CANCOM SE — Interim / Quarterly Report 2008

Aug 21, 2008

Q2/2008

»Leading provider of IT infrastructure and professional services«

Table of contents
Tab le of ontents
Section	page
tab le of contents	02
Prefac e – Key figures	03
Business development Q2	04-09
1) CANCOM's business and the general economic situation	04-05
2) Earnings, financial and assets situation of the CANCOM Group	05-07
3) Shareholdings of the Executive and Supervisory Boards	07
4) Events of particular significance after the reporting date	08
5) Risk report	08
6) Opportunities report	08
7) Forecast	08
8) Responsibility statement by the management	09
Balance Sheet	10-11
Income statement	12
Cash flow statement	13
Development of equity	14-15
Appendix	16-25

CONTENT

Dear Shareholders,

At the end of the first half of 2008, CANCOM continues to be in an excellent state. In the second quarter we managed again to grow faster than the market. The reason for this, in addition to our organic growth, was our successful acquisition policy. We are targeting companies with a proportionately large, high-margin services segment or, in the hardware trading business, companies

that promise potential for reduction of costs through cost optimisation, or for obtaining purchasing advantages. In your interests we will take care to ensure that the multiples derived from the purchase price are below CANCOM's valuation multiples.

Precisely these conditions are met by Sysdat GmbH in Cologne, Germany, which we were able to acquire at the end of the first half-year. This acquisition is of particular strategic importance for us, because it means that in one

go we enter the IBM world and become a significant partner. Our business has thus been given a broader base and we are less dependent on individual partners.

The general economic slowdown has not had any impact on our figures yet, and

we are also cautiously optimistic for the current quarter. We are well prepared for a downturn in the economy, thanks to our ongoing cost optimisation and also our strong balance sheet. We can therefore look forward to the future with confidence and trust that the stock exchange will judge our potential correctly.

Kind regards

Klaus Weinmann, CEO

Kennzahlenübersicht CANCOM Ko
in Mio $\epsilon$

Key figures in Euro million

Kennzahlenübersicht CANCOM Konzern			Veränderungen/	Overview of key figures CANCOM group
in Mio. €	01/01/ - 06/30/2008	01/01/ - 06/30/2007	Change	in € million
Umsatzerlöse	157.1	137.8	+ 14.0%	Revenue
Rohertrag	47.9	41.6	+ 15.1%	Gross profit
Rohertragsmarge	30.5%	30.2%	+ 1.0%	Gross margin
EBITDA	3.8	3.3*	+ 16.4%	EBITDA
EBIT	2.8	2.5*	+ 12%	EBIT
Periodenüberschuss				Net profit after
nach Minderheitenanteilen	1.5	1.7*	- 15.45%	minority interests
Ergebnis pro Aktie (in €)	0.14	0.17*	- 15.45%	Earnings per share (in €)
Durchschnittliche Aktienzahl				Adjusted average number of shares
(in 1.000) (verwässert)	10,391	10,391	+/- 0%	(in 1,000) (diluted)
Mitarbeiter zum 30.06.	1,337	1,287	+ 3.9%	Employees as of 30 June
			Veränderungen/
in Mio. €	06/30/2007	12/31/2006 C	hange	in € million
Bilanzsumme	94.6	100.4	- 5.8%	Balance sheet total
Eigenkapital	37.9	36.3	+ 4.4%	Equity
Eigenkapitalquote	40.1	36.2	+ 10.8%	Equity ratio

* For easier comparison with the 2007 figures, the above comparative figures for the period 1 January to 30 June 2007 exclude the extraordinary, non-taxable profit of € 633k from the sale of Maily Distribution GmbH in the second half of 2007. These figures are marked with an asterisk.

1. CANCOM's business and the general economic situation

Organisational and legal structure of the CANCOM Group

CANCOM IT Systeme Aktiengesellschaft, based in Jettingen-Scheppach, Germany, performs the central financial and management role for the equity investments held by the CANCOM Group.

Focus of activities and sales markets

One of the largest integrated systems providers in Germany, the CANCOM Group has been transformed over the last few years from a systems house focusing primarily on hardware and software, into a full-service IT solutions provider. Its central focus is therefore now on providing IT services, in addition to selling hardware and software from reputable manufacturers. Its IT services offering includes design and integration of IT systems, as well as system operation.

The CANCOM Group's customer base primarily includes commercial end-users, from independent professionals and small, medium and large-sized companies, to publicsector institutions.

Explanation of the control system used within the Group

To control and monitor the development of the individual subsidiaries, once a month CANCOM analyses, among other things, their sales revenues, gross profit, operating expenditure and operating profit, and compares these key figures with the original plan as well as the quarterly forecast. Additionally, the Company regularly uses external indicators such as inflation rates, interest rates, the general economic trend and the business trend within the IT sector – as well as forecasts for these – for the purpose of management control.

Research and development activities

As the business activities of the CANCOM Group are restricted to hardware and software distribution and service provision, no major research and development costs were incurred.

Overview of the CANCOM Group's business development

The CANCOM Group continued on its path of growth in the first half of 2008. Consolidated sales revenues significantly exceeded the figure for the first half of the previous year, and also consolidated operating profit surpassed the level reached in 2007.

Consolidated sales revenues were up 14.0 percent on the figures for the first half of 2007, at € 157.1 million compared with € 137.8 million. Consolidated earnings before interest and tax (EBIT) were 9.7 percent lower in the first six months of 2008 than in the first half of 2007, at € 2.8 million compared with € 3.1 million.

Significant events and investments

Since June 2008, Apple has been asserting claims for recovery of an unspecified amount against CANCOM's UK subsidiary CANCOM Ltd. for alleged wrongful charging of replacement parts to Apple under guarantee. These claims mainly concern business transactions relating to CANCOM Ltd.'s refurbishment business, which has now ceased. CANCOM Ltd. expects an amicable resolution, leading only to a one-off expense to discontinued operations. A provision was therefore made at 30 June 2008 and taken into account in the half-year result. It is not known for certain on the basis of the current status of negotiations whether this provision will be sufficient.

There were no major investments made.

Employees

As at 30 June 2008, there were 1,337 people employed by the CANCOM Group.

The employees worked in the following areas (as at 30 June 2008):

Administration	109
Logistics and customer services	46
Marketing and product management, purchasing	55
Professional service	929
Sales	198
Total	1,337

The personnel expenses for the first half year were as follows (in € '000):

	First half 008 F	irst half 2007
Wages and salaries	28,073	24,096
Social security contributions	4,963	4,366
of which pension provisions	45	60
Total	33,036	28,462

2. Earnings, financial and assets situation of the CANCOM Group

a) Earnings situation

The CANCOM Group's sales revenues rose considerably in the first half of 2008. The reason for this, in addition to the successful acquisition strategy, is the stronger demand for IT services as well as hardware and software products.

Consolidated sales revenues were 14.0 percent higher than in the first half of 2007 at € 157.1 million, compared with € 137.8 million.

Note: Since SoftMail IT AG, which was sold with effect from 31 March 2008, is treated as a discontinued operation in accordance with IFRS rules, the figures in this report for consolidated sales revenues and profits for the years 2007 and 2008 exclude the sales revenues and profits of SoftMail IT AG.

Sales revenues of the CANCOM Group, first half 2007 – first half 2008 (in € million)

Sales revenues in Germany were 10.0 percent higher than in the first half of 2007, at € 136.6 million. This growth is partly owing to the positive trend in the IT services business.

In international business, Group sales revenues rose by 50.9 percent, from € 13.6 million to € 20.5 million. This increase is mainly the result of the acquisition of CANCOM a+d IT solutions GmbH.

In the business solutions segment, sales revenues were up 13.5 percent, from € 89.9 million to € 102.1 million. In the IT solutions segment, sales revenues were up 15.0 percent, from € 47.8 million to € 55.0 million.

