INXN InterXion Holding NV

Interxion Holding NV (INXN:NYSE), a leading European provider of carrier-neutral colocation data centre services, announced its results today for the three months ended 31 March 2011.

Highlights

• Revenue increased by 21% to €57.9 million (Q1 2010: €47.8 million)
• Adjusted EBITDA increased by 27% to €22.2 million (Q1 2010: €17.4 million)
• Adjusted EBITDA margin increased to 38.4% (Q1 2010: 36.5%)
• Net profit of €2.8 million (Q1 2010: €4.7 million loss)
• Capital Expenditures of €19.1 million during the quarter
• 2011 annual guidance reaffirmed

“The first quarter of 2011 was Interxion’s 18th consecutive quarter of sequential quarterly growth in revenue and Adjusted EBITDA,” said Chief Executive Officer David Ruberg. “These results are in line with our plans and attributable to the execution of our market segmentation strategy and providing our targeted communities of interest with the excellent products and quality of service that they require.”

Quarterly Highlights

Revenue for the first quarter was €57.9 million, a 21% increase over the first quarter of 2010 and a 4.2% increase from the fourth quarter 2010. Recurring revenue was 94% of total revenue.

Cost of sales for the first quarter increased by 14% to €24.8 million, leading to an increased gross profit margin of 57.2%. Sales and marketing costs in the first quarter were €4.2 million, up 27% as a result of our continued investment in the company’s market segmentation strategy. General and administrative costs, excluding depreciation, amortisation, exceptional general and administrative costs, and share-based payments of €6.7 million, increased by 27% and were adversely impacted by the onset of public company costs. Depreciation and amortisation increased by 19% to €8.5 million.

Net financing costs were €6.6 million, down from €13.5 million in the first quarter 2010. First quarter 2010 costs included a non-recurring charge of €10.2 million related to the debt refinancing in February 2010.

Adjusted EBITDA was €22.2 million, up 27% year over year. Adjusted EBITDA margin expanded to 38.4% as the company’s increased scale provided greater operating leverage.

Net profit was €2.8 million in the first quarter 2011.

Cash generated from operations, defined as cash generated from operating activities before interest and tax payments and receipts, was €20.7 million. Net cash used in investing activities was €19.5 million, including €19.1 million of capital expenditures. Cash generated from financing activities was €141.4 million, reflecting the proceeds from the IPO.

Cash and equivalents were €229.3 million, up from €99.1 million at year end.

Equipped space at the end of the period was 61,000 square metres. Utilisation rate, the ratio of revenue-generating space to equipped space, was 73%, up from 72% in the first quarter 2010.

Business Outlook

The company’s outlook for 2011 is reaffirmed:

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. EDT (1:30 p.m. BST) on 17 May to discuss the results.

To participate on this call, U.S. callers may dial toll free 1-866-926-5708; callers outside the U.S. may dial direct +44 (0) 1452 560 304. The conference ID for this call is 66158917. 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 through 23 May. 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 66158917#.

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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 EBITDA and Adjusted EBITDA 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 €50 million revolving credit facility and €260 million 9.50% Senior Secured Notes due 2017. However, other companies may present EBITDA and Adjusted EBITDA differently than we do. EBITDA and Adjusted EBITDA 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 of Adjusted EBITDA to operating profit is provided in the Notes to the Consolidated Income Statement: Group Metrics.

About Interxion

Interxion (NYSE: INXN) 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 350 carriers and ISPs and 20 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 NVCONSOLIDATED INCOME STATEMENTS'(in €'000 - except per share data and where stated otherwise)(unaudited)

      Three Months Ended 31-Mar   31-Mar 2011 2010   Revenue 57,892 47,815

 Cost of sales

(24,780 ) (21,773 ) Gross profit 33,112 26,042

 Other income

127 108

 Sales and marketing costs

(4,212 ) (3,325 )

 General and administrative costs

(17,299 ) (12,833 ) Operating profit 11,728 9,992

 Finance income

513 79

 Finance expense

(7,101 ) (13,558 ) Profit before taxation 5,140 (3,487 )

 Income tax (expense) / benefit

(2,332 ) (1,247 ) Net profit 2,808   (4,734 )   Basic earnings per share: (€) (i) 0.05 (0.11 ) Diluted earnings per share: (€) (i) 0.05 (0.10 )      

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

65,577 44,351

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

59,146 44,351

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

61,477 47,567

(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 NVNOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT INFORMATION'(in €'000 - except where stated otherwise)(unaudited)

                Three Months Ended 31-Mar       31-Mar 2011 2010

Consolidated

 

  Recurring revenue

54,142 44,729

  Non-recurring Revenue

3,750   3,086  

Revenue

57,892   47,815   Adjusted EBITDA 22,210   17,444   Gross Margin 57.2 % 54.5 % Adjusted EBITDA Margin 38.4 % 36.5 %   Total assets 692,175 452,260 Total liabilities 392,682 321,705 Capital expenditures (iv) (19,124 ) (28,650 ) Depreciation and amortization (8,526 ) (7,187 )  

France, Germany, Netherlands, and UK

 

  Recurring revenue

32,245 26,482

  Non-recurring Revenue

2,427   2,038   Revenue 34,672   28,520   Adjusted EBITDA 16,779   12,687   Gross Margin 58.5 % 54.4 % Adjusted EBITDA Margin 48.4 % 44.5 %   Total assets 298,005 241,947 Total liabilities 88,922 108,078 Capital expenditures (iv) (12,340 ) (15,639 ) Depreciation and amortization (5,146 ) (4,511 )  

Rest of Europe

 

