CANCOM SE — Earnings Release 2012

Jun 19, 2012

CANCOM AG Germany - IT Services

Buy (old: Buy)				19-June-12
	Price target: EUR 18.50	(old: EUR 18.50)		Tim Wunderlich, CFA Analyst
Price:	EUR 13.85	Next result:	Q2 2012: 09.08.12
Bloomberg:	COK GR	Market cap:	EUR 142.2 m	tim.wunderlich@ha-research.de
Reuters:	COKG.DE	Enterprise Value:	EUR 109.8 m	Tel.: +49 40 4143885 81

TecDax entry and move towards Cloud Computing drive re-rating

Peer Computacenter's trading statement released last week underpinned the healthy IT market environment and presented a positive x-read for CANCOM. Service growth was 15% y-o-y in H1 '12 (at constant currency) implying an acceleration of growth in Q2 '12 given that growth in Q1 amounted to "merely" 11%. In our view, Computacenter's service growth in Germany in H1 '12 should have been even above the mentioned 15% given that a weak UK business biases group top-line growth to the downside. In its outlook, Computacenter said it expects growth rates to remain on these elevated levels throughout 2012.

Thriving on the positive IT climate, CANCOM has been a clear outperformer of the TecDax recently (50% in the last 3 months and 6 months) triggered not only by strong Q1 results (sales +13% y-o-y / EBITDA +50% y-o-y) but also by an expansion of the P/E multiple for 2013E from 6.7 at the beginning of 2012 to 8.6 currently (figures based on consensus estimates). This positive re-rating in times of growing macro uncertainty is seen to be due to:

• Higher investor interest in light of the TecDax entry and index funds having to buy the stock.
• Higher liquidity which improved from € 200,000 per day at the beginning of the year to € 650,000 per day currently (vs. € 900,000 per day for Bechtle).
• The company's success in moving towards Cloud Computing on the back of its proprietary AHP platform making the implementation of a Cloud solution much faster and cheaper. Related projects are high-margin and throw off recurring maintenance sales (eH&A: Up to € 80,000 per month depending on project size).

That said, CANCOM remains our favoured pick in the German IT Services sector given (1) Cheap valuation in absolute (c. 8x earnings 2013E) and relative terms (10% discount to Bechtle on PER 2013E); (2) Strong footprint in Cloud Computing which has helped narrow the EBIT margin gap to Bechtle to 0.2pp (2012E) versus 2.6pp in 2008 despite CANCOM's smaller size; (3) Pure Play on Germany (90% of sales) with no exposure to ailing Southern European countries or France. This explains why CANCOM outgrew Bechtle in Q1 '12 (13% y-o-y sales growth vs. 7%). Remains a BUY with a PT of € 18.50 based on DCF.

Y/E 31.12 (EUR m)	2008	2009	2010	2011	2012E	2013E	2014E
Sales	342.8	348.3	474.6	544.4	594.0	624.4	654.4
Sales growth	14 %	2 %	36 %	15 %	9 %	5 %	5 %
EBITDA	7.8	9.5	19.0	25.0	29.9	32.9	35.8
EBIT	5.6	7.1	15.2	18.5	24.3	26.6	28.8
Net income	2.7	5.1	7.8	11.5	16.1	18.3	20.0
Net debt	3.9	-3.5	-0.9	-18.5	-32.5	-44.1	-56.8
Net gearing	9.9 %	-8.0 %	-1.8 %	-30.4 %	-44.0 %	-49.5 %	-54.1 %
Net Debt/EBITDA	0.5	0.0	0.0	0.0	0.0	0.0	0.0
EPS fully diluted	0.26	0.49	0.76	1.11	1.55	1.76	1.92
CPS	1.05	0.80	1.28	2.18	2.13	1.86	2.06
DPS	0.00	0.15	0.15	0.30	0.30	0.40	0.40
Dividend yield	0.0 %	1.1 %	1.1 %	2.2 %	2.2 %	2.9 %	2.9 %
Gross profit margin	29.9 %	31.0 %	29.3 %	29.1 %	29.1 %	29.1 %	29.1 %
EBITDA margin	2.3 %	2.7 %	4.0 %	4.6 %	5.0 %	5.3 %	5.5 %
EBIT margin	1.6 %	2.0 %	3.2 %	3.4 %	4.1 %	4.3 %	4.4 %
ROCE	8.9 %	10.5 %	19.5 %	20.6 %	25.2 %	25.9 %	25.0 %
EV/sales	0.4	0.4	0.3	0.2	0.2	0.2	0.1
EV/EBITDA	18.9	14.8	7.4	4.9	3.7	3.0	2.4
EV/EBIT	26.3	19.7	9.3	6.7	4.5	3.7	3.0
PER	45.4	28.8	15.0	12.1	9.0	7.9	7.2
Adjusted FCF yield	3.0 %	4.4 %	8.2 %	12.8 %	16.7 %	20.5 %	26.3 %

