Market Overview

Interxion Reports Second Quarter 2018 Results

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Continuing Strong Demand Drives 15% Y/Y Revenue Growth

Interxion Holding NV (NYSE:INXN), a leading European provider of carrier
and cloud-neutral colocation data centre services, announced its results
today for the three months ended 30 June 2018.

Financial Highlights*

  • Revenue increased 15% to €138.8 million (2Q 2017: €120.8 million).
  • Recurring revenue1 increased 16% to €131.7 million (2Q
    2017: €113.4 million).
  • Net income decreased 94% to €0.6 million (2Q 2017: €9.7 million) and
    was impacted by €11.2 million (pre-tax) of one-off charges related to
    the recently completed refinancing.
  • Adjusted EBITDA2 increased by 17% to €63.4 million (2Q
    2017: €54.3 million).
  • Adjusted EBITDA margin increased to 45.7% (2Q 2017: 45.0%).
  • Adjusted net income2 decreased by 6% to €8.9 million (2Q
    2017: €9.4 million), which includes higher share-based payment charges.
  • Earnings per diluted share decreased by 94% to €0.01 (2Q 2017: €0.13)
    and was impacted by one-off charges related to the recently completed
    refinancing.
  • Adjusted earnings2 per diluted share decreased by 6% to
    €0.12 (2Q 2017: €0.13).
  • Capital expenditures, including intangible assets3, were
    €120.5 million (2Q 2017: €56.4 million).
  • Refinanced €875 million of secured debt with €1 billion in unsecured
    Senior Notes due 2025 and a new €200 million unsecured revolving
    credit facility.

* Certain comparative figures for the three months and six
months ended 30 June 2017 have been restated. For further details, see
Note 2 and Note 29 of our 2017 Consolidated Financial Statements
included on Form 20-F, filed with the SEC on 30 April 2018, and note 12
of our Condensed Consolidated Interim Financial Statements included on
Form 6-K, filed with the SEC on 2 August 2018.

Operating Highlights

  • Equipped space increased by 3,700 square metres in the second quarter
    to 132,600 square metres.
  • Revenue generating space increased by 2,100 square metres in the
    second quarter to 106,200 square metres.
  • Utilisation rate at the end of the second quarter was 80%.
  • During the second quarter, Interxion completed the following capacity
    additions:
    • 1,200 sqm expansion in Dublin;
    • 900 sqm data centre in Copenhagen;
    • 500 sqm expansion in Paris;
    • 400 sqm expansion in Vienna;
    • 400 sqm expansion in Marseille; and
    • 300 sqm expansion in Stockholm.

"Interxion continues to experience strong demand across markets and
segments, driven by the digitisation of enterprise processes and
consumer services," said David Ruberg, Interxion's Chief Executive
Officer. "We are investing to expand capacity in our highly-connected
data centres to meet the substantial demand that we are seeing from the
major Cloud platforms and content providers and to grow the communities
that are starting to form around them. Our recent refinancing provides
us with the flexibility to maintain our strategic position and
attractive returns profile."

Quarterly Review

Revenue in the second quarter of 2018 was €138.8 million, a 15% increase
over the second quarter of 2017 and a 4% increase over the first quarter
of 2018. Recurring revenue was €131.7 million, a 16% increase over the
second quarter of 2017 and a 4% increase over the first quarter of 2018.
Recurring revenue in the second quarter represented 95% of total
revenue. On a constant currency4 basis, revenue in the second
quarter of 2018 was 16% higher than in the second quarter of 2017.

Cost of sales in the second quarter of 2018 was €53.7 million, a 12%
increase over the second quarter of 2017 and a 2% increase over the
first quarter of 2018.

Gross profit was €85.1 million in the second quarter of 2018, a 17%
increase over the second quarter of 2017 and a 5% increase over the
first quarter of 2018. Gross profit margin was 61.3% in the second
quarter of 2018, compared with 60.3% in the second quarter of 2017 and
60.6% in the first quarter of 2018.

Sales and marketing costs in the second quarter of 2018 were €9.6
million, a 16% increase over the second quarter of 2017 and a 10%
increase from the first quarter of 2018.

Other general and administrative costs (excluding depreciation and
amortisation, share-based payments and M&A transaction costs) were €12.1
million in the second quarter of 2018, a 17% increase over the second
quarter of 2017 and a 5% increase from the first quarter of 2018.

Depreciation and amortisation in the second quarter of 2018 was €32.2
million, an increase of 18% from the second quarter of 2017 and a 9%
increase from the first quarter of 2018.

Operating income in the second quarter of 2018 was €26.3 million, an
increase of 8% from the second quarter of 2017 and a 2% decrease from
the first quarter of 2018.

Net finance expense in the second quarter of 2018 was €22.9 million. On
18 June 2018, Interxion completed a refinancing transaction, issuing
€1,000.0 million of 4.75% Senior Notes due 2025 and entering into a
€200.0 million unsecured multi-currency revolving credit facility. The
proceeds of the notes issue were used to redeem the €625.0 million 6.00%
Senior Secured Notes due 2020 and repay €250 million drawn under
Interxion's revolving credit facilities. Interxion recognized €11.2
million of one-time charges related to these transactions. Excluding the
finance expense associated with the refinancing transactions, net
finance expense in the second quarter was €11.7 million, an increase of
7% over the second quarter of 2017 and an increase of 3% over the first
quarter of 2018.

