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

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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

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The issuer is solely responsible for the content of this research. The

result of this research does not constitute investment advice or an

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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 (.7%) and third-party

software revenue (.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:

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: 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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