CENIT AG

Quarterly Report • Oct 27, 2005

9-Months Report 2005

CENIT AG Systemhaus

	Industriestraße 52-54
D-70565 Stuttgart
Phone:	+49 711 7825-30
Fax:	+49 711 7825-4000
Internet:	http://www.cenit.de

Investor Relations:

Fabian Rau Phone: +49 711 7825-3185 Fax: +49 711 7825-4185 E-Mail: aktie@cenit.de

CENIT AT A GLANCE (unaudified)

At a glance - January 1 until September 30, 2005

in Mill. EUR	September 30, 2005	Sept. 30, 2004
Sales	54,51	50,95
Gross profits	38,77	34,32 *
EBITDA	7,13	4,43
Operating returns (EBIT)	6,55	3,93
EBT	6,43	3,98
Netincome of the group	4,59	2,97
Result per share (basic) in EURO	1,10	0,71
Result per share (diluted) in EURO	1,07	0,71
Number of employees at end of period	511	463
EBIT - Margin	12,0%	7,7%
Profit - Margin	8,4%	5,8%
in Mill. EUR	September 30, 2005	December 31, 2004
Equity in ratio	55,7%	49,0%
Equity	17,29	13,96
Liabilities	13,78	14,52
Balance sheet total *changed inclosure	31,07	28,47

LETTER TO SHAREHOLDERS

Dear Shareholders, Business Partners, Customers and Interested Parties,

The past nine months have demonstrated that our consultancy services in the fields of Outsourcing, Enterprise Content Management and Product Lifecycle Management are optimally oriented to suit the needs of the market. As of today, we already know that we will surpass our goals and projections for 2005. Naturally, we will not sit back and enjoy what we have already achieved, but are already making important plans in order to allow business developments to continue to move forward at CENIT over the next few years. Here, there will be an equal focus on technology partnerships and special software developments and the expansion of expertise and personnel in the core areas of our business segments.

The new orders we have received in the software and consultancy area reflect something our customers have known for some time – namely that they can achieve decisive competitive advantages by using the services we offer.

The Executive Board

MANAGEMENT REPORT

In its spring survey, the leading German economic institute predicts worldwide real gross domestic product growth of 3.0% from April, compared to 3.8% the previous year. However, general economic growth is expected to weaken slightly in the growth centres of the USA and China, as well as in many emerging markets. Thus, in Germany, for example, as a result of the current uncertain political situation, growth is progressing more slowly than in most other countries in Europe and Asia and in the USA. According to its most recent statements, the Association of Computer Consultants in Germany (VDEB) expects global market volumes to increase by around 4.2% to EUR 917 billion in 2005. While the USA and Europe are expected to generate above-average growth of 4.5% and 4.4%, respectively, Japan will lag behind at 2.4%. The VDEB's statements are based on an analysis performed by EITO, the European Information Technology Observatory. At the same time, in its "black book", the market research company IDC forecasts an increase in global IT sales of 5.5% for the year from April 2005 and 6.0% in 2006.

America, the Asian-Pacific area and Europe are expected to contribute equally to this positive development. For Germany, IDC is predicting increased growth in IT expenditure of 3.6 % in 2005 to 4.8% in 2006.

EARNINGS REVIEW

It is clear from 9-months-figures presented here that CENIT will surpass its business targets for 2005. The positive business developments at CENIT were driven by growth in our three core business areas of Product Lifecycle Management, Enterprise Content Management und Outsourcing Solutions. Sales of our own CENIT software solutions continue to develop positively. Three contracts in particular are representative of CENIT's success: firstly, in the outsourcing area, the taking over of the application management function of an automobile manufacturer in southern Germany; secondly, the introduction of a SAP PLM core system for Airbus suppliers Pfalz-Flugzeugwerke; and thirdly, the implementation of an Enterprise Content Management solution for Westdeutsche Immobilienbank.

Consolidated sales increased by 7 percent to EUR 54.51 million (2004: EUR 50.95 million). Consolidated gross income reached EUR 38.77 million (2004: EUR 34.32 million / 13 %). Group EBITDA rose by 61 percent to EUR 7.13 million (2004: EUR 4.43 million EUR). Group EBIT improved by 2.62 million EUR and amounted to EUR 6.55 million (2004: EUR 3.93 million / 67%), while Group EBT was EUR 6.43 million (2004: EUR 3.98 million / 62%). Group basic EPS were EUR 1.10 (2004: EUR 0.71 / 55%).

