Europe's Datacenter Leader IXEurope Grows First Half Revenues by 38%

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IXEurope, Europe's fastest growing specialist datacentre services company with nine locations in the UK, France, Germany and Switzerland, publishes today its trading performance for the six months to 30 June 2004.

Revenues up 38% to €10.4 million (2003 H1: €7.5m) Compound annual revenue growth over the last three years - 37% . Monthly recurring revenues in June €1.7 million, up 26% compared to December 2004. Acquisition of Telehouse (Suisse) business in Geneva brings new 3,600m2 datacentre.

Zurich operation capacity increased by over 30% due to customer demand. Significant increase in non-telecoms customer base - up 400% over three years. Current backlog from long-term contracts provides confidence of continuous EBITDA positive performance from Q4 . Guy Willner, Chief Executive Officer, IXEurope said:

"Our original business plan is now really beginning to show operational and financial returns, with two of our operating countries already net profitable. We are delivering quality datacentre services to the enterprise, eBusiness and networking markets across a number of European countries. Our obsession with quality services, custom delivered to individual client needs, continues to assist us win the most demanding customers and improve the bottom line.

"Our mix of customers in a number of countries, good visibility of forward revenues plus extension of services to existing customers provides a stable platform for our future success. We are now actively looking to take the Group forward, both from an operational and corporate point of view."

IXEurope, Europe's fastest growing specialist datacentre services group, has increased revenues for the six months to 30 June 2004 by 38% to €10.4 million (June 2003: €7.5 million).

Monthly recurring revenue in June 2004 was €1.7 million, up 26% on December 2003 and up 43% compared to June 2003.

EBITDA strongly improved in the first six months of the year and the Group is on track to be EBITDA positive by the end of the year. The strong financial progress made by the Group is as a result of continued focus on quality services leading to contracts with leading enterprise clients, together with strong cost control across the Group.

Operations

The Group significantly expanded its footprint in Switzerland by the acquisition of Telehouse (Suisse) SA in Geneva, a new market for IXEurope with a highly specified and secure datacentre of approximately 3,600m2 gross space. At IXEurope's existing Zurich operation, capacity has been increased by over 30% due to customer demand.

Due to an increased focus on enterprise sales the mix of the Group's customer base has continued to diversify resulting in reduced exposure to the telecoms sector. Less than 35% of the Group's revenue now comes from the telecoms sector. The non-telecoms business has grown by 400% over the last three years with over 35% of revenue being generated from enterprise and IT Services companies. Over 20% of revenues are now generated from the financial services markets and this latter area is one of IXEurope's fastest growing market sectors, reflecting this sector's appreciation of IXEurope's quality and systems focus.

Over 15% of revenue is coming from enhanced service offerings such as Internet Exchange peering, cabling and interconnects, and secure bandwidth services. To meet this growing demand the Group is increasing its capacity to handle on-site support, monitoring and networking needs.

Seven of the top 10 global IT Outsourcing companies now use IXEurope services.

IXEurope's commitment to quality continued in 2004 and is reflected in numerous initiatives. Uniquely for the industry all the Group's datacentres are accredited to ISO9001:2000 quality certification. IXEurope's secure bandwidth services (IPMultihoming) have been using class-leading VRRP technology from Cisco Systems.

New clients during the first half included LambdaNet and AboveNet on the networking side and Stadtwerke Dusseldorf (through a local partnership with the outsourcer Steria) on the government side.

Strategy

Since 1999, IXEurope has successfully grown its pan-European datacentre and services business in France, Germany, Switzerland and the UK. The Group focuses on the three key concepts of quality, flexibility and customer service. Having established its position in its four core markets, the Group continues to pursue strategic growth opportunities.

IXEurope delivers its services to systems integrators, outsourcers, hosting and managed service providers and network service providers. Working in partnership with selected solution providers, the Group's datacentres house IT and networking systems for global enterprises, financial institutions, government agencies and e-commerce businesses.

Outlook

Although the sales process in our sector is long, contracts secured typically have 3 to 5 years duration. With a high renewal rate and a strong backlog of existing contracts, we have an increasingly good visibility of future cashflows. The company remains on track for continuous EBITDA positive performance from Q4.

Contacts:

Petrina Steele, Tel +44 207 533 6618

petrina.steele@ixeurope.com

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Guy Willner
ixeurope
00 44 207 533 6618
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