CANCOM SE — Earnings Release 2011

May 19, 2011

CANCOM AG Germany - IT Services

Buy (old: Buy) 13-May-11

	Price target: EUR 15.00	(old: EUR 15.00)		Tim Wunderlich Analyst
Price:	EUR 9.85	Next result:	Q2 2011: 11.08.11
Bloomberg:	COK GR	Market cap:	EUR 107.3 m	tim.wunderlich@ha-research.de
Reuters:	COKG.DE	Enterprise Value:	EUR 103.3 m	Tel.: +49 40 4143885 81

Release of final Q1 2011 figures

EUR	Q1 11	Q1 10	yoy	Q4 10	qoq
Sales	141.4	114.6	23%	169.1	-16%
EBITDA	4.8	3.1	54%	8.5	-44%
EBITDA margin	3.4%	2.7%	+ 0.7 pp	5.0%	- 1.6 pp
EBIT	3.1	2.2	44%	6.1	-49%
EBIT margin	2.2%	1.9%	+ 0.3 pp	3.6%	- 1.4 pp
Net profit	1.7	1.4	22%	3.2	-48%
Net margin	1.2%	1.2%	- 0.0 pp	1.9%	- 0.7 pp
EPS	0.16	0.13	22%	0.31	-48%

Source: Company data, Hauck & Aufhäuser

Sales growth of 23% y-o-y to € 141m was mainly organic; Plaut Managed Services acquired at the end of 2010 added no more than 1pp. The IT Solutions segment was the better performer showing growth of 29% y-o-y to € 82m (58% of sales) while IT eCommerce grew 17% y-o-y to € 59m (42% of sales).

It was the reverse for bottom-line growth: EBITDA margin for the segment comprising the scalable eCommerce platform rose 0.6pp y-o-y to 3.4%. In contrast, profitability of IT Solutions stayed merely constant y-o-y at c. 5% BUT only due to a positive one-off in Q1 '10, namely badwill of € 0.6m from the take-over of Bürotex. The EBITDA margin adjusted for this in fact rose 1.1pp y-o-y.

On group level, EBIT grew less-than-proportionately to EBITDA due to c. € 0.5m higher amortisation reflecting PPA from the Plaut Managed Services take-over.

In Q1 '11, CANCOM invested € 1.5m to upgrade its eCommerce platform, which is seen to be well worth it resulting in:

• Synergies of c. € 1m from 2012E as the online shops of the brands Home of Hardware and CANCOM will be merged, making for a sizeable headcount cut of c. 35 employees.
• Multilingual functionality enabling the scalable expansion into other European countries, offering substantial growth prospects for the IT eCommerce segment.
• A state-of-the-art website supplying strong value-add through customised shops which offer clients a bespoke product range ensuring uniform IT infrastructures.

No FY 2011E guidance yet released but the CEO in a recent interview suggested that sales may exceed € 600m and EBITDA € 23m, confirming our current expectations. Reiterate BUY with a PT of € 15 based on a DCF model.

Y/E 31.12 (EUR m)	2007	2008	2009	2010	2011E	2012E	2013E
Sales	300.1	364.1	422.5	549.3	605.1	639.0	667.7
Sales growth	13 %	21 %	16 %	30 %	10 %	6 %	5 %
EBITDA	8.0	8.8	10.4	19.2	23.1	25.8	26.9
EBIT	6.2	5.4	7.0	13.7	17.1	19.3	20.3
Net income	4.7	2.7	5.1	7.9	10.1	11.7	12.6
Net debt	6.2	3.9	-3.5	-1.5	-4.0	-12.0	-19.8
Net gearing	17.2 %	9.9 %	-8.0 %	-3.0 %	-7.0 %	-18.4 %	-27.3 %
Net Debt/EBITDA	0.8	0.4	0.0	0.0	0.0	0.0	0.0
EPS fully diluted	0.45	0.36	0.49	0.87	0.97	1.12	1.21
CPS	0.40	1.03	0.71	1.24	0.60	1.21	1.29
DPS	0.00	0.00	0.15	0.27	0.39	0.51	0.61
Dividend yield	0.0 %	0.0 %	1.4 %	2.5 %	3.7 %	4.8 %	5.8 %
Gross profit margin	28.8 %	29.1 %	27.5 %	27.6 %	27.2 %	27.9 %	27.9 %
EBITDA margin	2.7 %	2.4 %	2.5 %	3.5 %	3.8 %	4.0 %	4.0 %
EBIT margin	2.1 %	1.5 %	1.6 %	2.5 %	2.8 %	3.0 %	3.0 %
ROCE	10.6 %	8.5 %	10.3 %	17.7 %	19.4 %	20.1 %	19.7 %
EV/sales	0.4	0.3	0.2	0.2	0.2	0.1	0.1
EV/EBITDA	14.3	12.9	10.1	5.5	4.5	3.7	3.2
EV/EBIT	18.7	21.0	15.0	7.7	6.0	4.9	4.3
PER	22.4	39.4	21.4	13.8	10.8	9.3	8.6
Adjusted FCF yield	4.9 %	4.6 %	6.1 %	10.9 %	14.2 %	17.4 %	20.1 %
Source: Company data, Hauck & Aufhäuser Close price as of: 12.05.2011