The consolidated gross profit for the first half of 2008 was up 15.1 percent on the figure for the same period of 2007, from € 41.6 million to € 47.9 million. This gave rise to a gross profit margin of 30.5 percent, in comparison with 30.2 percent in the same period of 2007.

Gross profit of the CANCOM Group, first half 2007 – first half 2008 (in € million)

Consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) were down 2.6 percent in the first half of 2008 at € 3.8 million, in comparison with € 3.9 million in 2007.

EBITDA of the CANCOM Group, first half 2007 – first half 2008 (in € million)

Consolidated earnings before interest and taxes (EBIT) in the first half of 2008 were down 9.7 percent on the figure for the first half of 2007, at € 2.8 million compared with € 3.1 million.

EBIT of the CANCOM Group, first half 2007 – first half 2008 (in € million)

Order position

In our merchandise business, the majority of incoming orders are converted to sales within two weeks because of our large delivery capacity. Consequently, the reporting date figures on their own do not give a true picture of our order situation in this area of our business, which is why they are not published.

b) Asset and financial position

Objectives of financial management

The core objective of the financial management of the CANCOM Group is to safeguard its liquidity at all times, to ensure that day-to-day business activities can be continued. In addition, the Group aims to achieve optimum profitability as well as a high credit status to ensure favourable financing rates.

Notes on the capital structure

On the asset side of the consolidated balance sheet, as at 30 June 2008 the current assets had fallen by 9.9 percent in comparison with 31 December 2007, to € 61.2 million. Trade accounts receivable fell only slightly by 2.3 percent to € 38.4 million, and cash and cash equivalents fell from € 11.8 million to € 7.6 million as a result of seasonal effects. Noncurrent assets were 2.7 percent higher than at 31 December 2007, at € 33.4 million.

On the liabilities side of the balance sheet, there was a 18.7 percent decline in current liabilities, to € 37.3 million. This is mainly owing to the reduction in trade accounts payable.

Non-current liabilities with a remaining term of at least one year rose slightly by 5.6 percent in comparison with 31 December 2007, to € 19.4 million.

For this reason the ratio of short to long-term loan capital has shifted in favour of long-term finance since the start of the year.

The balance sheet total was reduced to € 94.5 million in comparison with €100.4 million as at 31 December 2007.

The economic equity capital was increased over the first half of 2008, mainly through transfers to net profits, from € 36.3 million to € 37.9 million. Overall, therefore, the equity ratio as at 30 June 2008 is further improved, at 40.1 percent compared with 36.2 percent as at 31 December 2007.

The consolidated net profit for the first half of 2008 was € 1.5 million, in comparison with € 2.4 million for the first half of 2007. Earnings per share were therefore € 0.14, as against € 0.23 for the first six months of 2007.

Notes on changes in the cash flow

The cash flow from ordinary activities, traditionally negative during the year, shows an increased negative figure as at 30 June 2008 in comparison with the same date in 2007, at € 4.7 million compared with € 2.5 million. This is the result of the higher level of accounts receivable than in the first half of 2007.

The cash flow from investing activities improved to € 0.6 million as at 30 June 2008, as compared with a negative cash flow of € 1.1 million as at 30 June 2007.

The cash flow from financing activities rose to € 0.0 million, in comparison with a negative € 0.1 million in 2007.

Cash and cash equivalents fell to € 7.6 million as at 30 June 2008, in comparison with € 8.0 million as at 30 June 2007.

3. Shareholdings of the Executive and Supervisory Boards as at 30 June 2008

Total number of shares:	10,390,751	100%
Shares held by Executive Board members:
Klaus Weinmann:	286,145	2.754%
Paul Holdschik:	13,056	0.126%
Shares held by Supervisory Board members:
Walter von Szczytnicki	6,252	0.060%
Dr. Klaus F. Bauer	1,500	0.014%
Stefan Kober	526,289	5.065%
Raymond Kober	620,891	5.975%
Walter Krejci	2,000	0.019%

4. Events of particular significance after the reporting date

• Sale of SoftMail IT AG, Switzerland

CANCOM IT Systeme AG sold its wholly-owned Swiss subsidiary SoftMail IT AG by management buy-out at the beginning of July 2008. SoftMail IT AG operates a direct marketing business in Switzerland selling, among other things, translation programs, phone book CDs and route planners to end-users. SoftMail's business activities were no longer relevant to CANCOM's core business.

• Takeover of SYSDAT GmbH

On 29 July 2008, CANCOM IT Systeme AG took over 100 percent of the shares in SYSDAT GmbH, based in Cologne, Germany. The purchase price of € 5.95 million will be paid from existing cash balances.

This acquisition will improve significantly CANCOM IT Systeme AG's position in the German systems house environment. An IBM Premier Business Partner and an HP Preferred Partner, SYSDAT GmbH is one of the 15 largest systems houses in Germany. With 283 employees, SYSDAT made sales revenues of € 80.3 million in 2007, a gross profit of € 20.7 million and EBITDA of € 1.5 million (statements drawn up according to German commercial law – Handelsgesetzbuch, HGB).

6. Opportunities report

There have been no major changes in the opportunities of future development at CANCOM since the beginning of the current financial year. Details of the opportunities can be found in the annual report for 2007, starting on page 41.

7. Forecast

The positive trend in the German IT sector should continue throughout the remainder of the current financial year, according to the German Association of Information Economy, Telecommunications and New Media (Bitkom). For the first time in a long while, Bitkom is expecting an increase in sales revenues in the IT hardware business. Experts in the industry expect sales in the IT services segment – and particularly in the software segment – to grow by 5.3 percent and 6.6 percent respectively.

In addition, the Company feels that the trend towards full-service solutions in a one-stop shop will continue.

Development of the German IT sector in 2008* (real change in comparison with 2007, as a percentage)

Forecast: Bitkom, April 2008

CANCOM geared its business policy to these trends at an early stage and, because of the promising prospects, it intends to continue pursuing the same policy.

The business plan therefore provides for organic growth, among other things by appointing new IT consultants and technicians, so as to strengthen as a matter of priority the IT services provided by existing locations.

In its media customer business, CANCOM will place increased emphasis on IT infrastructure solutions and services. The structural changes brought about in the sales and distribution segment in 2007 are intended to enable employees in the media environment to improve customer sales potential and achieve a higher net product by means of a larger product portfolio.

5. Risk report

There have been no major changes in the risks of future development at CANCOM since the start of the current financial year. Details of the risks can be found in the annual report for 2007, starting on page 37. The annual report can be downloaded from www.cancom.de, or obtained free of charge from the Company.

In the Windows-based hardware and software business, the existing business units are to be consolidated further, for instance by expanding key account management. The enlargement of the individual sales and distribution units and the introduction of the new position of Regional Key Account Managers will ensure that the quality approach in the go-to-market strategy is boosted further.

The CANCOM Group's market position in the German IT environment is also to be consolidated by means of targeted acquisitions. The current market environment continues to offer favourable conditions for this policy.

CANCOM aims to make improvements to its quality management, for instance by steadily improving customer satisfaction and the efficiency of certain business and work processes. The introduction of Microsoft's ERP system Dynamic AX™ in July 2007 has brought with it a multitude of new opportunities with regard to the supply chain, such as delivery directly from Distribution to the customer, and the significant improvement in e-procurement. Overall, the improvement and streamlining of logistics processes, and concentration at the Company headquarters, should result in significant cost savings in this area. By crossselling and by taking advantage of synergy effects and best practices, costs are to be reduced and resources gathered, so that CANCOM can operate even more competitively in the market in the future. The resulting benefits will bring added value to CANCOM and to its customers and business partners.

However, our planned strategic orientation also carries risks with it. For instance, acquisitions planned or already carried out may not develop as positively as expected, and have a negative impact on CANCOM's performance. An unexpected worsening of general economic conditions could also have a significant negative impact on future business prospects.

