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Original-Research: Cenit AG - from GBC AG

26.02.2025 / 10:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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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

Restructuring will impact earnings in 2024; 2025 financial year will be a
year of transition; growth impetus expected in 2026

According to initial preliminary figures, CENIT AG generated sales of around
EUR 207 million in the past fiscal year and is thus in the middle of the sales
guidance adjusted in October 2024 (EUR 205 million - EUR 210 million). However,
with preliminary EBITDA of around EUR 17 million (previous year: EUR 16.41
million), the EBITDA guidance (EUR 17.9 million - EUR 18.4 million) was not met.
At the end of October 2024, CENIT's management had already lowered its
earnings expectations for the fourth quarter of 2024. This was against the
backdrop of a cyclical weakness in demand in the Automotive segment, which
is responsible for around 30% of total sales. In addition, CENIT AG was
affected by lower call-offs from the aviation industry, so that overall the
usual jump in earnings for the company in the fourth quarter was no longer
foreseeable. The ongoing switch from one-time licences to SaaS revenues also
made matters worse.

The fact that EBITDA is now below the guidance is due to the ongoing
restructuring of the organisation, including the planned reduction in
personnel. Some of the provisions required for this were already recognised
in the 2024 financial year, which had a negative impact on earnings in
advance. Similar to EBITDA, the preliminary EBIT of EUR 7.2 million to EUR 7.4
million is also below the guidance (EUR 8.0 million to EUR 8.5 million).

With the publication of the 2024 Annual Report (10 April 2025), CENIT's
management will publish guidance for the current 2025 financial year for the
first time. The long-term target (CENIT 2030) could then be updated in the
course of the year. In view of the fact that a new government has yet to be
formed in Germany and possible tariff-related trade barriers, it is likely
to be particularly difficult to provide meaningful guidance.

In the current 2025 financial year, CENIT AG should nevertheless report a
visible increase in sales. The base effect from the first-time full-year
consolidation of Analysis Prime, which was acquired in July 2024, should
contribute to this in particular. Taking into account additional sales
growth of the US subsidiary, Analysis Prime should make an additional sales
contribution of around EUR 17.5 million in 2025 compared to the past financial
year. Beyond this base effect, we expect CENIT AG to achieve only slight
growth (approx. 2%), meaning that we anticipate total sales revenue of EUR
228.43 million. We assume that demand will largely move sideways, reflecting
the current economic difficulties. For the current financial year 2025, we
anticipate restructuring expenses of EUR 4 million and are therefore reducing
our previous EBIT forecast to EUR 8.02 million (previously: EUR 12.52 million).
The current financial year should be seen as a transitional year in which
the high level of M&A activity to date is also likely to come to a
standstill.

We are assuming higher organic growth momentum for 2026, but are slightly
more cautious with a forecast turnover of EUR 244.42 million (previously: EUR
250.08 million). Although demand in the company's main customer sectors is
currently weak, there are also rays of hope. For example, Dassault Systèmes
has agreed long-term partnerships with the Volkswagen Group and the BMW
Group. CENIT AG could benefit significantly from this downstream, e.g. in
the connection to the SAP landscape or in the context of consulting
services. In addition, this could have a signalling effect on suppliers,
enabling CENIT AG to generate direct sales. The operating result should also
reflect the savings potential realised as part of the restructuring measures
(GBC forecast: approx. EUR 5 m p.a.), so that we assume a jump in EBIT to EUR
15.44 m (previously: EUR 20.01 m).

As part of the DCF valuation model, we have determined a new price target of
EUR 19.00 (old: EUR 22.00). The reduction of the price target results from the
adjusted estimates for the financial years 2025 and 2026. We continue to
assign a BUY rating.

You can download the research here: http://www.more-ir.de/d/31851.pdf

Contact for questions:
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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
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Date and time of completion of the study: 26/02/25 (08:14 am)
Date and time of the first dissemination of the study: 26/02/25 (10:00 am)

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2091539 26.02.2025 CET/CEST

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