INXN InterXion Holding NV

Recurring Revenue Growth of 10% Y/Y Combined with Gross Margin Expansion

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 2016.

Financial Highlights

• Revenue increased by 9% to €104.0 million (2Q 2015: €95.4 million).
• Recurring revenue1 increased by 10% to €99.3 million (2Q 2015: €90.3 million).
• Net profit was €9.2 million (2Q 2015: €21.6 million, which included net M&A transaction income of €17.0 million).
• Adjusted net profit2 increased by 8% to €9.0 million (2Q 2015: €8.3 million).
• Earnings per diluted share were €0.13 (2Q 2015: €0.31, which included the aforementioned net M&A transaction income).
• Adjusted earnings per diluted share were €0.13 (2Q 2015: €0.12).
• Adjusted EBITDA2 increased by 13% to €47.3 million (2Q 2015: €42.0 million).
• Adjusted EBITDA margin increased to 45.5% (2Q 2015: 44.0%).
• Capital expenditures3, including intangible assets, were €62.6 million (2Q 2015: €47.8 million).
• During the second quarter, Interxion issued €150 million aggregate principal amount of 6.00% Senior Secured Notes due 2020 at an issue price of 104.50%.

Operating Highlights

• Equipped space increased by 2,600 square metres in the quarter to 104,200 square metres.
• Revenue generating space increased by 1,200 square metres in the quarter to 81,600 square metres.
• Utilisation rate at the end of the quarter was 78%.
• During the second quarter, Interxion completed expansions in Germany, opening the second phases of FRA10 in Frankfurt and DUS2 in Dusseldorf, as well as opening the first phase of its second data centre in Copenhagen (CPH2).

"Interxion’s financial and operational results continued their consistent upward trajectory in the second quarter, with solid recurring revenue growth and adjusted EBITDA margin growth of 150 basis points from the second quarter 2015,” said David Ruberg, Interxion's Chief Executive Officer. “Demand in the quarter was strong in multiple geographies and multiple industry segments as we continue to attract magnetic platform providers and build our communities of interest around them.”

Quarterly Review

Revenue in the second quarter of 2016 was €104.0 million, a 9% increase over the second quarter of 2015 and a 2% increase over the first quarter of 2016. Recurring revenue was €99.3 million, a 10% increase over the second quarter of 2015 and a 2% increase over the first quarter of 2016. Recurring revenue in the second quarter was 95% of total revenue.

Cost of sales in the second quarter of 2016 was €39.7 million, a 5% increase over the second quarter of 2015 and a 1% increase over the first quarter of 2016.

Gross profit was €64.4 million in the second quarter of 2016, an 11% increase over the second quarter of 2015 and a 2% increase over the first quarter of 2016. Gross profit margin was 61.9% in the second quarter of 2016 compared to 60.5% in the second quarter of 2015 and 61.6% in the first quarter of 2016.

Sales and marketing costs in the second quarter of 2016 were €7.3 million, a 1% increase over the second quarter of 2015 and a 6% decrease from the first quarter of 2016.

Other general and administrative costs were €9.7 million in the second quarter of 2016, a 14% increase over the second quarter of 2015 and a 5% increase from the first quarter of 2016. Other general and administrative costs exclude depreciation, amortisation, impairments, share-based payments, M&A transaction costs and provision for onerous lease contracts.

Depreciation, amortisation, and impairments in the second quarter of 2016 was €22.0 million, an increase of 12% from the second quarter of 2015 and a 3% increase from the first quarter of 2016.

Operating profit in the second quarter of 2016 was €23.5 million, a decrease of 38% from the second quarter of 2015 and 3% increase from the first quarter of 2016. Quarterly results in the second quarter 2015, first quarter 2016, and second quarter 2016 were impacted by M&A transaction related items. Excluding these items, underlying operating profit increased 16% over the second quarter of 2015.

