All for One Group SE — Interim / Quarterly Report 2006

May 11, 2006

Quarterly Report 1/2006

Key Figures Schlüsselzahlen (IFRS)

Profit and Loss Account Gewinn-und-Verlust-Rechnung	01.01.-31.03.06 EUR 1 000	01.01.-31.03.05 EUR 1 000
Sales to third parties (consolidated)
Umsatzerlöse (konsolidiert)	15 914	10 514
EBITA
Operatives Ergebnis vor Abschreibungen auf immaterielles Anlagevermögen	332	581
EBIT
Operatives Ergebnis	133	538
Result for the period
Periodenergebnis	(752)	296
Earnings per share in EUR
Ergebnis pro Aktie in EUR	(0,14)	0,06
Cash Flow Statement
Mittelflussrechnung
Cash flows from operating activities
Mittelfluss aus operativer Geschäftstätigkeit	268	1 724
Cash flows from investing activities
Mittelfluss aus Investitionstätigkeit	(15 107)	(3 059)
Cash flows from financing activities
Mittelfluss aus Finanzierungstätigkeit	15 128	(362)
Cash and cash equivalents at end of interim period
Zahlungsmittel und -äquivalente am Ende der Berichtsperiode	12 129	11 325
Balance Sheet Bilanz
Balance sheet total (at period end / at 31.12.05)
Bilanzsumme (zum Periodenende / zum 31.12.05)	63 846	42 076
Shareholders' equity (at period end / at 31.12.05)
Eigenkapital (zum Periodenende / zum 31.12.05)	25 788	26 663
Shareholders' equity ratio % (at period end / at 31.12.05)
Eigenkapitalquote % (zum Periodenende / zum 31.12.05)	40%	63%
Average number of employees
Mitarbeiter im Durchschnitt	384	287
Employees at period end
Personal zum Periodenende	425	313

AC-Service AG Posts Major Sales Increase in First Quarter Borrowing Causes One-Time Burden on Earnings

The integration of All for One Systemhaus GmbH Midmarket Solutions (All for One GmbH), whose acquisition was agreed to on 7 February 2006 and completed on 17 February 2006, has allowed the AC Group to move into a top position among SAP service providers in the German-language market supporting small to mid-size companies. This clearly positions AC-Service as a one-stop, full-service provider that can deliver the entire value chain extending from SAP licenses, industry solutions, implementation consulting and software maintenance all the way to operating services in its Managed IT Service Center. The AC Group posted a significant increase in inquiries, projects and business deals during the first quarter of 2006. The number of contacts with visitors at the joint AC-Service and All for One exhibition booth during this year's CeBIT computer trade show was more than double that of last year. The unfinished build-up in staffing meant that our own resources were unable to completely handle all the work generated by this big increase in the first quarter of 2006 sales. In addition to this these first-quarter results also include major one-time charges in connection with the loan arrangement for funding the acquisition of All for One GmbH. This is the first quarterly report to reflect the changes we announced in the Annual Report 2005, most of which involve the inclusion of All for One GmbH and changes in financial reporting standards. Prior-year figures were adjusted accordingly to ensure comparability. Because these corporate acquisitions result in depreciation and amortisation of intangible assets, we have chosen the EBITA to replace the EBIT as the key indicator used in reporting operating earnings. Apart from one-time costs involved in arranging the loan to fund the acquisition, these results are within the board of directors' expectations.

On the Growth Track

AC-Service finished the first quarter of 2006 with sales of EUR 15.9 million (prior year: EUR 10.5 million), which is an increase of 51%. The EBITA after these first three months of 2006 was EUR 0.3 million (prior year: EUR 0.6 million). Included in this figure are one-time costs of some EUR 0.2 million for providing the loan to fund the acquisition of All for One GmbH.

The loss after taxes of minus EUR 0.8 million (prior year: EUR 0.3 million) includes other one-time expenses of EUR 0.4 million that arose in arranging the acquisition financing and that have to be reported in the financial results in accordance with IFRS. Earnings/loss per share (IFRS) on the quarter were minus 14 euro cents (prior year: 6 euro cents). The quarterly average staffing strength in full-time equivalents was 384 (prior year: 287 FTEs) and there were a total of 425 people (prior year: 313 people) employed in the AC Group at the end of the quarter. The shareholders' equity of EUR 25.8 million (31 Dec 2005: EUR 26.7 million) as at the end of the first quarter of 2006 accounts for 40% (31 Dec 2005: 63%) of the balance sheet total of EUR 63.8 million (31 Dec 2005: EUR 42.1 million) following the borrowing of EUR 15.5 million to fund the takeover of All for One GmbH. Cash and cash equivalents total EUR 12.1 million (31.12.2005: EUR 11.9 million). All this makes for a healthy balance of accounts.

