CENIT AG

Quarterly Report • Nov 19, 2018

CENIT Aktiengesellschaft, Stuttgart
At a glance – January 1 until September,	30, 2018
in EUR k	September 30, 2018	September 30, 2017
Sales	123,306	102,219
Gross profits	63,655	57,360
EBITDA	6,927	8,634
Operating returns (EBIT)	4,731	6,926
EBT	4,719	6,907
Netincome of the group	3,403	4,723
Earnings per share (basic) in EUR	0.41	0.56
Earnings per share (diluted) in EUR	0.41	0.56
Number of employees at end of period	739	746
EBIT‐Margin	3.8%	6.8%
Profit‐Margin	2.8%	4.6%
in EUR k	September 30, 2018	December 31, 2017
Equity in ratio	47.2%	46.8%
Equity	35,862	40,855
Liabilities	40,174	46,409
Balance sheet total	76,036	87,264

SALES DEVELOPMENT VERSUS 9 MONTHS 2017

In the first nine months, CENIT AG increased its sales by approximately 21 percent. The company recorded significant growth in its sales of third‐party software (+43.1%), while the sales of own software declined by ‐8.3%.

OVERVIEW OF SALES FIGURES AND RESULTS

During the first 9 months, CENIT group generated sales of EUR k 123,306 (prior year: EUR k 102,219/20.6%). EBITDA amounted to EUR k 6,927 (prior year: EUR k 8,634/‐19.8%) and EBIT reached EUR k 4,731 (prior year: EUR k 6,926/‐31.7%). Earnings per share were EUR 0.41 (prior year: EUR 0.56).

BREAKDOWN OF SALES

In its PLM segment, CENIT achieved in the first 9 months sales of EUR k 112,363 (prior year: EUR k 90,318/24.4%). The EIM segment contributed sales of EUR k 10,943 against EUR k 11,901 during the same period of 2017 (‐8.0%). Sales of third‐party software totaled EUR k 75,620 (prior year: EUR k 52,853/43.1%), while sales of CENIT's proprietary software decreased from EUR k 11,409 to EUR k 10,461/‐8.3%. Sales in the service and consulting segment amounted to EUR k 36,852 (prior year: EUR k 37,746/‐2.4%). Other sales totaled EUR k 373 (prior year: EUR k 211/76.8%).

COST DEVELOPMENT

Other operating expenses totaled EUR k 12,903 (prior year: EUR k 11,006).

INVESTMENTS

Investment expenditures in the first nine months 2018 amounted to EUR k 1,255 (prior year: EUR k 1,109).

CHANGES IN MANAGING AND SUPERVISORY BOARDS

None in the 3rd quarter. At the Annual General Meeting on May 18, 2018, Prof. Dr. Oliver Riedel was elected as Chairman of the Supervisory Board and Stephan Gier as a member of the Supervisory Board. Ricardo Malta was elected as the new employee representative to the Supervisory Board.

EVENTS OF SPECIAL SIGNIFICANCE WHICH MAY AFFECT BUSINESS RESULTS

None.

INTERIM DIVIDEND

No interim dividend has been distributed.

DIVIDENDS PAID OR PROPOSED FOR PAYMENT

At the General Meeting of Shareholders on 18 May 2018, the Managing Board and the Supervisory Board of CENIT proposed the payment of a dividend of EUR 1.00 for the 2017 business year. EUR k 8,368 were paid out to the CENIT AG shareholders.

ORDERS DEVELOPMENT

During the first nine months, the group‐wide order intake totaled EUR k 125,130 (prior year: EUR k 98,708). Order Backlog as at 30 September 2018 amounted to EUR k 47,285 (prior year: EUR k 58,152).

ORDERS OF SPECIAL SIGNIFICANCE

None.

