^Original-Research: Cenit AG - from GBC AGClassification of GBC AG to Cenit AGCompany Name: Cenit AGISIN: DE0005407100Reason for the research: Research Report (Anno)Recommendation: BUYTarget price: 20.55 EURTarget price on sight of: 31.12.2024Last rating change: Analyst: Cosmin Filker, Marcel GoldmannSales and earnings in line with expectations; "CENIT 2025" confirmed andfurther growth expected for 2024; Acquisitions to take place shortly With total annual sales of EUR 184.72 million (previous year: EUR 162.15million), CENIT AG slightly exceeded both its own guidance (approx. EUR 180million) and our previous estimates (EUR 181.61 million). The companybenefited in particular from the high level of M&A activity in recentfinancial years, which continued in the 2023 financial year with theacquisition of three new companies. The new companies contributed EUR 7.84million to total sales for the first time, meaning that inorganic growthaccounted for 4.8% of the total sales increase of 13.9%. However, organicgrowth of 9.1% also benefited from a base effect, as ISR, which wasacquired in the 2022 financial year, was included for the full year for thefirst time in 2023. As the new companies, particularly ISR with the highest sales, generatetheir sales primarily in the area of consulting and services, consultingsales rose particularly strongly by 33.5% to EUR 74.38 million (previousyear: EUR 55.72 million). At the same time, sales of third-party softwarerose by 5.2% to EUR 92.70 million (previous year: EUR 88.14 million). Bycontrast, sales of own software fell slightly to EUR 16.79 million (previousyear: EUR 17.71 million), which is mainly due to the ongoing transformationtowards SaaS sales. At the end of the transformation, sales will be easierto plan, which is already the case at CENIT AG with a recurring sales shareof 53.5%. The strong increase in sales is also reflected in a significant improvementin EBIT toEUR 9.22 million (previous year: EUR 6.31 million). This would have been evenhigher, but was offset by M&A-related extraordinary expenses (EUR 0.64million) and increased PPA amortisation. In addition, personnel expensesrose sharply as a result of acquisitions, but also due to salary increasesand inflation compensation payments. Despite the increase in EBIT, earningsafter taxes were down on the previous year at EUR 4.50 million (previousyear: EUR 6.28 million). This is primarily due to higher interest expenses.On the one hand, outstanding bank liabilities increased significantly inpreparation for the inorganic growth. On the other hand, the financialresult included write-downs on financial instruments. The Management Board of CENIT expects an increase in sales in the range ofEUR 195 million to EUR 202 million for the current 2024 financial year andanticipates an improvement in the EBIT margin to 6.0% (previous year:5.0%). At the same time, the 'CENIT 2025' plan was confirmed, according towhich an increase in total sales to EUR 300 million and an increase in theEBIT margin to at least 8% is to be achieved by 2025. To this end, two tothree acquisitions are to be made each year. Although the company is inadvanced negotiations regarding an acquisition, we have not yet includedthis in our estimates. We therefore expect sales of EUR 200.42 million andEBIT of EUR 12.01 million for the current 2024 financial year. This growthshould be achieved solely through the full-year inclusion of the companiesacquired in 2023. We forecast sales growth of 8.0% in each of the followingyears and expect a gradual increase in the EBIT margin. However, due to thelack of inorganic growth in our planning, this is below the expectations of'CENIT 2025'. As part of our DCF valuation model, we have determined a target price of EUR20.55 (previously: EUR 20.90). We continue to assign a BUY rating. You can download the research here:http://www.more-ir.de/d/29379.pdfContact for questions++++++++++++++++Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,6a,7,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:https://www.gbc-ag.de/de/Offenlegung.htm+++++++++++++++Date and time of completion of the study: 10.04.2024 (3:50 pm)Date and time of the first dissemination of the study: 11.04.2024 (9:30 am)-------------------transmitted by EQS Group AG.-------------------The issuer is solely responsible for the content of this research.The result of this research does not constitute investment adviceor an invitation to conclude certain stock exchange transactions.°