Enhanced Products and Services Give Rise to New Designations

The inclusion of the Process Partner and KWP acquisitions in 2005 and All for One in 2006 greatly intensified the ongoing process of enhancing and improving the products and services we offer within our individual business divisions. The 2005 Annual Report marked the first time that the designations »Managed IT Services« and »SAP Solutions« were used for the divisions previously known as »IT Outsourcing« and »SAP Consulting«. There was no change to the »Human Resource Services« business division. These new division designations were also applied to the segment reporting and do not affect comparability with prior-year figures.

Managed IT Services

The Managed IT Services division closed the first quarter with segment revenues of EUR 4.4 million (prior year: EUR 4.1 million) and an EBITA (before allocation of corporate costs) of EUR 0.3 million (prior year: minus EUR 0.1 million). Sales and earnings exceeded the board of directors' expectations. The average staffing strength in full-time equivalents was 93 (prior year: 96 FTEs).

The already existing sales collaboration with All for One was intensified following the 11 November 2005 announcement of the letter of intent to take over All for One GmbH. A big increase in promising projects was the outcome of having worked together to refine the portfolio of products and services, which extends from licenses and market-leading SAP industry solutions to consulting services all the way to running the solutions within the Managed IT Service Center. A number of our client companies are getting ready to significantly expand their business activities, which may well generate additional positive impulses within the Managed IT Services division.

SAP Solutions

All for One GmbH has been allocated to the SAP Solutions business division since February 2006 and makes it the biggest division within the AC Group. Besides All for One GmbH, this division also includes the two AC Solutions companies in Stuttgart and Vienna, Process Partner in St. Gallen and KWP, which specialises in SAP HCM (Human Capital Management) consulting.

The SAP Solutions division reported a jump in sales of EUR 2.4 million to EUR 7.8 million. The balanced segment earnings (EBITA before allocation of corporate costs) for the first quarter of 2006 correlate with a corresponding prior-year figure of EUR 0.1 million. The average staffing strength in fulltime equivalents within the SAP Solutions business division almost tripled to 180 (prior year: 61 FTEs).

This quarter witnessed an intensified cooperation with the Managed IT Services division to create tailored full-service packages that fully satisfy customer needs across the entire IT value chain. The build-up in staffing was unable to keep pace with the unexpectedly strong rise in new-customer business, which meant that we had to increasingly rely on outside consulting resources. Overall the SAP Solutions division fell short of the board's expectations in terms of sales and earnings after this first three-month period. Certain simplified planning assumptions had to be made for the related quarterly budget and for the initial consolidation of All for One GmbH (modifying the financial year and converting from the German Commercial Code (HGB) to IFRS), which perhaps only inadequately reflect seasonal shifts.

Human Resource Services

The Human Resource Services division was second only to the »other operations« division in making the biggest contribution to the AC Group's earnings. This business division posted an EBITA (before allocation of corporate costs) of EUR 0.4 million (prior year: EUR 0.5 million) on segment sales of EUR 2.9 million (prior year: EUR 3.2 million). The average staffing strength in full-time equivalents within the Human Resource Services division was 91 (prior year: 109 FTEs). The sales and earnings for the first quarter were within the board of directors' expectations and take into account changes in the customer base following the switchover to the proprietary human-resources software platform ACCURAT Multipers.

This division made further advances especially in the field of »HR Business Process Outsourcing«. With what are now some 120 clients, AC-Service has also expanded its important position within this slice of the human-resource services market. Additional business momentum is anticipated from continuing certifications under the provisions of the Sarbanes Oxley Act.

Earnings Performance

In addition to earnings contributions from the Managed IT Services, SAP Solutions and Human Resource Services divisions, the group's EBITA includes a EUR 0.3 million (prior year: EUR 0.6 million) contribution from »other operations«. These operations comprise specialised technology services in Belgium and Luxembourg that generated an EBITA (before allocation of corporate costs) of EUR 0.5 million, which was on par with that of a year ago.