ASSETS AND LIABILITIES

On 30 September 2018, the balance‐sheet total amounts to EUR k 76,036. Bank deposits and liquid assets as of the balance sheet date are totaling EUR k 18,278 (31 Dec. 2017: EUR k 23,692). Bank borrowings amount to EUR K 3 (31 Dec. 2017: EUR k 3,152) and are entirely of short‐term nature. Trade receivables are totaling EUR k 22,239. Equity amounts to approx. EUR k 35,862 (31 Dec. 2017: EUR k 40,855) resulting in an equity ratio of 47.2% (31 Dec. 2017: 46.8%)

OPERATIVE CASHFLOW

During the first nine months, CENIT generated an operative cashflow of EUR k 9,565 (prior year: EUR k 6,501).

EMPLOYEES

On 30 September 2018, CENIT employed 739 staff group‐wide (prior year: 746).

SUPPLEMENTARY, OPPORTUNITIES AND FORECAST REPORTS

For the current year, CENIT expects total sales in the range of EUR 175 to 180 million. Based on the course of business year to date, CENIT expects an operative result (EBIT) of around EUR 10 million.

CENIT Aktiengesellschaft, Stuttgart CONSOLIDATED BALANCE SHEET (in accordance with IFRSs) (unaudited)
in EUR k	September 30, 2018	December 31, 2017
ASSETS
NON‐CURRENT ASSETS
Intangible assets	13,865	14,839
Property, plant and equipment	2,720	2,711
Investment in Joint Venture	60	60
Other financial assets	2,000	0
Deferred tax assets	869	894
NON‐CURRENT ASSETS	19,514	18,504
CURRENT ASSETS
Inventories	88	87
Trade receivables	22,239	28,551
Receivables from Joint Venture	3,451	2,975
Current income tax assets	3,305	1,729
Other receivables	934	2,384
Cash and cash equivalents	18,278	23,692
Prepaid expenses	8,227	9,342
CURRENT ASSETS	56,522	68,760
TOTAL ASSETS	76,036	87,264

CENIT Aktiengesellschaft, Stuttgart CONSOLIDATED BALANCE SHEET (in accordance with IFRSs) (unaudited)
in EUR k	September 30, 2018	December 31,2017
EQUITY AND LIABILITIES
EQUITY
Issued capital	8,368	8,368
Capital reserve	1,058	1,058
Currency translation reserve	919	801
Statutory earnings reserve	418	418
Other earnings reserves	13,242	13,242
Profit carried forward	7,361	6,926
Net profit	3,236	8,803
Equity attributable to shareholders of CENIT AG	34,602	39,616
Non‐controlling interests	1,260	1,239
TOTAL EQUITY	35,862	40,855
NON‐CURRENT LIABILITIES
Other liabilities	3,570	3,842
Deferred tax liabilities	547	588
NON‐CURRENT LIABILITIES	4,117	4,430
CURRENT LIABILITIES
Bank liabilities	3	3,152
Trade liabilities	5,010	7,922
Liabilities due to Joint Venture	11	35
Other liabilities	13,015	17,059
Current income tax liabilities	285	460
Other provisions	110	192
Deferred income	17,623	13,159
CURRENT LIABILITIES	36,057	41,979
TOTAL EQUITY AND LIABILITIES	76,036	87,264

CENIT Aktiengesellschaft, Stuttgart CONSOLIDATED INCOME STATEMENT (in	accordance	with IFRSs) (unaudited)
in EUR k		1st Jan – 30th September 2018	1st Jan – 30th September 2017
1. REVENUE		123,306	102,219
2. Increase/decrease in work of process		16	0
Total operating performance		123,322	102,219
3. Other operating income		1,178	855
Operating performance		124,500	103,074
4. Cost of materials	60,845		45,714
5. Personnel expenses	43,825		37,720
6. Amortization and depreciation of intangible assets and property, plant and equipment	2,196		1,708
7. Other operating expenses	12,903		11,006
		119,769	96,148
OPERATING RESULT		4,731	6,926
8. Other interest and similar income	0		1
9. Other interest and similar expenses	12		20
		‐12	‐19
RESULT FROM ORDINARY ACTIVITIES		4,719	6,907
10. Income taxes		1,316	2,184
NET INCOME OF THE GROUP FOR THE YEAR		3,403	4,723
thereof attributable to the shareholders of CENIT AG		3,235	4,604
thereof attributable to non‐controlling interests		168	119
Earnings per share in EUR
basic		0.41	0.56
diluted		0.41	0.56

