Interxion Holding NV (NYSE: 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 2014.
“Interxion posted solid financial and operational results in the
first quarter. The strong order momentum experienced towards the
end of last year has continued into 2014, as cloud infrastructure
providers prepare for European enterprises migrating to the cloud,”
said Interxion Chief Executive Officer, David Ruberg. “Our focus on
attracting these magnetic customers as catalysts for our
communities of interest has resulted in significant customer orders
that underlie approximately 70% of Interxion’s capital expenditures
in 2014. These expansion projects are scheduled to open in late
2014 and in 2015.”
Financial Highlights
- Revenue increased by 8% to €80.6
million (Q1 2013: €74.4 million).
- Adjusted EBITDA increased by 9% to
€34.5 million (Q1 2013: €31.7 million).
- Adjusted EBITDA margin increased to
42.9% (Q1 2013: 42.6%).
- Net profit increased to €10.4 million
(Q1 2013: €7.0 million).
- Capital expenditure, including
intangible assets, was €57.0 million.
- Subsequent to the quarter end,
Interxion issued €150 million of 6% Senior Secured Notes due 2020
at 106.75.
Operating Highlights
- New data centres opened in Amsterdam
and Frankfurt.
- Expansion projects were completed in
Brussels and Stockholm.
- Other expansion projects remain on
schedule.
- Equipped Space increased by 2,800
square metres to 82,900 square metres.
- Revenue Generating Space increased by
1,700 square metres to 61,400 square metres.
- Utilisation Rate at the end of the
quarter was 74%.
Quarterly Review
Revenue in the first quarter of 2014 was €80.6 million, an 8%
increase over the first quarter of 2013 and a 3% increase over the
fourth quarter of 2013. Recurring revenue was €75.9 million, a 7%
increase over the first quarter of 2013 and a 2% increase over the
fourth quarter of 2013.
Cost of sales in the first quarter of 2014 was €32.6 million, a
10% increase over the first quarter of 2013 and a 4% increase over
the fourth quarter of 2013.
Gross profit was €48.0 million in the first quarter of 2014, a
7% increase over the first quarter of 2013 and a 3% increase over
the fourth quarter of 2013. Gross profit margin in the first
quarter of 2014 was 59.6%, compared with 60.2% in the first quarter
of 2013 and 59.9% in the fourth quarter of 2013.
Sales and marketing costs in the first quarter of 2014 were €5.9
million, a 7% increase over the first quarter of 2013 and an 8%
decrease from the fourth quarter of 2013.
General and administrative costs1 in the first quarter of 2014
were €7.6 million, a slight increase compared with the first
quarter of 2013 and a 14% increase over the fourth quarter of 2013.
Depreciation and amortisation in the first quarter of 2014 was
€14.0 million, a slight decrease compared with the first quarter of
2013 and a 3% increase over the fourth quarter of 2013.
Net financing costs in the first quarter of 2014 were €5.4
million, a 16% decrease compared with the first quarter of 2013 and
a 3% decrease over the fourth quarter of 2013.
Income tax expense was €4.2 million in the first quarter of
2014, a 26% increase over the first quarter of 2013 and a 16%
increase from the fourth quarter of 2013. The underlying effective
tax rate for the quarter was 29% compared with 32% in the same
period last year.
Net profit was €10.4 million in the first quarter of 2014, a 49%
increase over the first quarter 2013 and a 6% increase over the
fourth quarter of 2013. Earnings per share was €0.15 on a weighted
average of 69.6 million diluted shares in the first quarter of
2014. This result compares with earnings per share of €0.10 on a
weighted average of 69.1 million diluted shares in the first
quarter of 2013, and earnings per share of €0.14 on a weighted
average of 69.5 million diluted shares in the fourth quarter of
2013. Adjusted diluted earnings per share2 for the first quarter of
2014 was €0.14, compared with €0.09 for the first quarter of
2013.
