Clas­si­fi­ca­ti­on of GBC AG to Ce­n­it AG

1st HY 2024: Ac­qui­si­ti­on of Ana­ly­sis Prime is va­lue-enhan­cing, HY fi­gu­res in line with ex­pec­ta­ti­ons, pri­ce tar­get rai­sed to €24.15 (pre­vious­ly: €20.55), ra­ting: BUY

In the first six months of the cur­rent busi­ness year, CENIT AG once again achie­ved si­gni­fi­cant sa­les growth of 6.7% to € 93.36 mil­li­on (pre­vious year: € 87.47 mil­li­on). Fol­lo­wing sa­les growth of 16.4% in the first quar­ter of the cur­rent fi­nan­cial year, sa­les growth in the se­cond quar­ter re­main­ed in the dou­ble-di­git ran­ge at 10.8%.

De­spi­te the in­crease in sa­les, CENIT AG re­cor­ded a de­cli­ne in EBIT to € 2.01 mil­li­on (pre­vious year: € 2.62 mil­li­on). Ad­jus­ted for ac­qui­si­ti­on-re­la­ted ex­pen­ses (ac­qui­si­ti­on of CCE and ac­qui­si­ti­on of Ana­ly­sis Prime) and the dis­po­sal of CENIT Ja­pan, which con­tri­bu­ted € 0.87 mil­li­on to EBIT in the pre­vious year, CENIT AG would have achie­ved an EBIT in­crease of 33.2% to € 2.62 mil­li­on (pre­vious year: € 1.97 mil­li­on).

On 17 July 2024, CENIT an­noun­ced the ac­qui­si­ti­on of 60% of the shares in the US com­pa­ny Ana­ly­sis Prime LLC. Foun­ded in 2018, the com­pa­ny has a to­tal of 72 em­ployees and is ac­ti­ve in the field of plan­ning and ana­ly­sing busi­ness-cri­ti­cal pro­ces­ses ba­sed on SAP ar­chi­tec­tu­re. The com­pa­ny has a high de­gree of spe­cia­li­sa­ti­on and is able to call up high dai­ly ra­tes for con­sul­ting and im­ple­men­ta­ti­on.

A pro­vi­sio­nal base pri­ce of USD 14.31 mil­li­on was agreed for the ac­qui­si­ti­on of 60% of the shares. The fi­nal purcha­se pri­ce and the va­ria­ble com­pon­ents will not be de­ter­mi­ned un­til Ana­ly­sis Prime has pre­sen­ted its in­te­rim fi­nan­cial state­ments. For the cur­rent 2024 fi­nan­cial year, CENIT AG ex­pects a pro rata sa­les con­tri­bu­ti­on of USD 11.50 mil­li­on and EBIT of USD 2.70 mil­li­on.

Ana­ly­sis Prime has re­cor­ded strong sa­les growth in re­cent fi­nan­cial ye­ars and has a high­ly sca­lable busi­ness mo­del. With this ac­qui­si­ti­on, CENIT AG is in­cre­asing­ly en­te­ring the US mar­ket, which is ac­com­pa­nied by cor­re­spon­ding cross-sel­ling po­ten­ti­al. For ex­am­p­le, the ISR con­sul­ting busi­ness, which co­vers the in­fra­struc­tu­re area in the SAP Ana­ly­tics en­vi­ron­ment in par­ti­cu­lar, can be trans­fer­red to the USA. In the op­po­si­te di­rec­tion, the Ana­ly­sis Prime busi­ness is to be trans­fer­red to Eu­ro­pe. In the USA, the new­ly ac­qui­red com­pa­ny is the mar­ket lea­der in its field and an im­portant part­ner for SAP.
CENIT’s Ma­nage­ment Board has con­firm­ed the pre­vious fo­re­cast in its half- year re­port. Sa­les of € 195 mil­li­on to € 202 mil­li­on and EBIT of € 11.70 mil­li­on to € 12.20 mil­li­on are still ex­pec­ted for the cur­rent fi­nan­cial year.

The­se fo­re­casts do not yet in­clude the re­cent­ly ac­qui­red Ana­ly­sis Prime. Ac­cor­ding to the com­pa­ny, the new com­pa­ny is ex­pec­ted to con­tri­bu­te sa­les of USD 11.50 mil­li­on and EBIT of USD 2.70 mil­li­on in 2024. This is a pro rata tem­po­ris fi­gu­re, as the com­pa­ny will only be in­cluded in the CENIT scope of con­so­li­da­ti­on from 1 Au­gust 2024. The ex­pec­ted EBIT con­tri­bu­ti­on from Ana­ly­sis Prime also does not in­clude any M&A‑related ex­pen­ses or amor­ti­sa­ti­on of ac­qui­red in­tan­gi­ble as­sets (PPA). Ac­cor­ding to the Exe­cu­ti­ve Board, Ana­ly­sis Prime is not ex­pec­ted to con­tri­bu­te to ear­nings in 2024 af­ter ta­king the­se ex­pen­ses into ac­count. We only ex­pect to see a vi­si­ble jump in ear­nings from the fol­lo­wing fi­nan­cial year.

For the cur­rent 2024 fi­nan­cial year, we the­r­e­fo­re ex­pect sa­les of € 211.12 mil­li­on (pre­vious­ly: € 200.42 mil­li­on) and an un­ch­an­ged EBIT of € 12.01 mil­li­on (pre­vious­ly: € 12.01 mil­li­on). With sa­les growth of 5.0%, we ex­pect an ac­qui­si­ti­on-re­la­ted sa­les con­tri­bu­ti­on of € 24.21 mil­li­on (2025) and € 25.43 mil­li­on (2026) and are rai­sing our sa­les fo­re­casts ac­cor­din­gly. We ex­pect PPA amor­ti­sa­ti­on of € 3.0 mil­li­on and an ac­qui­si­ti­on-re­la­ted EBIT con­tri­bu­ti­on of € 2.21 mil­li­on (2025) and € 2.87 mil­li­on (2026). We have ad­jus­ted our ear­nings fo­re­casts ac­cor­din­gly.

As part of the DCF va­lua­ti­on mo­del, we as­su­me a con­stant share­hol­ding of 60%. In ad­di­ti­on to the pro­vi­sio­nal base purcha­se pri­ce of USD 14.31 mil­li­on (€ 13.31 mil­li­on), a va­ria­ble earn-out could be­co­me due in 2025. We an­ti­ci­pa­te an ad­di­tio­nal purcha­se pri­ce of € 2.89 mil­li­on. We have de­ter­mi­ned a new tar­get pri­ce of € 24.15 (pre­vious­ly: € 20.55). Ad­jus­ted for the pri­ce tar­get-in­cre­asing roll­over ef­fect, this re­sults in a pri­ce tar­get of €22.14, which we ca­te­go­ri­se as va­lue-enhan­cing for the ac­qui­si­ti­on of Ana­ly­sis Prime. We con­firm our BIY ra­ting.

You can down­load the re­se­arch here: http://​www​.more​-ir​.de/​d​/​3​0​3​6​9​.​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: 05/08/24 (08:52 am)
Date and time of the first dis­se­mi­na­ti­on of the stu­dy: 05/08/24 (1:00 pm)