Group cash flow from operating activities totalled EUR 6.24 million (2004: EUR 4.05 million). The Group's total assets amounted to EUR 31.07 million (2004: EUR 28.47 million). The equity ratio improved from 49 percent to 55.7 percent. At the end of the period under review, equity was EUR 17.3 million (31 December 2004: EUR 13.9 million). Cash and cash equivalents increased from the previous year's level of EUR 14.7 million to EUR 17.3 million.

ADDITIONAL EXPLANATORY NOTES

There were no changes in accounting policies.

DEVELOPMENT OF COSTS

Other operating costs developed in accordance with our financial planning and remained constant compared to 2004.

CAPITAL EXPENDITURE

Capital expenditure in the first 9 months of 2005 amounted to EUR 0.74 million (31.12.2004: EUR 0.71 million). These costs comprised the usual expansion and replacement investments in connection with IT, software and office equipment.

BREAKDOWN OF EARNINGS

CENIT operates in two business segments. Approx. 65% of total revenue was attributable to the Company's e-engineering business unit and approx. 35% to the e-business business unit.

CHANGES IN EXECUTIVE BOARD AND SUPERVISORY BOARD

None

EVENTS OF PARTICULAR SIGNIFICANCE THAT COULD AFFECT

BUSINESS OPERATIONS

None

INTERIM DIVIDENDS

No interim dividends were distributed.

AMOUNT DISTRIBUTED OR PROPOSED FOR DISTRIBUTION

No dividend was distributed or proposed for distribution.

NEW ORDERS

In the first 9 months, CENIT continued to generate strong growth in incoming orders, which increased by 9 % compared to the previous year to around EUR 59 million. As at 30 September 2005, orders on hand amounted to EUR 19 million, an increase of 12 %.

ORDERS OF PARTICULAR SIGNIFICANCE

None

EQUITY INVESTMENTS

CENIT Switzerland generated earnings before interest and tax (EBIT) of EUR 0.02 million on unconsolidated sales of EUR 0.95 million. CENIT North America generated sales of EUR 1.14 million and EBIT of EUR 0.18 million.

CASH, CASH EQUIVALENTS AND SECURITIES

As at 30 September 2005, cash and cash equivalents, including marketable securities, amounted to EUR 17.3 million (EUR 14.7 million). For further details, please refer to the balance sheet and cash flow statement included in this interim report.

FINANCIAL POSITION, FINANCIAL PERFORMANCE AND CASH FLOWS

Total assets amounted to EUR 31.07 million. Trade receivables and other current assets stood at EUR 9.69 million. Cash flow from operating activities at CENIT amounted to EUR 6.24 million.

EMPLOYEES

As at 30 September 2005, the number of employees within the Group was 511 (2004: 463).

OUTLOOK

As communicated on 29 September, as result of continued strong business performance, the business targets for the 2005 financial year announced in February will be surpassed. The third quarter results provide further evidence to support this statement.

	CENIT Aktiengesellschaft Systemhaus
--	-------------------------------------	--	--

Consolidated Balance Sheet prepared in accordance with IFRS (unaudified)

in EUR '000	September 30, 2005	Dec. 31, 2004
ASSETS
FIXED ASSETS
Intangible assets	99	124
Property, plant and equipment	1.403	1.222
	1.502	1.346
DEFERRED TAX ASSETS (long-term)	94	92
CURRENT ASSETS
Inventories	2.202	1.595
Trade receivables	9.598	10.574
Tax receivables	13	16
Other receivables	76	100
Securities	12.997	2.988
Cash and cash equivalents	4.307	11.696
Prepaid expenses	278	67
	29.471	27.036
	31.067	28.474

	CENIT Aktiengesellschaft Systemhaus
--	-------------------------------------	--

Consolidated Balance Sheet prepared in accordance with IFRS (unaudified)

in EUR '000	Sept. 30, 2005	Dec. 31, 2004
EQUITY AND LIABILITIES
EQUITY
Subscribed capital	4.184	4.184
Capital reserve	448	418
Foreign currency reserve	-142	-115
Revenue reserves	5.039	1.239
Net income/loss of the Group	7.725	8.192
Minority Interests	37	37
	17.291	13.955
LIABILITIES (long-term)
Deferred tax liabilities	181	312
Long-term liabilities to banks	0	0
	181	312
LIABILITIES (short-term)
Short-term liabilities to banks	774	2.183
Trade payables	2.249	1.817
Other liabilities	7.896	7.837
Tax Provisions	2.441	2.101
Other Provisions	187	122
Deferred Income	48	147
	13.595	14.207
	31.067	28.474