Net finance costs for the second quarter of 2016 were €10.2 million, a 28% increase over both the second quarter of 2015 and the first quarter of 2016. On 14 April 2016, Interxion issued €150 million principal amount of 6.00% Senior Secured Notes due 2020 at an issue price of 104.50%.

Income tax expense for the second quarter of 2016 was €4.2 million, a 49% decrease compared to the second quarter of 2015 and a 10% decrease from the first quarter of 2016.

Net profit was €9.2 million in the second quarter of 2016, a 58% decrease over the second quarter of 2015 and a 10% decrease from the first quarter of 2016.

Adjusted net profit was €9.0 million in the second quarter of 2016, an 8% increase over the second quarter of 2015, and a 10% decrease from the first quarter of 2016.

Adjusted EBITDA for the second quarter of 2016 was €47.3 million, a 13% increase over the second quarter of 2015 and a 3% increase over the first quarter of 2016. Adjusted EBITDA margin was 45.5% in the second quarter of 2016 compared to 44.0% in the second quarter of 2015 and 45.0% in the first quarter of 2016.

Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €39.3 million in the second quarter of 2016, compared to €54.1 million in the second quarter of 2015, and €50.4 million in the first quarter of 2016.

Capital expenditures, including intangible assets, were €62.6 million in the second quarter of 2016 compared to €47.8 million in the second quarter of 2015 and €50.0 million in the first quarter of 2016.

Cash and cash equivalents were €193.5 million at 30 June 2016, compared to €58.6 million at year end 2015. Total borrowings, net of deferred revolving facility financing fees, were €739.1 million at 30 June 2016 compared to €555.1 million at year end 2015. As of 30 June 2016, the Company’s revolving credit facility was undrawn. Cash balances at 30 June 2016 reflect the receipt of net proceeds of approximately €155 million related to the Senior Secured Notes issuance completed on 14 April 2016.

Equipped space at the end of the second quarter of 2016 was 104,200 square metres compared to 98,300 square metres at the end of the second quarter of 2015 and 101,600 square metres at the end of the first quarter of 2016. Utilisation rate, the ratio of revenue-generating space to equipped space, was 78% at the end of the second quarter of 2016, compared with 78% at the end of the second quarter of 2015 and 79% at the end of the first quarter of 2016.

New expansion in Copenhagen (CPH2.2) announced today

Interxion is announcing today that it will expand its CPH2 data centre in Copenhagen by constructing an additional 600 square metres phase (“CPH2.2”) and adding over 1 MW of customer available power. CPH2.2 space capacity is scheduled to open in the first quarter of 2017 and has been completely pre-sold. Capital expenditure associated with the incremental space and power for CPH2 is expected to be approximately €15 million.

Business Outlook

Interxion today reaffirms guidance for its revenue, adjusted EBITDA and capital expenditures (including intangibles) for full year 2016:

Revenue   €416 million – €431 million Adjusted EBITDA €185 million – €195 million Capital expenditures (including intangibles) €200 million – €220 million

Conference Call to Discuss Results

Interxion will host a conference call today at 8:30 a.m. ET (1:30 pm BST, 2:30 pm CET) to discuss its Second Quarter 2016 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 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 16 August 2016. 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 41849012.

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, 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) EBITDA; (ii) adjusted EBITDA; (iii) recurring revenue, (iv) adjusted net profit; (v) adjusted basic earnings per share and (vi) adjusted diluted earnings per share.

Other companies may present EBITDA, adjusted EBITDA, recurring revenue, adjusted net profit, adjusted basic earnings per share and adjusted diluted earnings per share 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 profit or as a measure of liquidity or an alternative to Profit for the period attributable to shareholders (“net profit”) as indicators of our operating performance or any other measure of performance implemented in accordance with IFRS.

EBITDA, Adjusted EBITDA and Recurring revenue

We define EBITDA as net profit plus income tax expense, net finance expense, depreciation, amortisation and impairment of assets.

