INXN InterXion Holding NV

18% Year Over Year Revenue Growth in Fourth Quarter and Continued Strong Bookings Reflect Growing Broad-Based Demand

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 and year ended 31 December 2017.

Financial Highlights

• Revenue for the fourth quarter and full year (FY) increased by 18% and 16% to €129.9 million and €489.3 million, respectively (4Q 2016: €110.5 million; FY 2016: €421.8 million).
• Recurring revenue1 for the fourth quarter and full year increased by 19% and 16% to €123.4 million and €462.5 million, respectively (4Q 2016: €103.4 million; FY 2016: €400.0 million).
• Net income for the fourth quarter and full year was €11.0 million and €42.2 million, respectively (4Q 2016: €10.0 million; FY 2016: €39.9 million).
• Adjusted net income2 for the fourth quarter and full year was €11.9 million and €43.4 million, respectively (4Q 2016: €9.0 million; FY 2016: €36.6 million).
• Earnings per diluted share for the fourth quarter and full year were €0.15 and €0.59, respectively (4Q 2016: €0.14; FY 2016: €0.56).
• Adjusted earnings2 per diluted share for the fourth quarter and full year were €0.17 and €0.61, respectively (4Q 2016: €0.13; FY 2016: €0.51).
• Adjusted EBITDA2 for the fourth quarter and full year increased by 20% and 16% to €59.1 million and €221.0 million, respectively (4Q 2016: €49.3 million; FY 2016: €190.9 million).
• Adjusted EBITDA margin for the fourth quarter and full year was 45.5% and 45.2%, up 90 basis points and down 10 basis points, respectively (4Q 2016: 44.6%; FY 2016: 45.3%).
• Capital expenditures, including intangible assets3, were €69.7 million in the fourth quarter and €256.0 million for full year 2017 (4Q 2016: €73.8 million; FY 2016: €250.9 million).

Operating Highlights

• Equipped Space4 increased by 3,600 square metres in the fourth quarter and 11,700 square metres for the full year to 122,500 square metres.
• Revenue Generating Space4 increased by 2,700 square metres in the fourth quarter and 12,600 square metres for the full year to 99,800 square metres.
• Utilisation Rate was 81% at the end of the year.
• During the fourth quarter, Interxion opened a new data centre in Frankfurt. In addition, Interxion completed the following expansions:
  • 700 sqm expansion in Zurich;
  • 300 sqm expansion in Vienna; and
  • 200 sqm expansion in Stockholm.
• Interxion today announces a 500 sqm expansion in Paris.

“Interxion’s fourth quarter results conclude another year of strong performance, with 18% revenue growth for the quarter and 16% revenue growth for full year 2017,” said David Ruberg, Interxion’s Chief Executive Officer. “These results reflect Interxion’s consistent strategic and operational execution, our success in capturing the broad-based demand for our colocation services across our European footprint and the increasing value that our customers receive from our communities of interest strategy. Looking ahead, we are continuing to see positive growth drivers, including cloud platform providers expanding their infrastructure across our European footprint, and emerging enterprise hybrid cloud adoption.”

Quarterly Review

Revenue in the fourth quarter of 2017 was €129.9 million, an 18% increase over the fourth quarter of 2016 and a 4% increase over the third quarter of 2017. Recurring revenue was €123.4 million, a 19% increase over the fourth quarter of 2016 and a 5% increase over the third quarter of 2017. Recurring revenue in the fourth quarter represented 95% of total revenue. On an organic constant currency5 basis, revenue in the fourth quarter of 2017 was 17% higher than in the fourth quarter of 2016 and 4% higher than in the third quarter of 2017.

Cost of sales in the fourth quarter of 2017 was €48.8 million, a 14% increase over the fourth quarter of 2016 and a 2% decrease over the third quarter of 2017.

Gross profit was €81.0 million in the fourth quarter of 2017, a 20% increase over the fourth quarter of 2016 and an 8% increase over the third quarter of 2017. The gross profit margin was 62.4% in the fourth quarter of 2017 (inclusive of full year impact of an energy credit in Germany booked in the fourth quarter) compared with 61.1% in the fourth quarter of 2016 and 60.2% in the third quarter of 2017. Adjusting for this one-time item, the gross profit margin in the fourth quarter of 2017 was 61.8%.