Source: Company data, Hauck & Aufhäuser Close price as of: 18.06.2012

Source: Company data, Hauck & Aufhäuser

High/low 52 weeks:	13.85 / 6.74
Price/Book Ratio:	1.9
Relative performance (TecDAX):
3 months	49.8 %
6 months	49.6 %
12 months	83.5 %

Changes in estimates

		Sales	EBIT	EPS
2012	old:	594.0	24.3	1.55
	∆	-	-	-
	old:	624.4	26.6	1.76
2013	∆	-	-	-
2014	old:	654.4	28.8	1.92
	∆	-	-	-

Key share data:

Number of shares: (in m pcs)	10.4
Authorised capital: (in € m)	4.0
Book value per share: (in €)	7.1
Ø trading volume: (12 months)	60,000

Major shareholders:

Free Float	82.7 %
JP Morgan	5.3 %
AGI	5.0 %
Stefan Kober	2.5 %
Raymond Kober	2.5 %
Klaus Weinmann	2.0 %

Company description:

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

Financials

Profit and loss (EUR m)	2008	2009	2010	2011	2012E	2013E	2014E
Net sales	342.8	348.3	474.6	544.4	594.0	624.4	654.4
Sales growth	14.2 %	1.6 %	36.2 %	14.7 %	9.1 %	5.1 %	4.8 %
Increase/decrease in finished goods and work-in-process	0.3	1.0	1.3	0.9	0.8	1.0	1.0
Total sales	343.1	349.3	475.8	545.3	594.8	625.4	655.4
Other operating income	0.3	2.3	3.3	0.7	0.2	0.4	0.5
Material expenses	240.7	241.1	336.3	386.6	421.6	443.4	464.8
Personnel expenses	71.0	79.2	97.0	108.0	116.2	121.2	125.7
Other operating expenses	24.0	21.8	26.8	26.4	27.3	28.3	29.6
Total operating expenses	335.3	339.8	456.8	520.3	564.9	592.5	619.6
EBITDA	7.8	9.5	19.0	25.0	29.9	32.9	35.8
Depreciation	2.2	2.4	3.8	2.8	3.4	3.8	4.3
EBITA	5.6	7.1	15.2	22.2	26.5	29.1	31.5
Amortisation of goodwill	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Amortisation of intangible assets	0.0	0.0	0.0	3.7	2.2	2.5	2.7
Impairment charges	0.0	0.0	0.0	0.0	0.0	0.0	0.0
EBIT	5.6	7.1	15.2	18.5	24.3	26.6	28.8
Interest income	0.3	0.2	0.1	0.3	0.2	0.3	0.3
Interest expenses	1.4	1.3	1.9	2.2	1.7	0.8	0.6
Other financial result	-0.1	0.0	0.0	0.4	0.4	0.4	0.4
Financial result	-1.2	-1.1	-1.8	-1.6	-1.1	-0.1	0.1
Recurring pretax income from continuing operations	4.4	5.9	13.3	16.9	23.2	26.5	28.9
Extraordinary income/loss	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Earnings before taxes	4.4	5.9	13.3	16.9	23.2	26.5	28.9
Taxes	1.3	0.9	3.7	4.9	7.0	7.9	8.7
Net income from continuing operations	3.2	5.0	9.6	12.0	16.3	18.5	20.2
Result from discontinued operations (net of tax)	0.5	-0.1	1.7	0.3	0.0	0.0	0.0
Net income	2.7	5.1	7.9	11.7	16.3	18.5	20.2
Minority interest	0.0	0.0	0.1	0.2	0.2	0.2	0.2
Net income (net of minority interest)	2.7	5.1	7.8	11.5	16.1	18.3	20.0
Average number of shares	10.4	10.4	10.3	10.4	10.4	10.4	10.4
EPS reported	0.26	0.49	0.76	1.11	1.55	1.76	1.92