The AC Group's EBITA also takes into consideration general corporate expenses (»Corporate Services« segment), which grew from EUR 0.4 million to EUR 0.8 million. This increase is attributable primarily to one-time costs in connection with the arrangement of the loan to fund the acquisition of All for One GmbH. The financial result of minus EUR 0.4 million (prior year: virtually even) includes other one-time costs in the amount of approximately EUR 0.4 million that were incurred in arranging the loan agreement. Income tax expenses of EUR 0.5 million (prior year: EUR 0.3 million) apply to the loss before taxes of minus EUR 0.3 million (prior year: EUR 0.6 million). Among other things, certain companies that did not have any loss carry forwards made profits on which subsequent tax charges arose. No deferred tax assets were recognised on the current tax losses of AC-Service AG and All for One GmbH, which could have led to a related reduction in the group's tax expense. The quarterly loss after taxes was minus EUR 0.8 million (prior year: EUR 0.3 million). The earnings/loss per share (IFRS) of minus 14 euro cents (prior year: 6 euro cents) were calculated on the basis of an unchanged average number of 5,173,418 shares outstanding in the first quarter of 2006.

Healthy Balance of Accounts Despite Acquisition Financing

The inclusion of All for One GmbH resulted in an increase in total reported assets from EUR 42.1 million (31 Dec 2005) to EUR 63.8 million. Goodwill and other intangible assets grew from a total of EUR 5.7 million to EUR 18.5 million and trade accounts receivable went from EUR 6.6 million to EUR 10.3 million. The shareholders' equity of EUR 25.8 million (31 Dec 2005: EUR 26.7 million) makes up 40% (31 Dec 2005: 63%) of the balance sheet total of EUR 63.8 million (31 Dec 2005: EUR 42.1 million). The group enjoys a healthy balance of accounts. Cash and cash equivalents were EUR 12.1 million compared to EUR 11.9 million on 31 December 2005. The EUR 0.3 million (prior year: EUR 1.7 million) in cash flows from operating activities includes cash used to settle the one-time costs of EUR 0.6 million for extending the loan to acquire All for One GmbH.

Personnel

Lars Landwehrkamp was appointed to the AC-Service AG board of directors effective 17 February 2006. The average number of full-time equivalents during the quarter was 384 (prior year: 287) and there were 425 people employed in the AC Group at the close of the quarter (prior year: 313 people).

Outlook

The acquisition of All for One GmbH helped AC-Service take one of the top positions among SAP service providers on the German-language midmarket segment. Such a position enables

AC-Service to provide its clients with the entire value chain covering SAP licenses, industry solutions, implementations, maintenance and operation within its Managed IT Service Center. With this move AC-Service is pursuing a clear growth strategy and taking hold of important market positions in such key branches as machinery manufacturing, the auto-parts industry, services companies and the public sector. Along with an overall improved economic environment, this first quarter of 2006 generated a great deal of positive stimulus and saw the completion of numerous new client projects, including four new, shared customers of AC-Service and All for One. We look forward to this trend continuing in the coming quarters.

Herbert Werle Marco Fontana Lars Landwehrkamp Chairman of the Board Member of the Board Member of the Board

Shares Held by Members of Corporate Bodies

Von Organmitgliedern gehaltene Aktien

	31.03.06	31.03.05 Shares Aktien
	Shares
	Aktien
Supervisory Board
Aufsichtsrat
Peter Brogle	14 555	14 555
Rainer Schad	333	333
Peter Fritsch	2 000	-
Board of Directors
Vorstand
Herbert Werle	180 000	180 000
Marco Fontana	27 000	27 000
Lars Landwehrkamp	-	-

