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Original-Research: Cenit AG - from GBC AG

22.04.2025 / 10:00 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 Study (Anno)
Recommendation: BUY
Target price: 19.00 EUR
Target price on sight of: 31.12.2025
Last rating change:
Analyst: Cosmin Filker, Marcel Goldmann

Significant improvement in earnings expected after transition year 2025; M&A
activity to take a back seat for the time being

In the past 2024 financial year, CENIT AG achieved a visible jump in sales
of 12.2% with sales of EUR 207.33 million (previous year: EUR 184.72 million).
The guidance adjusted in October, which forecast sales of EUR 205 to EUR 210
million, was thus fully met. The first-time inclusion of sales from the
companies acquired in 2024, CCE and Analysis Prime, was responsible for
sales of EUR 12.95 million, meaning that the company reported organic sales
growth of 5.2%. This is slightly above the internal target of organic growth
of at least 5.0%.

All product segments contributed to the increase in revenue with at least
double-digit growth. While both service revenue (+14.7%) and third-party
software revenue (+10.7%) benefited from inorganic growth, among other
things, proprietary software revenue also increased dynamically by 14.8%.
Although the revenue share of this particularly high value-added product
area is still below the 10.0% mark at 9.3%, the acquisitions of recent years
had a dilutive effect here.

Among other things, the M&A-related incidental costs (EUR 1.12 million) and
the flatter increase in earnings in the traditionally strong fourth quarter
led to a disproportionately low increase in EBITDA of 5.2% to EUR 17.26
million (previous year: EUR 16.41 million). Without taking into account the
special effects, CENIT AG would have reported an EBITDA increase of 12.0%.
Below EBITDA, the accrued PPA amortization of the last acquisitions is
noticeable, which led to a decline in EBIT of -19.9 % to EUR 7.38 million
(previous year: EUR 9.22 million). The fact that, contrary to expectations, a
negative result for the period of EUR -1.94 million (previous year: EUR 4.50
million) had to be reported is exclusively due to extraordinary write-downs
on financial instruments in the amount of EUR 5.60 million. A financial
investment (ASCon) had to be written off in full.

For the current financial year, CENIT's management anticipates a year of
transition in which inorganic growth will be suspended and the focus will be
on internal processes to improve profitability. With the first-time
full-year inclusion of Analysis Prime in 2025, Group sales are expected to
increase significantly between EUR 229 million and EUR 234 million and EBITA
(EBIT before PPA amortization) slightly to EUR 12.4 million (previous year: EUR
11.35 million). This includes restructuring expenses of around EUR 4.0
million.

For the 2025 financial year, we expect sales revenue of EUR 230.22 million,
assuming sales growth of 3.0% in addition to the base effect of Analysis
Prime. For the two subsequent financial years, we are assuming organic sales
growth of slightly over 5.0% in each case. Following the restructuring
expenses in 2025, margin increases should be achieved again from the coming
financial year 2026 (savings effect: approx. EUR 5.0 million). For 2025, we
expect EBITA of EUR 12.40 million (EBITA margin: 5.4%) and anticipate a
gradual increase in the margin to 8.4% by 2027.

The DCF valuation result is unchanged at EUR 19.00/share. Marginal changes in
the forecasts for the financial years 2025 and 2026 are offset by the
first-time inclusion of the financial year 2027 in the forecast period, so
that any valuation changes cancel each other out. We continue to assign the
BUY rating.

You can download the research here: http://www.more-ir.de/d/32282.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: 22/04/25 (08:12 am)
Date and time of the first dissemination of the study: 22/04/25 (10:00 am)

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2121092 22.04.2025 CET/CEST

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