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

• Share-based payments – the fair value at the date of grant to employees of share options, is recognised as an employee expense over the vesting period. 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 incurred. We exclude these effects because we believe they are not reflective of our ongoing operating performance.
• Adjustments related to terminated and unused datacentre sites – these gains and losses relate to historical leases entered into for certain brownfield sites, with the intention of developing datacentres, 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 gains or losses that management believes are not representative of our current ongoing performance. Examples of this would include: adjusting for the cumulative effect of a change in accounting principle or estimate, impairment losses, litigation gains and losses or windfall gains and losses.

Recurring revenue comprises revenue that is incurred monthly from colocation, connectivity and associated power charges, office space, amortized set-up fees and certain recurring managed services (but excluding any ad hoc managed services) provided by us directly or through third parties. Rents received for the sublease of unused sites are excluded.

We believe EBITDA and adjusted EBITDA provide 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 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 profit provides a more complete analysis of our operating performance. Management also believes the use of EBITDA and adjusted EBITDA facilitates comparisons between us and other data centre operators and other data centre operators that are REITs and other infrastructure based businesses. EBITDA and adjusted EBITDA are also relevant measures used in the financial covenants of our €100 million revolving facility and our 6.00% Senior Secured Notes due 2020. We also present recurring revenue as we believe it assists investors understand our operating performance.

A reconciliation from net profit to EBITDA and EBITDA to adjusted EBITDA is provided in the tables attached to this press release.

Adjusted net profit, adjusted basic earnings per share and adjusted diluted earnings per share

We define adjusted net profit as net profit 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 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 profit. 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 gains or losses that management believes are not representative of our current ongoing performance. Examples of this would include: adjusting for the cumulative effect of a change in accounting principle or estimate, impairment losses, 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 profit to aid investors in evaluating the operating performance of our business and to aid investors compare our operating performance with other data centre operators and infrastructure companies. We believe the presentation of adjusted net profit, when combined with net income (loss) prepared in accordance with IFRS is beneficial to a complete understanding of our performance.

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

Interxion does not provide forward-looking estimates of net profit, operating profit, depreciation, amortisation, and impairments, share-based payments, M&A transaction costs or increase/decrease in provision for onerous lease contracts, and income from sub-leases of 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.

A reconciliation from net profit to adjusted net profit is provided in the tables attached to this press release.

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 42 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 600 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.

This announcement contains inside information under Regulation (EU) 596/2014 (16 April 2014).

1 Recurring revenue is revenue that is 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. Rents received for the sublease of unused sites are excluded.

2 Adjusted net profit and adjusted EBITDA are non-IFRS figures intended to adjust for certain items and are not measures of financial performance under IFRS. Full definitions can be found in the “Non-IFRS Financial Measures” section later in this press release. Reconciliations of net profit to adjusted EBITDA and net profit to adjusted net profit can be found in the financial tables later in this press release.

