

2012

Reconciliation to Adjusted EBITDA

Consolidated

Net profit

6,970

8,696

Income tax expense

3,355

3,929

Profit before taxation

10,325

12,625

Net finance expense

6,451

4,435

Operating profit

16,776

17,060

Depreciation, amortization and impairments

14,011

9,655

EBITDA

30,787

26,715

Share-based payments

1,009

739

Income from sub-leases on unused data center sites

(123

)

(118

)

Adjusted EBITDA

31,673

27,336

France, Germany, the Netherlands, and the UK

Operating profit

15,912

16,209

Depreciation, amortization and impairments

9,123

5,325

EBITDA

25,035

21,534

Share-based payments

255

161

Income from sub-leases on unused data center sites

(123

)

(118

)

Adjusted EBITDA

25,167

21,577

Rest of Europe

Operating profit