Under the present conditions, the Executive Board expects the financial years 2008 and 2009 to bring further growth in sales revenues, with an even greater increase in profits and a further improvement in the financial situation.

8. Responsibility statement by the management

To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.

Jettingen-Scheppach, Germany, August 2008 CANCOM IT Systeme AG

The Executive Board

This document has not been audited. It contains statements and information about the future that are based on the assumptions and estimates of the Executive Board of CANCOM IT Systeme Aktiengesellschaft. These statements are identifiable by words and phrases such as "plan", "intend", "will", "expect", "we feel" etc. and are based on current expectations, assumptions and assessments. Although we feel that these expectations are realistic, we cannot guarantee their correctness. The assumptions may be subject to several internal and external risks and uncertainties, which may lead to the actual results deviating considerably, either positively or negatively, from the situations and figures forecast. The following influencing factors are relevant in this respect: changes in the general economic and business situation; changes in interest rates and foreign currency exchange rates; changes in the competitive situation, for instance by the emergence of new competitors, new products and services or new technologies; changes in the consumer habits of target customer groups etc.; and changes to the business strategy.

CANCOM does not plan to update its forecasts, nor does it make any commitment to do so.

Consolidated balance sheet (ifrs) – Assets

Zahlenangaben in T€ Aktiva	06/30/2008	12/31/2007	Figures in € '000 Assets
Kurzfristige Vermögenswerte			Current assets
Zahlungsmittel und Zahlungsmitteläquivalente	7,622	11,778	Cash and cash equivalents
Forderungen aus Lieferungen und Leistungen	38,395	39,316	Trade accounts receivable
Vorräte	8,281	8,551	Inventories
Aufträge in Bearbeitung	1,961	932	Orders in process
Rechnungsabgrenzungsposten und			Prepaid expenses and
sonstige kurzfristige Vermögenswerte	4,933	7,372	other current assets
Kurzfristige Vermögenswerte, gesamt	61,192	67,949	Total current assets
Langfristige Vermögenswerte			Long-term assets
Sachanlagevermögen	3,878	3,019	Property, plant and equipment
Immaterielle Vermögenswerte	3,699	3,817	Intangible assets
Geschäfts- oder Firmenwert	22,054	21,889	Goodwill
Finanzanlagen	57	140	Investments
Nach der Equity-Methode bilanzierte Finanzanlagen	13	14	Investments accounted for by the equity method
Ausleihungen	182	182	Notes receivable/loans
Latente Steuern aus temporären Differenzen	371	404	Deferred taxes arising from temporary differences
Latente Steuern aus steuerlichem Verlustvortrag	2,266	2,663	Deferred taxes arising from tax loss carryover
Sonstige Vermögenswerte	836	349	Other assets
Langfristige Vermögenswerte, gesamt	33,356	32,477	Total long-term assets
Aktiva, gesamt	94,548	100,426	Total assets

Consolidated balance sheet (ifrs) – Equity and liabilities

Zahlenangaben in T€			Figures in € '000
Passiva	06/30/2008	12/31/2007	Equity and liabilities
Kurzfristige Schulden			Current liabilities
Kurzfristige Darlehen und kurzfristiger Anteil an			Short term debt and
langfristigen Darlehen	1,398	1,935	current portion of long-term debt
Verbindlichkeiten aus Lieferungen
und Leistungen	22,267	27,522	Trade accounts payable
Erhaltene Anzahlungen	203	815	Advanced payments redeived
Rückstellungen	6,546	6,671	Accrued expenses
Umsatzabgrenzungsposten	1,406	1,594	Deferred revenues
Verbindlichkeiten aus Ertragssteuern	932	1,236	Income tax payable
Sonstige kurzfristige Schulden	4,532	6,056	Other current liabilities
Kurzfristige Schulden, gesamt	37,284	45,829	Total current liabilities
Langfristige Schulden			Long-term liabilities
Langfristige Darlehen	5,428	4,510	Long-term debt, less current portion
Genussrechtskapital und nachrangige Darlehen	11,563	11,563	Profit-participation capital and subordinated loans
Umsatzabgrenzungsposten	988	867	Deferred revenues
Latente Steuern aus temporären Differenzen	703	675	Deferred taxes from temporary differences
Pensionsrückstellungen	168	168	Pension provisons
Sonstige langfristige Schulden	527	560	Other long-term liabilities
Langfristige Schulden, gesamt	19,377	18,343	Total Long-term liabilities
Eigenkapital			Equity
Gezeichnetes Kapital	10,391	10,391	Shared capital
Kapitalrücklage	15,441	15,441	Additional paid-in capital
Bilanzgewinn/Bilanzverlust			Net profit
(inklusive Gewinnrücklagen)	12,188	10,721	(incl. retained earnings)
Eigenkapitaldifferenz aus Währungsumrechnung	-180	-294	Currency translation difference
Minderheitenanteile	47	-5	Minority interests
Eigenkapital, gesamt	37,887	36,254	Total equity
Passiva, gesamt	94,548	100,426	Total equity and liabilities

Income statement (ifrs)

Zahlenangaben in T€	04/01/08	04/01/07	01/01/08	01/01/07	Figures in € '000
Gewinn- und Verlustrechnung	-06/30/08	-06/30/07	-06/30/08	-06/30/07	Income Statement
Umsatzerlöse	78,837	69,687	157,064	137,763	Revenues
Sonstige betriebliche Erträge	146	907	325	1,144	Other operating income
Andere aktivierte Eigenleistungen	122	1	305	1	Other capitalised services rendered for own account
Gesamtleistung	79,105	70,595	157,694	138,908	Total operating revenue
Materialaufwand /					Cost of purchased
Aufwand für bezogene Leistungen	-54,866	-49,296	-109,762	-97,271	materials and services
Rohertrag	24,239	21,299	47,932	41,637	Gross profit
Personalaufwand	-16,597	-14,344	-33,036	-28,462	Personnel expenses
Abschreibungen auf Sachanlagen					Depreciation of property, plant and equipment
und immaterielle Vermögensgegenstände	-525	-394	-1,027	-788	and amortisation of intangible assets
Sonstige betriebliche Aufwendungen	-5,753	-4,882	-11,113	-9,292	Other operating expenses
Betriebsergebnis	1,364	1,679	2,756	3,095	Operating income
Zinsen und ähnliche Erträge	49	41	121	69	Interest and similar income
Zinsen und ähnliche Aufwendungen	-354	-238	-685	-476	Interest and other expenses
Abschreibungen auf Finanzanlagen	-3	0	-5	0	Write-downs of financial assets
Gewinn-Verlustanteile aus Joint Ventures,					Share in profit or loss from joint ventures
die nach der Equity-Methode bilanziert werden	1	1	-1	-5	accounted for by the equity method
Währungsgewinne / -verluste	9	26	-20	19	Foreign currency exchange income / losses
Ergebnis vor Steuern					Profit before taxes
(und Minderheitenanteile)	1,066	1,509	2,166	2,702	(and minority interests)
Steuern vom Einkommen und Ertrag	-349	107	-626	-90	Income tax expense
Ergebnis nach Steuern aus
aus fortzuführenden Geschäftsbereichen	717	1,616	1,540	2,612
Verlust aus aufgegebenen Geschäftsbereichen	-144	-183	-21	-60	Loss from discontinued operations
Jahresüberschuss	573	1,433	1,519	2,552	Net profit for the year???
davon entfallen auf Gesellschafter					thereof attributable to the
des Mutterunternehmens	557	1,376	1,467	2,368	shareholders of the parent
davon entfallen auf Minderheiten	16	57	52	184	thereof attributable to minority interests
Durchschnittlich im Umlauf befindliche					Average number of
Aktien (Stück) unverwässert	10,390,751	10,390,751	10,390,751	10,390,751	shares outstanding (basic)
Durchschnittlich im Umlauf befindliche					Average number of
Aktien (Stück) verwässert	10,390,751	10,390,751	10,390,751	10,390,751	shares outstanding (diluted)
Ergebnis je Aktie (unverwässert)	0.05	0.13	0.14	0.23	Earnings per share (basic)
Ergebnis je Aktie (verwässert)	0.05	0.13	0.14	0.23	Earnings per share (diluted)

