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April 3, 2006

IXEurope PLC Admission to trading on AIM


IX Europe PLC Admission to trading on AIM
Expected market capitalisation of �38 million
Placing of 45.45 million Ordinary Shares raising
�10 million for the Company

IX Europe plc ("IXEurope", “the Group” or "the Company"), one of Europe's largest and fastest growing independent datacentre outsourcers, has today published an AIM Admission Document for its flotation on the London Stock Exchange. The Company is raising �10 million through an institutional placing at 22p which values IXEurope at a market capitalisation of approximately �38 million. The Placing has been underwritten by Investec and trading in IXEurope shares is expected to begin on Friday 7 April.

IXEurope provides datacentre capacity and service to enterprise, Internet and telecoms customers such as Merrill Lynch, Capgemini, Google (a member of the IXEurope internet exchange in Zurich) and France Telecom. Launched in 1999, IXEurope has achieved rapid customer growth, with annual revenue growth of over 30 per cent. for the past six years . The Company operates ten IXDatacentres in four European countries: the UK, Germany, France and Switzerland. IXEurope provides a range of datacentre services including co-location space, dedicated suites, network services, technical support and business continuity services.

The two founders, Guy Willner and Christophe de Buchet continue to run the Company as Chief Executive Officer and Chief Operating Officer respectively. The Chairman, Sir Anthony Cleaver, who is also Chairman of the recently floated recruitment group SThree plc and the Nuclear Decommissioning Authority, was an early stage investor in IXEurope. Karen Bach, Chief Financial Officer, joined in June 2004 from US outsourcer EDS, her most recent position being Finance Director of EDS France.

Placing details:


  • The Company has raised �10 million (gross through a placing to institutions of 45.45 million new ordinary shares at 22 pence per share.
  • IXEurope is expected to have a market capitalisation of approximately �38 million on Admission.
  • The Group intends to use the proceeds of the placing for the repayment of a �5.0 million bridging loan and shareholder loans of �1.9 million. Further proceeds will contribute to the fit out of a further large planned datacentre (London 4) to the West of London. The total cost of London 4 is estimated at approximately �15 million and will be phased in line with customer demand.
  • Trading is expected to commence on AIM on Friday 7 April 2006 (Ticker symbol IXE).
  • Investec, the nominated adviser and broker to IXEurope, has underwritten the Placing and placed all the shares with institutional investors.


Business Summary


  • * IXEurope currently operates ten datacentres in four European countries (the UK, Germany, France and Switzerland). This provides IXEurope with exposure to more than 59 per cent. of the European IT services market and also offers exposure to the different stages of maturity of these markets.
  • IXEurope's customer base comprises over 400 clients in the enterprise, internet and telecoms sectors. Clients include Merrill Lynch, Capgemini, Google and France Telecom.
  • IXEurope offers customers 99.999 per cent. service level agreements which is equivalent to a maximum of 5 minutes and 23 seconds of ��down-time'', planned or unplanned, in any twelve month period.
  • In 2005 revenue growth continued to be strong, rising by 45 per cent. to �22.5 million. The organic growth rate from existing datacenters was 39 per cent. The Company achieved �1.8m of underlying EBITDA over the same period, its first full year of positive EBITDA.
  • Recurring revenues from long term contracts represented over 85 per cent. of the Group's 2005 revenue.
  • Gross profit rose by 59 per cent. in 2005 with gross margins rising to 44 per cent. in 2005, from 41 per cent. in 2004 and 36 per cent in 2003.
  • IXEurope experienced a low churn rate of approximately 3 per cent. of revenues in 2005.
  • As at 31 Dec. 2005, 79 per cent. of the total 16,800 square meters of net fitted out capacity was contracted and the Company has a further 7,900 square meters which can be fitted out within the existing datacenter portfolio.
  • The business has a strong management team, with the two co-founders, Guy Willner and Christophe de Buchet as Chief Executive Officer and Chief Operating Officer. Many senior managers have also been with the business since shortly after launch in 1999.


Guy Willner, Chief Executive Officer, commenting on the Admission, said:

“We are delighted to have achieved the successful IPO of IXEurope and look forward to being a quoted company. We believe that our seven-year track record, our market leading position, and the growth prospects for the business all contributed to the support shown by many institutional investors.