Profit and loss (common size)	2008	2009	2010	2011	2012E	2013E	2014E
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	0.1 %	0.3 %	0.3 %	0.2 %	0.1 %	0.2 %	0.2 %
Total sales	100.1 %	100.3 %	100.3 %	100.2 %	100.1 %	100.2 %	100.2 %
Other operating income	0.1 %	0.6 %	0.7 %	0.1 %	0.0 %	0.1 %	0.1 %
Material expenses	70.2 %	69.2 %	70.9 %	71.0 %	71.0 %	71.0 %	71.0 %
Personnel expenses	20.7 %	22.7 %	20.4 %	19.8 %	19.6 %	19.4 %	19.2 %
Other operating expenses	7.0 %	6.3 %	5.7 %	4.8 %	4.6 %	4.5 %	4.5 %
Total operating expenses	97.8 %	97.6 %	96.3 %	95.6 %	95.1 %	94.9 %	94.7 %
EBITDA	2.3 %	2.7 %	4.0 %	4.6 %	5.0 %	5.3 %	5.5 %
Depreciation	0.6 %	0.7 %	0.8 %	0.5 %	0.6 %	0.6 %	0.7 %
EBITA	1.6 %	2.0 %	3.2 %	4.1 %	4.5 %	4.7 %	4.8 %
Amortisation of goodwill	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Amortisation of intangible assets	0.0 %	0.0 %	0.0 %	0.7 %	0.4 %	0.4 %	0.4 %
Impairment charges	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
EBIT	1.6 %	2.0 %	3.2 %	3.4 %	4.1 %	4.3 %	4.4 %
Interest income	0.1 %	0.0 %	0.0 %	0.1 %	0.0 %	0.0 %	0.0 %
Interest expenses	0.4 %	0.4 %	0.4 %	0.4 %	0.3 %	0.1 %	0.1 %
Other financial result	0.0 %	0.0 %	0.0 %	0.1 %	0.1 %	0.1 %	0.1 %
Financial result	-0.4 %	-0.3 %	-0.4 %	-0.3 %	-0.2 %	0.0 %	0.0 %
Recurring pretax income from continuing operations	1.3 %	1.7 %	2.8 %	3.1 %	3.9 %	4.2 %	4.4 %
Extraordinary income/loss	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Earnings before taxes	1.3 %	1.7 %	2.8 %	3.1 %	3.9 %	4.2 %	4.4 %
Tax rate	28.3 %	15.6 %	28.1 %	28.8 %	30.0 %	30.0 %	30.0 %
Net income from continuing operations	0.9 %	1.4 %	2.0 %	2.2 %	2.7 %	3.0 %	3.1 %
Income from discontinued operations (net of tax)	0.1 %	0.0 %	0.4 %	0.1 %	0.0 %	0.0 %	0.0 %
Net income	0.8 %	1.5 %	1.7 %	2.1 %	2.7 %	3.0 %	3.1 %
Minority interest	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Net income (net of minority interest)	0.8 %	1.5 %	1.6 %	2.1 %	2.7 %	2.9 %	3.1 %