Income tax expense for the second quarter of 2018 was €2.8 million, a
25% decrease compared with the second quarter of 2017 and a 27% decrease
from the first quarter of 2018.

Net income was €0.6 million in the second quarter of 2018, a 94%
decrease over the second quarter of 2017 and a 95% decrease from the
first quarter of 2018, reflecting the impact of the finance expense
relating to the refinancing transactions discussed above.

Adjusted net income was €8.9 million in the second quarter of 2018, a 6%
decrease over the second quarter of 2017 and a 26% decrease from the
first quarter of 2018.

Adjusted EBITDA for the second quarter of 2018 was €63.4 million, a 17%
increase over the second quarter of 2017 and a 4% increase over the
first quarter of 2018. Adjusted EBITDA margin was 45.7% in the second
quarter of 2018, compared with 45.0% in the second quarter of 2017 and
45.5% in the first quarter of 2018.

Net cash flows from operating activities were €31.6 million in the
second quarter of 2018, compared with €35.7 million in the second
quarter of 2017 and €34.6 million in the first quarter of 2018.

Cash generated from operations5 was €55.1 million in the
second quarter of 2018, compared with €40.6 million in the second
quarter of 2017 and €58.1 million in the first quarter of 2018.

Capital expenditures, including intangible assets, were €120.5 million
in the second quarter of 2018, compared with €56.4 million in the second
quarter of 2017 and €96.2 million in the first quarter of 2018.

Cash and cash equivalents were €133.6 million at 30 June 2018, compared
with €38.5 million at year end 2017.

Total borrowings, net of deferred financing fees, were €1,079.8 million
at 30 June 2018, compared with €832.6 million at year end 2017.

Equipped space at the end of the second quarter of 2018 was 132,600
square metres, compared with 117,000 square metres at the end of the
second quarter of 20176 and 128,900 square metres at the end
of the first quarter of 2018. Revenue generating space at the end of the
second quarter of 2018 was 106,200 square metres, compared with 95,000
square metres at the end of the second quarter of 2017 and 104,100
square metres at the end of the first quarter of 2018. Utilisation rate,
the ratio of revenue-generating space to equipped space, was 80% at the
end of the second quarter of 2018, compared with 81% at the end of the
second quarter of 2017 and 81% at the end of the first quarter of 2018.

Business Outlook

Interxion today is reaffirming guidance for Revenue and Adjusted EBITDA
and updating guidance for full year 2018 for Capital expenditures
(including intangibles):

Revenue   €553 million – €569 million
Adjusted EBITDA €250 million – €260 million
Capital expenditures (including intangibles) €365 million – €390 million
 

Conference Call to Discuss Results

Interxion will host a conference call today at 8:30 a.m. EDT (1:30 p.m.
BST, 2:30 p.m. CEST) to discuss the results.

To participate on this call, U.S. callers may dial toll free
1-866-966-1396; callers outside the U.S. may dial direct +44 (0) 2071
928 000. The conference ID for this call is INXN. 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 18 August 2018. To access the replay, U.S.
callers may dial toll free 1-866-331-1332; callers outside the U.S. may
dial direct +44 (0) 3333-009-785. The replay access number is 3174258.

Forward-looking Statements

This communication contains forward-looking statements that involve
risks and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual results and future events could
differ materially from those anticipated in such forward-looking
statements. Factors that could cause actual results and future events to
differ materially from Interxion's expectations include, but are not
limited to, the difficulty of reducing operating expenses in the short
term, the 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, delays in remediating the
material weakness in internal control over financial reporting and/or
making disclosure controls and procedure effective, certain other risks
detailed herein and other risks described from time to time in
Interxion's filings with the United States Securities and Exchange
Commission (the "SEC").

Interxion does not assume any obligation to update the forward-looking
information contained in this report.

Non-IFRS Financial Measures

Included in these materials are certain non-IFRS financial measures,
which are measures of our financial performance that are not calculated
and presented in accordance with IFRS, within the meaning of applicable
SEC rules. These measures are as follows: (i) Adjusted EBITDA; (ii)
Recurring revenue; (iii) Revenue on a constant currency basis; (iv)
Adjusted net income; (v) Adjusted basic earnings per share; (vi)
Adjusted diluted earnings per share and (vii) Cash generated from
operations.

Other companies may present Adjusted EBITDA, Recurring revenue, Revenue
on a constant currency basis, Adjusted net income, Adjusted basic
earnings per share, Adjusted diluted earnings per share and Cash
generated from operations differently than we do. Each of these measures
are not measures of financial performance under IFRS and should not be
considered as an alternative to operating income or as a measure of
liquidity or an alternative to Profit for the period attributable to
shareholders ("net income") as indicators of our operating performance
or any other measure of performance implemented in accordance with IFRS.