Consolidated cash flow statement (ifrs)

Zahlenangaben in T€	01/01/08	01/01/07	Figures in € '000
Kapitalfluss	-06/30/08	-06/30/07	Cashflow
Cashflow aus gewöhnlicher Geschäftstätigkeit:			Cash flow from ordinary activities:
Periodengewinn vor Steuern- und Minderheitenanteilen	2,166	2,702	Net profit for the period before taxes and minority interests
Berichtigungen:			Adjustments:
+/- Abschreibungen auf Sachanlagen und immaterielle			+/- Depreciation of property, plant and
Vermögensgegenstände	1,027	788	equipment, and amortisation of intangible assets
+/- Veränderungen der langfristigen Rückstellungen	-33	0	+/- Changes in long-term accruals
+/- Veränderungen der kurzfristigen Rückstellungen	-83	-1,870	+/- Changes in current accruals
+/- Ergebnis aus dem Abgang von Anlagevermögen	23	38	+/- Profit/ losses on the disposal of fixed assets
+/- Zinsaufwand	564	407	+/- Interest expense
+/- Veränderungen der Vorräte	159	-259	+/- Changes in inventories
+/- Veränderungen der Forderungen aus Lieferungen			+/- Changes in trade accounts receivable
und Leistungen sowie anderer Forderungen	-868	4,207	and other accounts receivables
+/- Veränderungen der Verbindlichkeiten aus Lieferungen			+/- Changes in trade accounts payables
und Leistungen sowie anderer Schulden	-7,064	-3,163	and other accounts payable
+/- Gezahlte Zinsen	-104	-90	+/- Interest paid
+/- Gezahlte und erstattete Ertragsteuern	-442	-219	+/- Income tax payments and rebates
+/- Ertrag / Aufwand aus Entkonsolidierung	0	0
Nettozahlungsmittel aus betrieblicher Tätigkeit	-4,655	2,541	Net cash from operating activities
Cashflow aus Investitionstätigkeit			Cash flow from investing activities
+/- Erwerb von Tochterunternehmen	-205	-388	+/- Acquisition of subsidiaries
+/- Beim Kauf von Anteilen erworbene Zahlungsmittel	0	0
+/- Zahlungen für Zugänge zu immateriellen			+/- Payments for additions to intangible assets as
Vermögenswerten sowie Sachanlagen	-1,802	-1,066	well as property, plant and equipment
+/- Zahlungen für Zugänge und Abgänge			+/- Payments for additions to and disposal
zu anderen Finanzanlagen	0	-63	of financial assets
+/- Erlöse aus dem Abgang von Sachanlagen			+/- Proceeds from disposal of property, plant and
und Finanzanlagen	11	-24	equipment as well as financial assets
- Beim Verkauf von Anteilen hingegebene Zahlungsmittel	-212	-214	- Cash used in disposal of equity holdings
+/- Erhaltene Zinsen	121	69	+/- Interest received
+/- Einzahlungen / Auszahlungen aufgegebene Geschäftsbereiche	2,675	-195	+/- Cash inflow / outflow from discontinued
Für Investitionstätigkeit eingesetzte Nettozahlungsmittel	588	-1,105	Net cash used in investing activities
Cashflow aus Finanzierungstätigkeit			Cash flow from financing activities
+/- Erlöse aus der Ausgabe von gezeichnetem Kapital	0	0	+/- Income from issuance of share capital
+/- Kapitalerhöhungskosten	0	0	+/- Costs of capital increase
+/- Ein/Auszahlungen für aufgenommene Kredite	381	-353	+/- Inflows/ outflows from borrowings
+/- Gezahlte Zinsen	-581	-386	+/- Interest paid
Für Finanzierungstätigkeit eingesetzte Nettozahlungsmittel	-200	-739	Net cash used in financing activities
Nettozu-/abnahme von Zahlungsmitt. u. Zahlungmittelaqivalente	-4,267	697	Net change in cash and cash equivalents
+/- Wechelkursbedingte Wertänderungen	111	-12	+/- Changes in value resulting from foreign currency exchange
+/- Finanzmittelbestand am Anfang der Periode	11,778	7,302	+/- Cash and cash equivalents as at beginning of period
Finanzmittelbestand am Ende der Periode	7,622	7,987	Cash and cash equivalent sat end of period
Zusammensetzung:			Breakdown:
Liquide Mittel	7,622	7,987	Cash

Consolidated statement of changes in equity (ifrs)

	Aktien/	Gezeichnetes Kapital	Kapitalrücklagen/	Gewinnrücklagen	Eigene Anteile
	Shares	Issued capital	Capital reserves	Revenue reserves	Treasury shares
	TStück/Quantity '000	T€ /'000	T€ /'000	T€ /'000	T€ /'000
31. Dezember 2006	10,391	10,391	15,441	122	0
Kapitalerhöhungen	0	0	0
Veränderung der kumulierten
Währungsdifferenzen
Veränderung der Rücklagen:
- Veränderung stock options
- IPO Kosten
Ergebnis des Berichtszeitraums
Minderheitenanteile
- Minderheitenanteile-Ergebnisteil
- Ausschüttungen
- Veränderungen durch Erwerb/Veräußerungen
31. Dezember 2007	10,391	10,391	15,441	122	0
Kapitalerhöhungen	0	0	0
Veränderung der kumulierten
Währungsdifferenzen
Veränderung der Rücklagen:
- Veränderung stock options
- IPO Kosten			0
Ergebnis des Berichtszeitraums
Minderheitenanteile
- Mindreheitenanteile-Ergebnisanteil
- Ausschüttungen
- Veränderungen durch Erwerb/Veräußerungen
30. Juni 2008	10,391	10,391	15,441	122	0

Consolidated statement of changes in equity (ifrs)

	Eigenkapital gesamt/Total	Minderheitenanteile	Bilanzgewinn/	Eigenkapitaldiff. aus der erstmaligen Anwendung	Eigenkapitaldiff. aus der Währungsumrechnung/
	equity	Minority interests	Earned surplus	von IFRS	Translation reserve
		T€ /'000	T€ /'000	T€ /'000	T€ /'000
31 December 2006	33,404	1,671	6,070	-153	-138
Capital increase	0
Change in accumulated foreign
currency exchange difference	-156				-156
Change in reserves:
- change in stock options	0
	0
Net profit for the period	4,682		4,682
Minority interests	0
Result of minority interests	523	523
	-349	-349
Change by acquisition/sale	-1,850	-1,850
31 December 2007	36,254	-5	10,752	-153	-294
	0
Change in accumulated foreign
currency exchange difference	114				114
Change in reserves
- change in stock options	0
	0
Net profit for the period	1,467		1,467
Result of minority interests	52	52
	0
Change by acquisition/sale	0
	37,887	47	12,219	-153	-180

NOTES

to the consolidated accounts for the quarter ended 30 June 2008

A. The principles adopted for the consolidated financial statements

1. General information

The consolidated financial statements of CANCOM IT Systeme Aktiengesellschaft and its subsidiaries ("the CANCOM Group" or "the Group") for the financial year 2008 are drawn up according to International Financial Reporting Standards or International Accounting Standards (IFRS/IAS).

The main corporate objective of CANCOM IT Systeme Aktiengesellschaft and its consolidated subsidiaries is the sales and distribution of integrated IT system solutions (hardware, software and network products) and the provision of a broad range of IT services (e.g. consultation, system integration, service and support, and training).

