Original-Research: Cenit AG (von GBC AG): BUY

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Original-Research: Cenit AG - from GBC AG

16.05.2025 / 11:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of GBC AG to Cenit AG

Company Name: Cenit AG

ISIN: DE0005407100

Reason for the research: Research Comment

Recommendation: BUY

Target price: 19.00 EUR

Target price on sight of: 31.12.2025

Last rating change:

Analyst: Cosmin Filker, Marcel Goldmann

Q1 marked by announced restructuring expenses; guidance, price target and

rating confirmed

Despite the challenging environment, CENIT AG increased its revenue by 1.9%

to EUR51.51 million in the first three months of 2025 (previous year: EUR50.55

million). The decline in sales resulting from the difficult market

environment was offset by inorganic effects. The first three months of 2025

also include sales of Analysis Prime LLC, acquired in July 2024, which are

estimated at around EUR3 million.

This inorganic effect is also reflected in the revenue breakdown. As

Analysis Prime mainly generates consulting revenue, this rose significantly

by 11.5% to EUR22.15 million (previous year: EUR19.86 million). This increase

offset the decline in proprietary software revenue (-1.4%) and revenue from

third-party software (-4.9%). The previous year's revenue from third-party

software included a high-volume order from the defence sector (3DS), which

contributed to the exceptionally strong performance in the first quarter of

2024.

Despite a slight increase in revenue, CENIT AG reported a decline in EBITDA

to EUR-2.44 million (previous year: EUR3.15 million). An important factor in

this development was a special expense of EUR3.35 million in connection with

the implementation of the announced restructuring measures. As part of the

restructuring programme, the number of employees is to be reduced in the

coming quarters (planned reduction: 51), for which accruals were build up in

the first quarter of 2025. This will have two positive effects on EBITDA in

the following quarters. On the one hand, the extraordinary expenses will

decline significantly (Q2 2025: approximately EUR0.3-0.4 million), and on the

other hand, the first savings effects from the reduction in personnel will

become visible. In addition to the special expenses, EBITDA included a

negative contribution of EUR1.4 million from Analysis Prime. Analysis Prime

was affected by postponements and a delayed start to customer orders.

However, this should lead to stronger revenue growth and a positive

contribution to earnings in subsequent quarters.

In addition to the effects mentioned above, EBIT of EUR-5.44 million (previous

year: EUR1.24 million) was impacted by additional PPA amortisation of around

EUR0.9 million in connection with the adjustment of intangible assets

(customer base).

On a positive note, operating cash flow for the first quarter was at its

usual high level of EUR11.66 million (previous year: EUR12.54 million), which

includes advance payments received from customers. Cash and cash equivalents

increased to EUR27.03 million (31 December 2024: EUR16.46 million). They should

decrease again in the course of the year in line with the services rendered

for the advance payments received.

For the current 2025 financial year, CENIT's management continues to expect

revenues of between EUR229 million and EUR234 million, representing a visible

increase in revenues compared to 2024. The first full-year contribution from

Analysis Prime, for which revenues of USD28 million (approx. EUR 24.9 million)

are expected, is expected to make a significant contribution to this.

Although business performance in the first three months of 2025 remained

below this expectation, CENIT anticipates a significant improvement in the

following quarters. According to the company, a noticeable improvement at

Analysis Prime was already evident in April. The company also expects the

cautious customer demand to ease across the group.

The earnings guidance, which anticipates EBITA of EUR12.4 million, was also

confirmed. The coming quarters are likely to be characterised by a

significantly lower-than-expected increase in operating costs compared with

the first quarter. In connection with the restructuring measures initiated,

only special expenses of approximately EUR0.3 to EUR0.4 million are expected to

be incurred in the second quarter. At the same time, the first savings

effects from the reduction in headcount should become visible. Finally,

Analysis Prime should make a positive contribution to earnings with the

expected expansion of its business activities.

In line with the company's guidance, we are keeping our forecasts unchanged

and continue to assign a BUY rating with a price target of EUR19.00.

You can download the research here: http://www.more-ir.de/d/32642.pdf

Contact for questions:

ﯯ뻻ﯯ뻻

Disclosure of potential conflicts of interest pursuant to Section 85 WpHG

and Art. 20 MAR The company analysed above has the following potential

conflict of interest: (5a,6a,7,11); A catalogue of potential conflicts of

interest can be found at:

https://www.gbc-ag.de/de/Offenlegung.htm

ﯯ뻻ﯯ뻻

Date and time of completion of the study: 16/05/25 (10:04 am)

Date and time of the first dissemination of the study: 16/05/25 (11:00 am)

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2139696 16.05.2025 CET/CEST

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