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27.03.2006

CENIT prepares for further growth in 2006

CENIT Software as growth and earnings driver

Ad hoc Disclosure in line with Article 15 of the Securities Trading Act

Stuttgart, March 27, 2007 – For CENIT 2006 was characterised primarily by expanding international business and related investments in further profitable growth. Higher marketing and sales expenditure resulted particularly from the successful expansion of the US business and higher revenues from the sale of CENIT software via distribution partners such as SAP, IBM/FileNet and Dassault Systèmes. In 2006, the number of employees across the group again increased by 10% and now totals 576. The foundation of a new company in Rumania in 2006 is also a necessary investment to improve the company’s competitive ability. The basis for figures for 2006 is preparing the future of CENIT and its strategic alignment.

In financial year 2006, CENIT generated group sales of EUR 82.4 million (2005: EUR 74.3 million / 11%). The services area again generated strong growth. This was accompanied by an extremely positive development in selling CENIT proprietary software. Gross profit rose again, by 13% to EUR 59 million (2005: EUR 52.1 million). EBITDA reached €11.1 million (2005: EUR 10.2 million / 9%). In the reporting period, EBIT moved up from EUR 9.4 million by 9% to EUR 10.2 million. CENIT will conclude an extremely important and positive year with EBT of EUR 10 million (2005: EUR 9.1 million / 10%) and group earnings per share (EPS) of EUR 1.00 (2005 adjusted: EUR 0.81). Earnings per share include a positive non-recurring effect of EUR 699 thousand from one-off corporation tax income.

The good earnings situation positively impacted the group assets situation. As of the reporting date, equity totalled EUR 24.3 million (2005: EUR 19.6 million), resulting in an equity ratio of 62% (2005: 58%). As of the balance sheet date, bank balances and securities totalled EUR 18.7 million (2005: EUR 20.8 million). Cash flow from operating activities was EUR 10.3 million (2005: EUR 8.9 million), with a free cash flow of EUR 1.6 million being reached (2005: EUR 4.4 million).

Dividend proposal

The Executive Board and Supervisory Board will propose the shareholders’ meeting the distribution of a dividend of EUR 0.50 to the shareholders and the transfer of EUR 3.5 million to revenue reserves.

Breakdown of sales

In the Product Lifecycle Management segment, CENIT achieved sales of EUR 53.9 million (2005: EUR 48.9 million / 10%) and an EBIT of EUR 6.9 million (2005: EUR 6.4 million / 8%). The Enterprise Content Management segment posted sales of EUR 28.5 million (2005: EUR 25.4 million/ 12%) and an EBIT of EUR 3.3 million (2005: EUR 3.0 million / 10%).

Sales with CENIT software increased by 47% to EUR 11.2 million. Now 14% of sales are achieved with CENIT proprietary software. In the previous year, the figure was EUR 7.7 million, approximately 10% of total sales. The business with third-party software also increased, by 13% to EUR 9.4 million (2005: EUR 8.3 million). The development in the services area is equally pleasing. Sales again increased, by 9% to EUR 46.8 million (2005: EUR 42.8 million). The hardware business declined by 3% to EUR 15 million (2005: EUR 15.5 million).

Foreign subsidiaries

In the past financial year, CENIT (Schweiz) AG generated sales of EUR 2.6 million (2005: EUR 1.3 million) and an EBIT of EUR 1.1 million (2005: EUR 56 thousand). The software solution FileNet Systems Monitoring was the key driver for results and sales. On sales of EUR 4.7 million (2005: EUR 1.7 million), CENIT North America Inc. posted an EBIT of EUR 0.4 million (2005: EUR 0.2 million). With a total of 17 employees and a positive earnings contribution already been made to the group, the decision of the Executive Board to develop the software and consultancy business in the USA in a rigorous fashion was confirmed on a sustained basis.

In the 2006 financial year, CENIT also founded a subsidiary in Rumania. In the application management and software development area, CENIT is now able to face the market on a more competitive basis. The company is being developed and is to be further extended in 2007. Smaller initial projects were already processed in 2006. On sales of EUR 0.03 million, CENIT SRL generated an EBIT of EUR 0.01 million.

Order situation

As of December 31, 2006 the order backlog for the group was EUR 18.2 million (2005: EUR 19.3 million) and incoming orders in 2006 totalled approximately EUR 84.8 million (2005: EUR 79.6 million). Overall, the share of new customers increased to 7% in 2006.

Outlook

CENIT has established the objective to increase the share of proprietary software in total sales to between 20 and 30 percent over the next two to three years. To do this, it is necessary to expand the international distribution channel further. A fundamental element of this strategic focus is the existing distribution and software development cooperation with Dassault Systèmes, SAP, FileNet and IBM. For group sales we expect growth in line with the market in 2007 and 2008. In particular, increasing revenues for the sale of CENIT proprietary software and the worldwide distribution cooperation for the FileNet System Monitoring solution will contribute to this.

With the strategic alignment on the attractive markets for Product Lifecycle Management, Enterprise Content Management and Application Management Outsourcing and concentration on our core competencies, CENIT will also invest strongly in the consultancy and software market in 2007 and 2008. We anticipate that in 2007 and 2008 all segments will contribute to improving further the operating performance of the group. Our market and customer contacts in all segments are a good basis for offering our business partners supplementary products and services. Added to this is a consistent alignment to the world market and the expansion of our USA activities, particularly in the software area together with SAP and Dassault Systémes. The development of our subsidiary for software development and application management outsourcing services in Rumania in line with the market is a further important step to improve competitive strength at CENIT.

We continue to expect a positive market environment in our relevant markets. We want to take this opportunity to gain further market share. For this reason, CENIT wants to increase its staffing levels by 10% again in 2007. Should the trend continue, then a further expansion in staff numbers is to be expected in 2008. We want to become stronger, particularly in the consultancy business and in bespoke software development as well as advancing our US business with American staff.

The expansion of the US business initiated in 2006 brought with it a strong increase in marketing and sales expenses. This will again be the case in 2007 as the market opportunities in the USA are stronger than the possible risks.

Forward-Looking Statements This news release may contain forward-looking statements about the business, financial condition, results of operations and earnings outlook of CENIT Words such as "may,""will," "expect," "anticipate," "contemplate," "intend," "plans," "believe,""continue" and "estimate," and variations of these words and similar expressions, identify these forward-looking statements. These statements are not guarantees of future performance, involve certain risks, uncertainties and assumptions that are difficult to predict, and are based upon assumptions as to future events that may not prove accurate. Therefore, actual outcomes and results may differ materially from what is expressed herein. In any forward-looking statement in which CENIT expresses an expectation or belief as to future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement or expectation or belief will result or be achieved or accomplished. Actual operating results may differ materially from such forward-looking statements and are subject to certain risks.

Please contact:

CENIT AG Systemhaus
Prime Standard Listing - ISIN DE0005407100

Fabian Rau
Vice President Investor Relations & Marketing
Industriestraße 52-54, D-70565 Stuttgart
Tel.:  +49 711 7825-3185
Fax:  +49 711 782544-4185
E-Mail: info@cenit.de