3 Capital expenditures, including intangible assets, represent 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 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 2016 2015 2016 2015   Revenue 104,026 95,449 206,026 187,931 Cost of sales (39,663 ) (37,663 ) (78,782 ) (73,945 ) Gross Profit 64,363 57,786 127,244 113,986 Other income 33 20,997 130 21,060 Sales and marketing costs (7,284 ) (7,210 ) (15,008 ) (13,889 ) General and administrative costs (33,568 ) (33,824 ) (65,953 ) (69,983 )                 Operating profit 23,544 37,749 46,413 51,174 Net Finance expense (10,170 ) (7,946 ) (18,128 ) (14,531 )                 Profit or loss before income taxes 13,374 29,803 28,285 36,643 Income tax expense (4,209 ) (8,216 ) (8,901 ) (10,631 ) Net income 9,165   21,587   19,384   26,012     Basic earnings per share: (€) 0.13 0.31 0.28 0.37 Diluted earnings per share: (€) 0.13 0.31 0.27 0.37     Number of shares outstanding at the end of the period (shares in thousands) 70,479 69,575 70,479 69,575 Weighted average number of shares for Basic EPS (shares in thousands) 70,316 69,562 70,163 69,478 Weighted average number of shares for Diluted EPS (shares in thousands) 71,198 70,609 71,018 70,573     As at Jun-30 Jun-30 Capacity metrics 2016 2015 Equipped space (in square meters) 104,200 98,300 Revenue generating space (in square meters) 81,600 77,100 Utilization Rate 78 % 78 %           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 2016 2015 2016 2015 Consolidated   Recurring revenue 99,331 90,297 196,542 177,348 Non-recurring revenue 4,695   5,152   9,484   10,583   Revenue 104,026   95,449   206,026   187,931   Net income 9,165 21,587 19,384 26,012 Net income margin 9 % 23 % 9 % 14 % Operating profit 23,544 37,749 46,413 51,174 Operating profit margin 23 % 40 % 23 % 27 % Adjusted EBITDA 47,346   42,029   93,265   82,634   Gross profit margin 61.9 % 60.5 % 61.8 % 60.7 % Adjusted EBITDA margin 45.5 % 44.0 % 45.3 % 44.0 %   Total assets 1,473,099 1,211,968 1,473,099 1,211,968 Total liabilities 946,348 729,019 946,348 729,019 Capital expenditure, including intangible assets (a) (62,592 ) (47,835 ) (112,594 ) (115,405 )   France, Germany, the Netherlands, and the UK     Recurring revenue 63,773 57,321 126,039 112,304 Non-recurring revenue 2,608   2,995   5,884   6,622   Revenue 66,381 60,316 131,923 118,926 Operating income 22,374 20,319 44,056 39,802 Operating income margin 34 % 34 % 33 % 33 % Adjusted EBITDA 37,012   33,248   73,193   64,618   Gross profit margin 63.4 % 62.6 % 62.9 % 62.3 % Adjusted EBITDA margin 55.8 % 55.1 % 55.5 % 54.3 %   Total assets 954,598 836,429 954,598 836,429 Total liabilities 205,333 177,916 205,333 177,916 Capital expenditure, including intangible assets (a) (43,627 ) (36,545 ) (80,383 ) (70,311 )   Rest of Europe   Recurring revenue 35,558 32,976 70,503 65,044 Non-recurring revenue 2,087   2,157   3,600   3,961   Revenue 37,645   35,133   74,103   69,005   Operating income 15,083 13,206 30,352 26,553 Operating income margin 40 % 38 % 41 % 38 % Adjusted EBITDA 21,574   19,342   43,089   38,320   Gross profit margin 65.8 % 63.6 % 66.3 % 64.1 % Adjusted EBITDA margin 57.3 % 55.1 % 58.1 % 55.5 %   Total assets 340,529 314,422 340,529 314,422 Total liabilities 81,711 57,932 81,711 57,932 Capital expenditure, including intangible assets (a) (16,389 ) (10,289 ) (26,671 ) (43,414 )   Corporate and other   Operating profit (13,913 ) 4,224   (27,995 ) (15,181 ) Adjusted EBITDA (11,240 ) (10,561 ) (23,017 ) (20,304 )   Total assets 177,972 61,117 177,972 61,117 Total liabilities 659,304 493,171 659,304 493,171

Capital expenditure, including intangible assets (a)

(2,576 ) (1,001 ) (5,540 ) (1,680 )  

(a) 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 2016 2015 2016 2015 Reconciliation to Adjusted EBITDA   Consolidated   Net profit 9,165 21,587 19,384 26,012 Income tax expense 4,209   8,216   8,901   10,631   Profit before taxation 13,374 29,803 28,285 36,643 Net finance expense 10,170   7,946   18,128   14,531   Operating profit 23,544 37,749 46,413 51,174 Depreciation, amortisation and impairments 22,021   19,577   43,498   37,792   EBITDA (1) 45,565 57,326 89,911 88,966 Share-based payments 1,322 1,789 2,763 4,030