Adjusted EBITDA, Recurring revenue and Revenue on a constant currency
basis

We define Adjusted EBITDA as Operating income adjusted for the following
items, which may occur in any period, and which management believes are
not representative of our operating performance:

  • Depreciation and amortisation – property, plant and equipment and
    intangible assets (except goodwill) are depreciated on a straight-line
    basis over the estimated useful life. We believe that these costs do
    not represent our operating performance.
  • Share-based payments – represents primarily the fair value at the date
    of grant of employee equity awards, which is recognised as an expense
    over the vesting period. In certain cases, the fair value is
    redetermined for market conditions at each reporting date, until the
    final date of grant is achieved. We believe that this expense does not
    represent our operating performance.
  • Income or expense related to the evaluation and execution of potential
    mergers or acquisitions ("M&A") – under IFRS, gains and losses
    associated with M&A activity are recognised in the period in which
    such gains or losses are incurred. We exclude these effects because we
    believe they are not reflective of our ongoing operating performance.
  • Adjustments related to terminated and unused data centre sites – these
    gains and losses relate to historical leases entered into for certain
    brownfield sites, with the intention of developing data centres, which
    were never developed and for which management has no intention of
    developing into data centres. We believe the impact of gains and
    losses related to unused data centres are not reflective of our
    business activities and our ongoing operating performance.

In certain circumstances, we may also adjust for other items that
management believes are not representative of our current ongoing
performance. Examples include: adjustments for the cumulative effect of
a change in accounting principle or estimate, impairment losses,
litigation gains and losses or windfall gains and losses.

We define Recurring revenue as revenue incurred from colocation and
associated power charges, office space, amortised set-up fees,
cross-connects and certain recurring managed services (but excluding any
ad hoc managed services) provided by us directly or through third
parties, excluding rents received for the sublease of unused sites.

We believe Adjusted EBITDA and Recurring revenue provide useful
supplemental information to investors regarding our ongoing operational
performance. These measures help us and our investors evaluate the
ongoing operating performance of the business after removing the impact
of our capital structure (primarily interest expense) and our asset base
(primarily depreciation and amortisation). Management believes that the
presentation of Adjusted EBITDA, when combined with the primary IFRS
presentation of net income, provides a more complete analysis of our
operating performance. Management also believes the use of Adjusted
EBITDA facilitates comparisons between us and other data centre
operators (including other data centre operators that are REITs) and
other infrastructure-based businesses. Adjusted EBITDA is also a
relevant measure used in the financial covenants of our revolving credit
facility and our 4.75% Senior Notes due 2025.

A reconciliation from net income to Adjusted EBITDA is provided in the
tables attached to this press release. Adjusted EBITDA and other key
performance indicators may not be indicative of our historical results
of operations, nor are they meant to be predictive of future results.

We present constant currency information for revenue to provide a
framework for assessing how our underlying businesses performed
excluding the effect of foreign currency rate fluctuations. To present
this information, current and comparative prior period results for
entities reporting in currencies other than Euro are converted into Euro
using the average exchange rates from the prior period rather than the
actual exchange rates in effect during the current period.

We believe that revenue growth is a key indicator of how a company is
progressing from period to period and presenting constant currency
information for revenue provides useful supplemental information to
investors regarding our ongoing operational performance because it helps
us and our investors evaluate the ongoing operating performance of the
business after removing the impact of acquisitions and currency exchange
rates.

Adjusted net income, Adjusted basic earnings per share and Adjusted
diluted earnings per share

We define Adjusted net income as net income adjusted for the following
items and the related income tax effect, which may occur in any period,
and which management believes are not reflective of our operating
performance:

  • Income or expense related to the evaluation and execution of potential
    mergers or acquisitions ("M&A") – under IFRS, gains and losses
    associated with M&A activity are recognised in the period in which
    such gains or losses are incurred. We exclude these effects because we
    believe they are not reflective of our ongoing operating performance.
  • Adjustments related to provisions – these adjustments are made for
    adjustments in provisions that are not reflective of the ongoing
    operating performance of Interxion. These adjustments may include
    changes in provisions for onerous lease contracts.
  • Adjustments related to capitalised interest – under IFRS, we are
    required to calculate and capitalise interest allocated to the
    investment in data centres and exclude it from net income. We believe
    that reversing the impact of capitalised interest provides information
    about the impact of the total interest costs and facilitates
    comparisons with other data centre operators.

In certain circumstances, we may also adjust for items that management
believes are not representative of our current ongoing performance.
Examples include: adjustments for the cumulative effect of a change in
accounting principle or estimate, impairment losses, costs related to
refinancing, litigation gains and losses or windfall gains and losses.

Management believe that the exclusion of certain items listed above
provides useful supplemental information to net income to aid investors
in evaluating the operating performance of our business and comparing
our operating performance with other data centre operators and
infrastructure companies. We believe the presentation of Adjusted net
income, when combined with net income prepared in accordance with IFRS,
is beneficial to a complete understanding of our performance. A
reconciliation from reported net income to Adjusted net income is
provided in the tables attached to this press release.

