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.

You can down­load the re­se­arch here: http://​www​.more​-ir​.de/​d​/​3​1​8​5​1​.​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/​d​e​/​O​f​f​e​n​l​e​g​u​n​g​.​htm
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Date and time of com­ple­ti­on of the stu­dy: 26/02/25 (08:14 am)
Date and time of the first dis­se­mi­na­ti­on of the stu­dy: 26/02/25 (10:00 am)