The consolidated financial statements were drawn up in euro. Unless otherwise stated, all amounts are shown in thousand euro (€ '000 or € k).

The financial year covers the period from 1 January to 31 December 2008. The address of the Company's registered office is Messerschmittstrasse 20, 89343 Jettingen-Scheppach, Germany.

The shares are traded on the Regulated Market of the FWB Frankfurt Stock Exchange under ISIN DE0005419105 and are admitted to the Prime Standard of Deutsche Börse AG.

2. Reporting entity – scope of consolidation

The consolidated financial statements include CANCOM IT Systeme Aktiengesellschaft and all subsidiaries in which CANCOM IT Systeme Aktiengesellschaft has either a direct or an indirect majority shareholding, or in which it holds the majority of the voting rights. These subsidiaries are fully consolidated.

The following German and non-German subsidiaries are included in CANCOM IT Systeme Aktiengesellschaft's consolidated financial statements for the period ended 30 June 2008:

		Companys's registered office	Equity- share
	1. CANCOM Deutschland GmbH sowie	Jettingen-Scheppach, Germany 100.0
	and its subsidiaries
	• CANCOM Computersysteme GmbH	Graz/Thondorf/Austria	100.0
	and its subsidiariy
	– CANCOM a+d IT solutions GmbH	Perchtoldsdorf/Austria	100.0
	• CANCOM Switzerland AG	Caslano/Switzerland	100.0
2.	CANCOM NSG GmbH	Jettingen-Scheppach, Germany 100.0
	3. CANCOM IT Solutions GmbH	Munich, Germany	100.0
	4. CANCOM physical infrastructure GmbH	Jettingen-Scheppach, Germany 100.0
	and its subsidiary
	– Novodrom People Value Service GmbH	Jettingen-Scheppach, Germany 100.0
	5. acentrix GmbH	Jettingen-Scheppach, Germany	51.0
	6. CANCOM EN GmbH	Jettingen-Scheppach, Germany 100.0
	6. CANCO M Ltd.	Guildford/UK	100.0

The entire equity capital of SoftMail IT AG, with the nominal value of CHF 100,000, has been sold by contract of sale dated 4 July 2008. The sale is effective from 31 March 2008. The net profit of SoftMail IT AG in the first quarter of 2008 and in 2007 is shown under discontinued operations.

The impact of the omission of SoftMail IT AG on the consolidated companies is shown below:

	Balance sheet B at 31 March 2008	alance sheet at 31 December 2007
Cash and cash equivalents	-212	-160
Trade accounts receivable	-260	-120
Inventories	-111	-68
Prepaid expenses and
other current assets	-122	-117
Current assets	-705	-465
Other assets	-12	-13
Non-current assets	-12	-13
Total assets	-717	-478
Trade accounts payable	-581	-127
Advance payments received	-9	-9
Accrued expenses	-24	-28
Other current liabilities	-6	-9
Current liabilities	-620	-173
Long-term loans	0	0
Non-current liabilities	0	0
Total liabilities	-620	-173
Short net assets	-97	-305

CANCOM IT Systeme AG purchased 100 percent of the shares of SYSDAT GmbH Gesellschaft für IT-Lösungen, with a nominal value of DM 5,000,000.00 (€ 2,556,459.41). This is documented by a contract of sale (deed no. B1230/2008) dated 29 July 2008 drawn up by notary Dr Thomas Braun.

The purchase price is € 5,950,000 and is payable on 12 August 2008. The company will be included in the consolidated financial statements from 1 August 2008 since, according to the contract of sale, CANCOM IT Systeme Aktiengesellschaft effectively gained control over SYSDAT GmbH Gesellschaft für IT-Lösungen once the contract had been signed on 29 July 2008.

3. Accounting and valuation policies

The same accounting and valuation policies were used as in the consolidated financial statements for the financial year 2007, which can be downloaded from www.cancom.de.

Currency conversion principles

Currency

	Second quarter 2008	Second quarter 2007 Second quarter 2006
Swiss francs
• Rate on reporting date	€ 1=1.606 SFR	€ 1=1.544 SFR	€ 1=1.567 SFR
• Average rate	€ 1=1.606 SFR	€ 1=1.632 SFR	€ 1=1.561 SFR
Britisches Pfund
• Rate on reporting date	€ 1=0.793 GBP	€ 1=0.673 GBP	€ 1=0.693 GBP
• Average rate	€ 1=0.775 GBP	€ 1=0.675 GBP	€ 1=0.687 GBP

Classification of financial instruments

An interest rate swap was used as a hedging tool as defined by IFRS 7.22-23 for a variablerate loan in the financial year 2008. The cash value of the swap as at 30 June 2008 was € 33k.

B. Notes to the consolidated balance sheet

1. Cash and cash equivalents

Cash and cash equivalents consist exclusively of cash in banks payable on demand and cash in hand.

2. Trade accounts receivable

The trade accounts receivable are payable within a year.

3. Inventories

Inventories consist almost exclusively of merchandise, particularly hardware components and software. Most of it is stored at the logistics centre in Jettingen-Scheppach, Germany.

Inventories consist of the following (company-specific breakdown):

	30 June 2008 € '000	31 December 2007 € '000
Finished products and goods Down-payments made	8.220 61	8.465 86
	8,281	8,551

4. Orders in progress

The orders in progress are orders calculated according to the percentage of completion method. They amount to € 2,069k less down-payments of € 108k.

5. Prepaid expenses, deferred charges and other current assets

This item mainly consists of other current assets. These include receivables arising from a copyright levy (€ 1,150k), bonuses due from suppliers (€ 1,136k), tax refunds (€ 342k), creditors with a debit balance (€ 272k), a claim to the payment of a purchase price (€ 227k), receivables from employees (€ 202k), receivables from former shareholders (€ 199k), a claim in respect of a loan to SoftMail IT AG (€ 373k), marketing revenue (€ 143k), receivables due from suppliers for returned goods (€ 90k) and insurance recovery (€ 40k).

The prepaid expenses and deferred charges (€ 663k) include deferred insurance premiums.

6. Non-current assets (fixed assets)

6.1 Property, plant and equipment

Property, plant and equipment mainly consists of the equipment necessary for the automated small parts warehouse and the manual pallet rack to the value of € 0.5 million. Computer equipment, tenant's fittings and office furnishings and equipment are also shown under this item.

In a contract for work and services of 27 April 2007, recorded by notary Bernd Eilbrecht (deed no. 177/2007) and formed between CANCOM IT Systeme Aktiengesellschaft and Jinova Hamburg-Harburg Grundstücks GmbH & Co. KG, CANCOM IT Systeme Aktiengesellschaft undertook to build an office building with a dispatch centre on the land at Messerschmittstrasse 20 in Jettingen-Scheppach, Germany.

An all-inclusive fixed price of € 4,025,000 was agreed as remuneration for the entire work and services to be performed by the Company.

The building was ready for use in February 2008, following inspection and approval. The purchase price was paid on 28 March 2008.

6.2 Intangible assets

The intangible assets include purchased software (€ 1,431k), software produced in-house (€ 730k), a customer list (€ 1,506k) and orders received (€ 32k).

The carrying amount of the software produced in-house mainly comprises the costs for the development (customising) of the integrated ERP system, Microsoft®Dynamics AXTM. A great economic benefit was attributed to the in-house software projects, on the basis of the savings potential created by automating the systems used for business processes and carrying out sector and company-specific adjustments. In addition, Microsoft® Dynamics AXTM will enable the systems of any companies acquired in the future to be integrated into the Group more quickly, and any potential for synergies to be realised swiftly.

6.3 Goodwill

Goodwill at the balance sheet date mainly includes the relevant figures arising from the inclusion of CANCOM Deutschland GmbH, CANCOM IT Solutions GmbH, CANCOM NSG GmbH, CANCOM Ltd., UK and CANCOM a+d IT solutions GmbH in the consolidated financial statements.