Group Profit and Loss Account

Gewinn-und-Verlust-Rechnung des Konzerns

	Notes Erläuterungen	01.01.-31.03.06 EUR 1 000	01.01.-31.03.05 EUR 1 000
Sales to third parties
Umsatzerlöse	3	15 914	10 514
Other operating income
Sonstige betriebliche Erträge		95	282
Cost of traded goods and third party services
Materialaufwand und bezogene Leistungen		(4 090)	(1 572)
Personnel costs
Personalaufwand		(7 863)	(5 755)
Total depreciation and amortisation
Abschreibungen	7	(683)	(597)
Other operating costs
Sonstiger betrieblicher Aufwand	4	(3 241)	(2 333)
EBIT
Operatives Ergebnis		133	538
Financial income
Finanzertrag		261	95
Financial expense
Finanzaufwand	4	(655)	(44)
Financial result
Finanzergebnis		(394)	51
Result from associated company
Ergebnis aus assoziierter Gesellschaft		–	(8)
EBT
Ergebnis vor Steuern		(261)	581
Income tax
Ertragsteuern		(492)	(286)
Earnings after tax
Ergebnis nach Steuern		(752)	296
Attributable to:
Davon zuzurechnen:
Equity holders of the parent
den Aktionären des Mutterunternehmens		(713)	336
Minority shareholders
den Minderheitsanteilseignern		(39)	(40)
Result for the period
Periodenergebnis		(752)	296
Earnings per share in EUR (undiluted and diluted)
Ergebnis pro Aktie in EUR (unverwässert und verwässert)		(0,14)	0,06
Average number of shares in circulation
Durchschnittlich im Umlauf befindliche Aktien		5 173 418	5 173 418

Group Balance Sheet Bilanz des Konzerns

Assets	Notes	31.03.06	31.12.05
Vermögenswerte	Erläuterungen	EUR 1 000	EUR 1 000
Non-current assets
Langfristige Vermögenswerte
Goodwill
Geschäfts- und Firmenwerte	3	5 822	3 862
Other intangible assets
Sonstige immaterielle Anlagen	3	12 671	1 797
Tangible fixed assets
Sachanlagen	1	5 543	4 962
Share in associated company
Anteil an assoziierter Gesellschaft		–	–
Other assets
Sonstige Vermögenswerte	1	3 779	4 088
Deferred tax assets
Latente Steueransprüche	3	7 633	4 219
Total non-current assets
Total langfristige Vermögenswerte		35 448	18 928
Current assets
Kurzfristige Vermögenswerte
Inventories
Vorratsvermögen		833	140
Trade accounts receivable
Forderungen aus Lieferungen und Leistungen		10 312	6 590
Current income tax assets
Laufende Ertragsteueransprüche		233	176
Other assets
Sonstige Vermögenswerte		4 891	4 365
Cash and cash equivalents
Zahlungsmittel und Zahlungsmitteläquivalente		12 129	11 877
Total current assets
Total kurzfristige Vermögenswerte		28 398	23 148
Total assets
Total Vermögenswerte		63 846	42 076

Group Balance Sheet Bilanz des Konzerns

Equity and liabilities Eigenkapital und Verbindlichkeiten	Notes Erläuterungen	31.03.06 EUR 1 000	31.12.05 EUR 1 000
Shareholders' equity
Eigenkapital
Share of equity attributable to equity holders of the parent
Den Aktionären des Mutterunternehmens zurechenbarer Anteil am Eigenkapital
Issued share capital
Gezeichnetes Kapital		16 200	16 200
Treasury stock
Eigene Aktien		(1 023)	(1 023)
Capital reserve
Kapitalrücklage		12 269	12 269
Currency conversion reserve
Währungsumrechnungsrücklage		(86)	38
Accumulated losses
Angesammeltes Ergebnis (Bilanzverlust)		(2 015)	(1 302)
Share of equity attributable to equity holders of the parent
Den Aktionären des Mutterunternehmens zurechenbarer Anteil am Eigenkapital		25 345	26 182
Minority interests
Minderheitsanteile		443	481
Total shareholders' equity
Total Eigenkapital		25 788	26 663
Liabilities
Verbindlichkeiten
Non-current liabilities
Langfristige Verbindlichkeiten
Provisions
Rückstellungen		1 457	1 531
Pension liabilities
Pensionsverbindlichkeiten		244	253
Financial liabilities
Finanzverbindlichkeiten	4	14 269	1 403
Deferred tax liabilities
Latente Steuerverbindlichkeiten	3	4 170	1 147
Other liabilities
Sonstige Verbindlichkeiten		540	578
Total non-current liabilities
Total langfristige Verbindlichkeiten		20 680	4 912
Current liabilities
Kurzfristige Verbindlichkeiten
Provisions
Rückstellungen		326	341
Current income tax liabilities
Laufende Ertragsteuerverbindlichkeiten		1 016	984
Financial liabilities Finanzverbindlichkeiten	4	4 104	1 719
Trade accounts payable Verbindlichkeiten aus Lieferungen und Leistungen		4 206	1 675
Other liabilities
Sonstige Verbindlichkeiten		7 726	5 782
Total current liabilities
Total kurzfristige Verbindlichkeiten		17 378	10 501
Total liabilities
Total Verbindlichkeiten		38 058	15 413
Total equity and liabilities
Total Eigenkapital und Verbindlichkeiten		63 846	42 076