Source: Company data, Hauck & Aufhäuser

High/low 52 weeks:	11.40 / 5.31
Price/Book Ratio:	1.8
Relative performance (TecDAX):
3 months	-9.2 %
6 months	-16.3 %
12 months	46.4 %

Changes in estimates

		Sales	EBIT	EPS
2011	old:	605.1	17.1	0.97
	∆	-	-	-
	old:	639.0	19.3	1.12
2012	∆	-	-	-
	old:	667.7	20.3	1.21
2013	∆	-	-	-

Key share data:

Number of shares: (in m pcs)	10.4
Authorised capital: (in € m)	4.0
Book value per share: (in €)	5.5
Ø trading volume: (12 months)	60,000

Major shareholders:

Free Float	84.8 %
JP Morgan	5.3 %
AGI	3.0 %
Stefan Kober	2.5 %
Raymond Kober	2.5 %
Klaus Weinmann	1.9 %

Company description:

CANCOM is Germany's 3rd largest independent system house operating a scalable eCommerce business.

Financials

Profit and loss (EUR m)	2007	2008	2009	2010	2011E	2012E	2013E
Net sales	300.1	364.1	422.5	549.3	605.1	639.0	667.7
Sales growth	13.2 %	21.3 %	16.0 %	30.0 %	10.2 %	5.6 %	4.5 %
Increase/decrease in finished goods and work-in-process	0.9	0.3	1.0	0.7	1.0	1.0	1.0
Total sales	301.0	364.5	423.4	550.0	606.1	640.0	668.8
Other operating income	1.5	1.7	2.7	1.9	2.1	2.2	2.3
Material expenses	214.2	258.3	306.8	398.0	441.2	461.6	482.4
Personnel expenses	59.0	73.0	82.8	103.4	111.7	121.5	127.0
Other operating expenses	21.2	26.1	26.1	31.3	32.2	33.3	34.8
Total operating expenses	293.0	355.7	413.1	530.8	583.0	614.2	641.8
EBITDA	8.0	8.8	10.4	19.2	23.1	25.8	26.9
Depreciation	1.4	1.4	2.4	2.9	3.4	3.7	3.6
EBITA	6.6	7.4	7.9	16.3	19.7	22.1	23.3
Amortisation of goodwill	0.0	1.0	0.1	1.2	0.0	0.0	0.0
Amortisation of intangible assets	0.5	1.0	0.9	1.4	2.6	2.8	3.0
Impairment charges	0.0	0.0	0.0	0.0	0.0	0.0	0.0
EBIT	6.2	5.4	7.0	13.7	17.1	19.3	20.3
Interest income	0.2	0.3	0.2	0.2	0.2	0.2	0.2
Interest expenses	1.0	1.6	1.5	2.1	2.6	2.6	2.6
Other financial result	0.0	-0.1	0.0	0.0	-0.2	-0.1	0.0
Financial result	-0.9	-1.3	-1.3	-1.9	-2.6	-2.5	-2.4
Recurring pretax income from continuing operations	5.3	4.0	5.7	11.8	14.5	16.8	18.0
Extraordinary income/loss	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Earnings before taxes	5.3	4.0	5.7	11.8	14.5	16.8	18.0
Taxes	-0.1	1.3	0.6	3.9	4.4	5.0	5.4
Net income from continuing operations	5.4	2.8	5.1	7.9	10.2	11.7	12.6
Result from discontinued operations (net of tax)	0.2	0.1	0.0	0.0	0.0	0.0	0.0
Net income	5.2	2.7	5.1	7.9	10.2	11.7	12.6
Minority interest	0.5	0.0	0.0	0.0	0.1	0.1	0.0
Net income (net of minority interest)	4.7	2.7	5.1	7.9	10.1	11.7	12.6
Average number of shares	10.4	10.4	10.4	10.4	10.4	10.4	10.4
EPS reported	0.45	0.26	0.49	0.76	0.97	1.12	1.21