6.4 Loans

Loans include the asset value from reinsurance in the sum of € 182k.

7. Deferred tax assets

The deferred tax assets are as follows:

Deferred taxes from	temporary differences	tax loss carryforwards
	€'000	€'000
As at 01/01/2008	404	2,663
Inflow from capitalisation	0
Tax expenditure from
profit and loss calculation	-33	-397
As at 06/30/2008	371	2,266

The deferred tax assets for tax loss carryforwards were capitalised on the basis of the existing loss carryforwards of approximately € 7.8 million (31 December 2007: € 9.2 million) (corporation tax in Germany and other countries) and approximately € 6.7 million (31 December 2008: € 8.3 million) (German trade tax).

The deferred taxes from temporary differences are the result of differences in goodwill (€ 226k), intangible assets (€ 72k), other provisions (€ 61k) and pension provisions (€ 12k).

8. Short-term loans and current component of long-term loans

Short-term loans and the current component of long-term loans comprises liabilities due to banks. These are drawings on credit facilities provided by banks and the portion of long-term loans due for repayment within one year.

9. Trade accounts payable

The trade accounts payable are due within one year.

10. Other provisions

The provisions mainly include outstanding invoices (€ 1,494k), copyright levy (€ 1,228k), bonuses and commission (€ 1,147k), severance payments and salaries (€ 1,015k), holiday entitlements (€ 920k), purchase price for shares in affiliated companies (€ 677k), trade association payments (€ 174k), cost of financial statements (€ 103k), social security contributions and tax on wages and salaries (€ 98k), contingent risks (€ 92k), additional leasing costs (€ 76k), maintenance (€ 23k) and warranties (€ 13k).

The total amount of the provisions includes long-term provisions amounting to € 524k, which are shown under other long-term liabilities. These mainly relate to a provision for severance payments which is legally mandatory in Austria (€ 360k) and anniversaries (€ 134k).

11. Income tax liabilities

Income tax liabilities mainly consist of obligations for 2006, 2007 and 2008, and an obligation arising from tax audits for 2000.

12. Other current liabilities

Other current liabilities include sales tax liabilities (€ 2,170k), tax on wages and salaries and church tax (€ 1,178k), debtors with a credit balance (€ 543k), wages and salaries (€ 217k), social security contributions (€ 155k) and purchase price liabilities (€ 15k).

13. Long-term loans

Long-term loans consist purely of liabilities due to banks with a remaining term of at least one year. The part of these loans that is due for repayment within the next twelve months is shown under short-term loans and current component of long-term loans.

14. Capital from profit-participation rights and subordinated loans

This item includes profit-participation rights of € 6,000,000 (PREPS 2005-1 and PREPS 2005-2), mezzanine capital of € 4,000,000 (Bayern Mezzaninekapital GmbH & Co. KG) and a subordinated loan of € 1,650,000 (Sparkasse Günzburg-Krumbach no. 6005 000 119).

15. Deferred tax liabilities

The deferred tax liabilities provide for deviations from the tax balance sheets. They are the result of the revaluation of intangible assets (€ 410k), software produced in-house (€ 215k), deferred revenues (€ 37k), capital from profit-participation rights and subordinated loans (€ 26k), long-term loans (€ 9k) and other provisions (€ 6k).

They are recognised at an individual tax rate of between 25 percent (for the Austrian subsidiary) and 31.26 percent.

16. Pension provisions

Provisions for pensions include € 132k for members of the Executive Board and € 36k for other employees.

Individual defined benefit obligations exist with regard to an Executive Board member. There are also other defined benefit obligations for other employees who joined the Company as the result of an acquisition.

The pension obligations for pension schemes in Germany are basically measured according to the number of years of service and the remuneration of the employees in question.

17. Equity capital

Changes in the equity capital are shown on page 15.

Share capital

The Company's share capital at 30 June 2008 was € 10,390,751, divided into 10,390,751 notional no-par-value shares.

Authorised and conditional capital

According to the articles of association, the Company's authorised capital at 30 June 2008 amounted to € 4,838,671, and is divided up as follows:

At the Annual General Meeting of 16 June 2004 a resolution was passed authorising the Executive Board to undertake a one-off increase or several increases in the share capital of up to a total of € 838,671 by issuing up to 838,671 new notional no-par-value bearer shares in exchange for cash or non-cash contributions. The capital increases require the approval of the Supervisory Board and must be carried out by 15 June 2009. The shareholders were granted subscription rights which can be rescinded in the event of a capital increase through non-cash contributions in connection with the acquisition of an equity investment or parts of other companies. The Executive Board is also authorised to exclude fractional amounts from the shareholders' subscription rights; the Executive Board, with the agreement of the Supervisory Board, will decide on the nature of the relevant rights conferred by the shares and the other conditions of the share issue (Authorised Capital 2004/I).

Furthermore, on the basis of a resolution of the Annual General Meeting of 25 June 2008, the Executive Board is authorised to increase the share capital by up to € 1,000,000 in one or more stages by issuing up to 1,000,000 new notional no-par-value bearer shares in exchange for cash. The capital increases require the approval of the Supervisory Board and must be carried out by 24 June 2013.

The Executive Board is authorised to rescind the shareholders' statutory subscription rights in the following cases, subject to the approval of the Supervisory Board:

a) for fractional amounts;

b) if the capital increase is in exchange for cash and the proportion of the share capital accounted for by the new shares, for which subscription rights are excluded, is not greater than 10 percent of the share capital existing at the time the new shares are issued; and if the issue price of the new shares is not significantly lower than the stock market price of the shares of the same securities class and nature which are already quoted when the price is finally determined by the Executive Board as laid down by Section 203, paragraphs 1 and 2, and Section 186, paragraph 4, sentence 4 of the German Stock Companies Act (Aktiengesetz, AktG). When the 10 percent threshold is calculated, the proportion of the share capital that is accounted for by new or repurchased shares that have been issued or sold since 25 June 2008 with the simplified exclusion of preemptive rights in line with Section 186, paragraph 3, sentence 4 of the German Stock Companies Act must be taken into account, as well as the proportion of the share capital relating to option and/or conversion rights or obligations from bonds which have been issued since 25 June 2008 in accordance with Section 186, paragraph 3, sentence 4 of the German Stock Companies Act.

The Executive Board and the Supervisory Board will decide together on the nature of the relevant rights conferred by the shares and the other conditions of the share issue (Authorised Capital 2008/II).

In addition, on the basis of a resolution of the Annual General Meeting of 22 June 2005, the Executive Board is authorised to undertake a one-off increase or several increases in the share capital of up to a total of € 3,000,000 by issuing up to 3,000,000 new notional no-par-value bearer shares in exchange for cash contributions or contributions in kind. The capital increases require the approval of the Supervisory Board and must be carried out by 20 June 2010. Shareholders have been granted subscription rights which may be rescinded in the event of a capital increase through non-cash contributions in connection with the acquisition of an equity investment or parts of other companies. The Executive Board is also authorised, subject to the agreement of the Supervisory Board, to exclude fractional amounts from the shareholders' subscription right; the Executive Board, with the agreement of the Supervisory Board, will decide on the nature of the relevant rights conferred by the shares and the other conditions of the share issue (Authorised Capital 2005/III).

In accordance with the articles of association, the conditional capital at 30 June 2008 amounted to € 5,000,000, and is established as follows:

The share capital can be increased conditionally by up to € 5,000,000 through the issue of up to 5,000,000 new no-par-value shares. The conditional increase in capital will only be implemented to the extent that the holders of bonds which the Executive and Supervisory Boards have been authorised by resolution of the AGM of 25 June 2008 to issue up to 24 June 2013, exercise their conversion rights/obligations or their option rights. The new shares will be issued at an option exercise price or conversion price to be determined in accordance with the above resolution. The new shares will carry dividend rights from the beginning of the financial year for which, at the time of their issue, no resolution of the Annual General Meeting has been passed on the appropriation of the net income for the year. The Executive Board is authorised to determine the other details for the implementation of the conditional capital increase with the approval of the Supervisory Board.