Sales and marketing costs in the fourth quarter of 2017 were €9.0 million. This represented an 18% increase over the fourth quarter of 2016 and a 9% increase from the third quarter of 2017, reflecting investment in go-to-market projects.

Other general and administrative costs (excluding depreciation, amortisation, impairments, share-based payments and M&A transaction costs) were €12.9 million in the fourth quarter of 2017. This represented a 23% increase over the fourth quarter of 2016 and a 22% increase from the third quarter of 2017, largely due to professional fees associated with the implementation of IFRS 15 and 16, as well as increased business taxes in France.

Depreciation, amortisation, and impairments in the fourth quarter of 2017 was €29.1 million, a 20% increase from the fourth quarter of 2016 and a 5% increase from the third quarter of 2017.

Operating income in the fourth quarter of 2017 was €27.0 million, an increase of 20% from the fourth quarter of 2016 and an 8% increase from the third quarter of 2017.

Net finance expense for the fourth quarter of 2017 was €12.3 million, a 30% increase over the fourth quarter of 2016 and a 14% increase over the third quarter of 2017.

Income tax expense for the fourth quarter of 2017 was €3.7 million, a 22% increase compared with the fourth quarter of 2016 and an 11% decrease from the third quarter of 2017.

Net income was €11.0 million in the fourth quarter of 2017, a 9% increase over the fourth quarter of 2016 and a 9% increase from the third quarter of 2017.

Adjusted net income was €11.9 million in the fourth quarter of 2017, a 33% increase over the fourth quarter of 2016 and a 12% increase from the third quarter of 2017.

Adjusted EBITDA for the fourth quarter of 2017 was €59.1 million, a 20% increase over the fourth quarter of 2016 and a 5% increase over the third quarter of 2017.

Adjusted EBITDA margin was 45.5% in the fourth quarter of 2017, compared with 44.6% in the fourth quarter of 2016 and 45.1% in the third quarter of 2017.

Net cash flows from operating activities were €45.5 million in the fourth quarter of 2017, compared with €45.4 million in the fourth quarter of 2016 and €32.5 million in the third quarter of 2017.

Cash generated from operations6 was €50.3 million in the fourth quarter of 2017, compared with €50.2 million in the fourth quarter of 2016 and €55.2 million in the third quarter of 2017.

Capital expenditures, including intangible assets, were €69.7 million in the fourth quarter of 2017, compared with €73.8 million in the fourth quarter of 2016 and €75.2 million in the third quarter of 2017.

Cash and cash equivalents were €38.5 million at 31 December 2017, compared with €115.9 million at 31 December 2016.

Total borrowings, net of deferred revolving facility financing fees, were €832.6 million at 31 December 2017, compared with €735.0 million at year end 2016.

All of the capacity metrics below do not include Interxion Science Park.

Equipped space at the end of the fourth quarter of 2017 was 122,500 square metres, compared with 110,800 square metres at the end of the fourth quarter of 2016 and 118,900 square metres at the end of the third quarter of 2017.

Revenue generating space at the end of the fourth quarter of 2017 was 99,800 square metres, compared with 87,200 square metres at the end of the fourth quarter of 2016 and 97,100 square metres at the end of the third quarter of 2017.

Utilisation rate, the ratio of revenue-generating space to equipped space, was 81% at the end of the fourth quarter of 2017, compared with 79% at the end of the fourth quarter of 2016 and 82% at the end of the third quarter of 2017.

Annual Review

Revenue for 2017 was €489.3 million, a 16% increase compared to 2016. Recurring revenue for 2017 was €462.5 million, a 16% increase compared to 2016, and accounted for 95% of total revenue in 2017, consistent with 2016. On an organic constant currency basis, revenue in 2017 was 15% higher than in 2016.

Gross profit was €298.8 million in 2017, a 15% increase compared to 2016. Gross profit margin was 61.1% in 2017, a decrease of 40 bps compared to 2016.

Sales and marketing costs for 2017 were €33.5 million, a 12% increase compared to 2016.

Adjusted EBITDA for 2017 was €221.0 million, a 16% increase compared to 2016. Adjusted EBITDA margin for 2017 was 45.2%, a decrease of 10 bps compared to 2016.

