euNetworks Reports Second Quarter and First Half 2013 Results

For the quarter ended 30 June 2013:

  • Recurring revenue of €24.5m, improving 6% from 2Q 2012
  • Gross profit of €17.7m, improving 14% from 2Q 2012
  • Gross margin of 72.0%, improving from 67.1% in 2Q 2012
  • Adjusted EBITDA of €6.0m, improving from €2.5m in 2Q 2012
  • Proxy Cash Flow of €1.1m, improving from €(5.7)m in 2Q 2012
  • 20 new customers added, compared to 29 in 2Q 2012
  • 40 new buildings brought on-net, with 985 total buildings connected

For the half year ended 30 June 2013:

  • Total revenue of €49.3m, improving 7% from 1H 2012
  • Gross profit of €35.7m, increasing 15.4% from 1H 2012
  • Gross Margin of 72.2%, increasing from 66.8% in 1H 2012
  • Adjusted EBITDA of €11.7m, improving from €4.6m in 1H 2012
  • Proxy Cash Flow of €3.2m, improving from €(11.7)m in 1H 2012
  • Net loss of €(3.5)m, improving from €(18.5)m in 1H 2012
  • 45 new customers, compared to 58 in 1H 2012
  • 73 new buildings on-net, declining from 157 new in 1H 2012

London, UNITED KINGDOM – 12 August 2013 euNetworks Group Limited, a unique Western European provider of bandwidth infrastructure services, announced results for the three months ended 30 June 2013 and for the first half of 2013. The Group reported steady improvement, with strong performance in gross margin, Adjusted EBITDA1 and proxy cash flow.

Recurring revenue increased 6% year over year, to €24.5m in 2Q 2013 and by 7% from 1H 2012 to 1H 2013. Adjusted EBITDA was €6.0m in 2Q 2013, improving 140% from 2Q 2012 and 5% from 1Q 2013. For 1H 2013, Adjusted EBITDA was €11.7m, increasing from €4.6m in 1H 2012.

Gross margin for the quarter was 72.0%, increasing from 67.1% in 2Q 2012. Year on year improvement reflected the Group’s continued focus on high margin new sales. Gross margin on new sales were between 78% and 82% in recent months, reaching 80% for the 1H 2013. Discretionary capital investment was higher in 2Q 2013 than 1Q 2013, but still lower than investment levels in 2012. euNetworks plans to increase capital investment over the balance of the year, utilising the debt raised on 8 May 2013. This will further enable connections to data centres and strategic network developments, delivering more bandwidth infrastructure services to growing in-place and new customers in the future.

“Our proxy cash flow position significantly improved through the last year, reflecting the benefits of the continued scaling and progress toward our goal of having a lean production system,” said Brady Rafuse, Chief Executive Officer of euNetworks. “With capital investment set to increase through the remainder of the year, this will have an effect on our proxy cash flow, but this investment is being undertaken to grow the business organically.” “As well as driving the business forward commercially and operationally towards scale, it has also been a busy quarter for corporate activity. The 2013 Convertible Bond matured on 1 April 2013, with 98.4% of the Convertible Bonds converted to shares on 3 April. A consolidation of 50 existing shares into one ordinary share was approved by shareholders on 24 April and completed on 31 May, signifying a first step in simplifying the Company’s capital structure.

Finally, we secured a debt funding commitment on 8 May, with those funds now being invested to stimulate organic growth, as I have mentioned above, and supporting our effort to grow inorganically should opportunities surface.”


About euNetworks

euNetworks is a bandwidth infrastructure company, owning and operating 17 fibre based metropolitan networks connected with a high capacity intercity backbone covering 53 cities in 17 countries. The company leads the market in data centre connectivity, directly connecting over 515 today. euNetworks is also a leading cloud connectivity provider, directly connecting to all key cloud platforms with access to additional platforms. The company offers a targeted portfolio of metropolitan and long haul services including Dark Fibre, Wavelengths, and Ethernet. Wholesale, finance, content, media, data centre and enterprise customers benefit from euNetworks’ unique inventory of fibre and duct based assets that are tailored to fulfil their high bandwidth needs.

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