Group Cash Flow Statement Mittelflussrechnung des Konzerns

Cash flows from operating activities Mittelfluss aus operativer Geschäftstätigkeit	Notes Erläuterungen	01.01.-31.03.06 EUR 1 000	01.01.-31.03.05 EUR 1 000
EBT
Ergebnis vor Steuern		(261)	581
Adjustments for:
Anpassungen für:
Depreciation and amortisation on non-current assets
Abschreibungen auf langfristige Vermögenswerte		683	597
(Decrease) increase in value adjustments and provisions
(Abnahme) Zunahme der Wertberichtigungen und Rückstellungen		(636)	(100)
Foreign exchange losses
Fremdwährungsverluste		(20)	1
(Profit) loss from sale of non-current assets
(Gewinn) Verlust aus Abgang von langfristigen Vermögenswerten		10	(11)
Financial result (net)
Finanzergebnis, netto		30	(51)
Share of loss from associated company
Anteiliger Verlust assoziierte Gesellschaft		–	8
Adjusted net result before changes in current assets and nonfinancial liabilities
Bereinigtes Ergebnis vor Veränderungen der kurzfristigen Vermögenswerte und der
nicht finanziellen Verbindlichkeiten		(194)	1 025
Decrease in inventories
Abnahme Vorratsvermögen		120	77
Decrease in trade accounts reveivable
Abnahme der Forderungen aus Lieferungen und Leistungen		1 729	988
(Increase) decrease in other assets
(Zunahme) Abnahme der sonstigen Vermögenswerte		4 347	(101)
(Increase) decrease in trade accounts payable
(Zunahme) Abnahme der Verbindlichkeiten aus Lieferungen und Leistungen		(4 173)	173
Decrease in pension liabilities
Abnahme der Pensionsverbindlichkeiten		(7)	-
Decrease in other liabilities
Abnahme der sonstigen Verbindlichkeiten		(1 288)	(374)
Cash flows from operating activities before taxation
Mittelfluss aus operativer Geschäftstätigkeit vor Steuern		534	1 788
Income tax payments
Ertragsteuerzahlungen		(266)	(64)
Cash flows from operating activities
Mittelfluss aus operativer Geschäftstätigkeit		268	1 724

Group Cash Flow Statement Mittelflussrechnung des Konzerns

Cash flows from investing activities Mittelfluss aus Investitionstätigkeit	Notes Erläuterungen	01.01.-31.03.06 EUR 1 000	01.01.-31.03.05 EUR 1 000
Cash outflow from purchase of tangible fixed assets
Mittelabfluss aus Kauf von Sachanlagen		(747)	(861)
Cash outflow from purchase of intangible assets Mittelabfluss aus Kauf von immateriellen Vermögenswerten		–	–
Cash outflow from purchase of other intangible assets
Mittelabfluss aus Kauf von sonstigen Vermögenswerten		(4)	–
Net cash outflow from acquisition of shares (net of cash acquired) Nettomittelabfluss aus Beteiligungserwerb (abzüglich erworbene Zahlungsmittel)	3	(14 481)	(2 434)
Cash inflow from sale of tangible fixed assets Mittelzufluss aus Verkauf von Sachanlagen		20	98
Cash inflow from disposal of other assets
Mittelzufluss aus Veräußerung von sonstigen Vermögenswerten		–	43
Cash inflow from interest received Mittelzufluss aus Zinsen		105	95
Cash flows from investing activities
Mittelfluss aus Investitionstätigkeit		(15 107)	(3 059)
Cash flows from financing activities Mittelfluss aus Finanzierungstätigkeit
Cash inflow (outflow) from use (repayment) of short term credit line Mittelzufluss (-abfluss) aus Beanspruchung (Rückzahlung) Bankkontokorrentkredit		(66)	–
Cash inflow from long-term financial liabilities Mittelzufluss aus der Aufnahme langfristiger Finanzverbindlichkeiten	4	15 500	–
Cash outflow from repayment of financial liabilities Mittelabfluss aus Tilgung Finanzverbindlichkeiten		(268)	(323)
Cash outflow from interest paid
Mittelabfluss aus Zinsen Cash flows from financing activities		(38)	(39)
Mittelfluss aus Finanzierungstätigkeit		15 128	(362)
Increase (decrease) in cash and cash equivalents
Zunahme (Abnahme) der Zahlungsmittel und -äquivalente		289	(1 697)
Effect of exchange rate fluctuations on cash and cash equivalents Einfluss von Wechselkursänderungen auf die Zahlungsmittel und -äquivalente		(37)	(7)
Cash and cash equivalents at the beginning of the year
Zahlungsmittel und -äquivalente zu Beginn des Jahres		11 877	13 029
Cash and cash equivalents at the end of the period
Zahlungsmittel und -äquivalente am Ende der Berichtsperiode		12 129	11 325
Significant non-cash transactions Bedeutende nicht liquiditätswirksame Vorgänge
Initial inclusion of tangible fixed assets in finance leases
Ersterfassung von Sachanlagen im Finanzierungsleasing		134	347
Initial inclusion of other current assets from finance leases
Ersterfassung sonstiger langfristiger Vermögenswerte aus Finanzierungsleasingverträgen		382	468