Income or expense related to the evaluation and execution of potential mergers or acquisitions

M&A transaction break fee income (2) - (20,923 ) - (20,923 ) M&A transaction costs (3) 492 3,911 721 10,798 Items related to terminated or unused data centre sites: Increase/(decrease) in provision for onerous lease contracts (4) - - - (100 ) Income from sub-leases on unused data centre sites (5) (33 ) (74 ) (130 ) (137 ) Adjusted EBITDA (1) 47,346   42,029   93,265   82,634     France, Germany, the Netherlands, and the UK   Operating profit 22,374 20,319 44,056 39,802 Depreciation, amortisation and impairments 14,543   12,544   28,835   24,261   EBITDA (1) 36,917 32,863 72,891 64,063 Share-based payments 128 459 432 792 Items related to terminated or unused data centre sites: Increase/(decrease) in provision for onerous lease contracts (4) - - - (100 ) Income from sub-leases on unused data centre sites (5) (33 ) (74 ) (130 ) (137 ) Adjusted EBITDA (1) 37,012   33,248   73,193   64,618     Rest of Europe   Operating profit 15,083 13,206 30,352 26,553 Depreciation, amortisation and impairments 6,387   5,927   12,529   11,362   EBITDA 21,470 19,133 42,881 37,915 Share-based payments 104   209   208   405   Adjusted EBITDA (1) 21,574   19,342   43,089   38,320     Corporate and Other   Operating profit/(loss) (13,913 ) 4,224 (27,995 ) (15,181 ) Depreciation, amortisation and impairments 1,091   1,106   2,134   2,169   EBITDA (12,822 ) 5,330 (25,861 ) (13,012 ) Share-based payments 1,090 1,121 2,123 2,833

Income or expense related to the evaluation and execution of potential mergers or acquisitions

M&A transaction break fee income (2) - (20,923 ) - (20,923 ) M&A transaction costs (3) 492   3,911   721   10,798   Adjusted EBITDA (11,240 ) (10,561 ) (23,017 ) (20,304 )  

(1) “EBITDA” and "Adjusted EBITDA" are non-IFRS financial measures within the meaning of the rules of the SEC. See "Non-IFRS measures" for more information on these measures, including why we believe that these supplemental measures are useful, and the limitations on the use of these supplemental measures.

 

(2) “M&A transaction break-fee income” represents the cash break-up fee received following the termination of the Implementation Agreement in May 2015. This fee was included in "Other Income".

 

(3) 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". In the quarter ended 30 June 2015, M&A transaction costs included €3.9 million related to the abandoned merger with TelecityGroup. In the quarter ended 30 June 2016, M&A transaction costs included €0.5 million related to other activity including the evaluation of potential asset acquisitions.

 

(4) “Increase/(decrease) in provision for onerous lease contracts” relates to those contracts in which we expect losses to be incurred in respect of unused data centre sites over the term of the lease contract.