The float will enable us to invest in further datacentre capacity in response to significant demand. Our proposed fourth London datacentre will also be our largest to date and will be looking at acquiring further datacentres or datacentre operators.”

3 April 2006

For further details

IXEurope plc
Guy Willner, Chief Executive
Karen Bach, Chief financial Officer
020 7689 1400

Investec Investment Banking
Chris Godsmark/Andrew Pinder
020 7597 5000

College Hill
Adrian Duffield/Corinna Dorward
020 7457 2020


The contents of this communication, which have been prepared by and are the sole responsibility of IXEurope plc, have been approved by Investec Investment Banking, a division of Investec Bank (UK) Limited ("Investec") solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000. Investec, which is authorised and regulated by the Financial Services Authority, is acting for IXEurope plc in connection with the proposed admission of the Company to trading on the AIM market of the London Stock Exchange plc and is not acting for any person other than IXEurope plc and will not be responsible to any other person than IXEurope plc for providing the protections afforded to its customers or for providing advice to any other person in connection with the proposed admission to trading.

This announcement shall not, and no part of it shall, constitute or form part of any offer for sale or subscription, or any solicitation of any such offer, nor shall it, or any part of it, form the basis of or be relied upon in connection with any contract or commitment whatsoever. Any eventual acquisition of, or application for, shares in IXEurope plc should be made solely on the basis of information contained in a formal admission document relating to IXEurope plc issued in connection with its proposed admission to trading. The price and value of, and income from, shares may go down as well as up. Persons needing advice should consult a professional adviser.


1. Introduction
IXEurope is one of Europe's largest and fastest growing datacentre outsourcers, focused on providing capacity and service to enterprise, Internet and telecoms customers. Launched in 1999, IXEurope has demonstrated rapid customer growth and year on year revenue growth in excess of 30 per cent. IXEurope has ten IXDatacentres in four European countries: the UK, Germany, France and Switzerland. The Group provides a wide range of datacentre services including co-location space, dedicated suites, network services, technical support and business continuity services.

The Directors believe that the Group has established market leadership as an independent provider of high quality datacentre capacity to its customers. This is demonstrated by the customer base which comprises over 400 enterprise, Internet and telecoms companies and also by the recent operational and financial performance of the Group. IXEurope has successfully increased occupancy rates at its datacentres with more than 79 per cent. of net datacentre space occupied at 31 December 2005 (where net datacentre space is defined as fitted out datacentre space which is available to house customer IT and telecoms equipment). In addition the Group has plans to increase by 45 per cent. the amount of net datacentre space at existing sites by expanding its infrastructure. Approximately 85 per cent. of total Group revenue in 2005 was recurring revenue from long term customer contracts (typically one to five years). The Group has a stable customer base and has experienced a low churn rate (see Glossary) of approximately 3 per cent. during the year ended 31 December 2005.

The Directors believe that one of the key factors contributing to the success of IXEurope has been its stable and experienced management team and the support of long term shareholders. The Group was founded by Guy Willner, Chief Executive Officer, and Christophe de Buchet, Chief Operating Officer, and Sir Anthony Cleaver has been Chairman and an investor since shortly after the Group's foundation. This senior management team positioned the Group so that it was able to continue to grow its revenues during the collapse of the Internet market which began in the year 2000. The two major financial investors in the Group, European Acquisition Capital and BA Capital Partners Europe, have led the funding of the business since 1999 and 2000 respectively. Both European Acquisition Capital and BA Capital Partners Europe have agreed not to sell any of their shares at Admission and for the following 12 months thereafter.

IXEurope's proven business model is based on securing long term customer contracts in order to provide a growing base of recurring revenues and to leverage a relatively fixed overhead cost base. The combination of increasing datacentre occupancy rates and low revenue churn has delivered strong EBITDA margins and cash generation in the Group's more mature datacentres. The majority of capital expenditure on fixed assets has been related to the creation of new datacentre space to generate revenue growth. IXEurope achieved 45 per cent. revenue growth in the year ended 31 December 2005 (39 per cent. excluding acquisitions), 59 per cent. gross profit growth with improving gross margins and, for the first time in the history of IXEurope, positive full year EBITDA.