Adjusted basic earnings per share and Adjusted diluted earnings per
share amounts are determined on Adjusted net income.

Cash generated from operations

Cash generated from operations is defined as net cash flows from
operating activities, excluding interest and corporate income tax
payments and receipts. Management believe that the exclusion of these
items provides useful supplemental information to net cash flows from
operating activities to aid investors in evaluating the cash generating
performance of our business.

Management's outlook for 2018 included in this press release includes a
range for expected Adjusted EBITDA, a non-IFRS financial measure, which
excludes items that management believes are not representative of our
operating performance. These items include, but are not limited to,
depreciation and amortisation, share-based payments, income or expense
related to the evaluation and execution of potential mergers or
acquisitions, adjustments related to terminated and unused data centre
sites, and other significant items that currently cannot be predicted.
The exact amount of these items is not currently determinable but may be
significant. Accordingly, the company is unable to provide equivalent
reconciliations from the corresponding forward-looking IFRS measures to
expected Adjusted EBITDA.

About Interxion

Interxion (NYSE:INXN) is a leading provider of carrier and cloud-neutral
colocation data centre services in Europe, serving a wide range of
customers through 50 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 over 700 connectivity providers, 21 European Internet exchanges,
and most leading cloud and digital media platforms across its footprint,
Interxion has created connectivity, cloud, content and finance hubs that
foster growing customer communities of interest. For more information,
please visit www.interxion.com.

1 Recurring revenue is revenue incurred from colocation and
associated power charges, office space, amortised set-up fees,
cross-connects and certain recurring managed services (but excluding any
ad hoc managed services) provided by us directly or through third
parties, excluding rents received for the sublease of unused sites.

2 Adjusted net income (or ‘Adjusted earnings') and Adjusted
EBITDA are non-IFRS figures intended to adjust for certain items and are
not measures of financial performance under IFRS. Complete definitions
can be found in the "Non-IFRS Financial Measures" section in this press
release. Reconciliations of net income to Adjusted EBITDA and net income
to Adjusted net income can be found in the financial tables later in
this press release.

3 Capital expenditures, including intangible assets,
represent payments to acquire property, plant, 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.

4 We present constant currency information to provide a
framework for assessing how our underlying businesses performed
excluding the effect of foreign currency rate fluctuations. For purposes
of calculating Revenue on a constant currency basis, current and
comparative prior period results for entities reporting in currencies
other than Euro are converted into Euro using the average exchange rates
from the prior period rather than the actual exchange rates in effect
during the current period. The reconciliation of total revenue growth to
total revenue growth on a constant currency basis, is as follows:

Three months ended 30 June 2018   Year-on-year   Sequential
 
Reported total revenue growth 14.9 % 3.7 %
Add back: impact of foreign currency translation 0.9 % 0.1 %
Total revenue growth on an organic constant currency basis 15.8 % 3.8 %
 

5 We define Cash generated from operations as net cash flows
from operating activities, excluding interest and corporate income tax
payments and receipts.

6 Totals from the end of 1Q 2018 include 2,300 sqm of
equipped space and 1,300 sqm of revenue generating space from Interxion
Science Park. 2Q 2017 excludes the impact of Interxion Science Park.

       
INTERXION HOLDING NV
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in €'000 ― except per share data and where stated otherwise)
(unaudited)
 
Three Months Ended Six Months Ended
Jun-30 Jun-30 Jun-30 Jun-30
2018

2017(a)

2018

2017(a)

 
Revenue 138,824 120,823 272,660 234,773
Cost of sales (53,701 ) (47,926 ) (106,398 ) (92,021 )
Gross Profit 85,123 72,897 166,262 142,752
Other income - - 86 27
Sales and marketing costs (9,601 ) (8,285 ) (18,309 ) (16,210 )
General and administrative costs (49,250 ) (40,310 ) (94,894 ) (78,421 )
               
Operating income 26,272 24,302 53,145 48,148
Net finance expense (22,895 ) (10,920 ) (34,299 ) (21,207 )
               
Profit or loss before income taxes 3,377 13,382 18,846 26,941
Income tax expense (2,795 ) (3,727 ) (6,608 ) (7,027 )
Net income 582   9,655   12,238   19,914  
 
Basic earnings per share(b): (€) 0.01 0.14 0.17 0.28
Diluted earnings per share(c): (€) 0.01 0.13 0.17 0.28
 
 
Number of shares outstanding at the end of the period (shares in
thousands)
71,609 71,060 71,609 71,060
Weighted average number of shares for Basic EPS (shares in thousands) 71,481 71,035 71,455 70,907
Weighted average number of shares for Diluted EPS (shares in
thousands)
71,946 71,688 71,902 71,546
 
 
As at
Jun-30 Jun-30
Capacity metrics 2018 2017
Equipped space (in square meters)(d) 132,600 117,000
Revenue generating space (in square meters)(d) 106,200 95,000
Utilisation rate 80 % 81 %
 

(a) Certain comparative figures for the three months and six
months ended 30 June 2017 have been restated. For further details,
see Note 2 and Note 29 of our 2017 consolidated financial
statements as included in our 20-F, filed with the SEC on 30 April
2018, and note 12 of our Condensed Consolidated Interim Financial
Statements, filed with the SEC under a 6-K on 2 August 2018.