Net income was €42.2 million in 2017, compared to €39.9 million in 2016. Diluted earnings per share in 2017 were €0.59 on a weighted average of 71.6 million diluted shares, compared to €0.56 on a weighted average of 71.2 million diluted shares in 2016.

Adjusted net income was €43.4 million in 2017, a 19% increase compared to 2016. Adjusted earnings per diluted share were €0.61 on a weighted average of 71.6 million diluted shares, compared to €0.51 on a weighted average of 71.2 million diluted shares in 2016. A reconciliation from net income to Adjusted net income is provided in the tables attached to this press release.

Cash generated from operations, defined as cash generated from operating activities before interest and corporate income tax payments and receipts, was €209.0 million in 2017, an increase of 14% compared to 2016.

Capital expenditures, including intangible assets, were €256.0 million in 2017 compared to €250.9 million in 2016.

During 2017, Interxion opened 11,700 square metres of new Equipped Space4, and installed a net 12,600 Revenue Generating Square Metres4, increasing utilisation to 81% as of 31 December 2017 from 79% as of 31 December 2016.

Business Outlook

Interxion today is providing guidance for full year 2018:

Revenue   €553 million – €569 million Adjusted EBITDA €250 million – €260 million Capital expenditures (including intangibles) €335 million – €365 million  

Conference Call to Discuss Results

Interxion will host a conference call today at 8:30 a.m. EST (1:30 p.m. GMT, 2:30 p.m. 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 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 20 March 2018. 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 1468928.

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) Adjusted EBITDA; (ii) Recurring revenue; (iii) Revenue on an organic 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 an organic 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.

Our financial statements and results of operations presented herein include the financial results for Interxion Science Park, however equipped space, revenue generation space and other metrics derived from these measures exclude Interxion Science Park, which was acquired on 24 February 2017. We intend to include Interxion Science Park in equipped space, revenue generation space and other metrics derived from these measures within earnings materials for periods commencing on and after 1 January 2018.

Adjusted EBITDA, Recurring revenue and Revenue on an organic 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 – primarily the fair value at the date of grant to employees of equity awards, are 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 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 on-going operating performance.

In certain circumstances, we may also adjust for other items that management believes are not representative of our current on-going 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 on-going operational performance. These measures help us and our investors evaluate the on-going 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 €100.0 million revolving credit facility, our €100.0 million senior secured revolving facility and our 6.00% Senior Secured Notes due 2020.

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 believe that revenue growth is a key indicator of how a company is progressing from period to period and presenting organic 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 of 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 on-going operating performance.
• Adjustments related to provisions – these adjustments are made for adjustments in provisions that are not reflective of the on-going 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 on-going 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.

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 (loss) 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.

The company’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, amortisation and impairments, 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 49 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.

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

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 Equipped space and Revenue generating space (and other metrics derived from these measures) exclude Interxion Science Park, which was acquired on 24 February 2017.

5 We present organic constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of acquisitions and foreign currency rate fluctuations. For purposes of calculating Revenue on an organic constant currency basis, results from entities acquired during the current and comparison period are excluded. Also, 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 an organic constant currency basis, is as follows:

Three Months Ended 31 December 2017  

Year-on-year

 

Sequential

  Reported total revenue growth 18% 4.2% Add back: impact of foreign currency translation 1% 0.2% Reverse: impact of acquired ISP business -2% 0.1% Total revenue growth on an organic constant currency basis 17% 4.4%   Percentages may not add due to rounding  

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

        INTERXION HOLDING NV CONDENSED CONSOLIDATED INCOME STATEMENTS (in €'000 ― except per share data and where stated otherwise) (unaudited)   Three Months Ended Year Ended Dec-31 Dec-31 Dec-31 Dec-31 2017 2016 2017 2016   Revenue 129,881 110,487 489,302 421,788 Cost of sales (48,842 ) (43,022 ) (190,471 ) (162,568 ) Gross Profit 81,039 67,465 298,831 259,220 Other income 70 191 97 333 Sales and marketing costs (9,008 ) (7,640 ) (33,465 ) (29,941 ) General and administrative costs (45,103 ) (37,438 ) (164,051 ) (137,010 ) Operating income 26,998 22,578 101,412 92,602 Net finance expense (12,327 ) (9,513 ) (44,367 ) (36,269 ) Profit or loss before income taxes 14,671 13,065 57,045 56,333 Income tax expense (3,681 ) (3,027 ) (14,839 ) (16,450 ) Net income 10,990   10,038   42,206   39,883     Basic earnings per share(a): (€) 0.15 0.14 0.59 0.57 Diluted earnings per share(b): (€) 0.15 0.14 0.59 0.56     Number of shares outstanding at the end of the period (shares in thousands) 71,415 70,603 71,415 70,603 Weighted average number of shares for Basic EPS (shares in thousands) 71,343 70,538 71,089 70,349 Weighted average number of shares for Diluted EPS (shares in thousands) 71,900 71,407 71,619 71,215     As at Dec-31 Dec-31 Capacity metrics 2017 2016 Equipped space (in square meters) (c) 122,500 110,800