The Executive Board did not exercise these powers in the second quarter of 2008.

The Executive Board does not know of any restrictions on voting rights or on the transfer of shares.

18. Minority interests

Minority interests relate to the share of the equity held by the minority shareholders of acentrix GmbH.

19. Capital risk management

The Group manages its capital with the aim of maximising the return to stakeholders through the optimisation of the debt and equity balance. It is ensured that all entities in the Group can operate under the going concern premise. The capital structure of the Group consists of debt, cash and cash equivalents and the equity attributable to equity holders of the parent company, comprising issued shares, reserves and retained earnings.

The goals of the capital management are to ensure that the Group will be able to continue as a going concern and to obtain an adequate return on equity. To implement these goals the Group takes its capital as a proportion of the total capital.

The capital is monitored on the basis of the economic equity. The economic equity is the balance sheet equity. The liability is defined as current and non-current components, provisions and other liabilities as well as prepaid expenses and deferred charges.

C. Notes to the consolidated income statement

1. Segment reporting

The CANCOM Group discloses segmental information according to the rules of IAS 14.

The primary segment reporting format of the CANCOM Group is based on geographical segments, since the risks, the return on equity and the earnings potential of the Group are influenced mainly by whether the business is operational in Germany or elsewhere in Europe.

The secondary segment reporting format of the CANCOM Group is based on the business segments: business solutions and IT solutions.

The same principles apply to the preparation of the segmental report as in the financial statements for the year 2007.

Internal sales are recorded on the basis of either their cost or their current market prices, depending on the type of service.

The CANCOM Group's primary segmental reporting for 2008 includes the following companies in Germany: CANCOM Deutschland GmbH, CANCOM IT Solutions GmbH, CANCOM NSG GmbH, CANCOM physical infrastructure GmbH, Novodrom People Value Service GmbH, acentrix GmbH, CANCOM EN GmbH and CANCOM IT Systeme Aktiengesellschaft.

The Europe segment includes CANCOM Ltd., CANCOM (Switzerland) AG, CANCOM Computersysteme GmbH and CANCOM a+d solutions GmbH.

The performance pool method is used for internal transfer pricing for transactions between the segments.

Geographical segments		Germany		Europe		Elemination		Consolidation
	06/30/08	06/30/07	06/30/08	06/30/07	06/30/08	06/30/07	06/30/08	06/30/07
	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
Sales revenues
- External sales	136,581	124,193	20,483	13,570
- Inter-segment sales	3,512	3,487	47	53	-3,559	-3,540
- Total income	140,093	127,680	20,530	13,623	-3,559	-3,540	157,064	137,763
Profit
EBITDA	3,539	3,874	244	9			3,783	3,883
- Depreciation and amortisation	840	729	187	59			1,027	788
Operating profit (EBIT)	2,699	3,145	57	-50			2,756	3,095
- Interest income							121	69
- Interest expense							-685	-476
- Write-downs of financial assets							-5	0
- Profits and losses from joint ventures
recognised according to the equity method	-1	-5	0	0			-1	-5
Profit from ordinary activities							2,186	2,683
- Extraordinary profit	0	0	0	0			0	0
- Currency differences							-20	19
- Income tax							-626	-90
- Discontinued operations	-21	0	0	0			-21	0
Consolidated income for the year							1,519	2,612
of which attributable to the shareholders of the parent company							1,467	2,368
of which attributable to minority interest							52	184
Other information
- Segment assets 1,2	80,863	75,076	11,048	5,051			91,911	80,127
- Current liabilities	31,776	31,001	5,508	2,476			37,284	33,477
- Non-current liabilities	16,746	13,350	2,631	18			19,377	13,368
- Investments1	1,784	1,043	213	86			1,997	1,129

1 Segment assets and investments including goodwill from capital consolidation 2 Excluding deferred tax assets

In secondary segment reporting, the IT solutions segment includes the subsidiaries CANCOM NSG GmbH, CANCOM physical infrastructure GmbH, Novodrom People Value Service GmbH, acentrix GmbH, CANCOM IT Solutions GmbH, as well as the CANCOM Deutschland GmbH cost centres allocated to them.

The business solutions segment comprises the companies CANCOM IT Systeme Aktiengesellschaft, CANCOM Deutschland GmbH, CANCOM EN GmbH, CANCOM Computersysteme GmbH, CANCOM a+d IT solutions GmbH, CANCOM (Switzerland) AG and CANCOM Ltd., less the cost centres allocated to CANCOM IT Solutions GmbH.

							Consolidated
06/30/08	06/30/07	06/30/08	06/30/07	06/30/08	06/30/07	06/30/08	06/30/07
€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
102,055	89,938	55,009	47,825
1,232	615	726	135	-1,958	-750
103,287	90,553	55,735	47,960	-1,958	-750	157,064	137,763
61,477	53,677	30,434	26,448			91,911	80,125
1,701	951	296	178			1,997	1,126
		business solutions		IT solutions		Elimination

Information on dominant customers:

The Siemens Group customers (Siemens IT Solutions and Services and Fujitsu Siemens Computers) each account for more than 5 percent of the total sales of the CANCOM Group, and significantly more than 5 percent of the contribution margin.

2. Sales revenues

The sales revenues of € 157,064k include order revenues of € 1,029k calculated using the POC method.

3. Other operating income

Other operating income is made up as follows:

€'000	1 January - 30 June 2008	1 January - 30 June 2007
Rent	86	67
Income from the sale of Maily Distribution GmbH	0	633
Income not relating to the period	210	236
Insurance recovery	0	127
Other operating income	29	81
Total	325	1.144

Income not relating to the period mainly includes payments received in relation to receivables that had been written off, income from debtors with a credit balance also written off, and income from the reversal of a provision for warranties.

4. Other own work capitalised

This item includes in-house services connected with the manufacture of non-current assets.

Other own work capitalised consists of the following:

€'000
103
102
100

5. Personnel expenses

Personnel expenses consist of the following:

Total	33,036	28,462
Pension expenses	45	60
Social security contributions	4,917	4,306
Wages and salaries	28,074	24,096
€'000	1 January - 30 June 2008	1 January - 30 June 2007

6. Other operating expenses

Other operating expenses consist of the following:

in T€	1 January - 30 June 2008	1 January - 30 June 2007
Office space	2,039	1,537
Insurance and other charges	410	407
Motor vehicles	2,230	1,955
Advertising	661	767
Stock exchange and enterainment expenses	336	245
Hospitality and travel expenses	1,003	756
Delivery costs	999	801
Third-party services	1,468	914
Repairs, maintenance, leasing	211	478
Communication and office expenses	612	530
Legal and consulting expenses	352	333
Fees and charges for money transactions	155	171
Allowance for bad debts	0	20
Other operating expenses	637	378
Total	11,113	9,292

7. Interest income / expense

Interest income mainly consists of interest on cash in banks and interest from customers.

