CENIT AG

Earnings Release • Nov 9, 2006

News Details

Ad-hoc | 9 November 2006 07:59

CENIT Group net income up 22 percent

Ad hoc announcement transmitted by DGAP – a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. —————————————————————————— CENIT Group net income up 22 percent Profitable US business boosts 3rd quarter results CENIT Switzerland with sharp sales and earnings raise Hardware sales decreases 13 percent Stuttgart, 9 November 2006 – The CENIT Executive Board’s strategic decision to expand operations in the US in 2006 already results in profits after only 9 months, contributing positively to Group earnings. Despite rising marketing and expansion-related expenses, business has been accelerating dramatically for CENIT software and consulting services in the US PLM market, with CENIT North America posting sales of €3.17 million (2005:€1.14 million) and EBIT of €0.28 million (2005: €0.18 million). At the half-year mark, the company reported a loss of €0.2 million. CENIT Switzerland also showed a significant growth with non-consolidated sales up 126% to €2.15 million (2005: €0.95 million) and EBIT rising to €0.84 million (2005: €0.02 million). Continued progress in software marketing in the 3rd quarter fuelled CENIT’s profitable growth, though the operating loss accumulated in the first 9 months of the year in the hardware business weighed on earnings and the hardware sales decreased 13 percent. Restructuring measures were started in the hardware segment to address this situation. Hardware contributed 18% of consolidated sales, while software accounted for 26% and consulting 56%. Systematically growing our consulting staff since the start of the year from 523 up to 563 approximately represents an important step for the further organic growth of CENIT in line with our strategy. Another 30 positions approximately are still unfilled at this time. Summary of consolidated reporting figures: Consolidated sales for the first 9 months rose by 7 percent to €58.33 million (2005: €54.51 million). Group gross margin expanded again by 12% to €43.51 million (2005: €38.77 million). Consolidated EBITDA was up approximately 12% to €8.00 million (2005: €7.13 million). Consolidated EBIT improved to €7.28 million (2005: €6.55 million/11%). Consolidated EBT came out at €7.05 million (2005: €6.43 million/10%) and Group net income increased 22% to hit €5.62 million (2005: €4.59 million). Earnings per share (EPS) on the basis of 8,367,758 shares came to €0.67 (2005 adjusted to current number of shares: €0.55/22%). Consolidated operating cash flow totalled €7.67 million (2005: €6.24 million/23%). Total consolidated assets of €32.35 million (31.12.2005: €33.91 million) were reported. The equity ratio improved to 67% (2005: 58%), with equity totalling €21.65 million (31.12.2005: €19.57 million) at the close of the period under review. Cash and cash equivalents including securities totalled €16.40 million (31.12.2005: €20.81 million) as of the statement date. Incoming orders for the Group were valued at €61 million (2005: €59 million). Applying the POC (percentage of completion) method to the figures from the 2005 9 Month Report yields the following: Sales €54.8 million; EBITDA €7.45 million; EBIT €6.87 million; EBT €6.75 million; EPS €0.59. Outlook The CENIT Executive Board anticipates CENIT software sales to be the fastest growing over the long term, and to benefit particularly from the seasonal effect typically seen in the 4th quarter. Expansion plans for the US market will be driven forward in order to capitalise better on business opportunities there. The Executive Board views CENIT’s business prospects going forward as fundamentally positive across all core business areas and regions. About CENIT: Since its founding in 1988 the Company has been a specialist in product lifecycle management, enterprise content management solutions and application management outsourcing. CENIT is listed on the Prime Standard segment of the German Stock Exchange and has a staff of over 560 employees. CENIT works for such customers as Allianz, BMW, DaimlerChrysler, EADS, Airbus, AXA, Metro, VW and numerous SMEs. http://www.cenit.de Other advisories: This press/ad hoc release may contain forward-looking statements regarding the business, financial and earnings situation of the CENIT corporation as well as earnings estimates. Forward-looking statements are characterised by such phrases and expressions as ‘the company may’, or ‘the company will’, ‘expects’, ‘anticipates’, ‘is considering’, ‘is intending’, ‘is planning’, ‘believes’, ‘continues to’, ‘estimates’ and other similar phrases and expressions. Such statements entail no assurance that anticipated events will transpire. On the contrary, such statements involve risks, uncertainty and contingencies that are difficult to predict and are furthermore based on assumptions regarding future events that may prove inaccurate. Actual outcomes may thus deviate substantially from expectations thereby expressed. Forward-looking statements made by CENIT representing expectations or projections of future events are made in good faith and may be presumed to be adequately grounded in fact; no assurance however can be provided that such statements, expectations or projections will be borne out/fulfilled/achieved. Actual operating results may vary substantially from those projected in forward-looking statements and are subject to specific risks – please consult the CENIT AG Systemhaus management report. Contact: Fabian Rau Direktor Investor Relations f.rau@cenit.de Telefon: 0711 – 78 25 3185 Fax: 0711 – 78 25 4185 (c)DGAP 09.11.2006 —————————————————————————