The Placing will provide further capital in order to continue to exploit the growth in the market for high-end datacentre services. In particular, the Group is planning to spend approximately �15 million for capital expenditure to fit out a substantial new-build datacentre site to the west of London. The Group has identified an appropriate location and is in the advanced stages of negotiations, although there is no guarantee that these will be successfully concluded. The Directors also intend to seek other value-enhancing acquisitions, either of individual datacentres or datacentre operators and are currently considering one such opportunity outside the UK. The Directors believe that this market consolidation could provide additional benefits to IXEurope in terms of synergy savings and consequent margin improvements.

2. History and background
IXEurope was founded by Guy Willner and Christophe de Buchet in 1998 after they identified the opportunity to create an independent provider of datacentre space for a variety of enterprise, Internet and telecoms customers. In early 1999, Sir Anthony Cleaver, previously Chairman of General Cable plc, agreed to join the Group as Chairman and also became an early stage co-investor in IXEurope along with Alan Tawil-Kummerman, a Swiss-based technology investor. IXEurope raised its first round funding in July 1999 from European Acquisition Capital, a private equity provider, in order to secure the lease on its first datacentre site in the City of London, which subsequently opened later in that year. The Directors believe that the stable and experienced management team and the financial backing of European Acquisition Capital and BA Capital Partners Europe helped IXEurope to grow rapidly during the extremely difficult external telecommunications and technology market conditions from late 2000 to 2003. In particular, IXEurope developed a business model which concentrated on a differentiated quality of service proposition and a cost-conscious and phased approach to investment in capacity at existing and new datacentre sites.

Key highlights in the history of IXEurope include:

  • 1999 - First datacentre opened in London City (London 1);
  • 2000 - Datacentres opened in Frankfurt (Frankfurt 1), in Zurich (Zurich 1); in Paris and Heathrow (London 2);
  • 2000 - ISO9001:2000 accreditation achieved for the first time;
  • 2001 - Datacentres opened in Du�sseldorf and Zurich (Zurich 2);
  • 2002 - Number 1 Sunday Times techTrack 100; won Best Co-location provider award from ISPA; signed 200th customer;
  • 2003 - Number 25 Sunday Times techTrack 100; 2004 - Acquisition of Geneva datacentre;
  • 2004 - Karen Bach appointed as Chief Financial Officer;
  • 2005 - Acquisition of datacentres in West London (London 3) and Frankfurt (Frankfurt 2) and acquisition of GIC, a provider of business continuity services, in Germany; and
  • 2005 - IXEurope achieves positive full year EBITDA for the first time.


3.Key strengths
The Directors believe that the Group has a number of attributes which, collectively, differentiate it in the marketplace and provide investors with a high degree of financial visibility. These include the following:


  • it is one of Europe's largest and fastest growing datacentre outsourcers;
  • it currently operates 10 datacentres in four European countries (the UK, Germany, France and Switzerland). This provides IXEurope with access to more than 59 per cent. of the overall European IT services market and also offers exposure to the different stages of maturity of each of these markets. The Directors believe that certain other European countries, including France and Germany, will follow the UK and Switzerland in terms of increasing levels of customer demand. As a result, the Group is well placed to exploit future market growth in such countries;
  • IXEurope's datacentres are all at different stages in their occupancy profiles and, while some of the datacentres are operating at close to full capacity, a number have the potential to expand further;
  • the Group benefits from a strong management team with a seven year track record: five of the directors of IXEurope (Guy Willner, Christophe de Buchet, Sir Anthony Cleaver, Richard Mead and Erick Rinner) have been with, and played key roles in the development of, IXEurope since its operational launch in 1999. In addition, Karen Bach joined the Group from EDS, the IT outsourcer, in June 2004. Alongside the current executive management team, there are several senior IXEurope managers who have also worked for the Group throughout its development;
  • both European Acquisition Capital and BA Capital Partners Europe have continued to support IXEurope financially and have committed not to sell shares in IXEurope at Admission and for the following 12 months;
  • the Directors believe that IXEurope provides high quality customer service, which includes offering 99.999 per cent. service level agreements. This quality of service has been recognised since 2000 with the ISO9001:2000 accreditation;
  • a customer base which comprises over 400 enterprise, Internet and telecoms companies. Typically these customers are large organisations seeking co-location space, dedicated suites, network services and technical support. The customer base includes many well-known enterprises, including Merrill Lynch, Capgemini, AVIS and AOL;
  • the European datacentre market is growing and recent market trends have remained positive, including strong demand for datacentre space from enterprise customers which the Directors believe has been driven by the continued increase in broadband Internet penetration in European markets, the trend towards outsourcing by large enterprises and increased financial services and other regulation;
  • the Group has a proven cash generative model for its individual datacentres. Once a datacentre is established, the overhead costs remain relatively fixed at both a datacentre and country level, with the consequent result that EBITDA margins can be improved substantially with the growth in revenue. The Directors believe that the success of the Group's longest established datacentres can be replicated with new sites in the future; and
  • approximately 85 per cent. of total Group revenue in 2005 was recurring revenue from long term customer contracts, which are typically one to five years. The Group has experienced a low churn rate of approximately 3 per cent. during 2005.