Segment Reporting Segmentberichterstattung

Segment sales	01.01.-31.03.06	01.01.-31.03.05
Segmentumsätze	EUR 1 000	EUR 1 000
Managed IT Services	4 418	4 075
SAP Solutions	7 774	2 388
Human Resource Services	2 898	3 245
Other operations
Übrige Geschäftsaktivitäten	1 259	1 392
Elimination of intersegment sales
Konsolidierungen Rundungen	(435)	(586)
Total sales
Total Umsatzerlöse	15 914	10 514
Segment sales with third parties
Umsatz mit Dritten
Managed IT Services	4 160	3 669
SAP Solutions	7 596	2 207
Human Resource Services	2 898	3 237
Other operations
Übrige Geschäftsaktivitäten	1 260	1 401
Total sales
Total Umsatzerlöse	15 914	10 514
Segment results
Operative Segmentergebnisse
Managed IT Services	264	(136)
SAP Solutions	(220)	115
Human Resource Services	408	469
Other operations
Übrige Geschäftsaktivitäten	492	536
Unallocated corporate expenses
Nicht zugeordnete Konzernaufwendungen	(811)	(446)
Total operating result
Total operatives Ergebnis	133	538

Consolidated Statement of Recognised Income and Expense

Konsolidierte Darstellung der im Eigenkapital erfassten Gewinne und Verluste

	01.01.-31.03.06 EUR 1 000	01.01.-31.03.05 EUR 1 000
Restatement of previous years (change in accounting standard IFRIC 4)
Anpassung Vorjahre (Änderung der Rechnungslegung IFRIC 4)	1 422	1 512
Restatement of purchase price allocation KWP
Anpassung Erstkonsolidierung KWP	–	418
Translation differences
Differenz aus Umrechnung von Abschlüssen in Fremdwährung	(123)	(2)
Net income recognised directly in equity
Direkt im Eigenkapital erfasste Ergebnisse	1 299	1 928
Result for the period (adjusted)
Periodenergebnis (angepasst)	(752)	296
Total recognised income and expense for the period
Total für die Periode erfasste Gewinne und Verluste	547	2 224
Attributable to:
Aufgeteilt auf:
Minority interests
Anteile Dritter	(18)	353
Equity holders of the parent
Anteilseigner der Muttergesellschaft	565	1 871
Total recognised income and expense for the period
Total für die Periode erfasste Gewinne und Verluste	547	2 224

Selected Notes to the Interim Report Ausgewählte Erläuterungen zum Zwischenbericht

1. Accounting Principles

The AC Group's consolidated interim report as of 31 March 2006 was prepared in accordance with International Financial Reporting Standards (IFRS). This interim report was prepared using the same accounting principles that applied for the consolidated annual financial statements as at 31 December 2005. The IFRS that came into effect on 1 January 2006 were applied. This interim report conforms to IAS 34 »Interim Financial Reporting«. IFRIC 4 took effect on 1 January 2006 and was adopted for the first time by the AC Group. Reference is made to the remarks in the Annual Report 2005 (page 19 f) regarding the effect of these interpretations. Figures for the comparable periods were adjusted accordingly.

