CentralNic Group - Deleveraged and delivering growth

CentralNic (CNIC) delivered high double-digit organic revenue growth in the nine months to 30 September (9M22), supplemented by five acquisitions year to date. Revenues in Online Marketing, now the group’s largest business segment (78% of 9M22 revenues), were up 147% y-o-y, driving overall performance and highlighting sustained market demand for privacy-safe marketing solutions. Adjusted EBITDA as a percentage of net revenue expanded by more than 7pp y-o-y, illustrating stronger operating leverage. Improved profitability, alongside the group’s cash-generative business model, reduced leverage from 2.2x pro forma EBITDA at end FY21 to 1.2x at end Q322. Our headline forecasts are broadly unchanged due to an uncertain trading environment, although we note the potential for upside if CNIC is able to maintain current run rates.