Revenue generating space (in square meters) (c)

99,800 87,200 Utilization rate 81 % 79 %   (a) Basic earnings per share are calculated as net income divided by the weighted average number of shares for Basic EPS.   (b) Diluted earnings per share are calculated as net income divided by the weighted average number of shares for Diluted EPS.  

(c) Equipped space and Revenue generating space (and other metrics derived from these measures) exclude Interxion Science Park, which was acquired on February 24, 2017.

          INTERXION HOLDING NV NOTES TO CONDENSED CONSOLIDATED INCOME STATEMENTS: SEGMENT INFORMATION (in €'000 ― except where stated otherwise) (unaudited)   Three Months Ended Year Ended Dec-31 Dec-31 Dec-31 Dec-31 2017 2016 2017 2016   Consolidated   Recurring revenue 123,422 103,429 462,516 399,958 Non-recurring revenue 6,459   7,058   26,786   21,830   Revenue 129,881   110,487   489,302   421,788   Net income 10,990 10,038 42,206 39,883 Net income margin 8.5 % 9.1 % 8.6 % 9.5 % Operating income 26,998 22,578 101,412 92,602 Operating income margin 20.8 % 20.4 % 20.7 % 22.0 % Adjusted EBITDA 59,111   49,280   220,961   190,876   Gross profit margin 62.4 % 61.1 % 61.1 % 61.5 % Adjusted EBITDA margin 45.5 % 44.6 % 45.2 % 45.3 %   Total assets 1,702,071 1,482,665 1,702,071 1,482,665 Total liabilities 1,105,343 933,896 1,105,343 933,896 Capital expenditure, including intangible assets(a) (69,659 ) (73,758 ) (256,015 ) (250,878 )   France, Germany, the Netherlands, and the UK   Recurring revenue 81,611 66,157 302,346 256,004 Non-recurring revenue 3,941   4,812   16,291   13,770   Revenue 85,552 70,969 318,637 269,774 Operating income 28,164 21,565 101,120 87,558 Operating income margin 32.9 % 30.4 % 31.7 % 32.5 % Adjusted EBITDA 48,121   38,222   174,818   148,191   Gross profit margin 64.4 % 62.0 % 62.4 % 62.6 % Adjusted EBITDA margin 56.2 % 53.9 % 54.9 % 54.9 %   Total assets 1,229,960 990,406 1,229,960 990,406 Total liabilities 267,751 202,330 267,751 202,330 Capital expenditure, including intangible assets(a) (47,406 ) (46,834 ) (174,818 ) (170,707 )   Rest of Europe   Recurring revenue 41,811 37,272 160,170 143,954 Non-recurring revenue 2,518   2,246   10,495   8,060   Revenue 44,329   39,518   170,665   152,014   Operating income 18,453 16,078 69,919 62,404 Operating income margin 41.6 % 40.7 % 41.0 % 41.1 % Adjusted EBITDA 26,056   22,740   99,665   88,195   Gross profit margin 66.7 % 65.9 % 66.1 % 65.9 % Adjusted EBITDA margin 58.8 % 57.5 % 58.4 % 58.0 %   Total assets 393,644 363,444 393,644 363,444 Total liabilities 77,505 73,613 77,505 73,613 Capital expenditure, including intangible assets(a) (18,737 ) (24,466 ) (69,832 ) (69,650 )   Corporate and other   Operating income (19,619 ) (15,065 ) (69,627 ) (57,360 ) Adjusted EBITDA (15,066 ) (11,682 ) (53,522 ) (45,510 )   Total assets 78,467 128,815 78,467 128,815 Total liabilities 760,087 657,953 760,087 657,953 Capital expenditure, including intangible assets(a) (3,516 ) (2,458 ) (11,365 ) (10,521 )    

