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

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 €51.51 million in the first three months of 2025 (previous year: €50.55 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 €3 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 €22.15 million (previous year: €19.86 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 €-2.44 million (previous year: €3.15 million). An important factor in this development was a special expense of €3.35 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 €0.3–0.4 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 €1.4 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 €-5.44 million (previous year: €1.24 million) was impacted by additional PPA amortisation of around €0.9 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 €11.66 million (previous year: €12.54 million), which includes advance payments received from customers. Cash and cash equivalents increased to €27.03 million (31 December 2024: €16.46 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 €229 million and €234 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. € 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 €12.4 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 €0.3 to €0.4 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 €19.00.

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)