For the year ended 31 December 2013:
- Total revenue of €97.4m, improving 3% from 2012
- Gross profit of €71.0m, increasing 10% from 2012
- Gross margin of 72.9%, increasing from 68.0% in 2012
- Adjusted EBITDA of €25.4m, improving from €12.9m in 2012
- Proxy Cash Flow of €(2.5)m, improving from €(14.9)m in 2012
- Net loss of €(6.3)m, improving from €(29.8)m in 2012
- 101 new customers, compared to 118 in 2012
- 134 new buildings on-net, declining from 279 in 2012
For the quarter ended 31 December 2013:
- Total revenue of €24.0m, declining 2% from 4Q 2012
- Gross profit of €17.7m, improving 2% from 4Q 2012
- Gross margin of 74.4%, improving from 71.2% in 4Q 2012
- Adjusted EBITDA of €7.4m, improving from €5.0m in 4Q 2012
- Proxy Cash Flow of €(3.3)m, compared to €(0.0)m in 4Q 2012
- 31 new customers added, compared to 33 in 4Q 2012
- 35 new buildings brought on-net, with 1,046 total buildings connected
London, UNITED KINGDOM – 24 February 2014 euNetworks Group Limited, a unique Western European provider of bandwidth infrastructure services, announced results for the three months ended and full year ending 31 December 2013. The Group reported a strong financial performance for the year, doubling adjusted EBITDA1 and significantly improving gross profit and proxy cash flow. For the 4Q 2013 compared to 4Q 2012, the Group delivered improved gross profit and adjusted EBITDA on continued flat revenue performance. As with 2Q 2013 and 3Q 2013, churn offset new sales.
Gross margin for the year was 72.9%, increasing from 68.0% in 2012 and improved from 71.2% in 4Q 2012 to 74.4% in 4Q 2013. Adjusted EBITDA for the full year was €25.4m, growing 97% from 2012. For 4Q 2013, adjusted EBITDA reached €7.4m, growing 48% from €5.0m in 4Q 2012 and 17% from 3Q 2013. For 4Q 2013, adjusted EBITDA included a one-off benefit of €0.9m from a reduction in provisions for the costs of returning properties to their original condition at the end of their lease terms. Excluding this one-off benefit, adjusted EBITDA was €24.5m for the full year and €6.4m in 4Q 2013. Continued focus on high gross margin sales and cost management will result in further performance improvement over time.
“These full year and fourth quarter results are indicative of the improving operating performance of the business and steady increase in demand for bandwidth services from our customers,” said Brady Rafuse, Chief Executive Officer of euNetworks. “Churn impacted revenue performance through the year, but remained steady at 2.3% in 4Q 2013, similar to 3Q 2013 and improved from 2.8% in 2Q 2013. We implemented a targeted customer account strategy in 2H 2013 to work to lower churn and this remains a priority moving into 2014.”
“While managing our key financial metrics, we also invested in network development in 2013 to compound our growth,” said Rafuse. “Discretionary capital expenditure in 2013 was in line with our investment in 2012, but allocated more heavily in 3Q 2013 and 4Q 2013. This investment enabled additional connections to high bandwidth consuming data centres. In addition, a number of strategic network development projects were launched. These included the new fibre based London to Stockholm ultra low latency network route for euTrade, the addition of a London to Moscow route, and the London metropolitan fibre expansion. These and other projects will deliver more bandwidth infrastructure services to grow in-place and new customers in the future.”
“The capital spending increase in 3Q 2013 and 4Q 2013 was reflected in our proxy cash flow performance in 2H 2013, reducing proxy cash flow to €(2.4)m in 3Q 2013 and €(3.3)m in 4Q 2013. Overall our proxy cash flow position has significantly improved over the last year, reflecting the benefits of continued scaling and progress towards our goal of having a lean production system. Also, the drawdown of €15m for investment following securing debt funding in May.”
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