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:	EUR 16.00
Target price on sight of:	31.12.2026
Last rating change:
Analyst:	Cosmin Filker, Marcel Goldmann

Analysis Prime weighs on revenue and earnings; forecast and price target lowered, BUY rating confirmed

Although CENIT AG achieved a slight increase in revenue of 1.8% to €154.20 million after nine months (previous year: €151.43 million), this growth was primarily attributable to the first-time inclusion of Analysis Prime, which was acquired in July 2024. However, this effect is limited to the first six months and, according to our findings, is likely to have amounted to around €6 million. Adjusted for this effect, the company would have had to accept a decline in revenue of around 2% in the first nine months of 2025. This development is in line with the generally difficult market situation, which is affecting the automotive industry in particular as CENIT AG's most important customer sector.

The difficult market environment is particularly evident in the figures broken down by sales groups. Sales of third-party software (Dassault, SAP, IBM) declined to €74.34 million (previous year: €75.70 million). However, this was offset by increased sales of high-margin proprietary software amounting to €14.15 million (previous year: €13.63 million). As expected, recurring revenues are becoming increasingly important. They now account for 80.3% (previous year: 76.4%) of revenues from CENIT software. Finally, consulting revenues showed the most visible jump to €65.49 million (previous year: €61.98 million). This is primarily due to the inorganic effect of the acquisition of Analysis Prime in 2024.

Despite the increase in sales, EBIT was significantly below the previous year's figure of €3.97 million at €-1.50 million. This is primarily due to special expenses for the implementation of the ‘Project Performance’ restructuring programme, which resulted in a reduction of just over 50 employees. The programme, which is now largely complete, led to a reduction in the workforce to 914 (31 December 2024: 984), while at the same time incurring special expenses of €4.0 million. The first positive effects were already visible in the third quarter, in which a significant reduction in personnel expenses was achieved compared to the first two quarters, leading to a noticeable improvement in EBIT to €2.18 million (Q1 25: €-5.44 million; Q2 25: €1.75 million). Another factor weighing on earnings was the negative EBIT contribution from Analysis Prime, which totalled €-2.6 million in the first nine months of 2025.

CENIT AG is implementing a liquidity-preserving strategy in the current 2025 financial year. Accordingly, no acquisitions are planned for 2025. Together with the high operating cash flow of €12.59 million (previous year: €9.91 million), cash and cash equivalents improved to €20.42 million (31 December 2024: €16.46 million). At the same time, bank liabilities were reduced to €37.23 million (31 December 2024: €49.03 million), which led to a visible improvement in the balance sheet ratios.

For CENIT management, the guidance adjusted in the 2025 half-year report remains valid even after nine months. Revenue of at least €205 million and EBIT of at least €-1.5 million are still expected. In view of the figures achieved in the first nine months, this forecast now appears defensive. This is particularly the case in light of the restructuring measures that have now been finalised. This means that no further extraordinary expenses will be incurred in the fourth quarter of 2025, but that the positive savings effects should have an even greater impact. Although Analysis Prime is likely to report a negative result in the fourth quarter as well, this should be offset by the positive effects.

We assume that the fourth quarter, which is typically the strongest quarter of the year for CENIT AG in terms of revenue, will remain below the previous year's figure, but that revenue growth will be achieved compared to the third quarter. We are therefore maintaining our revenue estimates of €208.95 million unchanged. However, we are adjusting our expected EBIT, which we are raising to €0.82 million (previously: €-0.28 million). We assume that the EBIT margin for the fourth quarter will remain unchanged compared to the third quarter.

We are keeping our estimates for the coming financial years unchanged. In addition to rising sales, CENIT AG should benefit from cost effects. Furthermore, CENIT's management also expects Analysis Prime to make a positive contribution to earnings from 2026 onwards. The adjustment of the estimates for the current financial year has only a minor impact on the result of the DCF valuation model, which is why we are maintaining our price target of €16.00 unchanged. We continue to assign a ‘BUY’ rating.

You can download the research here: 20251107_CENIT_Comment_engl

Contact for questions:
++++++++++++++++
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
+++++++++++++++
Date and time of completion of the study: 06/11/25 (06:01 pm)
Date and time of the first dissemination of the study: 07/11/25 (10:00 pm)