8. Income tax

The rate of income tax for the German companies is 29.04 percent. This is made up of corporation tax, trade tax and the solidarity surcharge. The divergence between the tax expenses reported and those at the tax rate of CANCOM IT Systeme Aktiengesellschaft arises as follows:

in T€	1 January - 30 June 2008	1 January - 30 June 2007
Earnings before tax	2,094	2,458
Expected tax at rate to German companies
(29.29 percent; 2007: 37.98 percent)	613	934
- Difference from tax paid abroad	-36	-13
- Change in allowance for deferred
tax assets on losses carried forward	3	-909
- Change in deferred tax assets owing to
reduction in tax rate from 2008	0	276
- Tax-free income	45	-43
- Actual income tax not relating to the period	6	-20
- Permanent differences: non-deductible
operating expenses and additions
and reductions due to trade tax	9	-245
- Other	-23	61
- Tax saving shown under
discontinued operations	9	49
Total Group income tax	626	90

The income tax consists of the following:

	T€
Utilisation of tax loss carryforwards of CANCOM IT Systeme Aktiengesellschaft	563
Deferred taxes owing to deviations from tax balance sheet of
CANCOM IT Systeme Aktiengesellschaft	4
Corporation tax and solidarity surcharge of CANCOM IT Systeme Aktiengesellschaft	85
Trade tax of CANCOM IT Systeme Aktiengesellschaft	85
Tax expense of CANCOM IT Systeme Aktiengesellschaft in previous years	2
Deferred taxes owing to deviations from tax balance sheet of CANCOM Deutschland GmbH 13
Tax expense of CANCOM Deutschland GmbH in previous years	-7
Capitalisation of tax loss carryforwards of CANCOM IT Solutions GmbH	-86
Deferred taxes owing to deviations from tax balance sheet of CANCOM IT Solutions GmbH	34
Tax expense of CANCOM IT Solutions GmbH in previous years	-48
Deferred taxes owing to deviations from tax balance sheet of CANCOM NSG GmbH	-29
Tax expense of CANCOM NSG GmbH in previous years	2
Utilisation of tax loss carryforwards of CANCOM physical infrastructure GmbH	-7
Corporation tax and solidarity surcharge of Novodrom People Value Service GmbH	15
Trade tax of Novodrom People Value Service GmbH	11
Utilisation of tax loss carryforwards of acentrix GmbH	5
Corporation tax and solidarity surcharge of acentrix GmbH	20
Trade tax of acentrix GmbH	13
Capitalisation of tax loss carryforwards of CANCOM Computersysteme GmbH, Austria -13
Capitalisation of tax loss carryforwards of CANCOM a+d IT solutions GmbH	-31
Deferred taxes owing to deviations from tax balance sheet of CANCOM a+d IT solutions GmbH 39
Capitalisation of tax loss carryforwards of CANCOM Ltd., UK	-83
Tax saving of CANCOM Ltd., UK shown under discontinued operations	39
Utilisation of tax loss carryforwards of the SoftMail Group, Switzerland	30
Tax saving of SOFT-MAIL Group, Switzerland shown under discontinued operations	-30
Total	626

The actual tax rate is calculated as follows:

	€'000
Income before tax	2,094
Income tax	626
Actual tax expense rate	29.89 %

Tax losses not yet utilised and for which no deferred tax claim was recognised in the balance sheet amounted to € 1.3 million (IAS 12.81.e).

Income tax comprises the income tax paid or owed in the individual countries and also the deferred taxes:

Deferred taxes from items charged directly to equity	0	0
	447	-417
Liabilities	27	-46
Assets	420	-371
Deferred taxes:
Actual income tax paid	179	507
€'000	1 January - 30 June 2008	1 January - 30 June 2007

The calculation of income tax in accordance with IAS 12 takes account of tax deferrals resulting from differing valuations in the commercial balance sheet and the tax balance sheet, from realisable loss carryforwards, from differing results between the tax valuations in the individual financial statements of the consolidated subsidiaries and the standards applied throughout the Group, and from consolidation processes, in as far as these balance out over the course of time. Deferred tax claims relating to the carrying forward of unused tax losses are partially capitalised, as results are expected to be positive in the next 5 years. The deferred taxes are calculated on the basis of the anticipated tax rates in the period in which an asset is realised or a debt satisfied. The tax rates used are those that apply or will apply on the balance sheet date.

9. Discontinued operations

The impact of discontinued operations on the income statement amounts to a loss of € 21k. The main areas are detailed below.

SOFT-MAIL Group:

The net effect of the sale of the SoftMail Group is shown as discontinued operations in the amount of € 69k. This figure can be broken down into income (including other operating income) of € 886k, expenditure of € 730k, profits before tax of € 156k and deferred tax savings of € 49k owing to existing tax loss carryovers. The loss on the sale amounted to € 38k.

CANCOM Ltd. "Apple B stock":

This item, shown under discontinued operations, amounts to € 90k. CANCOM Ltd. discontinued the sale of Apple B stock at the end of 2006, since Apple took on this business itself after that time. In June 2008, CANCOM Ltd. was confronted with a demand from Apple for payment for replacement parts that it had supplied, a claim that is disputed by CANCOM Ltd. The amount shown relates to precautionary provisions made by the management of CANCOM Ltd. These amount to € 129k, less deferred tax savings owing to an existing tax loss carryover of € 39k.

10. Minority interests

Minority interests are equivalent to 49 percent of the net income of acentrix GmbH (€ 52k).

D. Notes to the cash flow statement

The consolidated cash flow statement is prepared in accordance with IAS 7 "Statement of Cash Flows". This requires that a distinction be made between cash flows from operating activities, investing activities and financing activities. The cash and cash equivalents shown in the cash flow statement comprise cash in hand and cash at banks.

The indirect method was used to establish the cash flow from current activities. The cash flow from ordinary activities fell by € 7.2 million compared with the first half of 2007.

The cash resources of € 7,622k include cash and cash equivalents. This item shows cash in hand and cash at banks, as well as current-asset securities.

E. Other disclosures

1. Related party disclosures

CANCOM IT Systeme Aktiengesellschaft has prepared these consolidated financial statements as the parent company with ultimate control. These consolidated financial statements are not included in any other consolidated financial statements.

CANCOM Financial Services GmbH, the joint venture formed in January 2006 with TRS Technology Refresh GmbH, is a related party as defined by IAS 24. This company was set up to strengthen customer loyalty to the CANCOM Group by offering added value in the field of finance. CANCOM Financial Services GmbH brokers the leasing contracts concluded by TRS Technology Refresh GmbH.

For the purposes of IAS 24, Klaus Weinmann can be considered a related party who can exercise a significant influence on the CANCOM Group, both as an Executive Board member and as a shareholder in CANCOM IT Systeme Aktiengesellschaft. Rudolf Hotter and Paul Holdschik, who also belong to the Executive Board, are further related parties for the purposes of IAS 24, as are the members of the Supervisory Board.

There were no receivables or payables in relation to the Executive Board or the other companies in the CANCOM Group at the balance sheet date.

There is a consultancy agreement in place between CANCOM IT Systeme Aktiengesellschaft and the Chairman of its Supervisory Board, Walter von Szczytnicki. This was approved in accordance with Section 114 of the German Stock Companies Act (Aktiengesetz, AktG), and provides for annual remuneration of € 60k.

On 27 June 2007, the Supervisory Board approved an M&A consultancy agreement with Auriga Corporate Finance GmbH of Munich, Germany, dated 7 March 2007, in accordance with Section 114 I of the German Stock Companies Act (Aktiengesetz, AktG) on the occasion of the designated election of the managing director of Auriga Corporate Finance GmbH, Walter Krejci, to the Supervisory Board of CANCOM IT Systeme AG.

Transactions with related parties were settled in the same way as arm's length transactions.

2. Shares held by members of the Executive and Supervisory Boards (at the balance sheet date)

Please see page 8 of this report for a list of shareholdings.

3. Equity interests in the Company as defined in Section 20 IV of the German Stock Companies Act (Aktiengesetz, AktG)

No shareholder reported in writing to CANCOM IT Systeme Aktiengesellschaft a majority shareholding as defined by Section 20 of the above Act in the period from 1 January to 30 June 2008.

Interim Report

3-Monatszahlen 2007 Q2/2008

Masthead

CANCOM IT Systeme AG Investor Relations

Messerschmittstr. 20 89343 Jettingen-Scheppach

Germany

Tel.: +49 8225 996-1272 Fax: +49 8225 996-4-1272 E-Mail: IR@CANCOM.DE