  (5) “Income from sub-leases of unused data centre sites” represents income from sub-letting of unused data centre sites to third parties, which is treated as "Other Income".       INTERXION HOLDING NV CONDENSED CONSOLIDATED BALANCE SHEET (in €'000 ― except where stated otherwise) (unaudited)   As at Jun-30 Dec-31 2016 2015 Non-current assets Property, plant and equipment 1,087,585 999,072 Intangible assets 25,585 23,194 Deferred tax assets 20,895 23,024 Financial assets 947 - Other non-current assets 7,165   6,686   1,142,177 1,051,976 Current assets Trade receivables and other current assets 137,448 141,534 Cash and cash equivalents 193,474   58,554   330,922   200,088   Total assets 1,473,099   1,252,064     Shareholders’ equity Share capital 7,048 6,992 Share premium 515,974 507,296 Foreign currency translation reserve 12,172 20,865 Hedging reserve, net of tax (304 ) (213 ) Accumulated deficit (8,139 ) (27,523 ) 526,751 507,417 Non-current liabilities Trade payables and other liabilities 11,459 12,049 Deferred tax liabilities 9,224 9,951 Borrowings 735,455   550,812   756,138 572,812 Current liabilities Trade payables and other liabilities 180,910 162,629 Income tax liabilities 4,782 2,738 Provision for onerous lease contracts 260 1,517 Borrowings 4,258   4,951   190,210   171,835   Total liabilities 946,348   744,647   Total liabilities and shareholders’ equity 1,473,099   1,252,064         INTERXION HOLDING NV NOTES TO THE CONDENSED CONSOLIDATED BALANCE SHEET: BORROWINGS (in €'000 ― except where stated otherwise) (unaudited)   As at Jun-30 Dec-31 2016 2015 Borrowings net of cash and cash equivalents   Cash and cash equivalents (a) 193,474   58,554    

6.00% Senior Secured Notes due 2020 (b)

629,904 475,503 Mortgages 57,109 44,073 Financial leases 52,700 34,582 Other borrowings -   1,605   Borrowings excluding Revolving Facility deferred financing costs 739,713   555,763  

Revolving Facility deferred financing costs (c)

(568 ) (710 ) Total borrowings 739,145   555,053           Borrowings net of cash and cash equivalents 545,671   496,499    

(a) Cash and cash equivalents include €4.1 million as of 30 June 2016 and €4.9 million as of 31 December 2015, which is restricted and held as collateral to support the issuance of bank guarantees on behalf of a number of subsidiary companies.

 

(b) €625 million 6.00% Senior Secured Notes due 2020 include a premium on the additional issuance and are shown after deducting underwriting discounts and commissions, offering fees and expenses.

  (c) Deferred financing costs of €0.6 million as of 30 June 2016 were incurred in connection with the €100 million revolving facility.           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 2016 2015 2016 2015   Net profit 9,165 21,587 19,384 26,012 Depreciation, amortisation and impairments 22,021 19,577 43,498 37,792 Provision for onerous lease contracts (392 ) (849 ) (1,271 ) (1,774 )