Adjusted EBITDA in the first quarter of 2014 was €34.5 million,
a 9% increase over the first quarter of 2013 and a 2% increase over
the fourth quarter of 2013. Adjusted EBITDA margin was 42.9%,
compared with 42.6% in the first quarter of 2013 and 43.2% in the
fourth quarter of 2013.
Cash generated from operations, defined as cash generated from
operating activities before interest and corporate income tax
payments and receipts, was €34.3 million in the first quarter of
2014, a 45% increase over the first quarter of 2013 and a 49%
increase over the fourth quarter of 2013. Capital expenditure,
including intangible assets, was €57.0 million in the first quarter
of 2014, compared to €32.8 million in the first quarter of 2013 and
€55.3 million in the fourth quarter of 2013.
Cash and cash equivalents were €41.9 million at 31 March 2014,
down from €45.7 million at year-end 2013. Total borrowings were
€392.9 million at the end of the first quarter of 2014, including a
balance of €30.0 million on the company’s revolving credit
facility, compared with total borrowings of €362.7 million at the
end of 2013.
Subsequent to the end of the quarter, Interxion completed a
transaction which resulted in the company adding a further €150.0
million aggregate principal amount of its 6.00% Senior Secured
Notes due 2020, issued at 106.75 and resulting in estimated net
cash proceeds of €158.1 million. In connection with this
transaction, the Company terminated its €100 million senior secured
credit facility, which it entered into on 14 April 2014.
Equipped Space at the end of the first quarter of 2014 was
82,900 square metres, compared with 78,100 square metres at the end
of the first quarter of 2013 and 80,100 square metres at the end of
the fourth quarter of 2013. Revenue Generating Space at the end of
the first quarter of 2014 was 61,400 square metres, compared with
57,000 square metres at the end of the first quarter of 2013 and
59,700 square metres at the end of the fourth quarter of 2013.
Utilisation Rate, the ratio of Revenue Generating Space to Equipped
Space, was 74% at the end of the first quarter of 2014, compared
with 73% at the end of the first quarter of 2013 and 75% at the end
of the fourth quarter of 2013.
Business Outlook
Interxion today reaffirmed its guidance for 2014:
Revenue €334 million - €344 million Adjusted EBITDA €145
million - €152 million Capital expenditure (including intangibles)
€175 million - €200 million
Conference Call to Discuss Results
The Company will host a conference call today at 8:30am EDT
(1:30pm BST and 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 27524174.
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 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 27524174.
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 €475
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) is a leading provider of cloud and
carrier-neutral colocation data centre services in Europe, serving
a wide range of customers through 37 data centres in 11 European
countries. Interxion’s data centres offer customers extensive
security and uptime for their mission-critical applications. With
connectivity provided by over 500 connectivity providers and 20
European Internet exchanges across its footprint, 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.
2 Diluted earnings per share adjusted for capitalised interest
after tax.
3 We define Adjusted Net Profit as net profit/loss excluding the
impact of the refinancing charges, deferred tax adjustments, Dutch
crisis tax, adjustments to onerous leases, capitalised interest,
and the related corporate income tax effect.
