Classification of GBC AG to Cenit AG

Restructuring will impact earnings in 2024; 2025 financial year will be a year of transition; growth impetus expected in 2026

According to initial preliminary figures, CENIT AG generated sales of around € 207 million in the past fiscal year and is thus in the middle of the sales guidance adjusted in October 2024 (€ 205 million - € 210 million). However, with preliminary EBITDA of around € 17 million (previous year: € 16.41 million), the EBITDA guidance (€ 17.9 million - € 18.4 million) was not met. At the end of October 2024, CENIT's management had already lowered its earnings expectations for the fourth quarter of 2024. This was against the backdrop of a cyclical weakness in demand in the Automotive segment, which is responsible for around 30% of total sales. In addition, CENIT AG was affected by lower call-offs from the aviation industry, so that overall the usual jump in earnings for the company in the fourth quarter was no longer foreseeable. The ongoing switch from one-time licences to SaaS revenues also made matters worse.

The fact that EBITDA is now below the guidance is due to the ongoing restructuring of the organisation, including the planned reduction in personnel. Some of the provisions required for this were already recognised in the 2024 financial year, which had a negative impact on earnings in advance. Similar to EBITDA, the preliminary EBIT of € 7.2 million to € 7.4 million is also below the guidance (€ 8.0 million to € 8.5 million).

With the publication of the 2024 Annual Report (10 April 2025), CENIT's management will publish guidance for the current 2025 financial year for the first time. The long-term target (CENIT 2030) could then be updated in the course of the year. In view of the fact that a new government has yet to be formed in Germany and possible tariff-related trade barriers, it is likely to be particularly difficult to provide meaningful guidance.

In the current 2025 financial year, CENIT AG should nevertheless report a visible increase in sales. The base effect from the first-time full-year consolidation of Analysis Prime, which was acquired in July 2024, should contribute to this in particular. Taking into account additional sales growth of the US subsidiary, Analysis Prime should make an additional sales contribution of around € 17.5 million in 2025 compared to the past financial year. Beyond this base effect, we expect CENIT AG to achieve only slight growth (approx. 2%), meaning that we anticipate total sales revenue of € 228.43 million. We assume that demand will largely move sideways, reflecting the current economic difficulties. For the current financial year 2025, we anticipate restructuring expenses of € 4 million and are therefore reducing our previous EBIT forecast to € 8.02 million (previously: € 12.52 million). The current financial year should be seen as a transitional year in which the high level of M&A activity to date is also likely to come to a standstill. 

We are assuming higher organic growth momentum for 2026, but are slightly more cautious with a forecast turnover of € 244.42 million (previously: € 250.08 million). Although demand in the company's main customer sectors is currently weak, there are also rays of hope. For example, Dassault Systèmes has agreed long-term partnerships with the Volkswagen Group and the BMW Group. CENIT AG could benefit significantly from this downstream, e.g. in the connection to the SAP landscape or in the context of consulting services. In addition, this could have a signalling effect on suppliers, enabling CENIT AG to generate direct sales. The operating result should also reflect the savings potential realised as part of the restructuring measures (GBC forecast: approx. € 5 m p.a.), so that we assume a jump in EBIT to € 15.44 m (previously: € 20.01 m).

As part of the DCF valuation model, we have determined a new price target of € 19.00 (old: € 22.00). The reduction of the price target results from the adjusted estimates for the financial years 2025 and 2026. We continue to assign a BUY rating.