4. The European datacentre market
The European datacentre market is continuing to experience strong revenue growth as it matures and as available capacity reduces. The revenues in 16 major European markets surveyed by Broadgroup in 2005 are expected to more than double to �745 million from 31 December 2003 to 31 of December 2007 with revenue growth over this period being estimated to grow by more than 20 per cent. per annum in each of the years ended 31 December 2005, 2006 and 2007. A number of market commentators, such as CB Richard Ellis, have highlighted a recent and continuing tightening in the supply of new European datacentre capacity. The Directors believe that both recent and forecasted market trends are supported by the Group's own current experience.

History of the European datacentre market

The European datacentre market emerged in the mid 1990s following the rapid growth in the competitive telecoms and Internet service provider markets. In the first phase of growth from the mid to late 1990s, datacentres were predominantly marketed as co-location space for telecommunications and Internet companies that were seeking to house switching equipment and as a way to provide easy access to interconnection facilities with other operators.

In the late 1990s the market for Internet-based business models grew significantly and many companies sought datacentre space to house equipment in order to provide web-hosting capacity and online application services. Given a strong supply of financing for such services in the period from 1998 to 2001, many start-up companies, including IXEurope, opened new datacentre space in order to meet the anticipated strong demand for capacity. In addition, many telecommunications companies also built datacentres in key European cities in order to provide value-added services to their enterprise customers. During the extremely difficult telecommunications and technology market conditions from late 2000 to 2003, several of these datacentre providers lost their projected customer base and these and other businesses were consequently forced to exit the market for the provision of these services. A consolidation phase followed, where capacity was either removed from the market or was acquired by independent datacentre operators.

In the most recent phase of market development, from circa 2003 onwards the demand for datacentre capacity across Europe has begun to increase substantially. This has been typically driven by the demand for hosting space from a variety of enterprise and Internet customers.

Market Drivers
Demand for datacentre capacity has increased for a number of reasons, including the following:


  • financial services: large financial services companies such as banks and insurance businesses are increasingly seeking larger and more resilient datacentre facilities to provide primary hosting, business continuity and disaster recovery services. This trend has been fuelled by recent banking regulation, including the Basel II Capital Accord and the US Sarbanes-Oxley Act 2002, both of which require financial services companies to provide back-up facilities in remote locations
  • rather than physically alongside primary hosting capacity. The result has been the growth of alternative remote datacentre locations away from the existing historical hubs, for example the trend towards siting capacity to the west of London rather than in Docklands;
  • business continuity and disaster recovery: in addition to the demands of specific regulation, the boards of many enterprises are making investments in closely monitoring, assessing and upgrading their security, resilience, back-up and disaster recovery capabilities;
  • the Internet: broadband penetration continues to grow across Europe. Broadband penetration overtook narrowband penetration in several major European markets (for example the UK) in 2005 and is widely forecast to grow further for at least the next couple of years. In addition, broadband network speeds have typically increased from 500 kilobits per second to 2 megabits per second or more. The result has been the combination of increasingly sophisticated and bandwidth-hungry Internet applications for residential and business customers and, in addition, the increasing use of the Internet for services such as retailing, interactive media, gambling, gaming and business services; and
  • enterprise outsourcing and multi-sourcing: the Directors believe that enterprise customers have sought to outsource datacentre requirements to third parties in order both to reduce their initial capital investment and increase the quality of their IT infrastructure. The experience of the Directors is that enterprises are also increasingly seeking to ��multi-source'' from a variety of suppliers, including for datacentre capacity, in order to secure the highest quality standards and service level agreements.


