CENIT : 6 Months Report 2021

CENIT GROUP - AT A GLANCE

1 JANUARY TO 30 JUNE 2021 (UNAUDITED)

in EUR k		Q2 2021		Q2 2020	Change		H1 2021		H1 2020	Change
		in %			in %
Key data
Revenue		37,706		35,461	+6.3		73,928		74,689	-1.0
Third-party software		23,910		22,977	+4.1		47,552		46,701	+1.8
from licences		3,756		1,898	+97.9		7,474		4,584	+63.0
from recurring sales*		20,154		21,079	-4.4		40,078		42,117	-4.8
Proprietary software		4,111		3,683	+11.6		7,665		7,323	+4.7
from licences		1,487		865	+71.9		2,365		1,710	+38.3
from recurring sales*		2,624		2,818	-6.9		5,300		5,613	-5.6
Consulting and services		9,681		8,784	+10.2		18,698		20,378	-8.2
Merchandise		3		17	-82.4		12		287	-95.8
EBITDA		2,686		1,470	+82.7		3,520		3,808	-7.6
EBIT		1,458		-24	>100.0		936		781	+19.8
as % of sales		3.87		-0.07	>100.0		1.27		1.05	+21.0
Net income		929		-178	>100.0		427		312	+36.9
per share in EUR
(basic and undiluted after mi-		0.11		-0.02	>100.0		0.05		0.04	+25.0
nority interests)
Cash flow data
Cash flow from current business		1,947		-239	>100.0		9,714		9,414	+3.2
activities
Cash flow from		-383		-363	+5.5		-663		-724	-8.4
investment activity
Cash flow from		-4,747		-1,027	+362.2		-5,583		-1,890	+195.4
financing activity
Balance sheet ratios							30/06/		31/12/	Change
						2021		2020	in %
Liquid assets							29,524		26,056	+13.3
Net liquidity							12,463		14,133	-11.8
Total assets							86,384		83,449	+3.5
Equity ratio in %									51.20	+0.3
					45.42
Employees on reporting date							695		711	-2.3

* Subscription and software maintenance contracts

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Report on assets and financial and earnings situation

In comparison with last year, the first half of 2021 was dominated by an increase in sales of software licences (+56.3%), which contributed to an increase in consolidated EBIT on last year (+19.8%).

With the COVID-19 pandemic still causing difficulties in the market environment, the first quarter of 2021 saw, as anticipated, a challenging start. This was followed in the 2nd quarter 2021 by a consolidated EBIT up by EUR 1,482 k compared to the same quarter of last year, resulting in a Group-EBIT of EUR 936 k for the first half of 2021. This was driven by sales of software licences and third-party and proprietary software solutions in particular, which were higher than in the same period of last year (+EUR 3,545 k, +56.3%). At the same time, sales of proprietary software licences rose by 38.3%; in our experience, such increases tend to be followed by further sales for software maintenance as well as services and consulting.

Despite the fact that, unlike H1 2020, the first half of 2021 included two "corona quarters", consolidated sales for H1 2021 were maintained at approximately the same level as last year (EUR 73,928 k, - 1.0%). Measures rolled out last year to intensify and maintain contact with customers through virtual training sessions, webinars and support, as well as cost-management measures rolled out jointly with managers, allowed the Group to achieve a consolidated EBIT up by EUR 155 k on last year's figure (EUR 936 k).

Overview of segments

The performances of the PLM and EIM segments in the first half of 2021 contrasted strongly with each other. EIM registered declining external revenue (-4.8%), which was reflected in a segment EBIT down by EUR 107 k on last year's figure (EUR 655 k). The PLM sector, however, with segment sales comparable to last year's, improved its segment EBIT by EUR 262 k (to EUR 281 k). This gain was made possible by the strength of its licensing business, especially in June 2021 (+EUR 1,449 k, +138%).

Operating cash flow continues to be clearly positive, contributing to the CENIT Group's solidity.