(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 Year Ended Dec-31 Dec-31 Dec-31 Dec-31 2017 2016 2017 2016     Reconciliation to Adjusted EBITDA   Consolidated   Net income 10,990 10,038 42,206 39,883 Income tax expense 3,681   3,027   14,839   16,450   Profit before taxation 14,671 13,065 57,045 56,333 Net finance expense 12,327   9,513   44,367   36,269   Operating income 26,998 22,578 101,412 92,602 Depreciation, amortisation and impairments 29,069 24,244 108,252 89,835 Share-based payments 1,471 1,828 6,790 6,343 Income or expense related to the evaluation and execution of potential mergers or acquisitions: M&A transaction costs(2) 1,643 821 4,604 2,429 Items related to terminated or unused data centre sites: Items related to sub-leases on unused data centre sites(3) (70 ) 47 (97 ) (95 ) Increase/(decrease) in provision for site restoration(4) -   (238 ) -   (238 ) Adjusted EBITDA(1) 59,111   49,280   220,961   190,876     France, Germany, the Netherlands, and the UK     Operating income 28,164 21,565 101,120 87,558 Depreciation, amortisation and impairments 19,938 16,511 72,721 60,128 Share-based payments 89 337 1,074 838 Items related to terminated or unused data centre sites: Items related to sub-leases on unused data centre sites(3) (70 ) 47 (97 ) (95 ) Increase/(decrease) in provision for site restoration(4) -   (238 ) -   (238 ) Adjusted EBITDA(1) 48,121   38,222   174,818   148,191     Rest of Europe   Operating income 18,453 16,078 69,919 62,404 Depreciation, amortisation and impairments 7,544 6,554 29,365 25,371 Share-based payments 59   108   381   420   Adjusted EBITDA(1) 26,056   22,740   99,665   88,195     Corporate and Other   Operating income (19,619 ) (15,065 ) (69,627 ) (57,360 ) Depreciation, amortisation and impairments 1,587 1,179 6,166 4,336 Share-based payments 1,323 1,383 5,335 5,085 Income or expense related to the evaluation and execution of potential mergers or acquisitions: M&A transaction costs(2) 1,643   821   4,604   2,429   Adjusted EBITDA(1) (15,066 ) (11,682 ) (53,522 ) (45,510 )  

(1) “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.

 

(2) “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.”

 

(3) “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.’

 

(4) “Increase/(decrease) in provision for site restoration” represents income related to the termination of data centre sites. This item is treated as ‘Other income.’

