CIMdata PLM Industry Summary Online Archive
31 March 2008
Financial News
CENIT Proposes 50-cent Dividend
At the annual shareholders’ meeting on 30 May 2008, the Board of Directors and the Supervisory Board will propose to distribute a dividend of 50 cents per share to shareholders and to retain 1.7 m € as reserves. This equals a current dividend yield of over 7%. With a dividend payout of approx. 4.18 m €, the management thus underlines its positive expectations for 2008.
Annual Report 2007
CENIT’s 2007 business year was characterized by decisive course-setting, with important investments toward growing internationalization, recruitment of first-rate staff, as well as expansion of the software business. On 31 December 2007, the number of Group-wide employees was 636 (2006: 576) – a satisfactory plus of 10 percent despite a market shortage of qualified staff and a fluctuation rate of 11%.
During the 2007 business year, CENIT achieved consolidated sales of 77.1 m € (2006: 82.4 m €/ -6%). The gross surplus is 58.4 m € (2006: 59 m €/ -1%). EBITDA attained 9.5 m € (2006: 11.1 m €/ -14%). During the reporting period, EBIT fell by 18% from 10.2 m € to 8.4 m €. The year ended with an EBT of 9 m € (2006: 10 m €/ -10%) and a consolidated EPS of 0.73 € (2006: 1.00 €). The dip in earnings is rooted in lower PLM software proceeds as well as delays in IBM product sales for our software solutions.
Asset and Financial Situation
The Group’s asset situation is highly positive. On the balance-sheet date, shareholder equity amounted to 26.2 m € (2006: 24.3 m €), accounting for an equity ratio of 72% (2006: 62%). On the balance-sheet date, the total of bank deposits and short-term securities amounted to 18.3 m € (2006: 18.6 m €). There are no liabilities, short- or long-term, in relation to credit institutions. CENIT currently does not avail itself of any granted lines of credit. The operative cash flow attained 9.9 m € (2006: 10.3 m €), and the free cash flow rose to 5.6 m € (2006: 3.6 m €).
Development of Orders
As at 31 December 2007, Group-wide orders on hand amounted to 16.9 m € (2006: 18.2 m €), and incoming orders for 2007 totaled approx. 79.6 m € (2006: 84.8 m €).
Breakdown of Sales by Group Business Segments
CENIT’s PLM business segment achieved sales of 48.6 m € (2006: 53.9 m €). The EIM business segment achieved sales totaling 28.5 m € (2006: 28.5 m €).
Sales in the service sector remained virtually unchanged on-year at 46.60 m € (2006: 46.79 m €), making it the strongest contributor to sales with a share of 61%. Over the past business year, sales of CENIT software amounted to 9.18 m € (2006: 11.24 m €/ -18%). Thus, approx. 12% of overall sales can be attributed to CENIT’s proprietary software. Sales of non-CENIT software rose by 35% to 12.60 m € (2006: 9.36 m €), thus accounting for 16% of total sales. The hardware business contracted as expected, by 42% to 8.68 m € (2006: 14.98 m €). This equals approx. 11% of total CENIT sales.
Foreign Subsidiaries
Over the past business year, CENIT (Switzerland) AG was able to achieve sales proceeds of 3.9 m € (2006: 2.8 m €), with EBIT of 2.2 m € (2006: 1.1 m €).
With sales of 5.9 m € (2006: 4.6 m €), CENIT North America Inc. achieved EBIT totaling 0.5 m € (2006: 0.4 m €).
During the 2006 business year, CENIT established a subsidiary in Romania. In the field of application management and software development, CENIT is now in a position to offer its products and services far more competitively. The subsidiary is currently in the build-up stage and is to be further expanded in 2008. With sales of 0.4 m € (2006: 0.03 m €), CENIT SRL was able to achieve EBIT of 0.06 m € (2006: 0.01 m €).
During the 2007 business year, CENIT also established a subsidiary in France. This is likewise in the set-up phase. CENIT SARL achieved sales of 0.06 m € (previous: 0 €), accounting for EBIT of T€ -3 (previous: T€ 0)
On 27 December 2007, CENIT AG succeeded in acquiring our long-term PLM competitor and highly successful Dassault Systèmes partner cad scheffler, and to integrate it into the Group effective 1 January 2008 .
Outlook
With our strategic orientation towards attractive markets for product lifecycle management, enterprise information management and application management outsourcing, as well as our focus on our core competencies within these fields, CENIT will continue to invest in the consulting and software markets in 2008 and 2009. The targeted investment in important growth fields will also be necessary in future, both to cement our leading role and to expand our strong existing market position. Our competency in the field plays a decisive role in this respect. Meanwhile we possess an excellent market reputation in the aerospace industry, not only in the European but also the US aerospace industry. We also expect significant sales growth in the financial service provider sector. The sector’s investment needs for EIM solutions are rising steeply, e.g. for audit-safe archiving and compliance fulfillment requirements. In addition, the fundamental factors of CENIT’s balance sheet continue to offer the enterprise the stability and also the necessary dynamics to be able to invest freely and independently in the growth markets relevant to CENIT, even with a view to the expected future business climate. After all, the risk remains that the financial market tensions triggered by the US sub-prime crisis will remain and lead to a major overall slowdown of economic growth.
In terms of consolidated sales, we expect a return to clear gains in 2008, and growth in line with the market in 2009. Particularly the rising earnings from the sale of CENIT’s proprietary software and our world-wide sales cooperation for our software products with our partners IBM, SAP und Dassault should contribute to improved consolidated results. In the consulting field, we expect growing demand from the aerospace industry. The enterprise information management sector already saw above-market growth in 2007 and will again profit from a positive investment climate for EIM solutions in 2008. For the years 2008 and 2009, our goal is to ensure sustainable improvement in the Group’s operative performance.
Over the coming years, we will continue to push forward our activities in the US, particularly in the software sector, together with SAP, Dassault Systèmes and – as of 2008 – also with the Right Hemisphere Corporation. The new collaboration and world-wide sales cooperation with Right Hemisphere will open up new potential on the US market which will positively affect CENIT’s sales of non-proprietary software and the associated services.
The build-up of our subsidiary for software development and application management outsourcing services in Romania is a further important step towards enhancing CENIT’s future competitiveness.
In addition, the integration of cad scheffler offers us access to important new customers and market shares in the PLM field. This integration is a major task for CENIT in 2008 and is intended to make positive contributions to the Group’s results in the coming years.
Our new commitment in France represents an important bridge to our key account EADS. Important course-setting for the future will be made and filtered here.
To be able to rise even more successfully to future important EADS challenges, the three leading consulting and software providers as specialists for industrial solutions, application development and product lifecycle management (PLM), namely CS Communication & Systèmes, Paris, CENIT AG, Stuttgart, and PROSTEP AG, Darmstadt, have established a joint venture for the mutual key account EADS. The collaboration acts under the name CenProCS AIRliance GmbH. The three joint venture partners are pursuing a common goal: to create customized solutions for EADS. The association offers all three enterprises the opportunity to participate in major projects and thus to consolidate or expand their official status as strategic IT service providers. This ensures global and efficient service and software quality. In concert with our two partners, CENIT can now act in the interest of EADS Airbus in Germany, France, Spain, and the UK, as well as in the US, India and Romania – a competitive edge that should not be underestimated.
In 2008, we plan to increase our staff numbers by 10%. Should the trend continue, further staff increases can be expected for 2009.
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