Balance sheet (EUR m)	2008	2009	2010	2011	2012E	2013E	2014E
Intangible assets	28.3	31.5	42.5	39.6	40.2	40.7	41.0
Property, plant and equipment	5.4	6.5	9.7	12.9	16.6	19.4	22.1
Financial assets	3.5	0.2	3.2	2.2	2.2	2.2	2.2
FIXED ASSETS	37.3	38.2	55.4	54.6	58.9	62.2	65.2
Inventories	10.1	12.6	13.4	15.0	15.8	16.7	17.5
Accounts receivable	44.2	47.2	68.0	72.2	76.5	80.4	84.3
Other current assets	6.3	5.1	6.4	7.2	7.2	7.2	7.2
Liquid assets	18.3	25.8	31.5	44.4	49.0	54.2	66.8
Deferred taxes	2.5	2.6	0.7	0.6	0.6	0.6	0.6
Deferred charges and prepaid expenses	2.1	3.4	2.0	0.9	0.9	0.9	0.9
CURRENT ASSETS	83.4	96.7	122.0	140.2	150.0	159.9	177.2
TOTAL ASSETS	120.7	134.9	177.4	194.9	209.0	222.2	242.5
SHAREHOLDERS EQUITY	38.9	43.9	50.9	60.7	73.8	89.1	105.0
MINORITY INTEREST	0.0	0.0	0.1	0.2	0.4	0.6	0.8
Long-term debt	20.3	21.6	29.0	16.7	11.6	5.6	5.6
Provisions for pensions and similar obligations	0.2	0.0	0.1	0.1	0.1	0.1	0.1
Other provisions	3.2	4.3	3.2	7.6	7.6	7.6	7.6
Non-current liabilities	23.6	26.0	32.2	24.4	19.2	13.2	13.2
short-term liabilities to banks	1.8	0.7	1.6	9.1	5.0	4.5	4.5
Accounts payable	39.3	47.9	64.4	72.9	83.0	87.2	91.4
Advance payments received on orders	2.0	1.1	1.5	1.9	1.9	1.9	1.9
Other liabilities (incl. from lease and rental contracts)	12.6	10.7	16.3	17.4	17.4	17.4	17.4
Deferred taxes	1.3	2.0	4.3	2.7	2.7	2.7	2.7
Deferred income	1.2	2.7	6.0	5.6	5.6	5.6	5.6
Current liabilities	58.1	65.0	94.2	109.6	115.5	119.3	123.5
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	120.7	134.9	177.4	194.9	209.0	222.2	242.5

Balance sheet (common size)	2008	2009	2010	2011	2012E	2013E	2014E
Intangible assets	23.5 %	23.4 %	24.0 %	20.3 %	19.2 %	18.3 %	16.9 %
Property, plant and equipment	4.5 %	4.8 %	5.5 %	6.6 %	7.9 %	8.7 %	9.1 %
Financial assets	2.9 %	0.1 %	1.8 %	1.1 %	1.0 %	1.0 %	0.9 %
FIXED ASSETS	30.9 %	28.3 %	31.2 %	28.0 %	28.2 %	28.0 %	26.9 %
Inventories	8.4 %	9.3 %	7.5 %	7.7 %	7.6 %	7.5 %	7.2 %
Accounts receivable	36.6 %	35.0 %	38.3 %	37.1 %	36.6 %	36.2 %	34.8 %
Other current assets	5.2 %	3.8 %	3.6 %	3.7 %	3.4 %	3.2 %	3.0 %
Liquid assets	15.1 %	19.2 %	17.7 %	22.8 %	23.5 %	24.4 %	27.6 %
Deferred taxes	2.1 %	1.9 %	0.4 %	0.3 %	0.3 %	0.3 %	0.3 %
Deferred charges and prepaid expenses	1.7 %	2.5 %	1.1 %	0.4 %	0.4 %	0.4 %	0.4 %
CURRENT ASSETS	69.1 %	71.7 %	68.8 %	72.0 %	71.8 %	72.0 %	73.1 %
TOTAL ASSETS	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %
SHAREHOLDERS EQUITY	32.3 %	32.5 %	28.7 %	31.2 %	35.3 %	40.1 %	43.3 %
MINORITY INTEREST	0.0 %	0.0 %	0.0 %	0.1 %	0.2 %	0.3 %	0.3 %
Long-term debt	16.9 %	16.0 %	16.3 %	8.6 %	5.5 %	2.5 %	2.3 %
Provisions for pensions and similar obligations	0.1 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Other provisions	2.6 %	3.2 %	1.8 %	3.9 %	3.6 %	3.4 %	3.1 %
Non-current liabilities	19.6 %	19.3 %	18.2 %	12.5 %	9.2 %	5.9 %	5.5 %
short-term liabilities to banks	1.5 %	0.5 %	0.9 %	4.7 %	2.4 %	2.0 %	1.9 %
Accounts payable	32.5 %	35.5 %	36.3 %	37.4 %	39.7 %	39.3 %	37.7 %
Advance payments received on orders	1.6 %	0.8 %	0.9 %	1.0 %	0.9 %	0.8 %	0.8 %
Other liabilities (incl. from lease and rental contracts)	10.4 %	7.9 %	9.2 %	9.0 %	8.3 %	7.9 %	7.2 %
Deferred taxes	1.1 %	1.5 %	2.4 %	1.4 %	1.3 %	1.2 %	1.1 %
Deferred income	1.0 %	2.0 %	3.4 %	2.9 %	2.7 %	2.5 %	2.3 %
Current liabilities	48.2 %	48.2 %	53.1 %	56.2 %	55.3 %	53.7 %	50.9 %
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %

Cash flow statement (EUR m)	2008	2009	2010	2011	2012E	2013E	2014E
Net profit/loss	2.7	5.1	7.9	11.7	16.3	18.5	20.2
Depreciation of fixed assets (incl. leases)	2.2	2.4	3.8	2.8	3.4	3.8	4.3
Amortisation of goodwill	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Amortisation of intangible assets	0.0	0.0	0.0	3.7	2.2	2.5	2.7
Others	-10.8	-0.6	3.0	4.7	0.0	0.0	0.0
Cash flow from operations before changes in w/c	-6.0	6.9	14.7	22.9	21.9	24.8	27.2
Increase/decrease in inventory	0.9	-0.9	0.3	-6.3	-0.8	-0.8	-0.8
Increase/decrease in accounts receivable	4.4	0.8	-15.2	-5.2	-4.3	-3.9	-3.9
Increase/decrease in accounts payable	4.3	2.7	17.1	15.3	10.1	4.2	4.2
Increase/decrease in other working capital positions	9.5	1.1	0.0	0.0	0.0	0.0	0.0
Increase/decrease in working capital	19.0	3.8	2.2	3.8	5.0	-0.5	-0.5
Cash flow from operating activities	13.1	10.7	16.9	26.7	26.8	24.3	26.8
CAPEX	3.0	4.7	8.1	9.4	9.9	9.6	10.0
Payments for acquisitions	6.6	0.4	10.5	3.6	0.0	0.0	0.0
Financial investments	-0.3	-0.2	-0.1	-0.3	0.0	0.0	0.0
Income from asset disposals	8.1	2.3	1.1	4.8	0.0	0.0	0.0
Cash flow from investing activities	-1.2	-2.6	-17.3	-7.9	-9.9	-9.6	-10.0
Cash flow before financing	11.9	8.0	-0.4	18.8	16.9	14.7	16.8
Increase/decrease in debt position	-3.5	0.1	8.1	-2.6	-9.3	-6.5	0.0
Purchase of own shares	0.0	0.2	-0.6	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	1.5	1.6	3.1	3.1	4.1
Others	-1.0	-1.0	-1.3	-1.6	0.0	0.0	0.0
Effects of exchange rate changes on cash	-0.3	0.0	0.1	0.0	0.0	0.0	0.0
Cash flow from financing activities	-4.5	-1.1	5.9	-5.8	-12.4	-9.6	-4.1
Increase/decrease in liquid assets	7.1	7.0	5.6	13.0	4.5	5.2	12.7
Liquid assets at end of period	18.9	25.8	31.5	44.5	49.0	54.2	66.8