INTERXION HOLDING NVCONSOLIDATED INCOME
STATEMENT(in €'000 ― except per share data and where stated
otherwise)(unaudited)
Three Months Ended 31
Mar 31 Mar
2014 2013
Revenue 80,610
74,379 Cost of sales (32,578 ) (29,615 )
Gross profit
48,032 44,764 Other income 60 123 Sales and marketing
costs (5,880 ) (5,495 ) General and administrative costs (22,231 )
(22,616 )
Operating profit 19,981
16,776 Net finance expense (5,401 ) (6,451 )
Profit before taxation 14,580 10,325 Income
tax expense (4,221 ) (3,355 )
Net profit 10,359
6,970 Basic earnings per share: (€)
0.15 0.10 Diluted earnings per share: (€) 0.15 0.10
Number of shares outstanding at the end of the period (shares in
thousands) 68,898 68,411 Weighted average number of shares for
Basic EPS (shares in thousands) 68,871 68,225 Weighted average
number of shares for Diluted EPS (shares in thousands) 69,619
69,109
As at 31 Mar 31 Mar
Capacity
metrics
2014 2013 Equipped space (in square meters) 82,900 78,100
Revenue generating space (in square meters) 61,400 57,000
Utilisation rate 74 % 73 %
INTERXION HOLDING
NVNOTES TO CONSOLIDATED INCOME STATEMENT: SEGMENT
INFORMATION(in €'000 ― except where stated
otherwise)(unaudited)
Three Months
Ended 31 Mar 31 Mar
2014 2013
Consolidated
Recurring revenue 75,871 70,956 Non-recurring revenue 4,739
3,423
Revenue 80,610
74,379 Adjusted EBITDA 34,545
31,673 Gross margin 59.6 %
60.2 % Adjusted EBITDA margin 42.9
% 42.6 % Total assets 941,658 822,527
Total liabilities 542,343 439,639 Capital expenditure, including
intangible assets (i) (57,005 ) (32,789 )
France, Germany,
the Netherlands, and the UK
Recurring revenue 47,640 44,448 Non-recurring revenue 3,132
2,138
Revenue 50,772
46,586 Adjusted EBITDA 27,294
25,167 Gross margin 61.8 %
63.2 % Adjusted EBITDA margin 53.8
% 54.0 % Total assets 645,929 550,804
Total liabilities 138,082 127,036 Capital expenditure, including
intangible assets (i) (43,592 ) (20,693 )
Rest of
Europe
Recurring revenue 28,231 26,508 Non-recurring revenue 1,607
1,285
Revenue 29,838
27,793 Adjusted EBITDA 15,798
14,464 Gross margin 62.2 %
61.3 % Adjusted EBITDA margin 52.9
% 52.0 % Total assets 237,874 202,046
Total liabilities 43,981 41,166 Capital expenditure, including
intangible assets (i) (12,683 ) (11,249 )
Corporate and
other
Adjusted EBITDA (8,547 )
(7,958 ) Total assets 57,855 69,677 Total
liabilities 360,280 271,437
Capital expenditure, including intangible
assets (i)
(730 ) (847 )
(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 intangible assets,"
respectively.
INTERXION HOLDING NVNOTES TO CONSOLIDATED
INCOME STATEMENT: ADJUSTED EBITDA RECONCILIATION(in €'000 ―
except where stated otherwise)(unaudited)
Three
Months Ended 31 Mar 31 Mar
2014 2013
Reconciliation to
Adjusted EBITDA
Consolidated
Net profit 10,359 6,970 Income tax
expense 4,221 3,355
Profit before taxation
14,580 10,325 Net finance expense 5,401 6,451
Operating profit 19,981 16,776
Depreciation, amortisation and impairments 13,981 14,011
EBITDA 33,962 30,787 Share-based
payments 643 1,009 Income from sub-leases on unused data centre
sites (60 ) (123 )
Adjusted EBITDA 34,545
31,673
France, Germany,
the Netherlands, and the UK
Operating profit 18,284 15,912