2. Seasonal Fluctuations in the Results for the Quarter

The business divisions are subject to differing seasonal fluctuations. In addition, the conclusion of large contracts and the processing of these orders can cause significant differences in quarterly sales and profit.

3. Acquisition of Equity Interest in All for One Systemhaus GmbH Midmarket Solutions, Oberessendorf/Germany

On 17 February 2006 AC-Service AG acquired 100% of the shares in All for One Systemhaus GmbH Midmarket Solutions with headquarters in Oberessendorf/Germany (All for One GmbH). The purchase agreement is dated 7 February 2006. Within the market segment of discrete-manufacturing companies, this firm ranks among the leading partner companies of SAP in those parts of Europe where German is spoken. The purchase price of EUR 15,350 K was paid in cash on 17 February 2006. The total acquisition cost was EUR 15,624 K including indirect acquisition costs. The indirect acquisition costs of EUR 274 K comprise consulting, lawyer and notary fees in connection with the audit (due diligence) and the execution (purchase agreement) of the transaction. The other transaction-related expenses, particularly for initiating the financing, were charged against the profit and loss account. All for One GmbH represents an annual sales volume of over EUR 23 million with a double-digit EBIT margin. It employs some 110 people and serves an established customer base of more than 160 companies. Initial recognition of All for One GmbH was made as at 7 February 2006. The assets, liabilities, contingent liabilities on the date of initial consolidation, as well as the information on the allocation of realised intangible assets and the recognition of goodwill can be seen in the following presentation on page 16. Goodwill totals EUR 1,980 K and is due primarily to the fact that the employees and their skills do not fulfil the criteria for recognition as an intangible asset. Since its initial recognition in the consolidated financial statements of the AC Group, the company has contributed sales of EUR 4,124 K and a net loss of EUR 466 K. If the date of initial consolidation had been 1 January 2006, then the sales for the AC Group for the first quarter of 2006 would have been EUR 1,681 K higher and its earnings EUR 70 K lower. Monthly amortisation of the recognised intangible assets is EUR 60 K. Monthly deferred tax charges are also incurred.

4. Credit Agreement for Funding the Acquisition of All for One GmbH, Oberessendorf/Germany

In order to fund the acquisition of the shares of All for One GmbH, AC-Service AG and the Dresdner Bank AG, Frankfurt, entered into a credit agreement for an acquisition loan of EUR 15,500 K to purchase 100% of All for One GmbH, Oberessendorf, as well as for an operational funding line of credit of EUR 4,000 K. The agreement is dated 13 February 2006 and has a term until 30 December 2010. Repayment of the acquisition loan is made semi-annually on 30 June and 31 December each year at fixed repayment rates. Unscheduled early repayments may be made and are even obligatory in special cases. Such cases primarily involve unplanned cash inflows. Interest is oriented on the EURIBOR (Euro Interbank Offered Rate) plus an interest surcharge of between 1.0% and 1.9% depending on certain financial indicators. The interest period can be chosen as one, three or six months. There are a number of covenants to be complied with for extending the credit term, including adhering to various financial figures and the issue of other periodic warranties amongst other things. It was agreed that a first-rate pledge on all shares in the companies All for One GmbH, Oberessendorf, ACCURAT Informatik GmbH, Dreieich, and AC Solutions GmbH, Stuttgart, will serve as security for the financing bank.

The nonrecurring bank charge of EUR 400 K for arranging the credit agreement is reported as a financial expense. The attorney and lawyer fees of EUR 153 K in connection with the negotiation and conclusion of the credit and the security agreements are reported under the other operating expenses item in the profit and loss account for the reporting period.

In accordance with the terms of the credit agreement, 70% of the interest-rate risk of the acquisition loan must be covered through interest hedges. For this purpose an interest-rate swap agreement over an initial amount of EUR 7,000 K and a term of up to 30 December 2009 was signed with the Dresdner Bank on 2 March 2006. The agreement stipulates that AC-Service AG will pay quarterly interest in the amount of 3.47% (fixed interest rate) on the secured amount and will simultaneously receive interest based on the 3-month EURIBOR. The fair value of this interest derivative was EUR 26 K as at 31 March 2006 and is reported under other assets.