Source: Company data, Hauck & Aufhäuser

2008	2009	2010	2011	2012E	2013E	2014E
322.2	386.1	441.7	502.0	549.5	578.8	608.6
n/a	19.8 %	14.4 %	13.7 %	9.5 %	5.3 %	5.1 %
0.0	36.4	32.9	42.4	44.6	45.6	45.8
n/a	n/a	-9.6 %	28.9 %	5.1 %	2.3 %	0.5 %
0.0	0.0	n/a	n/a	n/a	n/a	n/a
n/a	n/a	n/a	n/a	n/a	n/a	n/a
0.0	0.0	n/a	n/a	n/a	n/a	n/a
n/a	n/a	n/a	n/a	n/a	n/a	n/a
0.0	0.0	n/a	n/a	n/a	n/a	n/a
n/a	n/a	n/a	n/a	n/a	n/a	n/a
322.2	422.5	474.6	544.4	594.0	624.4	654.4
n/a	31.1 %	12.3 %	14.7 %	9.1 %	5.1 %	4.8 %

P&L growth analysis Sales growth 14.2 % 1.6 % 36.2 % 14.7 % 9.1 % 5.1 % 4.8 % EBITDA growth -2.7 % 21.3 % 100.7 % 31.6 % 19.6 % 10.0 % 8.8 % EBIT growth -8.8 % 26.0 % 114.0 % 21.7 % 31.7 % 9.5 % 8.3 % EPS growth -42.4 % 87.8 % 55.5 % 46.4 % 39.5 % 13.9 % 9.2 % Efficiency Total operating costs / sales 97.8 % 97.6 % 96.3 % 95.6 % 95.1 % 94.9 % 94.7 % Sales per employee 215.9 196.0 257.7 273.1 280.6 282.2 585.6 EBITDA per employee 4.9 5.3 10.3 12.5 14.1 14.9 32.0 Balance sheet analysis Avg. working capital / sales 4.8 % 3.4 % 2.8 % 2.6 % 1.7 % 1.2 % 1.2 % Inventory turnover (sales/inventory) 34.0 27.7 35.5 36.3 37.5 37.5 37.5 Trade debtors in days of sales 47.0 49.5 52.3 48.4 47.0 47.0 47.0 A/P turnover [(A/P*365)/sales] 41.8 50.1 49.6 48.9 51.0 51.0 51.0 Cash conversion cycle (days) 2.8 -3.9 -3.1 -6.3 -11.1 -11.1 -11.1 Cash flow analysis Free cash flow 10.1 6.0 8.8 17.3 16.9 14.7 16.8 Free cash flow/sales 2.9 % 1.7 % 1.9 % 3.2 % 2.9 % 2.4 % 2.6 % FCF / net profit 374.5 % 118.4 % 113.1 % 150.3 % 105.3 % 80.5 % 83.8 % FCF yield 7.0 % 4.2 % 6.2 % 12.2 % 11.9 % 10.4 % 11.8 % Capex / depn 122.1 % 188.4 % 206.6 % 139.0 % 176.8 % 152.4 % 142.9 % Capex / maintenance capex 114.9 % 137.6 % 133.1 % 151.6 % 142.0 % 124.5 % 125.0 % Capex / sales 0.8 % 1.3 % 1.7 % 1.7 % n/a n/a n/a Security Net debt 3.9 -3.5 -0.9 -18.5 -32.5 -44.1 -56.8 Net Debt/EBITDA 0.5 0.0 0.0 0.0 0.0 0.0 0.0 Net debt / equity 0.1 -0.1 0.0 -0.3 -0.4 -0.5 -0.5 Interest cover 4.0 5.4 8.0 8.3 14.3 33.3 47.7 Dividend payout ratio 0.0 % 30.7 % 19.7 % 26.7 % 19.2 % 22.4 % 20.5 % Asset utilisation Capital employed turnover 5.3 4.9 5.6 5.8 6.0 5.8 5.3
Operating assets turnover 18.6 20.1 18.9 21.5 24.7 22.8 21.4
Plant turnover 63.5 53.4 49.0 42.2 35.8 32.2 29.6
Inventory turnover (sales/inventory) 34.0 27.7 35.5 36.3 37.5 37.5 37.5
Returns
ROCE 8.9 % 10.5 % 19.5 % 20.6 % 25.2 % 25.9 % 25.0 %
ROE 6.9 % 11.5 % 15.4 % 19.0 % 21.8 % 20.6 % 19.1 %
Other
Interest paid / avg. debt 7.0 % 5.9 % 7.2 % 7.9 % 8.0 % 6.0 % 6.0 %
No. employees (average) 1588 1777 1842 1994 2117 2213 1118
Number of shares 10.4 10.4 10.3 10.4 10.4 10.4 10.4
DPS 0.0 0.2 0.2 0.3 0.3 0.4 0.4
EPS reported 0.26 0.49 0.76 1.11 1.55 1.76 1.92
Valuation ratios
P/BV 3.7 3.3 2.8 2.4 1.9 1.6 1.4
EV/sales 0.4 0.4 0.3 0.2 0.2 0.2 0.1
EV/EBITDA 18.9 14.8 7.4 4.9 3.7 3.0 2.4
EV/EBITA 26.3 19.7 9.3 5.6 4.1 3.4 2.7 EV/EBIT 26.3 19.7 9.3 6.7 4.5 3.7 3.0
EV/FCF 14.6 23.3 16.0 7.1 6.5 6.7 5.1
Dividend yield 0.0 % 1.1 % 1.1 % 2.2 % 2.2 % 2.9 % 2.9 %