  Recurring revenue

21,897 18,247

  Non-recurring Revenue

1,323   1,048   Revenue 23,220   19,295   Adjusted EBITDA 12,102   9,768   Gross Margin 61.1 % 60.2 % Adjusted EBITDA Margin 52.1 % 50.6 %   Total assets 152,566 136,455 Total liabilities 35,768 50,749 Capital expenditures (iv) (6,264 ) (12,213 ) Depreciation and amortization (2,998 ) (2,368 )  

Corporate and Other

    Adjusted EBITDA (6,671 ) (5,011 )   Total assets 241,604 73,858 Total liabilities 267,992 162,878 Capital expenditures (iv) (520 ) (798 ) Depreciation and amortization (382 ) (308 )

(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 NVNOTES TO CONSOLIDATED INCOME STATEMENT: GROUP METRICS'(in €'000 - except where stated otherwise)(unaudited)

                Three Months Ended 31-Mar       31-Mar 2011 2010    

1. Reconciliation of adjusted EBITDA

  Adjusted EBITDA 22,210   17,444  

  Income from subleases on unused data centre sites

127   108  

  Exceptional income

127   108    

  (Increase)/decrease in provision for onerous lease contracts

(18 ) (108 )

  IPO transaction costs (v)

(1,725 ) -

  Share based payments

(340 ) (265 )

  Exceptional general and adminsitrative costs

(2,083 ) (373 ) EBITDA 20,254   17,179  

  Depreciation and amortization

(8,526 ) (7,187 ) Operating profit 11,728   9,992            

2. Capacity Metrics

Equiped space (in sqm) 61,000 55,800 Revenue generating space (in sqm) 44,600 40,100 Utilization rate 73 % 72 %

(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 NVCONSOLIDATED BALANCE SHEET'(in €'000 - except where stated otherwise)(unaudited)

                  As at 31-Mar       31-Dec 2011 2010 Non-current assets

  Property, plant and equipment

352,541 342,420

  Intangible assets

6,202 6,005

  Deferred tax assets

41,738 39,841

  Other non-current assets

3,538   3,709   404,019 391,975 Current assets

  Trade and other current assets

58,897 55,672

  Cash and cash equivalents

229,259   99,115   288,156   154,787   Total assets 692,175   546,762    

  Shareholders’ equity

  Share capital

6,558 4,434

  Share premium

462,675 321,078

  Foreign currency translation reserve

2,628 4,933

  Accumulated deficit

(172,368 ) (175,176 ) 299,493 155,269 Non-current liabilities

  Trade and other liabilities

8,956 7,795

  Deferred tax liability

1,302 660

  Provision for onerous lease contracts

12,609 13,260

  Borrowings

257,534   257,403   280,401 279,118 Current liabilities

  Trade and other liabilities

106,847 106,038

  Current tax liabilities

661 868

  Provision for onerous lease contracts

3,087 3,073

  Borrowings

1,686   2,396   112,281   112,375   Total liabilities 392,682   391,493   Total liabilities and shareholders’ equity 692,175   546,762  

INTERXION HOLDING NVNOTES TO THE CONSOLIDATED BALANCE SHEET: BORROWINGS'(in €'000 - except where stated otherwise)(unaudited)

            As at 31-Mar       31-Dec 2011 2010    

3. Borrowings net of cash and cash equivalents

  Cash and cash equivalents (vi) 229,259   99,115    

  9.5% Senior Secured Notes due 2017 (vii)

255,083 254,924

  Financial Leases

652 765

  Other Borrowings

3,485   4,110   Borrowings excluding revolving credit facility deferred financing costs 259,220   259,799  

  Revolving credit facility deferred financing costs (viii)

(1,129 ) (1,283 ) Total Borrowings 258,091   258,516       Borrowings net of cash and cash equivalents 28,832   159,401  

(vi) Cash and cash equivalents includes €4.2 million as of March 31, 2011 and 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) €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.

(viii) We reported deferred financing costs of €1.1 million in connection with entering into our €50 million revolving credit facility which is'     currently undrawn.

INTERXION HOLDING NVCONSOLIDATED STATEMENT OF CASH FLOWS'(in €'000 - except where stated otherwise)(unaudited)

              Three Months Ended 31-Mar       31-Mar 2011 2010    

  Profit for the period

2,808 (4,734 )

  Depreciation and amortization

8,526 7,187

  IPO transaction costs (ix)

1,725 -

  Provision for onerous lease contracts

(774 ) (583 )

  Share-based payments

340 265

  Net finance expense

6,588 13,479

  Income tax expense

2,332   1,247   21,545 16,861

  Movements in trade and other current assets

(7,283 ) 4,935

  Movements in trade and other liabilities

6,415   2,331   Cash generated from operations 20,677 24,127

  Interest paid

(12,159 ) (721 )

  Interest received

271 85

  Income tax paid

(687 ) (76 ) Net cash flows from operating activities 8,102 23,415 Cash flow from investing activities

  Purchase of property, plant and equipment

(19,124 ) (28,650 )

  Purchase of intangible assets

(394 ) (357 ) Net cash flows from investing activities (19,518 ) (29,007 ) Cash flow from financing activities

  Proceeds from exercised options

2,324 -

  Proceeds from issuance new shares

143,352 -

  Repayment of 'Liquidation Price' to former preferred shareholders

(3,055 ) -

  Proceeds/(repayment) bank facilities

- (159,046 )

  Proceeds from Senior Secured Notes and RCF

(439 ) 192,015

  Other Borrowings

(739 ) (1,046 ) Net cash flows from financing activities 141,443 31,923

  Effect of exchange rate changes on cash

117   145   Net movement in cash and cash equivalents 130,144 26,476

  Cash and cash equivalents, beginning of period

99,115   32,003   Cash and cash equivalents, end of period 229,259   58,479  

(ix) 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.