The continued positive cash flow from current business activities (EUR 9,714 k; last year: EUR 9,414 k) essentially results from a positive change in working capital (EUR 8,138 k). While part of this was allocated to investments in tangible fixed assets (EUR 465 k), it was primarily used for payment of lease liabilities (EUR 1,651 k) and the 2020 dividend (EUR 3,932 k). Consequently, CENIT's liquid assets increased by EUR 3,468 k to EUR 29,524 k in the period to 30 June 2021.

CENIT Group's financial position is characterised by a consistently high equity ratio of over 45%, stable net liquidity of EUR 12,463 k and growing cash holdings.

Total assets have increased by EUR 2,935 k since 31/12/2020. This results essentially from an increase in cash holdings (+EUR 2,935 k) on the assets side and, mainly, increased non-current liabilities arising from software update contracts (+EUR 8,345 k) accompanied by reduced equity due to the 2020 dividend payment (-EUR 3,490 k) on the liabilities side.

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Events after the interim report period

There have been no reportable events since the end of the interim report period to 30 June 2021.

Employees

On the reporting date, 30 June 2021, the CENIT Group had 695 employees (31/12/2020: 711). Despite the pandemic and the consequent necessity of short-time work, we succeeded in keeping staff turnover low. Retaining motivated and well-trained staff will allow the Group to take advantage of future business opportunities as the economy recovers.

Report on principal transactions with related parties

There have been no material changes to the relevant information since the last consolidated financial statement for the period to 31 December 2020.

Report on opportunities and risks

For information on the principal opportunities and risks - in particular the impact of the COVID-19 pandemic - for the anticipated development of the CENIT Group, we refer you to the relevant comments in the Report on expected developments within the Group's management report for the period to 31 December 2020 and to the remarks in this half-yearly financial report. In the intervening period, there have been no material changes to this information.

Report on forecasts and other statements regarding anticipated development

Over the course of a year, business activity is subject to certain seasonal fluctuations. In the past, contributions to sales and earnings tended to be lowest in the first quarter and, as a result of traditionally strong business at the year-end, highest in the fourth quarter. Consequently, interim results had only limited value as indicators of results for the whole fiscal year.

Against the backdrop of the results for the first half of 2021 and, having taken current estimates of the probable evolution of demand in relevant markets into account, we continue to expect consolidated sales of EUR 152,000 k and consolidated earnings (EBIT) of approximately EUR 4,900 k, provided that the general conditions do not deteriorate significantly as a result of the pandemic.

These forecasts remain subject to the express proviso that the COVID-19 pandemic does not lead to any significant deterioration of the global economic and sector-specific environments.

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CENIT AKTIENGESELLSCHAFT, STUTTGART

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IN ACCORDANCE WITH IFRS) (UNAUDITED)

in EUR k		Q2 2021		Q2 2020		H1 2021		H1 2020
REVENUE		37,706		35,461		73,928		74,689
Other operating income		869		323		1,613		700
OPERATING INCOME		38,575		35,784		75,541		75,389
Cost of materials		19,201		18,969		37,921		38,511
Personnel expenses		14,470		13,339		29,767		28,650
Amortisation of intangible assets and depreciation		1,229		1,493		2,584		3,026
of property, plant and equipment
Other operating expenses		2,217		2,007		4,333		4,420
OPERATING EXPENSES		37,117		35,808		74,605		74,608
NET OPERATING INCOME (EBIT)		1,458		-24		936		781
Interest income		0		0		0		0
Interest expenses		26		45		78		88
NET PROFIT (LOSS) BEFORE TAXES (EBT)		1,432		-69		858		693
Income taxes		503		109		431		381
NET INCOME		929		-178		427		312
Amount attributable to CENIT AG shareholders		914		-163		401		310
Amount attributable to non-controlling interests		15		-15		26		2
Earnings per share in EUR, basic and diluted		0.11		-0.02		0.05		0.04
Items that, under certain circumstances, will be reclassified under the income statement in the
future
Compensation from currency translation for for-		0		-41		15		35
eign subsidiaries
Items that will not be reclassified under the income statement in future
Other comprehensive income after taxes		0		-41		15		35
Total comprehensive income		929		-219		442		347
Amount attributable to CENIT AG shareholders		914		-204		416		345
Amount attributable to non-controlling interests		15		-15		26		2

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