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

Company	Disclosure
CANCOM AG	2, 5

(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 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

Buy	83.33 %	100.00 %
Sell	7.14 %	0.00 %
Hold	9.52 %	0.00 %

Valuation basis/rating key

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

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 AG, 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 AG 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 AG Mittelweg 142

20148 Hamburg Germany

Sascha Berresch, CFA Analyst

Tel.: +49 (0)40 414 3885 - 85 E-Mail: sascha.berresch@ha-research.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 Tel.: +49 (0) 40 414 3885 - 70 Fax: +49 (0) 40 414 3885 - 71 Email: info@ha-research.de www.ha-research.de

Henning Breiter Analyst

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

Christian Schwenkenbecher Analyst

Tel.: +49 (0)40 414 3885 - 76 E-Mail: christian.schwenkenbecher@ha-research.de

Tim Wunderlich, CFA Analyst

Hamish Edsell Sales

Tel.: +44 207 763 2180

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

E-Mail: hamish.edsell@ha-research.de

Nils-Peter Fitzl Analyst

Tel.: +49 (0)40 414 3885 - 86 E-Mail: nils-peter.fitzl@ha-research.de

Torben Teichler Analyst

Tel.: +49 (0)40 414 3885 - 74 E-Mail: torben.teichler@ha-research.de

Hauck & Aufhäuser Sales

Vincent Bischoff Sales

Tel.: +49 (0)40 414 3885 - 88 E-Mail: vincent.bischoff@ha-research.de

Hugues Madelin Sales

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

Supervisory Board

Graeme Davies Chairman

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

Mirko Brueggemann Trading

Tel.: +49 (0)69 2161 - 1525 E.Mail: mirko.brueggemann@hauck-aufhaeuser.de

Michael Schramm

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

Jochen Lucht

Toby Woods Sales

Tel.: +44 207 763 7179

E-Mail: toby.woods@ha-research.de

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

Sebastian Schuett

Trading

Tel.: +49 (0) 69 2161- 0 Fax: +49 (0) 69 2161- 1340 Email: info@hauck-aufhaeuser.de www.hauck-aufhaeuser.de

Tel.: +49 (0)69 2161 – 1556 E.Mail: sebastian.schuett@hauck-aufhaeuser.de Thomas Seibert Trading

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