Pricing trends
The Directors of IXEurope believe that the increasing demand for datacentre services combined with the reduction in available capacity is having a positive impact on industry pricing trends. The combination of typically long term customer contracts and a lack of price de���ation have, in the view of the Directors, created a positive outlook for the datacentre services market.

The overall market for larger European datacentre sites can be split into the following broad categories:


  • Multi-site independent operators
  • Single site operators: the operators of single site datacentres continue to occupy a significant segment of the market;
  • Telecoms operators: a variety of telecoms operators continue to own and operate datacentres. These include incumbent operators in most European markets and also alternative carriers which have either built datacentre capacity, such as COLT Telecom plc, or have acquired datacentres or companies with datacentre capacity. For example, in 2004 the UK subsidiary of Telstra acquired PSINet (UK) Limited, including a substantial datacentre facility in London Docklands; and
  • Diversified IT Services companies: this category includes IT outsourcers such as EDS, Inc. and IBM Corporation who provide datacentre services from in-house facilities as part of a much broader package of outsourced IT provision.


Whereas telecoms operators and IT outsourcers may be competitors in some markets, some outsource a proportion of their datacentre requirements and many are existing customers of IXEurope.

5.Customer proposition
The Group provides customers with an independent, outsourced, datacentre solution which focuses on high quality customer service. The Group offers customers substantial cost benefits when compared with the initial capital investment required to establish and fit out their own, in-house, datacentre space. Once signed up, customers can take advantage of IXEurope's proven reputation for service quality, which includes 99.999 per cent. service level agreements (equivalent to a maximum of 5 minutes and 23 seconds of ��down-time'', planned or unplanned, in any twelve month period), and its ISO 9001:2000 accreditation. A key advantage for customers is IXEurope's neutrality from any existing relationships with incumbent telecoms or IT services providers, thus providing increased choice and ���exibility. Within a datacentre, customers can provision anything from a single rack to a substantial co-location suite.

Services provided
IXEurope provides customers with a range of services, including:

IX FastRack:
Co-location space

Provides rack space in which customers can locate their IT equipment within a shared co-location area

Speed to market and flexibility to scale up capacity on demand

IX Business Suite: Dedicated suites

Provides a customer-built private area in which customers can typically locate tens to hundreds of racks of their IT equipment

Privacy, enhanced security, and ability to design space to suit customer requirements

IX Connect:
Network services

Provides a range of network services from installation and management of cable connections to provision of LAN segments between IXEurope datacentres and connections to internet exchanges

Ability to reduce connectivity costs, increased reliability and ability to connect to other customers within the datacentre

IX Support:
Technical support

Use of IXEurope-trained personnel to perform a range of services such as back- up tape changing, re-booting and checking alarms on equipment

Speedier response times and reduced support costs

Business continuity services

Provision of datacentre capacity and workplace recovery suites as part of a company's disaster recovery plan

Improved regulatory compliance and financial benefits over in-house provisioning

* Not currently available in all countries.