In addition, an interest cap for EUR 4,000 K and a term of up to 30 June 2010 was signed with the Dresdner Bank on 2 March 2006. With this the 3-month EURIBOR interest rate is limited to 3.25%. The bank reimburses AC-Service AG for any amounts of interest in excess of that. The fair value of this interest derivative was minus EUR 21 K as at 31 March 2006 and is reported under other liabilities. Under certain capitalmarket conditions a bonus is due for this interest-limitation transaction beginning on 6 March 2008 until 30 June 2010. This bonus will be from zero to 3.5% p.a. depending on the difference between the 2-year and 10-year swap rates.

5. Acquisition of Equity Interest in Kümmel, Wiedmann + Partner Unternehmensberatung GmbH, Talheim/Germany

Consistent with the values in the Annual Report 2005, the related comparative figures were adjusted to their definitive values within this report in connection with the allocation of the purchase price from the equity acquisition of 8 March 2005 to intangible asset items. Reference is made to page 30 of the Annual Report 2005.

6. Earnings per Share and Average Number of Shares in Circulation

The average number of shares in circulation (diluted) is shown at the bottom of the profit and loss account and corresponds to the average number of shares in circulation (undiluted). Earnings per share (diluted) are equivalent to earnings per share (undiluted).

7. Depreciation and Amortisation

Of the depreciation and amortisation, EUR 199 K (comparable period: EUR 43 K) is attributable to amortisation of intangible assets.

Initial Recognition Erstkonsolidierung

	Book Value Buchwert	Allocation Zuordnung	Initial Recognition Erstkonsolidierung
All for One Systemhaus GmbH Midmarket Solutions	07.02.2006	07.02.2006	07.02.2006
Other intangible assets
Sonstige immaterielle Anlagen	20	11 059	11 079
Tangible fixed assets
Sachanlagen	244	–	244
Other assets
Sonstige Vermögenswerte	38	–	38
Deferred tax assets
Latente Steueransprüche	5 050	(1 491)	3 559
Inventories
Vorratsvermögen	837	260	1 097
Trade accounts receivable
Forderungen aus Lieferungen und Leistungen	4 748	–	4 748
Other assets
Sonstige Vermögenswerte	4 569	–	4 569
Cash and cash equivalents
Zahlungsmittel und -äquivalente	1 143	–	1 143
Deferred tax liabilities
Latente Steuerverbindlichkeiten	–	(2 923)	(2 923)
Provisions
Rückstellungen	(78)	–	(78)
Trade accounts payable
Verbindlichkeiten aus Lieferungen und Leistungen	(6 699)	–	(6 699)
Other liabilities
Sonstige Verbindlichkeiten	(3 133)	–	(3 133)
Total identifiable assets and liabilities
Total identifizierbare Vermögenswerte und Verbindlichkeiten	6 739	6 905	13 644
Goodwill
Firmenwert			1 980
Total acquisition costs including transaction costs
Gesamte Anschaffungskosten einschließlich Transaktionskosten			15 624
Cash acquired
Erworbene Zahlungsmittel			(1 143)
Net cash outflow for acquisition of equity holdings
Nettomittelabfluss aus Beteiligungserwerb			14 481

Investor Relations – Facts and Figures Investor Relations – Daten und Fakten

The AC-Service Share

ISIN	DE0005110001
WKN	511 000
Stock Exchange	Prime Standard
Date of Listing	30.11.1998
Share Capital	EUR 16.2 million
Number of Shares	5,400,000 (Registered Shares)
Par Value	EUR 3
Number of Shares in Circulation on 31.03.2006	5,173,418

Shareholder Structure

(approximate distribution according to statements of owners)
BEKO HOLDING AG	ca. 52%
Board of Directors	ca. 4%

Free Float ca. 44%

Accounting Standards IFRS

Financial Calendar

11.05.2006	Quarterly Report 1/2006
18.05.2006	Annual General Meeting
29.08.2006	Quarterly Report 2/2006
14.11.2006	Quarterly Report 3/2006
14.11.2006	Analyst Presentation

Further dates and information can be found on the internet at www.ac-service.com

Notes Notizen

AC-Service helps companies to focus on their core business. For over 45 years. With industry-specifi c business process know-how, high-quality solutions and services featuring established brands: AC, ACCURAT, All for One, Process Partner and KWP.

www.ac-service.com

AC-Service AG Schockenriedstraße 7 D-70565 Stuttgart Telefon +49 (0)7 11 788 07-0 Telefax +49 (0)7 11 788 07-222