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Page 1: Benjamin Crawford, CEO · 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

Group

Benjamin Crawford, CEO

1

Page 2: Benjamin Crawford, CEO · 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

Group

Disclaimer

This presentation has been prepared by CentralNic Group Plc (the “Company”). The information contained in this presentation is for informational purposes only and may not

be reproduced, redistributed or passed on, directly or indirectly, to any other person (whether within or outside your organisation/firm) or published, in whole or in part, for

any purpose. The information contained in this presentation is not investment or financial product advice and is not intended to be used as the basis for making an investment

decision. This presentation has been prepared without taking into account the investment objectives, financial situation or particular needs of any particular person.

For the purposes of this disclaimer, the presentation shall mean and include the slides that follow, any oral presentation of the slides by the Company, any question-and-answer

session that follows the oral presentation of the slides by the Company, hard copies of this presentation and any other materials or information distributed or communicated at,

or in connection with any presentation of these slides by the Company. This presentation has been prepared by and is the sole responsibility of the Company and its directors.

This presentation includes forward-looking statements. Forward-looking statements include, but are not limited to, the Company’s growth potential, profit forecasts, capital

cost expenditures, market outlook and other statements that are not historical facts. When used in this presentation, the words such as "could," “plan," "estimate," "expect,"

"intend," "may," "potential," "should," and similar expressions are forward-looking statements. Although the Company believes that the expectations reflected in these

forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these

forward-looking statements.

No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in

this presentation. The information contained in this presentation should be considered in the context of the circumstances prevailing at the time and has not been, and will not

be, updated to reflect material developments which may occur after the date of the presentation. To the maximum extent permitted by law, none of the Company, its directors,

employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising out of fault or negligence, for any loss arising from the use of

the information contained in this presentation. In particular, no representation or warranty, express or implied, is given as to the accuracy, completeness or correctness,

likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in this presentation.

This presentation does not constitute, or form part of, a prospectus relating to the Company nor does it constitute or contain any invitation or offer to any person to underwrite,

subscribe for, otherwise acquire, or dispose of any shares in the Company or to advise persons to do so in any jurisdiction, nor shall it form the basis of or be relied upon in

connection with any contract or commitment whatsoever. Recipients of this presentation who are considering a purchase of shares in the Company are reminded that any such

purchase must be made solely on the basis of information that the Company has released into the public domain.

Disclaimer

Page 3: Benjamin Crawford, CEO · 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

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

Page 4: Benjamin Crawford, CEO · 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

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

Page 5: Benjamin Crawford, CEO · 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

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

Page 6: Benjamin Crawford, CEO · 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

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

Page 7: Benjamin Crawford, CEO · 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

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

Page 8: Benjamin Crawford, CEO · 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

Group

CentralNic’s retail business

CentralNic’s retail brands include

Page 9: Benjamin Crawford, CEO · 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

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

Page 10: Benjamin Crawford, CEO · 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

Group

CentralNic is the Global Leader nTLD Wholesaler

Source: http://ntldstats

Page 11: Benjamin Crawford, CEO · 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

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:

Page 12: Benjamin Crawford, CEO · 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

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