(b) Basic earnings per share are calculated as net income divided by
the weighted average number of shares for Basic EPS.
(c) Diluted earnings per share are calculated as net income divided
by the weighted average number of shares for Diluted EPS.

(d) Totals from the end of 1Q 2018 include 2,300 sqm of equipped
space and 1,300 sqm of revenue generating space from Interxion
Science Park. 2Q 2017 square meters exclude the impact of
Interxion Science Park.

 
       
INTERXION HOLDING NV
NOTES TO CONDENSED CONSOLIDATED INCOME STATEMENTS: SEGMENT
INFORMATION
(in €'000 ― except where stated otherwise)
(unaudited)
 
Three Months Ended Six Months Ended
Jun-30 Jun-30 Jun-30 Jun-30
2018

2017(a)

2018

2017(a)

Consolidated
Recurring revenue 131,709 113,427 258,671 221,702
Non-recurring revenue 7,115   7,396   13,989   13,071  
Revenue 138,824   120,823   272,660   234,773  
Net income 582 9,655 12,238 19,914
Net income margin 0.4 % 8.0 % 4.5 % 8.5 %
Operating income 26,272 24,302 53,145 48,148
Operating income margin 18.9 % 20.1 % 19.5 % 20.5 %
Adjusted EBITDA 63,431   54,313   124,306   105,650  
Gross profit margin 61.3 % 60.3 % 61.0 % 60.8 %
Adjusted EBITDA margin 45.7 % 45.0 % 45.6 % 45.0 %
 
Total assets 1,975,113 1,589,211 1,975,113 1,589,211
Total liabilities 1,361,149 1,015,136 1,361,149 1,015,136
Capital expenditure, including intangible assets(b) (120,515 ) (56,441 ) (216,709 ) (111,198 )
 
France, Germany, the Netherlands, and the UK
Recurring revenue 87,317 74,183 170,771 144,181
Non-recurring revenue 4,196   4,688   8,653   8,070  
Revenue 91,513 78,871 179,424 152,251
Operating income 30,311 24,784 57,946 48,770
Operating income margin 33.1 % 31.4 % 32.3 % 32.0 %
Adjusted EBITDA 51,388   43,115   99,366   83,284  
Gross profit margin 63.2 % 62.0 % 62.2 % 61.9 %
Adjusted EBITDA margin 56.2 % 54.7 % 55.4 % 54.7 %
 
Total assets 1,360,299 1,130,979 1,360,299 1,130,979
Total liabilities 269,553 231,445 269,553 231,445
Capital expenditure, including intangible assets(b) (82,556 ) (40,753 ) (153,130 ) (75,819 )
 
Rest of Europe
Recurring revenue 44,392 39,244 87,900 77,521
Non-recurring revenue 2,919   2,708   5,336   5,001  
Revenue 47,311   41,952   93,236   82,522  
Operating income 18,643 16,445 38,242 33,155
Operating income margin 39.4 % 39.2 % 41.0 % 40.2 %
Adjusted EBITDA 27,171   24,041   54,742   47,695  
Gross profit margin 65.0 % 65.2 % 66.3 % 66.0 %
Adjusted EBITDA margin 57.4 % 57.3 % 58.7 % 57.8 %
 
Total assets 443,999 379,372 443,999 379,372
Total liabilities 83,303 82,176 83,303 82,176
Capital expenditure, including intangible assets(b) (29,805 ) (13,635 ) (52,472 ) (29,852 )
 
Corporate and other
Operating income (22,682 ) (16,927 ) (43,043 ) (33,777 )
Adjusted EBITDA (15,128 ) (12,843 ) (29,802 ) (25,329 )
 
Total assets 170,815 78,860 170,815 78,860
Total liabilities 1,008,293 701,515 1,008,293 701,515
Capital expenditure, including intangible assets(b) (8,154 ) (2,053 ) (11,107 ) (5,527 )
 

(a) Certain comparative figures for the three months and six
months ended 30 June 2017 have been restated. For further details,
see Note 2 and Note 29 of our 2017 consolidated financial
statements as included in our 20-F, filed with the SEC on 30 April
2018, and note 12 of our Condensed Consolidated Interim Financial
Statements, filed with the SEC under a 6-K on 2 August 2018.

(b) Capital expenditure, including intangible assets, represents
payments to acquire property, plant and equipment and intangible
assets, as recorded in the condensed consolidated statements of
cash flows as "Purchase of property, plant and equipment" and
"Purchase of intangible assets", respectively.