Profit and loss (common size)	2007	2008	2009	2010	2011E	2012E	2013E
Net sales	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %
Increase/decrease in finished goods and work-in-process	0.3 %	0.1 %	0.2 %	0.1 %	0.2 %	0.2 %	0.2 %
Total sales	100.3 %	100.1 %	100.2 %	100.1 %	100.2 %	100.2 %	100.2 %
Other operating income	0.5 %	0.5 %	0.6 %	0.3 %	0.3 %	0.3 %	0.3 %
Material expenses	71.4 %	70.9 %	72.6 %	72.5 %	72.9 %	72.2 %	72.2 %
Personnel expenses	19.7 %	20.1 %	19.6 %	18.8 %	18.5 %	19.0 %	19.0 %
Other operating expenses	7.1 %	7.2 %	6.2 %	5.7 %	5.3 %	5.2 %	5.2 %
Total operating expenses	97.6 %	97.7 %	97.8 %	96.6 %	96.3 %	96.1 %	96.1 %
EBITDA	2.7 %	2.4 %	2.5 %	3.5 %	3.8 %	4.0 %	4.0 %
Depreciation	0.5 %	0.4 %	0.6 %	0.5 %	0.6 %	0.6 %	0.5 %
EBITA	2.2 %	2.0 %	1.9 %	3.0 %	3.3 %	3.5 %	3.5 %
Amortisation of goodwill	0.0 %	0.3 %	0.0 %	0.2 %	0.0 %	0.0 %	0.0 %
Amortisation of intangible assets	0.2 %	0.3 %	0.2 %	0.3 %	0.4 %	0.4 %	0.4 %
Impairment charges	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
EBIT	2.1 %	1.5 %	1.6 %	2.5 %	2.8 %	3.0 %	3.0 %
Interest income	0.1 %	0.1 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Interest expenses	0.3 %	0.4 %	0.3 %	0.4 %	0.4 %	0.4 %	0.4 %
Other financial result	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Financial result	-0.3 %	-0.4 %	-0.3 %	-0.3 %	-0.4 %	-0.4 %	-0.4 %
Recurring pretax income from continuing operations	1.8 %	1.1 %	1.3 %	2.1 %	2.4 %	2.6 %	2.7 %
Extraordinary income/loss	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Earnings before taxes	1.8 %	1.1 %	1.3 %	2.1 %	2.4 %	2.6 %	2.7 %
Tax rate	-1.1 %	31.4 %	9.8 %	33.0 %	30.0 %	30.0 %	30.0 %
Net income from continuing operations	1.8 %	0.8 %	1.2 %	1.4 %	1.7 %	1.8 %	1.9 %
Income from discontinued operations (net of tax)	0.1 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Net income	1.7 %	0.7 %	1.2 %	1.4 %	1.7 %	1.8 %	1.9 %
Minority interest	0.2 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Net income (net of minority interest)	1.6 %	0.7 %	1.2 %	1.4 %	1.7 %	1.8 %	1.9 %