IXEurope datacentres operate with a number of sophisticated features, which vary by datacentre, including the following:


  • Security: access to IXEurope datacentres is strictly controlled at all times with features such as internal and external CCTV monitoring and biometric access control. Many enterprise customers take advantage of the security features to use IXEurope datacentres to deliver key strategic IT services and applications;
  • Proprietary cabling: each datacentre has a full trunk cable network providing rapid deployment of connectivity between locations within the building. In addition, each datacentre has multiple fibre connections to major telecoms providers, offering both IXEurope and its customers resilience and choice;
  • Manned control room: major systems within the datacentre are monitored 24x7 and are controlled from manned network operations centres which are linked to other IXEurope datacentres through a virtual private data network;
  • Uninterruptible power supply: each datacentre has a substantial power supply infrastructure. The uninterruptible power supply ensures that if the mains supply fails at any time, a series of generators are designed to step in with no interruption to power. The generators are fuelled to run for up to 36 hours non-stop and the equipment is regularly tested to simulate a power ��outage'';
  • Fire protection: three-stage fire detection systems which in some cases includes a sophisticated nitrogen charged ��cold steam'' system which avoids the need for traditional gas-based systems that can cause environmental hazards if utilised; and
  • Optimum environmental control: temperature and humidity are continuously monitored within the datacentres and are maintained within strict limits.


6.Customer information
IXEurope provides services to over 400 customers in its ten datacentre locations. Typically, customers are larger enterprise and Internet organisations or telecoms operators and are signed up on a multi-year basis, typically ranging from one to five years. IXEurope divides its business into three customer categories:


  • Enterprise: within this market customers are targeted either directly or indirectly through outsourcing partners. Sectors of particular customer concentration are financial services (Merrill Lynch; Global Equities; ALP Invest) and IT services (Capgemini; Hewlett Packard; Fujitsu Siemens):
  • Internet: this category comprises a variety of Internet businesses including Google (a member of the IXEurope internet exchange in Zurich), Internet service providers (AOL) and hosting and value added service providers (Attenda, Rackspace and Black Spider Technologies); and
  • Telecoms: this category comprises more than 50 telecommunications companies which typically use IXEurope for equipment co-location space and in some cases connectivity to other IXEurope datacentre customers. Telecommunications customers include: BT Group, France Telecom, ntl/Telewest, Level 3 Communications, COLT Telecom, Cable & Wireless, Tiscali, MCI and AT&T.


7. Financial information

Financial model 
A key attribute of the IXEurope financial model is the cash generation capability of each datacentre, resulting from increasing occupancy levels with a relatively fixed overhead cost base and heavily front-end loaded capital expenditure. After the initial investment phase to fit out each datacentre, future capital expenditure is largely phased with revenue growth. These operational gearing characteristics have resulted in increasing EBITDA margins for individual datacentres.

The IXEurope financial model provides a high degree of long term visibility through its contracted revenue base with over 85 per cent. of total revenue recurring. Customers typically sign up for contracts of between one and five years and exhibit low churn. Churn during the year ended 31 December 2005 was only 3 per cent. of contracted Monthly Recurring Revenue. At 31 December 2005, IXEurope had contracted Monthly Recurring Revenue of �2.0 million and total minimum contracted revenue for 2006 of �18.8 million.

IXEurope has a substantial fixed asset base with tangible fixed assets of �50.5 million (cost) and �27.6 million (net book value).

Key performance indicators
IXEurope intends to provide Key Performance Indicators in order to re���ect its financial performance on an ongoing basis. It is envisaged that these KPIs will be made available at both the interim and preliminary results for the Group. The Directors believe that the following KPIs provide a comprehensive insight into the financial performance of the Group:


  • Contracted Monthly Recurring Revenue: this KPI measures the price paid each month by customers for space or services contracted on an ongoing basis, excluding one-off installation and other non-recurring revenues. At 31 December 2005, this stood at �2.0 million;
  • Minimum contracted revenue: this KPI measures the minimum revenue which is contracted for the following calendar year (assuming no contract renewals). This figure stood at �18.8 million at the end of 2005;
  • Win-loss analysis: This KPI shows the amount of recurring revenue won and lost in each period. For 2005, IXEurope lost �43,000 of Monthly Recurring Revenue, equivalent to churn of only 3 per cent. of total Monthly Recurring Revenue. In contrast, approximately �334,000 of Monthly Recurring Revenue was won from new customers and approximately �401,000 from existing customers during the same period;
  • The percentage of revenue growth won from existing customers: this KPI shows the percentage of revenue growth won from existing customers. The win-loss analysis shows that in 2005 more than 50 per cent. of Monthly Recurring Revenue growth was from existing customers; and
  • Contracted occupancy: this KPI measures the total space contracted for occupancy use compared with the total amount of available net datacentre space. This figure stood at 79 per cent. (of the total approximate 16,800 square metres of net datacentre space) at 31 December 2005.


