This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

22 November 2021

CENTRALNIC GROUP PLC

("CentralNic" or "the Company" or "the Group")

UNAUDITED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2021

CentralNic Group Plc (AIM: CNIC), the global internet technology company that sells online presence and marketing services, announces its unaudited financial results for the nine months ended 30 September 2021. Both revenue and adjusted EBITDA have significantly increased year-on-year, driven by a combination of underlying organic growth and acquisitions.

Financial summary:

●       Revenue increased by 67% to USD 282.0m (September 2020 YTD: USD 168.5m)

●       Organic revenue grew 29% between September 2020 YTD and September 2021 YTD

●       Net revenue (gross profit) increased by 60% to USD 85.5m (September 2020 YTD: USD 53.3m)

●       Adjusted EBITDA* increased by 46% to USD 32.3m (September 2020 YTD: USD 22.1m)

●       Operating profit of USD 8.9m (September 2020 YTD: USD 0.7m)

●       Adjusted operating cash conversion of 113% (September 2020 YTD: 93%)

●     Net debt** down to USD 78.6m (cash of USD 54.0m, gross interest-bearing debt of USD 132.6m) as compared to USD 85.0m on 31 December 2020 - despite two acquisitions for a combined USD 11.1m in the period, and the settlement of combined deferred consideration of USD 1.7m

●       Adjusted EPS for the period increased by 5% to USD 7.73 cents (September 2020 YTD: USD 7.33 cents)

Financial highlights:

●      Acceleration of organic growth from 9% in September 2020 YTD to 29% overall for September 2021 YTD

●      Non-recurring revenue products contributed less than 1% of our total revenues

●      Successful bond tap issue of EUR 15m at 104.5% of nominal value

●    Acquisition of SafeBrands (Online Presence segment) in January 2021 and Wando Internet Solutions (Online Marketing segment) in February 2021

●      Final and interim deferred consideration payments made for Team Internet (Online Marketing segment)

●      Currency exposure on the EUR 105m bond has been hedged at a locked-in average EUR/USD rate of 1.1891

Operational highlights:          

●      Very strong traction for the Group's privacy-safe online marketing technologies in context of privacy-conscious policies of Big Tech

●      Significant investment in new management, staff and systems accelerated organic growth to record levels and positions the Group well for continued growth

●     New Data and AI group established to improve customer service, optimise business operations and decision making, enhance marketing, reduce customer churn, and automate detection of non-compliant customer activity

●      Appointment of Carsten Sjoerup in the new role of Chief Technology & Product Officer to lead the integration of technology and product teams across all brands, with a focus on technical expertise and new product launches

●      Experienced non-executive directors added to the board

●      New customer wins for the Registry business include JISC and Dot London

Post period-end highlights:

●      Acquisition of publishing network of revenue generating websites for a consideration of USD 6.5m in cash and assumed working capital liabilities was completed on 15 November 2021 and is expected to generate at least USD 2.0m in annualised revenue and USD 1.5m in annualised EBITDA post-acquisition

Outlook:

●    The Company expects to trade comfortably at the upper end of market expectations*** for the year for both revenue and adjusted EBITDA

●     The accelerated organic growth seen during Q3 2021 YTD is expected to be sustained for the full year following the investment in new management, staff and systems

●   The Company's market consolidation strategy continues, with opportunities being continually assessed in what is a large, globally fragmented market

Ben Crawford, CEO of CentralNic, commented: "CentralNic has enjoyed a very strong first nine months of 2021, across both our online presence subscription products and our privacy enabled online marketing technologies - achieving record organic growth of 29% for the year to date. By virtue of our significant investment in human resources, restructuring and market-leading products and promotions, we expect full year revenue and profits to be at least at the upper end of market expectations.

A virtually pure play recurring revenue business with cash conversion of over 100%, CentralNic continues to improve its cash position, interest coverage and net debt to EBITDA ratio as it grows. As our investment levels plateau moving forward, we expect future periods to benefit from increasing operational leverage.

These robust results reflect CentralNic's continued success in sourcing, completing and integrating transformative acquisitions and driving the organic growth of our businesses. The pipeline of future acquisition targets remains strong, and we are confident in continuing our trajectory towards joining the ranks of the global leaders in our industry."

* Subsidiary and associate earnings before interest, tax, depreciation, amortisation, non-cash charges and non-core operating expenses 

** Includes gross cash, debt and prepaid finance costs

***) analyst expectations of revenue and adjusted EBITDA for the financial year ending 31 Dec 2021 currently range from USD 349.0m to USD 384.1m and USD 41.8m to USD 43.0m respectively.

These unaudited financial results have been prepared for the purpose of fulfilling the information undertaking requirements included in the bond terms for the Senior Secured Callable Bond Issue. To the best of our knowledge, these unaudited financial results have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial position and profit or loss of the Issuer and the Group taken as a whole. In addition, to the best of our knowledge, these unaudited financial results include a fair review of the development and performance of the business and the position of the Issuer and the Group taken as a whole. The principal risks and uncertainties that the business faces remain materially consistent with the risks and uncertainties described in the Risks section of the Group's 2020 annual report.

Ben Crawford - CEO

Don Baladasan - Group Managing Director

Michael Riedl - CFO

For further information:

Forward-Looking Statements

This document includes forward-looking statements. Whilst these forward-looking statements are made in good faith, they are based upon the information available to CentralNic at the date of this document and upon current expectations, projections, market conditions and assumptions about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Group and should be treated with an appropriate degree of caution. 