Balance sheet (EUR m)	2007	2008	2009	2010	2011E	2012E	2013E
Intangible assets	25.7	28.3	31.5	39.9	38.8	37.5	36.0
Property, plant and equipment	3.0	5.4	6.5	7.6	8.2	8.5	8.9
Financial assets	0.2	3.5	0.2	2.4	2.4	2.4	2.4
FIXED ASSETS	28.9	37.3	38.2	50.0	49.5	48.5	47.4
Inventories	8.6	10.1	12.6	14.5	16.4	17.3	18.0
Accounts receivable	39.3	44.2	47.2	56.4	66.3	70.0	73.2
Other current assets	1.5	6.3	5.1	5.1	5.1	5.1	5.1
Liquid assets	11.8	18.3	25.8	31.5	34.0	42.0	49.8
Deferred taxes	3.1	2.5	2.6	2.6	2.6	2.6	2.6
Deferred charges and prepaid expenses	7.4	2.1	3.4	3.4	3.4	3.4	3.4
CURRENT ASSETS	71.5	83.4	96.7	113.4	127.7	140.3	152.1
TOTAL ASSETS	100.4	120.7	134.9	163.5	177.2	188.8	199.5
SHAREHOLDERS EQUITY	36.3	38.9	43.9	50.2	57.5	65.2	72.6
MINORITY INTEREST	0.0	0.0	0.0	0.0	0.1	0.2	0.2
Long-term debt	16.1	20.3	21.6	29.2	29.2	29.2	29.2
Provisions for pensions and similar obligations	0.2	0.2	0.0	0.0	0.0	0.0	0.0
Other provisions	7.9	3.2	4.3	4.3	4.3	4.3	4.3
Non-current liabilities	24.1	23.6	26.0	33.6	33.6	33.6	33.6
short-term liabilities to banks	1.9	1.8	0.7	0.7	0.7	0.7	0.7
Accounts payable	27.5	39.3	47.9	62.5	68.8	72.7	75.9
Advance payments received on orders	0.8	2.0	1.1	1.1	1.1	1.1	1.1
Other liabilities (incl. from lease and rental contracts)	6.6	12.6	10.7	10.7	10.7	10.7	10.7
Deferred taxes	0.7	1.3	2.0	2.0	2.0	2.0	2.0
Deferred income	2.5	1.2	2.7	2.7	2.7	2.7	2.7
Current liabilities	40.0	58.1	65.0	79.6	86.0	89.8	93.1
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	100.4	120.7	134.9	163.5	177.2	188.8	199.5

Balance sheet (common size)	2007	2008	2009	2010	2011E	2012E	2013E
Intangible assets	25.6 %	23.5 %	23.4 %	24.4 %	21.9 %	19.9 %	18.1 %
Property, plant and equipment	3.0 %	4.5 %	4.8 %	4.7 %	4.6 %	4.5 %	4.5 %
Financial assets	0.2 %	2.9 %	0.1 %	1.5 %	1.4 %	1.3 %	1.2 %
FIXED ASSETS	28.8 %	30.9 %	28.3 %	30.6 %	27.9 %	25.7 %	23.8 %
Inventories	8.5 %	8.4 %	9.3 %	8.9 %	9.2 %	9.1 %	9.0 %
Accounts receivable	39.1 %	36.6 %	35.0 %	34.5 %	37.4 %	37.1 %	36.7 %
Other current assets	1.5 %	5.2 %	3.8 %	3.1 %	2.9 %	2.7 %	2.6 %
Liquid assets	11.7 %	15.1 %	19.2 %	19.2 %	19.2 %	22.2 %	25.0 %
Deferred taxes	3.1 %	2.1 %	1.9 %	1.6 %	1.4 %	1.4 %	1.3 %
Deferred charges and prepaid expenses	7.3 %	1.7 %	2.5 %	2.1 %	1.9 %	1.8 %	1.7 %
CURRENT ASSETS	71.2 %	69.1 %	71.7 %	69.4 %	72.1 %	74.3 %	76.2 %
TOTAL ASSETS	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %
SHAREHOLDERS EQUITY	36.1 %	32.3 %	32.5 %	30.7 %	32.5 %	34.5 %	36.4 %
MINORITY INTEREST	0.0 %	0.0 %	0.0 %	0.0 %	0.1 %	0.1 %	0.1 %
Long-term debt	16.0 %	16.9 %	16.0 %	17.9 %	16.5 %	15.5 %	14.7 %
Provisions for pensions and similar obligations	0.2 %	0.1 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Other provisions	7.9 %	2.6 %	3.2 %	2.7 %	2.5 %	2.3 %	2.2 %
Non-current liabilities	24.0 %	19.6 %	19.3 %	20.6 %	19.0 %	17.8 %	16.9 %
short-term liabilities to banks	1.9 %	1.5 %	0.5 %	0.4 %	0.4 %	0.4 %	0.4 %
Accounts payable	27.4 %	32.5 %	35.5 %	38.2 %	38.8 %	38.5 %	38.1 %
Advance payments received on orders	0.8 %	1.6 %	0.8 %	0.7 %	0.6 %	0.6 %	0.6 %
Other liabilities (incl. from lease and rental contracts)	6.6 %	10.4 %	7.9 %	6.5 %	6.0 %	5.7 %	5.4 %
Deferred taxes	0.7 %	1.1 %	1.5 %	1.2 %	1.1 %	1.0 %	1.0 %
Deferred income	2.5 %	1.0 %	2.0 %	1.6 %	1.5 %	1.4 %	1.3 %
Current liabilities	39.9 %	48.2 %	48.2 %	48.7 %	48.5 %	47.6 %	46.7 %
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %

Cash flow statement (EUR m)	2007	2008	2009	2010	2011E	2012E	2013E
Net profit/loss	5.2	2.7	5.1	7.9	10.2	11.7	12.6
Depreciation of fixed assets (incl. leases)	1.4	1.4	2.4	2.9	3.4	3.7	3.6
Amortisation of goodwill	0.0	1.0	0.1	1.2	0.0	0.0	0.0
Amortisation of intangible assets	0.5	1.0	0.9	1.4	2.6	2.8	3.0
Others	0.0	6.4	-0.2	0.0	0.0	0.0	0.0
Cash flow from operations before changes in w/c	7.0	12.5	8.3	13.4	16.2	18.2	19.2
Increase/decrease in inventory	0.2	-4.0	1.3	-1.9	-1.9	-0.9	-0.8
Increase/decrease in accounts receivable	-3.5	-4.8	1.1	-9.2	-9.9	-3.7	-3.2
Increase/decrease in accounts payable	1.3	-0.1	-1.1	14.6	6.3	3.9	3.3
Increase/decrease in other working capital positions	1.0	9.5	1.1	0.0	0.0	0.0	0.0
Increase/decrease in working capital	-1.1	0.5	2.4	3.5	-5.4	-0.8	-0.7
Cash flow from operating activities	6.0	13.1	10.7	16.9	10.8	17.5	18.5
CAPEX	4.2	3.2	4.7	5.5	5.5	5.5	5.5
Payments for acquisitions	4.7	3.0	-1.4	9.5	0.0	0.0	0.0
Financial investments	-0.1	-3.0	-0.6	2.3	0.0	0.0	0.0
Income from asset disposals	3.5	2.0	0.1	0.0	0.0	0.0	0.0
Cash flow from investing activities	-5.4	-1.2	-2.6	-17.3	-5.5	-5.5	-5.5
Cash flow before financing	0.6	11.9	8.0	-0.4	5.3	4.0	5.2
Increase/decrease in debt position	4.8	-4.4	0.3	7.6	0.0	0.0	0.0
Purchase of own shares	0.0	0.0	0.2	0.0	0.0	0.0	0.0
Capital measures	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Dividends paid	0.0	0.0	0.0	1.6	2.7	4.0	5.2
Others	-0.8	-0.1	-1.2	0.0	0.0	0.0	0.0
Effects of exchange rate changes on cash	-0.2	-0.3	0.0	0.0	0.0	0.0	0.0
Cash flow from financing activities	4.0	-4.5	-1.1	6.1	-2.7	-4.0	-5.2
Increase/decrease in liquid assets	4.5	7.1	7.0	5.6	2.5	n/a	n/a
Liquid assets at end of period	11.8	18.9	25.8	31.5	34.0	42.0	49.8

Source: Company data, Hauck & Aufhäuser

Regional split (EUR m)	2007	2008	2009	2010	2011E	2012E	2013E
Domestic	0.0	322.2	386.1	510.0	566.0	598.0	624.0
yoy change	n/a	n/a	19.8 %	32.1 %	11.0 %	5.7 %	4.3 %
Rest of Europe	0.0	0.0	36.4	39.3	39.1	41.0	43.7
yoy change	n/a	n/a	n/a	8.0 %	-0.5 %	4.8 %	6.7 %
NAFTA	0.0	0.0	0.0	0.0	0.0	0.0	0.0
yoy change	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Asia Pacific	0.0	0.0	0.0	0.0	0.0	0.0	0.0
yoy change	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Rest of world	0.0	0.0	0.0	0.0	0.0	0.0	0.0
yoy change	n/a	n/a	n/a	n/a	n/a	n/a	n/a
TTL	0.0	322.2	422.5	549.3	605.1	639.0	667.7
yoy change	n/a	n/a	31.1 %	30.0 %	10.2 %	5.6 %	4.5 %