Share-based payments

1,158 1,789 2,558 4,030 Net finance expense 10,170 7,946 18,128 14,531 Income tax expense 4,209   8,216   8,901   10,631   46,331 58,266 91,198 91,222 Movements in trade receivables and other current assets (3,732 ) (7,734 ) 1,310 (9,365 ) Movements in trade payables and other liabilities (3,264 ) 3,609   (2,758 ) 6,483   Cash generated from operations 39,335 54,141 89,750 88,340 Interest and fees paid (a) (1,060 ) (1,448 ) (15,422 ) (15,022 ) Interest received 18 31 25 80 Other financial items - - - - Income tax paid (2,484 ) (2,740 ) (3,538 ) (5,060 ) Net cash flows from / (used in) operating activities 35,809 49,984 70,815 68,338 Cash flows from investing activities Purchase of property plant and equipment (60,729 ) (46,911 ) (108,176 ) (112,229 ) Purchase of intangible assets (1,863 ) (924 ) (4,419 ) (3,176 ) Movement in short-term investments -   1,650   -   1,650   Net cash flows from / (used in) investing activities (62,592 ) (46,185 ) (112,595 ) (113,755 ) Cash flows from financing activities Proceeds from exercised options 4,250 230 6,176 2,408 Proceeds from mortgages 14,625 - 14,625 - Repayment of mortgages (948 ) (720 ) (1,268 ) (1,040 ) Proceeds Senior secured notes at 6% 155,346 - 155,346 - Interest received at issue of additional notes 2,225 - 2,225 - Net cash flows from / (used in) financing activities 175,498 (490 ) 177,104 1,368 Effect of exchange rate changes on cash 147   (193 ) (404 ) 1,224   Net increase / (decrease) in cash and cash equivalents 148,862 3,116 134,920 (42,825 ) Cash and cash equivalents, beginning of period 44,612   53,982   58,554   99,923   Cash and cash equivalents, end of period 193,474   57,098   193,474   57,098     (a) Interest paid is reported net of cash interest capitalised, which is reported as part of “Purchase of property, plant and equipment".           INTERXION HOLDING NV NOTES TO CONDENSED CONSOLIDATED INCOME STATEMENTS: ADJUSTED NET PROFIT RECONCILIATION (in €'000 ― except per share data and where stated otherwise) (unaudited)     For the three months ended For the six months ended 30 Jun 30 Jun 30 Jun 30 Jun 2016 2015 2016 2015   Consolidated €’000 €’000 €’000 €’000   Net income 9,165 21,587 19,384 26,012   Income or expense related to the evaluation and execution of potential mergers or acquisitions: M&A transaction costs 492 3,911 721 10,798 M&A transaction break fee income - (20,923 ) - (20,923 ) Adjustments related to provisions: Increase/(decrease in provision for onerous lease contracts - - - (100 ) Adjustments related to capitalised interest: (701 ) (700 ) (1,166 ) (1,600 ) (209 ) (17,712 ) (445 ) (11,825 )   Tax effect of above add backs and reversals 52 4,428 111 3,000                 Adjusted net profit 9,008   8,303   19,050   17,187     Reported basic EPS: (€) 0.13 0.31 0.28 0.37 Reported diluted EPS: (€) 0.13 0.31 0.27 0.37   Adjusted basic EPS: (€) 0.13 0.12 0.27 0.25 Adjusted diluted EPS: (€) 0.13 0.12 0.27 0.24           INTERXION HOLDING NV Status of Announced Expansion Projects as at 3 August 2016 with Target Open Dates after 1 January 2016  

CAPEX (a)(b)

Equipped Space (a)

Market   Project   (€ million)   (sqm)   Target Opening Dates   Amsterdam AMS 8: Phases 1 - 2 New Build 50 2,600 4Q 2016   Copenhagen CPH2: Phases 1 - 2 New Build 19 1,100 2Q 2016 - 1Q 2017(c)   Dublin DUB3: Phases 1 - 2 New Build 28 1,200 4Q 2016   Dusseldorf DUS 2: Phase 1 - 2 New Build 16 1,200 4Q 2015 - 2Q 2016 (d)   Frankfurt FRA 10: Phases 1 - 4 New Build 92 4,800 1Q 2016 - 4Q 2016 (e)   Marseille MRS 1: Phase 2 (continued) 10 800 3Q 2016   Paris PAR7: Phase 2 14 1,100 2Q 2017   Vienna VIE 2: New Build 65 4,200 4Q 2014 - 2Q 2017 (f)   Total € 294 17,000   (a) CAPEX and Equipped space are approximate and may change. Figures are rounded to nearest 100 sqm unless otherwise noted.   (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 (500 square metres) became operational in 2Q 2016. Phase 2 (600 square metres) is scheduled to become operational in 1Q 2017.   (d) Phase 1 (600 square metres) became operational in 4Q 2015. Phase 2 (600 square metres) became operational in 2Q 2016.   (e) Phase 1 (1,200 square metres) became operational in 1Q 2016; phase 2 (1,200 square metres) became operational in 2Q 2016; phases 3 & 4 (1,200 square metres each) are both scheduled to become operational in 4Q 2016.  

(f) 1,300 square metres became operational in 4Q 2014; 600 square metres became operational in 1Q 2015; 600 square metres became operational in 2Q 2015. 300 square metres became operational in 4Q 2015. 300 sqm is scheduled to become operational in 4Q 2016; another 1,100 square metres is scheduled to become operational in 2Q 2017.

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Interxion Holding NVJim Huseby, +1 813-644-9399IR@interxion.com