 
       
INTERXION HOLDING NV
NOTES TO CONDENSED CONSOLIDATED INCOME STATEMENTS: ADJUSTED
EBITDA RECONCILIATION
(in €'000 ― except where stated otherwise)
(unaudited)
 
Three Months Ended Six Months Ended
Jun-30 Jun-30 Jun-30 Jun-30
2018

2017(a)

2018

2017(a)

 
 
Reconciliation to Adjusted EBITDA
 
Consolidated
 
Net income 582 9,655 12,238 19,914
Income tax expense 2,795   3,727   6,608   7,027  
Profit before taxation 3,377 13,382 18,846 26,941
Net finance expense 22,895   10,920   34,299   21,207  
Operating income 26,272 24,302 53,145 48,148
Depreciation and amortisation 32,191 27,209 61,750 51,392
Share-based payments 3,927 2,246 7,249 4,808
Income or expense related to the evaluation and execution of
potential mergers or acquisitions:
M&A transaction costs(b) 1,041 556 2,248 1,329
Items related to terminated or unused data centre sites:
Items related to sub-leases on unused data centre sites(c) -   -   (86 ) (27 )
Adjusted EBITDA(d) 63,431   54,313   124,306   105,650  
 
France, Germany, the Netherlands, and the UK
 
Operating income 30,311 24,784 57,946 48,770
Depreciation and amortisation 20,818 18,097 40,903 33,996
Share-based payments 259 234 603 545
Items related to terminated or unused data centre sites:
Items related to sub-leases on unused data centre sites(c) -   -   (86 ) (27 )
Adjusted EBITDA(d) 51,388   43,115   99,366   83,284  
 
Rest of Europe
 
Operating income 18,643 16,445 38,242 33,155
Depreciation and amortisation 8,223 7,382 15,971 14,340
Share-based payments 305   214   529   200  
Adjusted EBITDA(d) 27,171   24,041   54,742   47,695  
 
Corporate and Other
 
Operating income (22,682 ) (16,927 ) (43,043 ) (33,777 )
Depreciation and amortisation 3,150 1,730 4,876 3,056
Share-based payments 3,363 1,798 6,117 4,063
Income or expense related to the evaluation and execution of
potential mergers or acquisitions:
M&A transaction costs(b) 1,041   556   2,248   1,329  
Adjusted EBITDA(d) (15,128 ) (12,843 ) (29,802 ) (25,329 )
 

(a) Certain comparative figures for the three months and six
months ended 30 June 2017 have been restated. For further details,
see Note 2 and Note 29 of our 2017 consolidated financial
statements as included in our 20-F, filed with the SEC on 30 April
2018, and note 12 of our Condensed Consolidated Interim Financial
Statements, filed with the SEC under a 6-K on 2 August 2018.

(b) "M&A transaction costs" are costs associated with the
evaluation, diligence and conclusion or termination of merger or
acquisition activity. These costs are included in "General and
administrative costs."

(c) "Items related to sub-leases on unused data centre sites"
represents the income on sub-lease of portions of unused data
centre sites to third parties. This income is treated as "Other
income."

(d) "Adjusted EBITDA" is a non-IFRS financial measure. See
"Non-IFRS Financial Measures" for more information, including why
we believe Adjusted EBITDA is useful, and the limitations on the
use of Adjusted EBITDA.

 
   
INTERXION HOLDING NV
CONDENSED CONSOLIDATED BALANCE SHEET
(in €'000 ― except where stated otherwise)
(unaudited)
 
As at
Jun-30 Dec-31
2018 2017
Non-current assets
Property, plant and equipment 1,492,495 1,342,471
Intangible assets 61,872 60,593
Goodwill 38,900 38,900
Deferred tax assets 29,439 24,470
Other investments 4,731 3,693
Other non-current assets 18,338   13,674  
1,645,775 1,483,801
Current assets
Trade receivables and other current assets 195,775 179,786
Cash and cash equivalents 133,563   38,484  
329,338   218,270  
Total assets 1,975,113   1,702,071  
 
Shareholders' equity
Share capital 7,160 7,141
Share premium 547,549 539,448
Foreign currency translation reserve 984 2,948
Hedging reserve, net of tax (173 ) (169 )
Accumulated profit 58,444   47,360  
613,964 596,728
Non-current liabilities
Other non-current liabilities 19,536 15,080
Deferred tax liabilities 23,192 21,336
Borrowings 1,077,900   724,052  
1,120,628 760,468
Current liabilities
Trade payables and other current liabilities 228,677 229,878
Income tax liabilities 7,371 6,237
Borrowings 4,473   108,760  
240,521   344,875  
Total liabilities 1,361,149   1,105,343  
Total liabilities and shareholders' equity 1,975,113   1,702,071  
 
   
INTERXION HOLDING NV
NOTES TO THE CONDENSED CONSOLIDATED BALANCE SHEET: BORROWINGS
(in €'000 ― except where stated otherwise)
(unaudited)
 
As at
Jun-30 Dec-31
2018 2017
 
Borrowings net of cash and cash equivalents
 
Cash and cash equivalents 133,563   38,484  
 
4.75% Senior Notes due 2025(a) 983,368 -
6.00% Senior Secured Notes due 2020(b) - 628,141
Mortgages 48,199 53,640
Financial leases 50,806 51,127
Borrowings under our Revolving Facilities -   99,904  
Borrowings excluding Revolving Facility deferred financing costs 1,082,373   832,812  
Revolving Facility deferred financing costs(c) (2,604 ) (204 )
Total borrowings 1,079,769   832,608  
       
Borrowings net of cash and cash equivalents 946,206   794,124  
 

(a) €1,000 million 4.75% Senior Notes due 2025 are shown after
deducting commissions, offering fees and expenses.