Key ratios (EUR m)	2007	2008	2009	2010	2011E	2012E	2013E
P&L growth analysis
Sales growth	13.2 %	21.3 %	16.0 %	30.0 %	10.2 %	5.6 %	4.5 %
EBITDA growth	38.7 %	9.1 %	18.4 %	85.3 %	20.3 %	11.6 %	4.5 %
EBIT growth	44.7 %	-13.0 %	29.8 %	97.0 %	24.8 %	12.8 %	5.5 %
EPS growth	85.5 %	-42.5 %	87.9 %	55.7 %	28.2 %	15.5 %	7.8 %
Efficiency
Total operating costs / sales	97.6 %	97.7 %	97.8 %	96.6 %	96.3 %	96.1 %	96.1 %
Sales per employee	233.3	229.3	237.7	281.7	292.3	297.2	301.8
EBITDA per employee	6.2	5.5	5.8	9.8	11.2	12.0	12.2
Balance sheet analysis
Avg. working capital / sales	6.2 %	4.5 %	2.8 %	1.6 %	1.7 %	2.1 %	2.1 %
Inventory turnover (sales/inventory)	35.1	36.1	33.6	37.9	37.0	37.0	37.0
Trade debtors in days of sales	47.8	44.3	40.8	37.5	40.0	40.0	40.0
A/P turnover [(A/P*365)/sales]	33.5	39.3	41.3	41.5	41.5	41.5	41.5
Cash conversion cycle (days)	15.5	3.1	-1.2	-6.5	-3.4	-3.8	-3.8
Cash flow analysis
Free cash flow	1.8	9.9	6.0	11.4	5.3	12.0	13.0
Free cash flow/sales	0.6 %	2.7 %	1.4 %	2.1 %	0.9 %	1.9 %	1.9 %
FCF / net profit	38.0 %	367.4 %	118.4 %	144.2 %	52.1 %	102.6 %	103.5 %
FCF yield	1.6 %	9.1 %	5.5 %	10.6 %	4.9 %	11.2 %	12.1 %
Capex / depn	221.5 %	4.0 %	120.4 %	141.9 %	91.7 %	84.6 %	83.3 %
Capex / maintenance capex	84.3 %	105.9 %	98.6 %	97.6 %	87.0 %	80.0 %	75.5 %
Capex / sales	1.4 %	0.0 %	1.0 %	1.4 %	0.9 %	n/a	n/a
Security
Net debt	6.2	3.9	-3.5	-1.5	-4.0	-12.0	-19.8
Net Debt/EBITDA	0.8	0.4	0.0	0.0	0.0	0.0	0.0
Net debt / equity	0.2	0.1	-0.1	0.0	-0.1	-0.2	-0.3
Interest cover	6.0	3.4	4.7	6.5	6.6	7.4	7.8
Dividend payout ratio	0.0 %	0.0 %	30.7 %	34.6 %	39.5 %	44.5 %	49.4 %
Asset utilisation
Capital employed turnover	4.8	5.7	6.0	6.5	6.6	6.4	6.2
Operating assets turnover	13.3	19.7	24.4	36.7	28.9	29.0	28.9
Plant turnover	99.4	67.4	64.7	72.0	73.5	74.9	74.8
Inventory turnover (sales/inventory)	35.1	36.1	33.6	37.9	37.0	37.0	37.0
Returns
ROCE	10.6 %	8.5 %	10.3 %	17.7 %	19.4 %	20.1 %	19.7 %
ROE	12.9 %	6.9 %	11.5 %	15.7 %	17.5 %	17.9 %	17.3 %
Other
Interest paid / avg. debt	6.6 %	7.8 %	6.6 %	8.0 %	8.7 %	8.7 %	8.7 %
No. employees (average)	1287	1588	1777	1950	2070	2150	2213
Number of shares	10.4	10.4	10.4	10.4	10.4	10.4	10.4
DPS	0.0	0.0	0.2	0.3	0.4	0.5	0.6
EPS reported	0.45	0.26	0.49	0.76	0.97	1.12	1.21
Valuation ratios
P/BV	3.0	2.8	2.5	2.2	1.9	1.7	1.5
EV/sales	0.4	0.3	0.2	0.2	0.2	0.1	0.1
EV/EBITDA	14.3	12.9	10.1	5.5	4.5	3.7	3.2
EV/EBITA	17.3	15.3	13.2	6.5	5.2	4.3	3.7
EV/EBIT	18.7	21.0	15.0	7.7	6.0	4.9	4.3
EV/FCF	64.6	11.4	17.5	9.3	19.6	8.0	6.7
Dividend yield	0.0 %	0.0 %	1.4 %	2.5 %	3.7 %	4.8 %	5.8 %