CENIT Aktiengesellschaft, Stuttgart CONSOLIDATED INCOME STATEMENT (in accordance with IFRSs) (unaudited)
in EUR k		3rd Quarter 2018	3rd Quarter 2017
1. REVENUE		41,193	42,939
2. Increase/decrease in work of process		16	0
Total operating performance		41,209	42,939
3. Other operating income		435	524
Operating performance		41,644	43,465
4. Cost of materials	20,647		21,945
5. Personnel expenses	14,105		13,840
6. Amortization and depreciation of intangible assets and property, plant and equipment	730		712
			4,229
7. Other operating expenses	4,012	39,494	40,726
OPERATING RESULT		2,150	2,738
8. Other interest and similar income	0		1
9. Other interest and similar expenses	4		15
		‐4	‐14
RESULT FROM ORDINARY ACTIVITIES		2,146	2,724
10. Income taxes		536	422
NET INCOME OF THE GROUP FOR THE YEAR		1,610	2,302
thereof attributable to the shareholders of CENIT AG		1,563	2,236
thereof attributable to non‐controlling interests		47	66
Earnings per share in EUR
basic		0.19	0.28
diluted		0.19	0.28

CENIT Aktiengesellschaft, Stuttgart CONSOLIDATED STATEMENT OF CASH FLOWS (in accordance with IFRS) (unaudited)

	1st Jan – 30th	1st Jan – 30th
in EUR k	September	September
	2018	2017
Cash flow from operating activities
Earnings before tax and net interest	4,731	6,926
Adjustments for:
Amortization/depreciation of intangible assets and property, plant and equipment	2,196	1,708
Gains (‐) and losses (+) on disposals of non‐current assets	32	14
Increase/decrease in other non‐current assets and liabilities and provisions	‐321	‐257
Interest paid	‐12	‐20
Interest received	0	1
Income tax paid	‐3,083	3,484
Net operating income before changes in net working capital	3,543	4,888
Increase/decrease in trade receivables and other current non‐cash assets	8,662	1,501
Increase/decrease in inventories	0	394
Increase/decrease in current liabilities and provisions	‐2,640	‐282
Net cash flows from operating activities	9,565	6,501
Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets	‐1,255	‐1,098
Purchase of non‐current financial assets	‐2,000	0
Purchase of shares in fully consolidated entities (net cash outflow)	‐200	‐6,197
Income from the sale of property, plant and equipment	0	0
Net cash paid for investing activities	‐3,455	‐7,295
Cash flow from financing activities
Dividends paid to shareholders	‐8,368	‐8,368
Dividends paid to non‐controlling interests	‐147	‐147
Net cash paid for financing activities	‐8,515	‐8,515
Net increase/decrease in cash and cash equivalents	‐2,405	‐9,309
Change in cash and cash equivalents due to foreign exchange differences	140	‐661
Cash and cash equivalents at the beginning of the reporting period	20,540	33,606
Cash and cash equivalents at the end of the reporting period	18,275	23,636

CENIT Aktiengesellschaft, Stuttgart CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in accordance with IFRS) (unaudited)

In EUR k		1st Jan – 30th September 2018	1st Jan – 30th September 2017
Net income for the year		3,403	4,723
Other comprehensive income
Items that will be reclassified to the income statement in the future under certain circumstances
Currency translation reserve of foreign subsidiaries	118		‐425
Items that will not be reclassified to the income statement in the future
Actuarial gains/losses from defined benefit obligations and similar obligations	0		0
Deferred taxes recognised on other comprehensive income	0		0
Other comprehensive income after tax		118	‐425
Total comprehensive income		3,522	4,298
Thereof attributable to the shareholders of CENIT AG		3,354	4,179
thereof attributable to non‐controlling interests		168	119

CENIT Aktiengesellschaft, Stuttgart STATEMENT OF CHANGES IN EQUITY (in accordance with IFRS) (unaudited)