Depreciation, amortisation and impairments 8,919 9,123
EBITDA 27,203 25,035 Share-based
payments 151 255 Income from sub-leases on unused data centre sites
(60 ) (123 )
Adjusted EBITDA 27,294
25,167
Rest of
Europe
Operating profit
11,468
10,175 Depreciation, amortisation and impairments
4,280
4,183
EBITDA
15,748
14,358 Share-based payments
50
106
Adjusted EBITDA
15,798
14,464
Corporate and
Other
Operating profit/(loss)
(9,771 )
(9,311 ) Depreciation, amortisation and impairments
782
705
EBITDA
(8,989 )
(8,606 ) Share-based payments
442
648
Adjusted EBITDA
(8,547 )
(7,958 ) INTERXION HOLDING
NVCONSOLIDATED BALANCE SHEET(in €'000 ― except where
stated otherwise)(unaudited)
As at 31
Mar 31 Dec
2014 2013
Non-current assets Property,
plant and equipment 745,554 698,748 Intangible assets 17,877 17,878
Deferred tax assets 33,137 34,446 Financial assets 774 774 Other
non-current assets 4,808 16,536
802,150
768,382 Current assets Trade and other current assets
97,569 96,703 Cash and cash equivalents 41,939 45,690
139,508 142,393 Total assets
941,658 910,775 Shareholders’
equity Share capital 6,890 6,887 Share premium 486,130 485,347
Foreign currency translation reserve 7,120 6,757 Hedging reserve,
net of tax (35 ) 60 Accumulated deficit (100,790 ) (111,149 )
399,315 387,902 Non-current liabilities Trade
payables and other liabilities 11,648 11,537 Deferred tax
liabilities 4,926 4,147 Provision for onerous lease contracts 4,042
4,855 Borrowings 362,352 362,209
382,968
382,748 Current liabilities Trade payables and other
liabilities 119,621 132,093 Income tax liabilities 3,902 2,229
Provision for onerous lease contracts 4,084 4,020 Borrowings 31,768
1,783
159,375 140,125
Total liabilities 542,343 522,873
Total liabilities and shareholders’ equity
941,658 910,775
INTERXION HOLDING NVNOTES TO THE CONSOLIDATED BALANCE
SHEET: BORROWINGS(in €'000 ― except where stated
otherwise)(unaudited)
As at 31 Mar 31
Dec
2014 2013
Borrowings net of
cash and cash equivalents
Cash and cash equivalents (ii) 41,939
45,690 6.0% Senior Secured Notes due
2020 (iii) 317,847 317,610 Mortgages 24,115 24,257 Financial leases
20,553 20,520 Revolving credit facility 30,000 - Other borrowings
1,605 1,605
Borrowings excluding Revolving Credit
Facility deferred financing costs 394,120
363,992 Revolving credit facility deferred financing
costs (iv) (1,189 ) (1,258 )
Total borrowings 392,931
362,734 Borrowings net of
cash and cash equivalents 350,992 317,044
(ii) Cash and cash equivalents include
€4.1 million as of 31 March 2014 and €4.1 million as of 31 December
2013, which is restricted and held as collateral to support the
issuance of bank guarantees on behalf of a number of subsidiary
companies.
(iii) €325 million 6.0% Senior Secured
Notes due 2020 are shown after deducting underwriting discounts and
commissions, offering fees and expenses. On 29 April 2014, the
Company completed the issuance of €150.0 million aggregate
principal amount of its 6.00% Senior Secured Notes due 2020 (the
“Additional Notes”). The estimated net proceeds of the offering
amount to €158.1 million.
(iv) Deferred financing costs of €1.2 million as of 31 March 2014
were incurred in connection with the €100 million revolving
facility.