Disclosure in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG)

Company	Disclosure
CANCOM AG	2

(1) Hauck & Aufhäuser or its affiliate(s) was Lead Manager or Co-Lead Manager over the previous 12 months of a public offering of this company.

(2) Hauck & Aufhäuser acts as Designated Sponsor for this company or offers Equity Advisory Services.

• (3) Over the previous 12 months, Hauck & Aufhäuser and/or its affiliate(s) has effected an agreement with this company for investment banking services or received compensation or a promise to pay from this company for investment banking services.
• (4) Hauck & Aufhäuser and/or its affiliate(s) hold 5 % or more of the share capital of this company.
• (5) Hauck & Aufhäuser holds a trading position in shares of this company.
• (6) Hauck & Aufhäuser and/or its affiliate(s) holds a net short position of 1 % or more of the share capital of this company, calculated by methods required by German law as of the last trading day of the past month.
• (7) Within the last five years Hauck & Aufhäuser was a member of the issuing syndicate of this company.
• (8) The research report has been made available to the company prior to its publication / dissemination. Thereafter, only factual changes have been made to the report

Historical target price and rating changes for CANCOM AG in the last 12 months

Valuation basis/rating key

Buy: Sustainable upside potential of more than 10% within 12 months.

Hold 15.87 % 0.00 %

Sell: Sustainable downside potential of more than 10% within 12 months.

Hold: Upside/downside potential limited. No immediate catalyst visible.

Competent supervisory authority

Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin – (Federal Financial Supervisory Authority), Graurheindorfer Straße 108, 53117 Bonn and Lurgiallee 12, 60439 Frankfurt am Main, Germany

Important Disclosures

This research report has been prepared by Hauck & Aufhäuser Institutional Research GmbH, Hamburg, or one of its affiliates ("Hauck & Aufhäuser").

Hauck & Aufhäuser has made every effort to carefully research all information contained in this financial analysis. The information on which the financial analysis is based has been obtained from sources which we believe to be reliable such as, for example, Reuters, Bloomberg and the relevant specialised press as well as the company which is the subject of this financial analysis.

Only that part of the research note is made available to the issuer, who is the subject of this analysis, which is necessary to properly reconcile with the facts. Should this result change considerably, a reference is made in the research note.

Opinions expressed in this financial analysis are the current, personal opinions of the analyst responsible for the document as of the issuing date indicated on this document and are subject to change without notice. Hauck & Aufhäuser does not commit itself in advance to whether and in which intervals an update is made. Also, the opinions in this document no not necessarily correspond to the opinions of Hauck & Aufhäuser.

The document and the recommendations and estimations contained therein are not linked - whether directly or indirectly - to the compensation of the analyst responsible for the document.

No representation, guarantees or warranties are made by Hauck & Aufhäuser with regard to the accuracy, completeness or suitability regarding all the information on the stocks, stock markets or developments referred to in it.

On no account should the document be regarded as a substitute for the recipient's procuring information for himself or exercising his own judgements.

The document has been produced for information purposes only, and only for institutional clients or market professionals. In particular, it is not intended to be distributed to private investors or private customers. Private investors or private customers, into whose possession this document comes, should discuss possible investment decisions with their customer service officer as differing views and opinions may exist with regard to the stocks referred to in this document.

This document is not a recommendation, offer or solicitation to buy or sell the mentioned stock and will not form the basis or a part of any contract.