Financial results for 2005
IXEurope significantly improved financial performance in 2005 as a result of strong revenue growth leveraging a fixed cost base.

IXEurope has adopted IFRS accounting policies for its financial results for the year to 31 December 2005 and its prior years have been restated on a consistent basis.

The 2005 results including profit and loss account, cash ���ow analysis and balance sheet are provided in Section B of Part 3 below. Highlights include:


  • revenue continued to grow strongly in 2005 to �22.5 million increasing by 45 per cent. versus 2004 (�15.5 million);
  • of the �7.0 million year-on-year increase in revenue, �6.0 million was generated from the existing datacentres (organic growth rate of 39 per cent.) and �1.0 million from the newly acquired datacentres;
  • the revenue growth of 45 per cent marked the sixth consecutive year of growth over 30 per cent.;
  • gross profit rose by 59 per cent., with gross margins rising from 35.6 per cent. in 2003 to 40.5 per cent. in 2004, then rising to 44.4 per cent. in 2005;
  • the underlying EBITDA (excluding IFRS adjustments and one-off items) was �1.8 million versus �0.75 million EBITDA loss in 2004. Therefore, 2005 was the first full year of positive EBITDA (underlying) for the Group;
  • the Group generated �1.1 million cash from the operating business in 2005 post one-off costs of �0.7 million;
  • the Group invested net cash of �10.0 million in 2005, including the purchase of a �4.8 million freehold in Germany; and
  • the Group raised bank debt of �18.6 million in 2005, of which �12.0 million was drawn as at 31 December 2005.


8.Current trading and prospects
The Directors of IXEurope remain encouraged by recent trading of the Group since 31 December 2005 and confident about the future financial prospects for the business.

In particular, progress with the London 3 datacentre at Park Royal is encouraging, with strong customer interest in the proposition, resulting in 30 per cent. of the planned net datacentre space being already under contract. This demonstrates the strength of customer demand in West London. Progress with the Frankfurt 2 datacentre, which was acquired last year, has been similarly encouraging and has recently included the signing of a substantial customer contract with a major international Internet search engine company. In addition to this, the strong demand trends for the existing London datacentres have encouraged the Board to progress the negotiations for London 4.

The Group's new business pipeline is strong and recently signed contracts include a major French bank operating in the UK, two major Internet companies, Belgacom (the Belgium incumbent telecoms provider) and a major European outsourcer. IXEurope continues to focus on addressing the needs of the enterprise and Internet segments in order to take full advantage of market growth.

The Directors believe that IXEurope benefits from a strong and stable executive and senior management team. Mr Willner and Mr de Buchet, the co-founders, have remained with the Group as CEO and COO respectively from the outset. Karen Bach, Chief Financial Officer, moved to IXEurope from a senior role as Finance Director of EDS France in 2004. In addition, the three non-Executive Directors, Sir Anthony Cleaver, Richard Mead and Erick Rinner, have all been with the Group from, or from shortly after, its foundation.

The board of IXEurope comprises the following directors:

Guy de Rohan Willner-Co-founder and Chief Executive Officer (42)
Guy has over ten years of leadership experience in high-tech companies and co-founded the company in 1998. Prior to founding IXEurope, Guy Willner worked for Compagnie Generale des Eaux (now Vivendi Group) between 1992 and 1998 both in the UK and in Hungary to establish a telecommunications operator, culminating in a $210 million EBRD funding. Prior to 1992 he began his career with Philips NV in Paris working in CDROM, Smart Card and Telematics technologies. Guy holds a BSc Hons Engineering at Oxford Brookes University.

