benjamin crawford, ceo · group key players in the domain name industry market cap (£m): 50...
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Group
Benjamin Crawford, CEO
1
Group
Disclaimer
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Disclaimer
Group 3
Industry Overview
21 years in operation
Listed on the AIM market of the London Stock Exchange (LON:CNIC) in 2013
Over 10 million domains under management
Ranked Number One registry backend for new TLDs
Over 100 domain extensions supported on CentralNic software
Over 1m customer accounts in over 200 countries
CentralNic develops and operates its own scalable global software platforms for delivering its services, with different brands tailored for different markets all using a common platform for maximum efficiency.
CentralNic’s subscription model is profitable, cash generative and growing. We are focussed on markets at early stages of their digital transformation.
CentralNic plc
1985: Birth - First domain name registered • ‘Symbolics.com’
1995: Monetization - First chargeable domain name• Information and Pay-for-porn• Amazon & Yahoo founded
2000: The Bubble - Dot-com domain expansion• Pay-for-anything• Buy-online
2010: Big Bang – Mature Market• Rise of the mega-sites• Birth of social media
2012: Rebirth - 1st new “dot anything“ domains• Introduction of the New Internet• 50 x 1$Bn+ US internet businesses
2016: The big expansion – 1000 new domain endings• The new Internet is online• China emerges as new internet superpower
6
9k
20m
202m
252m
329m
DOMAINS
1
23.5k
17m
207m
697m
1.2b
WEBSITES USERS PER WEBSITE
108k
1.9k
24
10
3.6
2.9
Group
Key Characteristics of the CentralNic and the Domain Name Industry
• Services are paid in advanceStrong cash generation
• Domain names: a subscription product with recurring revenuesQuality Earnings
• Wholesale platform is a relatively fixed cost –CentralNic expanded from 1m to 10m domains with virtually no cost increase
Highly scalable
• Company growth driven by business moving online in emerging markets
Sustained Growth
• Global industry rapidly consolidating, with CSC, GoDaddy, Tucows, Neustar, Verisign, Endurance, United Internet actively acquisitive
Consolidating
Group
Key Players in the Domain Name Industry
Market cap (£m): 50 Private Private 839 2,068 65 406 1,051* 215* Private 6,415 6,005 767
Wholesale (“Registry Backend”)
Retail (“Registrar”)
Emerging Market Focus
Enterprise – Premium Domain Brokerage
Enterprise – Online Protection
WIP
* acquired by Golden Gate Capital for USD 2.9bn including debt * Merger Announcement (14 Jun 17) – Donuts to acquire Rightside for approx $213m
Group
CentralNic Group plc overview
Proven track record of growth
Vision
“To rapidly join the ranks of the industry leaders by identifying and
exploiting growth opportunities globally. CentralNic is a global roll-up play
acquiring companies that provide domain names, hosting, websites, email
and other tools businesses need to get on the web. Our services are sold on a
subscription model, creating recurring revenues.”
FY2016 Revenues£22.1m (+113%) year-on-year increase (2015:£10.4m)
FY2016 Adjusted EBITDA*£5.5m (+68%) year-on-year increase (2015:£3.3m)
Net Cash at End of Year£7.3m
Recurring/subscription Revenues**C.81%
Instra acquisition drives growth in 2016:
Consideration £18.0m***Adjusted EBITDA* contribution £2.2mFully integrated in 2016
Growth through acquisition
* Earnings before interest, tax, depreciation and amortisation, acquisition costs, exceptional items and non-cash
charges
** Includes revenues from domain registrations, domain renewals, and other recurring revenues stated before
deferrals
*** Total consideration including loan assumed less cash balance acquired
0
5000
10000
15000
20000
25000
2013 2014 2015 2016
£,0
00
s
Revenue Adjusted EBITDA
Group
CentralNic’s Growth Strategy
1. Steady growth in the scale and scope of our existing operations
Supporting large companies with tools for the next generation internet
Disrupting the domain market with new Top-Level
Domains
Supplying businesses in emerging markets with the tools to get online
Retail Division
2. A roll-up strategy focussed on selecting high recurring earnings businesses and bolt-ons:
Wholesale Division Enterprise Division
Listed on AIM
Sept 2013
Acquired DomiNIC
(Germany)
Dec 2013
Acquired Internet.bs(Bahamas)
June 2014
Acquired 10% Accent Media Ltd
(UK)
Sept 2014
Acquired DNSXperts(Germany)
July 2015
Acquired Instra
(AU/NZ)
Jan 2016
Group
CentralNic’s retail business
CentralNic’s retail brands include
Group
CentralNic Wholesale
New Top-Level Domains (nTLDs): Since 2014, 1216 new Top-Level Domains have launched as
alternatives to .com, .net and .org and country codes
Over 28 million new TLD domains out of 329 million
registered
The most successful of these have used a “freemium” style
model of low priced registration with full-priced renewals.
The clear market leader is .xyz (one of thirty nTLDs exclusively
wholesaled by CentralNic), registered by millions of
businesses including:
Google’s parent Alphabet: http://abc.xyzSkype’s co-founders: http://starship.xyzMark Zuckerberg:
a disruptive force
https://www.facebook.com/zuck/posts/10102369976235421
Products
Infrastructure
Group
CentralNic is the Global Leader nTLD Wholesaler
Source: http://ntldstats
Group
CentralNic Enterprise
CentralNic’s Enterprise division includes a number of business lines:
Providing full suite of software and inventory enabling large
companies and governments to sell domain names and related
services. Clients include telcos and national governments.
Full outsource solution for large companies obtaining and
managing their own “DotBrand” Top-Level Domains.
Provide online security and brand protection services to large
companies – in development
Trading in premium domain names – expected to play a
diminishing role in future trading (US$4.5m sale announced in
December 2016)
CentralNic Enterprise Brands
Clients include:
Group
Income Statement - Group
All £’00031 Dec
201631 Dec
2015% Change Notes
Revenue 22,129 10,393 +113% Instra revenue £10.3m
Cost of Sales (14,462) (5,533)
Gross Profit 7,667 4,860 +58% Instra gross profit £2.9m
Gross Margin % 35% 47% Expected change in mix – greater proportion of retail revenue
Administrative Expenses (2,184) (1,606) Instra £0.66m; fx gains YOY +£0.36m
Adjusted EBITDA 5,483 3,254 +69% Reflects gross profit YOY and fx gains
Amortisation & Depreciation (2,191) (650) Acquired amortisation YOY increase £1.33m, mainly Instra
Acquisition, Integration costs & Exceptional items (1,262) (829) Commercial settlement, compliance costs, integration costs incl. transfer pricing strategy, IBS closure costs, M&A advisers
Share Based Payments (621) (316) Options issued to Directors, employees of Instra & dnsXperts
Operating Profit 1,409 1,459 Reflects higher non-cash and non-recurring charges
Profit Before Tax 1,157 1,454
Adjusted Profit Before Tax* 4,724 2,954 +60%
* Adjusted for acquisition costs, exceptional items, acquired amortisation charges and non-cash charges