      INTERXION HOLDING NV CONDENSED CONSOLIDATED BALANCE SHEET (in €'000 ― except where stated otherwise) (unaudited)   As at Dec-31 Dec-31 2017 2016 Non-current assets Property, plant and equipment 1,342,471 1,156,031 Intangible assets 60,593 28,694 Goodwill 38,900 - Deferred tax assets 24,470 20,370 Other investments 3,693 1,942 Other non-current assets 13,674   11,914   1,483,801 1,218,951 Current assets Trade receivables and other current assets 179,786 147,821 Cash and cash equivalents 38,484   115,893   218,270   263,714   Total assets 1,702,071   1,482,665     Shareholders’ equity Share capital 7,141 7,060 Share premium 532,242 519,604 Foreign currency translation reserve 2,948 9,988 Hedging reserve, net of tax (169 ) (243 ) Accumulated profit 54,566   12,360   596,728 548,769 Non-current liabilities Other non-current liabilities 15,080 11,718 Deferred tax liabilities 21,336 9,628 Borrowings 724,052   723,975   760,468 745,321 Current liabilities Trade payables and other current liabilities 229,878 171,399 Income tax liabilities 6,237 5,694 Borrowings 108,760   11,482   344,875   188,575   Total liabilities 1,105,343   933,896   Total liabilities and shareholders’ equity 1,702,071   1,482,665         INTERXION HOLDING NV NOTES TO THE CONDENSED CONSOLIDATED BALANCE SHEET: BORROWINGS (in €'000 ― except where stated otherwise) (unaudited)   As at Dec-31 Dec-31 2017 2016 Borrowings net of cash and cash equivalents   Cash and cash equivalents 38,484   115,893     6.00% Senior Secured Notes due 2020(a) 628,141 629,327 Mortgages 53,640 54,412 Financial leases 51,127 51,718 Borrowings under our Senior Revolving Facility(b) 99,904   -   Borrowings excluding Senior Secured Revolving Facility deferred financing costs 832,812   735,457   Senior Secured Revolving Facility deferred financing costs(c) (204 ) (426 ) Total borrowings 832,608   735,031           Borrowings net of cash and cash equivalents 794,124   619,138     (a) €625 million 6.00% Senior Secured Notes due 2020 include a premium on additional issuances and are shown after deducting underwriting discounts and commissions, offering fees and expenses.   (b) On 28 July 2017, we amended the terms of our €75.0 million Senior Revolving Facility Agreement dated 9 March 2017 to increase the amount available under the facility to €100.0 million and to add a second extension option enabling us to extend the maturity of this facility to 31 December 2018. Also, on 31 July 2017, we extended the maturity of our €100.0 million Senior Secured Revolving Agreement dated 17 June 2013, from 3 July 2018 to 31 December 2018.   (c) Deferred financing costs of €0.2 million as of 31 December 2017 were incurred in connection with the €100 million Senior Secured Revolving Facility.           INTERXION HOLDING NV CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in €'000 ― except where stated otherwise) (unaudited)   Three Months Ended Year Ended Dec-31 Dec-31 Dec-31 Dec-31 2017 2016 2017 2016     Net income 10,990 10,038 42,206 39,883 Depreciation, amortisation and impairments 29,069 24,244 108,252 89,835 Provision for onerous lease contracts - - - (1,533 ) Share-based payments 1,738 1,701 5,750 6,105 Net finance expense 12,327 9,513 44,367 36,269 Income tax expense 3,681   3,027   14,839   16,450   57,805 48,524 215,414 187,009 Movements in trade receivables and other assets (17,013 ) (7,480 ) (30,667 ) (11,126 ) Movements in trade payables and other liabilities 9,473   9,127   24,266   7,505   Cash generated from / (used in) operations 50,265 50,171 209,013 183,388 Interest and fees paid(a) (1,536 ) (2,224 ) (41,925 ) (36,003 ) Interest received 3 67 143 136 Income tax paid (3,241 ) (2,638 ) (11,985 ) (8,124 ) Net cash flows from / (used in) operating activities 45,491 45,376 155,246 139,397 Cash flows from / (used in) investing activities Purchase of property plant and equipment (67,198 ) (72,741 ) (247,228 ) (241,958 ) Financial investments - deposits 13 (25 ) (324 ) 1,139 Acquisition Interxion Science Park B.V. - - (77,517 ) - Purchase of intangible assets (2,461 ) (1,017 ) (8,787 ) (8,920 ) Loans provided (423 ) - (1,764 ) (1,942 ) Proceeds from sale of financial asset -   -   -   281   Net cash flows from / (used in) investing activities (70,069 ) (73,783 ) (335,620 ) (251,400 ) Cash flows from / (used in) financing activities Proceeds from exercised options 199 112 6,969 6,332 Proceeds from mortgages 9,950 - 9,950 14,625 Repayment of mortgages (8,804 ) (2,215 ) (10,848 ) (4,031 ) Proceeds from revolving credit facilities 24,746 - 129,521 - Repayment Revolving facilities - - (30,000 ) - Proceeds Senior secured notes at 6% - (538 ) - 154,808 Financial lease obligation (995 ) - (995 ) - Interest received at issue of additional notes -   -   -   2,225   Net cash flows from / (used in) financing activities 25,096 (2,641 ) 104,597 173,959 Effect of exchange rate changes on cash (238 ) 843   (1,632 ) 251   Net increase / (decrease) in cash and cash equivalents 280 (30,205 ) (77,409 ) 62,207 Cash and cash equivalents, beginning of period 38,204   146,098   115,893   53,686   Cash and cash equivalents, end of period 38,484   115,893   38,484   115,893    

