CentralNic Group continues to perform extremely strongly, CEO Michael Riedl explains why (LON:CNIC)

CentralNic

CentralNic Group Plc (LON:CNIC), the global internet software company that derives recurring revenue from marketplaces for Online Presence and Online Marketing services, recently announced the appointment of Michael Riedl, as Group CEO. We caught up with Michael to discuss his new role. 

Congratulations on your appointment as CEO of CentralNic. Obviously, you’ve been the CFO of the company for the past four years but could you give us a bit more background on yourself?

Yes, I’ve been with the Group for four years now, but I’ve been involved in the industry since 2007, first as an investor, and since 2011 as an executive. My first appointment was actually for an online marketing business, where I was CEO for four years and which we sold to Team Internet, currently our largest subsidiary in terms of revenue.

So with your background in selling a business to Team Internet was it you that introduced this key acquisition, and therefore the Online Marketing business, to CentralNic, which is now the biggest revenue contributor and growth engine of the company?

Ben and I always worked as a team, passing balls to each other. When the Team Internet business came up for sale, it was of course immensely helpful that I had built a basis of trust with the owners and management. This, together with my prior operational experience in this business, is why I was appointed as Chairman of the Board of Team Internet on acquisition in 2019.

The company continues to perform extremely strongly. The recent Q3 results showed 88% revenue growth and 100% growth in EBITDA and today you’ve stated the performance remains robust. Any more you can say on what is driving this and the outlook for the business?

One can see from our segmental reporting that our success is largely driven by the Online Marketing business. The growth is the result both of more consumers engaging with our websites, which increased from 1.8bn in the first 9 months of 2021 to 3.3bn in the first 9 months of this year, and us increasing the value per consumer engagement, from an average of USD 64.9 per thousand in the first 9 months 2021 to USD 104.1 per thousand engagements in the first 9 months this year. This is what actually drives the business.

Given your strong cash position and improved balance sheet you’ve announced you are launching a share buy-back programme, can you provide more detail on the rationale behind this?

The acquisitions we made in 2022 brought us a series of capabilities that are important to our strategic plan. While we still seek more opportunities, our success in the year just ended has taken away a bit of the urgency on acquisitions. This, combined with record free cashflow, allows us to proceed in earnest to return money to the shareholders that have always supported us when we needed it. It is not an abrupt pivot of our strategy, more a matter of rebalancing. You’ll see that we made a further small acquisition today for a total consideration of USD 5.2m which will bring us an additional $1.4m in EBITDA each year. This is in line with our vertical integration strategy, providing the Group’s Online Marketing segment with proprietary, exclusive special interest traffic to monetise.

And your successor in the role of CFO, Billy Green, what can you tell us about him?

I personally recruited Billy and we have worked closely for three years now. He has been instrumental in the acceleration of our reporting as well as our recent refinancing. He is very capable and well prepared for the role and I am still on hand to provide any support if requested.

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