Consolidated Income Statement prepared in accordance with IFRS (unaudified)

in EUR '000			Sept. 30, 2005 September 30, 2004
1. Sales		54.510	50.950
2.Changes in inventories in finished goods and work in process
		364	962 *
Total operating perfomance		54.874	51.912
3. Other operating income		523	1.100 *
Operating perfomance		55.397	53.012
4. Cost of materials	16.627		18.694 *
Gross profits		38.777	34.318
5. Personnel expenses	23.176		21.573
6. Amortization of intangible assets and depreciation on property,
plant and equipment	582		498
7. Other operating expenses	8.465		8.319 *
		48.851	49.084
Operating result		6.546	3.930
8. Other interest and similar income	175		100
9. Amortization of financial assets and securities classified as current assets
	-247		0
10. Interest and similar expenses	42		47
		-114	54
Result of ordinary activities		6.432	3.983
12. Income taxes	1.843		1.011
		1.843	1.011
15. Net income/loss of the Group		4.588	2.972
13. Net loss for the period before minority interests		4.587	2.972
14. Minority interests		1	0
Earnings per share (undiluted) in EUR		1,10	0,71
Earnings per share (diluted) in EUR		1,07	0,71

Consolidated Income Statement prepared in accordance with IFRS (unaudified)

1. Sales 2.Changes in inventories in finished goods and work in process Total operating perfomance 3. Other operating income Operating perfomance 4. Cost of materials		19.600 -482 19.118 167	18.610
			281 *
			18.891
			411 *
		19.285	19.303
	6.134		7.507 *
Gross profits		13.151	11.796
5. Personnel expenses	7.567		6.806
6. Amortization of intangible assets and depreciation on property,
plant and equipment	187		146
7. Other operating expenses	2.707		2.682 *
		16.595	17.141
Operating result		2.690	2.160
8. Other interest and similar income	51		34
9. Amortization of financial assets and securities classified as current assets
	-325		0
10. Interest and similar expenses	34		9
		-309	25
Result of ordinary activities		2.381	2.185
11. Extraordinary result		0	0
12. Income taxes	280		666
		280	666
15. Net income of the Group		2.102	1.519
13. Net loss for the period before minority interests		2.101	1.519
14. Minority interests		1	0
Earnings per share (undiluted) in EUR		0,50	0,36
Earnings per share (diluted) in EUR		0,49	0,36

Consolidated Statement of Cash Flows prepared in accordance with IFRS (unaudified) for the period from January 1 to September 30, 2005

in EUR '000	Sept. 30,2005	Sept. 30,2004
Cash flow from operating activities
Earnings before income taxes and deferred taxes	6.432	3.983
Adjusted for:
Amortization of intangible assets and depreciation of property, plant and equipment	582	498
Amortization of intangible assets	0	0
Loss on the disposal of fixed assets	3	-15
Dividend Income	-373
Other non-cash expenses and income	-261	-362
In/Decrease of provisions	-7	0
Interest income	-175	-100
Interest and similar expenses	42	47
Operating result before changes to net working capital	6.243	4.052
Increase/decrease in trade receivables and other assets	792	2.346
Increase/decrease in inventories	-607	-1.633
Increase/decrease in trade liabilities,other short term provisions
and liabilities	-743	-1.970
Cash flow from ordinary operations	5.685	2.795
Cash paid for interest and similar expenses	-42	-47
Cash received for interest	208	100
Dividend Income	373
Cash paid for income taxes	-1.635	0
Net cash received from operating activities	4.589	2.848
Cash flow from investing activities
Purchase of property, plant and equipment and intangible assets	-741	-447
Proceeds from the disposal of property, plant and equipment	0	0
Decrease of fixed assets carrying amount	-3
Increase in other loans		0
Net cash paid for investing activities	-744	-447
Cash flow from financing activities
Equity finance	30
Payment for shareholder	-1.255
Cash proceeds (+) from bank loans		0
Cash payments (-) from long-term bank loans	0	-240
Change in convertible bond	0	0
Net cash paid for investing activities	-1.225	-240
Net increase/decrease in cash and cash equivalents	2.620	2.161
Cash and cash equivalents at the beginning of the period	14.684	7.152
Net increase/decrease in cash and cash equivalents	2.620	2.161
Cash and cash equivalents at the end of the period	17.304	9.313

Consolidated Statement of Changes in Shareholders' Equity in accordance with IFRS (unaudified)