INTERXION HOLDING NVCONSOLIDATED
STATEMENT OF CASH FLOWS(in €'000 ― except where stated
otherwise)(unaudited)
Three Months Ended 31
Mar 31 Mar
2014 2013 Profit for the period 10,359
6,970 Depreciation, amortisation and impairments 13,981 14,011
Provision for onerous lease contracts (819 ) (826 ) Share-based
payments 643 1,009 Net finance expense 5,401 6,451 Income tax
expense 4,221 3,355 33,786 30,970 Movements in trade
and other current assets (800 ) (6,787 ) Movements in trade and
other liabilities 1,306 (588 )
Cash generated from
operations 34,292 23,595 Interest and fees paid
(v) (10,826 ) (10,031 ) Interest received 67 285 Income tax paid
(358 ) (436 )
Net cash flows from operating activities
23,175 13,413 Cash flows from investing
activities Purchase of property, plant and equipment (56,391 )
(30,920 ) Purchase of intangible assets (614 ) (1,869 )
Net cash
flows from investing activities (57,005 )
(32,789 ) Cash flows from financing activities
Proceeds from exercised options 256 1,611 Proceeds from mortgages -
9,621 Repayment of mortgages (167 ) -
Proceeds from Revolving Facility
30,000 - Repayment of other borrowings (11 ) (13 )
Net cash
flows from financing activities 30,078 11,219
Effect of exchange rate changes on cash 1 (9 )
Net
movement in cash and cash equivalents (3,751 )
(8,166 ) Cash and cash equivalents, beginning of
period 45,690 68,692
Cash and cash equivalents,
end of period 41,939 60,526
(v) Interest paid is reported net of cash
interest capitalised, which is reported as part of “Purchase of
property, plant and equipment."
INTERXION HOLDING NVNOTES TO
CONSOLIDATED INCOME STATEMENT: ADJUSTED NET PROFIT
RECONCILIATION(in € millions ― except per share data and where
stated otherwise)(unaudited)
Three Months Ended 31
Mar 31 Mar
2014 2013
Net profit - as
reported 10.4 7.0
Reverse - Interest
Capitalised (0.8 ) (0.7 ) (0.8 ) (0.7 )
Tax effect of
above add backs & reversals 0.2 0.2
Adjusted Net profit 9.8 6.5
Reported Basic EPS: (€) 0.15 0.10 Reported Diluted EPS: (€)
0.15 0.10 Adjusted Basic EPS: (€) 0.14 0.10 Adjusted Diluted
EPS: (€) 0.14 0.09
INTERXION HOLDING NV
Status of Announced Expansion Projects as at 7 May 2014
with Target Open Dates in 2014 & 2015
Equipped
CAPEX (a, b)
Space (a)
Market Project (€million)
(sqm) Target Opening Dates Amsterdam
AMS 7: Phases 1 - 6 New Build 115 7,300 1Q 2014 - 1H 2015 (c)
Brussels BRU 1: Phase 5 Expansion 2 300 1Q 2014 (fully opened)
Frankfurt FRA 8: Phases 1 - 4 New Build 67 3,600 2Q 2014 - 1H 2015
(d) Frankfurt FRA 9: Phase 1 New Build 13 800 1Q 2014 (fully
opened) Stockholm STO 2: Phase 2 Expansion 6 500 1Q 2014 (fully
opened) Stockholm STO 3: New Build 12 900 4Q 2014 Vienna VIE 2:
Phases 1 - 2 New Build 25 1,200 4Q 2014 - 1H 2015 (e)
Total
€ 240 14,600 (a) CAPEX and Equipped Space are
approximate and may change. (b) CAPEX reflects the total spend for
the projects listed at full power and capacity and the amounts
shown in the table above may be invested over the duration of more
than one fiscal year. (c) Phase 1 (1,100 sqm) became operational in
1Q 2014; phase 2 (1,000 sqm) is scheduled to be operational in 3Q
2014; phase 3 (1,300 sqm) is scheduled for 4Q 2014; phase 4 (1,300
sqm) is scheduled for 1Q 2015; phases 5 and 6 (1,300 sqm each) are
scheduled for 1H 2015. (d) Phase 1 (900 sqm) became operational in
the second quarter of 2014; phase 2 (900 sqm) is scheduled to be
operational in the fourth quarter of 2014; phases 3 and 4 (900 sqm
each) are scheduled for 1H 2015. (e) Phase 1 (600 sqm) is scheduled
to be operational in 4Q 2014; phase 2 (600 sqm) is scheduled to be
operational in 1H 2015.
InterxionJim Huseby, +1-813-644-9399Investor
RelationsIR@interxion.com
InterXion Holding NV (NYSE:INXN)
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