(b) €625 million 6.00% Senior Secured Notes due 2020 included a
premium on additional issuances and are shown after deducting
underwriting discounts and commissions, offering fees and
expenses. The Senior Secured Notes were redeemed with a portion of
the proceeds from the issuance of the 4.75% Senior Notes due 2025.

(c) Deferred financing costs of €2.6 million as of 30 June 2018
were incurred in connection with the €200 million Senior Unsecured
Revolving Credit Facility, entered into on 18 June 2018. Deferred
financing costs of €0.2 million as of 31 December 2017 were
incurred in connection with the €100 million Senior Secured
Revolving Facility, which was repaid in 2018.

 
       
INTERXION HOLDING NV
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in €'000 ― except where stated otherwise)
(unaudited)
 
Three Months Ended Six Months Ended
Jun-30 Jun-30 Jun-30 Jun-30
2018

2017(a)

2018

2017(a)

 
Net income 582 9,655 12,238 19,914
Depreciation and amortisation 32,191 27,209 61,750 51,392
Share-based payments 3,646 2,215 6,863 3,809
Net finance expense 22,895 10,920 34,299 21,207
Income tax expense 2,795   3,727   6,608   7,027  
62,109 53,726 121,758 103,349
Movements in trade receivables and other assets (13,858 ) (16,191 ) (20,055 ) (13,388 )
Movements in trade payables and other liabilities 6,858   3,051   11,486   13,581  
Cash generated from / (used in) operations 55,109 40,586 113,189 103,542
Interest and fees paid(b) (18,600 ) (2,462 ) (38,831 ) (20,912 )
Interest received - 8 - (53 )
Income tax paid (4,893 ) (2,474 ) (8,166 ) (5,305 )
Net cash flows from / (used in) operating activities 31,616 35,658 66,192 77,272
Cash flows from / (used in) investing activities
Purchase of property plant and equipment (117,534 ) (53,399 ) (211,751 ) (106,322 )
Financial investments - deposits 114 (148 ) 280 (366 )
Acquisition InterXion Science Park B.V. - - - (77,517 )
Purchase of intangible assets (2,981 ) (3,042 ) (4,958 ) (4,876 )
Loans provided (834 ) (1,341 ) (1,251 ) (1,341 )
Net cash flows from / (used in) investing activities (121,235 ) (57,930 ) (217,680 ) (190,422 )
Cash flows from / (used in) financing activities
Proceeds from exercised options 1,186 541 1,257 4,088
Repayment of mortgages (4,948 ) (872 ) (5,496 ) (1,420 )
Proceeds from revolving credit facilities 69,376 - 148,814 74,775
Repayment of revolving facilities (250,724 ) - (250,724 ) (30,000 )
Proceeds 4.75% Senior Notes 990,000 - 990,000 -
Repayment 6.00% Senior Secured Notes (634,375 ) - (634,375 ) -
Transaction costs 4.75% Senior Notes (1,192 ) - (1,192 ) -
Transaction costs 2018 revolving credit facility (1,636 ) -   (1,636 ) -  
Net cash flows from / (used in) financing activities 167,687 (331 ) 246,648 47,443
Effect of exchange rate changes on cash 159   (695 ) (81 ) (943 )
Net increase / (decrease) in cash and cash equivalents 78,227 (23,298 ) 95,079 (66,650 )
Cash and cash equivalents, beginning of period 55,336   72,541   38,484   115,893  
Cash and cash equivalents, end of period 133,563   49,243   133,563   49,243  
 

(a) Certain comparative figures for the three months and six
months ended 30 June 2017 have been restated. For further details,
see Note 2 and Note 29 of our 2017 consolidated financial
statements as included in our 20-F, filed with the SEC on 30 April
2018, and note 12 of our Condensed Consolidated Interim Financial
Statements, filed with the SEC under a 6-K on 2 August 2018.

(b) Interest and fees paid is reported net of cash interest
capitalized, which is reported as part of "Purchase of property,
plant and equipment."