(a) Interest and fees 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 INCOME RECONCILIATION (in €'000 ― except per share data and where stated otherwise) (unaudited)   Three Months Ended Year Ended Dec-31 Dec-31 Dec-31 Dec-31 2017 2016 2017 2016     Net income - as reported 10,990 10,038 42,206 39,883   Add back + M&A transaction costs 1,643   821   4,604   2,429   1,643 821 4,604 2,429 Reverse - Profit on sale of financial asset - - - (281 ) - Adjustment of financial lease obligation - - - (1,410 ) - Increase/(decrease) in provision for site restoration - (238 ) - (238 ) - Deferred tax asset adjustment - (809 ) - (809 ) - Interest capitalised (452 ) (941 ) (3,057 ) (3,362 ) (452 ) (1,988 ) (3,057 ) (6,100 )   Tax effect of above add backs & reversals (298 ) 89 (387 ) 363                 Adjusted net income 11,883   8,960   43,366   36,575     Reported basic EPS: (€) 0.15 0.14 0.59 0.57 Reported diluted EPS: (€) 0.15 0.14 0.59 0.56   Adjusted basic EPS: (€) 0.17 0.13 0.61 0.52 Adjusted diluted EPS: (€) 0.17 0.13 0.61 0.51             INTERXION HOLDING NV Status of Announced Expansion Projects as at 7 March 2018 with Target Open Dates after 1 October 2017  

CAPEX (a)(b)

Equipped Space (a)

Market   Project   (€ million)   (sqm)     Target Opening Dates   Amsterdam AMS8: Phases 3 - 6 63 5,300 4Q 2018 - 1Q 2019 (c)   Brussels BRU2: New data centre 3 1,000 1Q 2018   Copenhagen CPH2: Phases 3 - 5 18 1,500 2Q 2018 - 1Q 2019 (d)   Dublin DUB3: Phases 3 - 4 17 1,200 3Q 2018   Frankfurt FRA11: Phases 1 - 4 New Build 95 4,800 4Q 2017 - 2Q 2018 (e)   Frankfurt FRA13: Phases 1 - 2 New Build 90 4,900 4Q 2018 - 1Q 2019 (f)   London LON3: New Build 35 1,800 3Q 2018   Madrid MAD3: New Build 44 2,500 2Q 2019 (g)   Marseille MRS2: Phase 2 - 3 47 2,600

2Q 2018 - 2Q 2019 (h)

  Paris PAR7.2: Phase B (cont.) - C 47 2,500 2Q 2018 -1Q 2019 (i)   Stockholm STO5: Phases 1 (cont.) -3 23 1,400 4Q 2017 - 1Q 2019 (j)   Vienna VIE2: Phase 7 - 9 94 3,600 4Q 2017 - 3Q 2019 (k)   Zurich ZUR1: Phase 4 2 700 4Q 2017   Total € 578 33,800   (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) CPH2: Phases 3 and 4 (900 sqm total) are scheduled to open in 2Q 2018; phase 5 (600 sqm) is scheduled to open in 1Q 2019.   (e) FRA11: Phases 1 and 2 (1,200 square metres each) became operational in 4Q 2017; phases 3 & 4 (1,200 square metres each) are scheduled to become operational in 2Q 2018.   (f) FRA13: Phase 1 (2,300 square metres) is scheduled to become operational in 4Q 2018; phase 2 (2,600 square metres) is scheduled to become operational in 1Q 2019.   (g) MAD3: Capex total for MAD3 include land purchase price.   (h) MRS2: 700 square metres is scheduled to become operational in 2Q 2018; 1,900 square metres is scheduled to become operational in 2Q 2019.   (i) PAR7.2: Phase B (cont.) (500 sqm) is scheduled to become operational in 2Q 2018; Phase C (2,000 sqm) is scheduled to become operational in 1Q 2019.   (j) STO5: 200 sqm became operational in 4Q 2017; 400 sqm is scheduled to become operational in 2Q 2018; 800 sqm is scheduled to become operational in 1Q 2019.   (k) VIE2: 300 square metres became operational in 4Q 2017; 700 square metres is scheduled to become operational in 2Q 2018; 600 square metres is scheduled to become operational in 3Q 2018; 300 square metres is scheduled to become operational in 4Q 2018, 700 sqm scheduled to open in 2Q 2019, and 1,000 sqm scheduled to open in 3Q 2019.

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Interxion Holding NVInvestor Relations:Jim Huseby, +1 813-644-9399IR@interxion.com