Christophe de Buchet-Co-founder and Chief Operating Officer (41)
Christophe has 15 years general management experience in international IT markets. In 1990 he founded VoiceQuest, a specialist distributor of speech recognition, networking, memory and storage devices in the UK. In 1992 VoiceQuest was acquired by Austin Ventures-funded TechWorks Inc, headquartered in Texas. As European Vice-President of TechWorks he established pan-European sales and procurement channels, and a manufacturing and logistics centre in Ireland. In 1998, TechWorks Inc was acquired by Melco Inc, a manufacturer of computer peripherals listed on the first sections of the Tokyo and Nagoya stock exchanges. Christophe stayed as European Vice-President until he left to establish IXEurope with Guy Willner in 1998. Christophe is a graduate of ESSEC (Ecole Supérieure des Sciences Economiques et Commerciales) in France.

Karen Bach-Chief Financial Officer (36)
Karen joined as Chief Financial Officer in June 2004. Karen has a strong industry background, having been Finance Director of EDS France in Paris for two years, and prior to that, having held a number of managerial and financial roles at MCI (Worldcom) with responsibilities covering Europe and Asia. She has also worked for General Motors and General Accident after qualifying at Ernst & Young.

Sir Anthony Cleaver-Non-Executive Chairman (67)
Sir Anthony was appointed Non-Executive Chairman in July 1999. He spent the majority of his career with IBM, where he served as European Vice-President of Marketing and as General Manager, Chief Executive and Chairman and Chief Executive in the United Kingdom. Sir Anthony has also served as Chairman of the United Kingdom Atomic Energy authority, as Chairman of AEA Technology plc and Chairman of General Cable plc. He currently serves as Chairman of the Medical Research Council, the Nuclear Decommissioning Authority, SThree plc, Working Links (Employment) Ltd. and the Royal College of Music, as a Director of the Links Foundation and as a Non-Executive Director of Lockheed Martin UK Limited. Sir Anthony holds a degree in Literae Humaniores from Oxford and was President of the Chartered Management Institute.

Richard Mead-Non-Executive Director (58)
Richard Mead was appointed as a Non-Executive Director in July 1999. He is an independent consultant and has held a number of appointments as Non-Executive Chairman or Director. Quoted companies on whose boards he has served have included Tom Cobleigh, HW Group and BCH, and he is currently Chairman of Stonemartin plc, the AIM-listed serviced office company. After graduating, Richard qualified as a Chartered Accountant with a predecessor firm of Ernst & Young. He spent twelve years as an investment banker, latterly with CSFB, and then returned to Ernst & Young for nine years as National Director of UK Corporate Finance, four of them also as Chairman of European Corporate Finance.

Erick Rinner - Non-Executive Director (38)
Erick was appointed as a Non-Executive Director in July 1999. He has been a Partner at European Acquisition Capital since December 1998 where he is responsible for finding and executing private equity investments. He joined European Acquisition Capital from Société Générale's New York Investment Banking Division, where he spent eight years in the Leveraged and Structured Finance Group, including four years in London. He received an MBA (Award for Excellence) from Columbia University and is also a graduate of Nantes Graduate School of Management (France).

IXEurope intends to appoint a further Non-Executive Director to the board at some point in the near future and is currently identifying suitable candidates.

10.Dividend policy
IXEurope is a fast growing business which has historically invested and continues to invest in order to maximise future growth opportunities. The Directors do not currently consider it appropriate to pay a dividend and any future dividend payment will require the consent of CIT with whom IXEurope has debt facilities.

11. Use of proceeds and reasons for the Placing and Admission
The Group intends to raise approximately �10million (gross) for the following specific uses:


  • Repayment of the �5.0 million bridging loan from CIT which was provided to fund the acquisition of the Frankfurt 2 freehold;
  • Repayment of deep discounted bonds of �1.9 million held by European Acquisition Capital and BA Capital Partners Europe; and
  • Assuming the successful completion of negotiations, a contribution to the fit out of London 4, which is estimated at approximately �15 million in total, to be phased in line with customer demand (the balance is expected to be funded through additional debt facilities and cash resources of the business).


In addition to growth through new build and the expansion of existing datacentres, IXEurope will continue to seek to identify acquisition opportunities. These could include individual datacentres or datacentre operators.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of IXEurope into Equinix; a failure to receive significant revenue from customers in recently built out data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; the results of any litigation relating to past stock option grants and practices; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see Equinix's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.

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