 
       
INTERXION HOLDING NV
NOTES TO CONDENSED CONSOLIDATED INCOME STATEMENTS: ADJUSTED NET
INCOME RECONCILIATION
(in €'000 ― except per share data and where stated otherwise)
(unaudited)
 
Three Months Ended Six Months Ended
Jun-30 Jun-30 Jun-30 Jun-30
2018

2017(a)

2018

2017(a)

 
Net income - as reported 582 9,655 12,238 19,914
 
Add back
+ Charges related to termination of financing arrangements(b) 11,171 - 11,171 -
+ M&A transaction costs 1,041   556   2,248   1,329  
12,212 556 13,419 1,329
Reverse
- Interest capitalised (1,181 ) (853 ) (2,065 ) (1,765 )
(1,181 ) (853 ) (2,065 ) (1,765 )
 
Tax effect of above add backs & reversals (2,758 ) 74 (2,839 ) 109
               
Adjusted net income 8,855   9,432   20,753   19,587  
 
Reported basic EPS: (€) 0.01 0.14 0.17 0.28
Reported diluted EPS: (€) 0.01 0.13 0.17 0.28
 
Adjusted basic EPS: (€) 0.12 0.13 0.29 0.28
Adjusted diluted EPS: (€) 0.12 0.13 0.29 0.27
 

(a) Certain comparative figures for the three months and six
months ended 30 June 2017 have been restated. For further details,
see Note 2 and Note 29 of our 2017 consolidated financial
statements as included in our 20-F, filed with the SEC on 30 April
2018, and note 12 of our Condensed Consolidated Interim Financial
Statements, filed with the SEC under a 6-K on 2 August 2018.

(b) These charges relate to the repayment of our 6.00% Senior
Secured Notes due 2020 and the termination of our revolving credit
facility agreements.
 
       
INTERXION HOLDING NV
Status of Announced Expansion Projects as at 2 August 2018
with Target Open Dates after 31 March 2018
 
CAPEX (a)(b) Equipped Space (a)
Market Project (€ million) (sqm) Schedule
 
Amsterdam AMS8: Phases 3 - 6 63 5,300 4Q 2018 - 1Q 2019 (c)
Amsterdam AMS9: Phase 2 8 500 4Q 2018
Amsterdam AMS10: Phases 1 - 2 128 6,800 4Q 2019 - 1Q 2020 (d)
Copenhagen CPH2: Phases 3 - 5 18 1,500 2Q 2018 - 2Q 2019 (e)
Dublin DUB3: Phases 3 - 4 17 1,200 2Q 2018
Frankfurt FRA13: Phases 1 - 2 New Build 90 4,900 4Q 2018 - 1Q 2019 (f)
Frankfurt FRA14: Phases 1-2 New Build 76 4,600 3Q 2019 - 4Q 2019 (g)
London LON3: New Build 35 1,800 3Q 2018 - 4Q 2018 (h)
Madrid MAD3: New Build 44 2,500 2Q 2019 (i)
Marseille MRS2: Phase 2 - 3 47 2,600 2Q 2018 - 2Q 2019 (j)
Paris PAR7.2: Phase B (cont.) - C 47 2,500 2Q 2018 -1Q 2019 (k)
Stockholm STO5: Phases 2 -3 19 1,200 1Q 2018 - 1Q 2019 (l)
Vienna VIE2: Phase 7 - 9 94 4,300 4Q 2017 - 4Q 2020 (m)
Total € 686 39,700
 
 
(a) CAPEX and Equipped space are approximate and may change. Figures
are rounded to nearest 100 sqm unless otherwise noted. Totals may
not add due to rounding.
(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) AMS8: Phases 3 and 4 (1,300 sqm each) are scheduled to open in
4Q 2018; phases 5 and 6 (1,300 sqm each) are scheduled to open in 1Q
2019.
(d) AMS10: Phase 1 (2,700 sqm) is scheduled to open in 4Q 2019;
phase 2 (4,100 sqm) is scheduled to open in 1Q 2020.
(e) CPH2: Phases 3 and 4 (900 sqm total) became operational in 2Q
2018; phase 5 (600 sqm) is scheduled to open in 2Q 2019.
(f) FRA13: Phase 1 (2,300 sqm) is scheduled to become operational in
4Q 2018; phase 2 (2,600 sqm) is scheduled to become operational in
1Q 2019.
(g) FRA14: Phase 1 (2,400 sqm) is scheduled to open in 3Q 2019;
phase 2 (2,200 sqm) is scheduled to open in Q4 2019.
(h) LON3: 900 square metres is scheduled to become operational in 3Q
2018; another 900 square metres is scheduled to become operational
in 4Q 2018.
(i) MAD3: Capex total for MAD3 includes land purchase price.
(j) MRS2: 400 square metres became operational in 2Q 2018; 300 sqm
is scheduled to become operational in 3Q 2018; another 1,900 sqm is
scheduled to become operational in 2Q 2019.
(k) PAR7.2: Phase B (cont.) (500 sqm) became operational in 2Q 2018;
Phase C (2,000 sqm) is scheduled to become operational in 1Q 2019.
(l) STO5: Phases 2-3 - 100 sqm became operational in 1Q 2018; 300
sqm became operational in 2Q 2018; 800 sqm is scheduled to become
operational in 1Q 2019.
(m) VIE2: 1,000 square metres became operational in 4Q 2017 through
2Q 2018; 900 square metres is scheduled to become operational in 4Q
2018; 700 square metres is scheduled to become operational in 2Q
2019; 1,000 sqm scheduled to open in 3Q 2019; and 700 sqm scheduled
to open in 4Q 2020.

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