About CentralNic Group Plc

CentralNic (AIM: CNIC) is a London-based AIM-listed company which drives the growth of the global digital economy by developing and managing software platforms allowing businesses globally to buy subscriptions to domain names, websites, email, and brand protection services - as well as tools for monetising online traffic and acquiring customers online. The company's organic growth combines selling recurring revenue services with new customer wins, upselling and cross-selling of services, including a pipeline of new products. The Company's inorganic growth strategy is identifying and acquiring cash-generative businesses in its industry with annuity revenue streams and exposure to growth markets and migrating them onto the CentralNic software and operating platforms. CentralNic operates globally with customers in almost every country in the world. For more information please visit: www.centralnicgroup.com

MANAGEMENT COMMENTARY ON PERFORMANCE

Introduction

CentralNic's organic growth, combined with its 2021 and 2020 acquisitions, substantially increased the scale and capabilities of the Company. The effect of this is demonstrated in our unaudited September 2021 YTD results which show a transformational increase in revenue and adjusted EBITDA, which have grown by 67% and 46% respectively compared to September 2020 YTD.

Performance Overview

                The Company has performed strongly during the quarter with the key financial metrics listed below:

¹ Please refer to note 8

² Please refer to note 7

Segmental analysis

The Company has combined the previous Direct and Indirect segments into a single Online Presence segment as of this reporting date. In this segment, which provides the essential tools for businesses to go online, growth in domain name sales has accelerated notably. More importantly, our efforts to deliver value-added services are paying off, with the growth in sales of associated services outpacing growth in domain names sales. The Online Marketing (formerly "Monetisation") segment, was renamed as its service offering has been substantially expanded through the acquisitions of Zeropark, Voluum and Wando, to a full suite of online customer acquisition solutions, including data analytics.

Organic growth rates quoted below are calculated on a pro forma basis including all the Group's constituents as of the last balance sheet dates and adjusted for non-recurring or non-cash revenues and constant currency basis.

Online Presence segment

Significant scale was achieved in the Online Presence segment, with revenues increasing by USD 19.4m in the nine months ended 30 September 2021, or 20%, from USD 95.6m to USD 115.0m. Organic growth of the segment was 9% over the period. The growth has been predominantly carried by the Group's Wholesale and Enterprise brands. Enterprise has seen growth further accelerated by the successful SafeBrands acquisition.

Online Marketing segment

The Online Marketing segment grew more rapidly, with revenues increasing by USD 94.1m, or 129%, from USD 72.9m to USD 167.0m. Organic revenue grew at a high rate of 47%, foremost driven by CentralNic's PubTONIC media buying business, with the additional inorganic growth being contributed by the acquisitions of Zeropark, Voluum and Wando.

CentralNic is a leader in online privacy, as none of our marketing platforms make use of third-party cookies or collect personal data on our customers. We therefore expect that restrictions placed on those practices (e.g. the ban of third-party cookies in Google Chrome or App Tracking Transparency in Apple's iOS 14.5) will benefit CentralNic, as we provide an alternative to online marketers that is proven to be highly effective whilst respecting the privacy of internet users. This puts us at the forefront of companies offering solutions for a more privacy conscious world.

Outlook

CentralNic has enjoyed a very strong first nine months of 2021, across both our online presence subscription products and our privacy enabled online marketing technologies - achieving record organic growth of 29% for the year to date. By virtue of our significant investment in human resources, restructuring and market-leading products and promotions, we expect full year revenue and profits to be at least at the upper end of market expectations.

A virtually pure play recurring revenue business with cash conversion of over 100%, CentralNic continues to improve its cash position, interest coverage and net debt to EBITDA ratio as it grows. As our investment levels plateau moving forward, we expect future periods to benefit from increasing operational leverage.

These robust results reflect CentralNic's continued success in sourcing, completing and integrating transformative acquisitions and driving the organic growth of our businesses. The pipeline of future acquisition targets remains strong, and we are confident in continuing our trajectory towards joining the ranks of the global leaders in our industry.

Ben Crawford

Chief Executive Officer

All amounts relate to continuing activities.

^(a)   Subsidiary and associate earnings before interest, tax, depreciation, amortisation, non-cash charges and non-core operating expenses.

^(b)  Non-core operating expenses include items related primarily to acquisition, integration and other related costs, which are not incurred as part of the

underlying trading performance of the Group, and which are therefore adjusted for, in line with Group policy.

^(c)  The comparative figures have been restated due to the reclassification of foreign exchange differences and alignment of tax estimates with the 2020 Annual report.
 

^(a)  The comparative figures have been restated due to the reclassification of foreign exchange differences and alignment of tax estimates with the 2020 Annual report.

●      Share capital represents the nominal value of the company's cumulative issued share capital.

●      Share premium represents the cumulative excess of the fair value of consideration received for the issue of shares in excess of their nominal value less attributable share issue costs and other permitted reductions.

●      Merger relief reserve represents the cumulative excess of the fair value of consideration received for the issue of shares in excess of their nominal value less attributable shares issue costs and other permitted reductions.

●      Share-based payments reserve represents the cumulative value of share-based payments recognised through equity.

●      Cash flow hedging reserve represents the effective portion of changes in the fair value of derivatives.

●      Foreign exchange translation reserve represents the cumulative exchange differences arising on Group consolidation.

●      Retained earnings represent the cumulative value of the profits not distributed to shareholders but retained to finance the future capital requirements of the CentralNic Group.