	Attributable to shareholders of CENIT AG
in EUR k	Subscribed capital	Capital reserves	Currency translation reserve	Revenue reserves Legal reserve	Other reserves	Retained earnings	Net income	Non‐ controlling interests	Total
As of 1st January 2017	8,368	1,058	1,279	418	13,099	7,213	8,080	1,063	40,578
Net income prior year						8,080	‐8,080
Total comprehensive income			‐478		153		8,803	185	8,663
Acquisition of a subsidiary								128	128
Withdrawals from / addition to the revenue reserves					‐10			10	0
Dividend distribution						‐8.368		‐147	‐8,515
As of 31st December 2017	8,368	1,058	801	418	13,242	6,926	8,803	1,239	40,855
Total comprehensive income						8,803	‐8,803		0
Acquisition of a subsidiaries			118				3,236	168	3,522
Dividend distribution						‐8.368		‐147	‐8,515
As of 30 September 2018	8,368	1,058	919	10 418	13,242	7,361	3,236	1,260	35,862

CENIT Aktiengesellschaft

Segment Reporting by Business Unit (in accordance with IFRSs) unaudited

				Reconciliatio
		EIM	PLM	n	Group
in EUR k
External revenue	Q1-Q3 2018	10,943	112,363	0	123,306
	Q1-Q3 2017	11,901	90,318	0	102,219
EBIT	Q1-Q3 2018	1,485	3,246	0	4,731
	Q1-Q3 2017	978	5,948	0	6,926
Share of profit of	Q1-Q3 2018	0	0	0	0
joint ventures	Q1-Q3 2017	0	0	0	0
Other interest result and	Q1-Q3 2018	0	0	-12	-12
financial result	Q1-Q3 2017	0	0	-19	-19
Income taxes	Q1-Q3 2018	0	0	1,316	1,316
	Q1-Q3 2017	0	0	2,184	2,184
Net income of the Group	Q1-Q3 2018	1,485	3,246	-1,328	3,403
	Q1-Q3 2017	978	5,948	-2,203	4,723
Segment assets	Q1-Q3 2018	4,740	48,783	22,453	75,976
	Q1-Q3 2017	6,479	50,844	29,333	86,656
Investment in a joint venture	Q1-Q3 2018	0	60	0	60
	Q1-Q3 2017	0	61	0	61
Segment liabilities	Q1-Q3 2018	5,511	33,823	840	40,174
	Q1-Q3 2017	5,240	42,645	1,029	48,914
Investments in property, plant aQ1-Q3 2018		147	1,108	0	1,255
equipment and intangible assetQ1-Q3 2017		104	1,005	0	1,109
Amortization and depreciation	Q1-Q3 2018	344	1,851	0	2,195
	Q1-Q3 2017	337	1,371	0	1,708

EIM = Enterprise Information Management; PLM = Product Lifecycle Management

CENIT Aktiengesellschaft

Group Segment Report by Region (in accordance with IFRSs) unaudited

	Germany	witzerland S	merica North A	Romania	France	m Belgiu	Netherlands	Japan	Reconciliation	Consolidation	Group
Q1-Q3 2018	66.640	7.423	8.470	1.487	33.730	3.104	1.515	937	0	0	123.306
Q1-Q3 2017	65.439	8.581	10.309	1.381	13.454	1.049	474	1.531	0	0	102.219
Q1-Q3 2018	16.158	76	137	97	4.859	16	10	19	869	-2.727	19.514
Q1-Q3 2017	15.128	32	164	55	5.220	7	2	12	757	-2.733	18.644
Q1-Q3 2018	60	0	0	0	0	0	0	0	0	0	60
Q1-Q3 2017	61	0	0	0	0	0	0	0	0	0	61
Q1-Q3 2018	840	54	17	65	246	13	10	10	0	0	1.255
Q1-Q3 2017	951	27	18	36	74	0	0	2	0	0	1.109

DIRECTORS' HOLDINGS:

Number of shares as at September 30th, 2018

Total number of shares :		8,367,758
Management Board:		Supervisory Board:
Kurt Bengel:	6,000	Prof. Dr. Oliver Riedel: 80
Matthias Schmidt:	1,670	Stephan Gier:	0
		Ricardo Malta:	0

Financial Calendar:

26th ‐28th November 2018	German Equity Forum, Frankfurt
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