	Subscribed	Capital	Currency	Revenue	Net result	Convertible	Total
in EUR '000	capital	reserve	reserve	reserve	of the Group	bonds
as of January 1,2004	4.184	418	-122	1.239	4.340	0	10.059
Minority share of waiver
of receivable			3		-36	33	0
Currency fluctuation			4				4
Net income for the Group					3.888	4	3.892
as of Dec. 31,2004	4.184	418	-115	1.239	8.192	37	13.955
Transfers
to revenue reserves				3.800	-3.800		0
Capital reserve
share option rights		30		0			30
Changes in
equity interest in					-1.255	0	-1.255
Currency change			-27				-27
Net income for the Group					4.588	0	4.588
Sept. 30,2005	4.184	448	-142	5.039	7.725	37	17.291

Segment Report by Segments prepared in accordance with IFRS (unaudified)

for the period from January 1 to September 30, 2005

in EUR `000	EB	EE	not allocated	Continuing Operations	Discontinuing Operations not allocated	Group
Sales to third parties
Q1 - Q3 2005	18,940	35,570	0	54,510	0	54,510
Q1 - Q3 2004	17,085	33,865	0	50,950	0	50,950
EBIT
Q1 - Q3 2005	2,064	4,482	0	6,546	0	6,546
Q1 - Q3 2004	1,521	2,424	0	3,945	-15	3,930
Interest
Q1 - Q3 2005	0	0	-114	-114	0	-114
Q1 - Q3 2004	0	0	54	54	0	54
Taxes
Q1 - Q3 2005	0	0	-1,843	-1,843	0	-1,843
Q1 - Q3 2004	0	0	-1,011	-1,011	0	-1,011
Net Income/loss of the group
Q1 - Q3 2005	2,064	4,482	-1,958	4,588	0	4,588
Q1 - Q3 2004	1,521	2,424	-958	2,987	-15	2,972
Segment assets
Sep 30, 2005	4,906	8,750	17,411	31,067	0	31,067
Dec 31, 2004	4,973	8,709	14,792	28,474	0	28,474
Segment liabilities
Sep 30, 2005	4,168	6,212	3,396	13,776	0	13,776
Dec 31, 2004	3,215	6,708	4,596	14,519	0	14,519
Capital expenditure
Sep 30, 2005	166	575	0	741	0	741
Dec 31, 2004	145	568	0	713	0	713
Amortization & depreciation
Q1 - Q3 2005	119	463	0	582	0	582
Q1 - Q3 2004	112	386	0	498	0	498

EB = e-business; EE = e-engineering

Segment Report by Region prepared in accordance with IFRS (unaudified)

in E U R `0 0 0	D	C H	S U A	t a l loc te d no a	Co l i da t ion ns o	Gr ou p
In te Sa les rc om p an y
Q 1 - Q 3 2 0 0 5	4 2 8	3 7 8	3	0	-8 0 9	0
Q 1 - Q 3 2 0 0 4	4 8 2	2 8 9	9 9	0	-8 0 7	0
Sa les h ir d ies to t t p ar
Q 1 - Q 3 2 0 0 5	5 2, 8 7 5	4 9 9	1, 1 3 6	0	0	5 4, 5 1 0
Q Q 1 - 3 2 0 0 4	4 9, 4 1 4	8 8 0	6 5 6	0	0	5 0, 9 5 0
Se t a ts g me n ss e
Se 3 0, 2 0 0 5 p	1 3, 3 4 5	1 6 1	2 5 2	1 7, 4 1 1	-1 0 2	3 1, 0 6 7
De 3 1, 2 0 0 4 c	1 3, 4 9 2	1 8 6	1 9 8	1 4, 7 9 2	-1 9 4	2 8, 4 7 4
Ca i ta l e d i tu p xp en re
Se 3 0, 2 0 0 5 p	7 2 3	-2	2 0	0	0	7 4 1
De 3 1, 2 0 0 4 c	6 8 8	8	1 7	0	0	7 1 3

DIRECTORS´ Holding

EXPLANATORY NOTES TO SHARES AND SUBSCRIPTION RIGHTS HELD BY DIRECTORS, COMPANY OFFICERS AND EMPLOYEES IN ACCORDANCE WITH Section 160 Subsection 1 No. 2 AND Section 5 AktG

The Directors of the company have 12.000 share option rights.

CENIT employees have also 91.500 share option rights.

Directors´ Holding: Number of shares as at September 30, 2005

Total Number of Shares	4.183.879
------------------------	-----------

Shares owned by the Executive Board:		Shares owned by the Supervisory Board:
Hubertus Manthey	150.508	Falk Engelmann	160.000
Christian Pusch	2.350	Hubert Leypoldt	800
Andreas Schmidt	198.496	Dr. Dirk Lippold	0