The document may include certain descriptions, statements, estimates, and conclusions underlining potential market and company development. These reflect assumptions, which may turn out to be incorrect. Past performance is not a guide to future results. The price of securities may decrease or increase and as a result investors may loose the amount originally invested. Changes in exchange rates may also cause the value of investments to decrease or increase. Hauck & Aufhäuser and/or its directors, officers and employees accept no responsibility or liability whatsoever for any direct or consequential loss or damages of any kind arising out of the use of this document or any part of its content. To the extent this research report is being transmitted in connection with an existing contractual relationship, e.g. financial advisory or similar services, the liability of Hauck & Aufhäuser shall be restricted to gross negligence and wilful misconduct. In any case, the liability of Hauck & Aufhäuser is limited to typical, foreseeable damages and liability for any indirect damages is excluded.

Hauck & Aufhäuser may act as market-maker or underwrite issues for any securities mentioned in this document, derivatives thereon or related financial products or perform or seek to perform capital market or underwriting services.

Hauck & Aufhäuser reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or duplicated in any form by any means or redistributed without Hauck & Aufhäuser's prior written consent.

Please note that our research is only for the personal use of Hauck & Aufhäuser institutional clients. Do not pass on to third parties or make available to third parties. From time to time Hauck & Aufhäuser Institutional Research GmbH will be compensated for its services using soft dollar compensation arrangements, such as trading commissions.

By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations.

Remarks regarding foreign investors

The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions

Contacts: Hauck&Aufhäuser Investment Banking

Hauck & Aufhäuser Research

Hauck & Aufhäuser Institutional Research GmbH Mittelweg 142

20148 Hamburg Germany

Sascha Berresch, CFA Analyst

Tel.: +49 (0)40 414 3885 - 85 E-Mail: sascha.berresch@ha-research.de

Marc Osigus, CFA Analyst

Tel.: +49 (0)40 414 3885 - 90 E-Mail: marc.osigus@ha-research.de

Tim Wunderlich, CFA Analyst

Tel.: +49 (0)40 414 3885 - 81 E-Mail: tim.wunderlich@ha-research.de

Hauck & Aufhäuser Sales

Sales Tel.: +49 (0)40 414 3885 - 88

E-Mail: vincent.bischoff@ha-research.de

Sales Tel.: +33 1 78 41 40 62 E-Mail: hugues.madelin@ha-research.de

Hugues Madelin

Michael Schramm Senior Advisor

Tel.: +49 (0) 40 414 3885 - 70 Fax: +49 (0) 40 414 3885 - 71 Email: info@ha-research.de www.ha-research.de

Tel.: +49 (0)40 414 3885 - 73 E-Mail: henning.breiter@ha-research.de

Tel.: +49 (0)40 414 3885 - 86 E-Mail: roland.rapelius@ha-research.de

Roland Rapelius, CFA

Analyst

Henning Breiter Analyst

Toby Woods Sales

Tel.: +44 207 763 7179 E-Mail: toby.woods@ha-research.de

Senior Advisors

Vincent Bischoff

Graeme Davies Senior Advisor

Tel.: +49 (0)40 414 3885 - 72 E-Mail: graeme.davies@ha-research.de

Hauck & Aufhäuser Sales Trading

Hauck & Aufhäuser Privatbankiers KGaA Kaiserstraße 24

60311 Frankfurt am Main Germany

Thomas Seibert Trading

Tel.: +49 (0)69 2161 - 1555 E.Mail: thomas.seibert@hauck-aufhaeuser.de Tel.: +49 (0)69 2161 - 1240 E-Mail: michael.schramm@hauck-aufhaeuser.de

Tel.: +49 (0) 69 2161- 0 Fax: +49 (0) 69 2161- 1340 Jochen Lucht Senior Advisor

Tel.: +49 (0)69 2161 - 1260 E-Mail: jochen.lucht@hauck-aufhaeuser.de

Email: info@hauck-aufhaeuser.de www.hauck-aufhaeuser.de

Sebastian Schuett Trading

Tel.: +49 (0)69 2161 – 1556 E.Mail: sebastian.schuett@hauck-aufhaeuser.de Marie-Therese Gruebner Analyst

Tel.: +49 (0)40 414 3885 - 83 E-Mail: marie-therese.gruebner@ha-research.de

Thomas Wissler Analyst

Tel.: +49 (0)40 414 3885 - 80 E-Mail: thomas.wissler@ha-research.de