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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
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

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:
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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: 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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