CANCOM SE — Interim / Quarterly Report 2010

Nov 18, 2010

Interim report

9-months-report

»Leading provider of IT infrastructure and professional services«

Table of contents

Section	Page
Table of contents	02
Preface – Key figures	03
Consolidated interim management report Q3	04-09
1) CANCOM's business and the general economic situation 2) Earnings, financial and assets situation of the CANCOM group 3) Shareholdings of the Executive and Supervisory Board 4) Events of particular significance after the reporting date 5) Risk report 6) Opportunities report 7) Forecast Balance sheet	04-05 05-07 08 08 08 08 08-09 10-11
Income statement	12
Consolidated cash flow statement – IFRS	13
Consolidated statement of changes in equity – IFRS	14
Statement of comprehensive income – IFRS	15
Segment information – IFRS	16-17
Appendix	18-22

CONTENT

Preface – Key figures

Dear Shareholders,

In our half-year results published in August, we reported on the CANCOM Group's strategic redirection towards the latest IT trend, cloud computing. Now, a good three months later, we find our decision was more than justified. This is reflected both by the outstanding results for the third quarter and by our promising business prospects on account of our good position in the field of cloud computing, with our own CANCOM AHP Private Cloud solution.

The results for the third quarter of 2010 significantly exceed our expectations for the otherwise rather weak summer months. We experienced a broadening of our business as our customers' investment backlog started to clear. Convinced that this positive trend will continue for the year as a whole, in August we increased our EBITDA guidance to € 13.0 million, and the positive thirdquarter results are grounds for a further increase.

In August we received the award for Best Integrated Systems Provider again, showing that the Group is well positioned and that our products and services offer our customers added value. We are very proud of the award and are grateful for the confidence shown in us.

We are also grateful to you, our shareholders, for your confidence in CANCOM, and will be very pleased if you continue to support us.

Kind regards

Klaus Weinmann, CEO

Key figures

in Euro million

Kennzahlenübersicht CANCOM Konzern			Veränderungen/	Overview of key figures CANCOM group
in Mio. €	01/01/ - 09/30/2010	01/01/ - 09/30/2009	Change	in € million
Umsatzerlöse	380.2	304.4	+ 24.9 %	Revenue
Rohertrag	108.3	85.4	+ 26.8 %	Gross profit
Rohertragsmarge in %	28.5 %	28.1 %	+ 0.4 %	Gross margin
EBITDA Konzern	10.7	5.2	+ 105.8 %	EBITDA
EBIT Konzern	7.6	3.0	+ 153.3 %	EBIT
Periodenergebnis	4.7	1.8	+ 161.1 %	Net profit before minority interests
Ergebnis pro Aktie (in €)				Earnings per share (in €)
(verwässert)	0.45	0.18	+ 150.0 %	from continuing operations /diluted)
Durchschnittliche Aktienzahl				Adjusted average number of shares
(in 1.000) (verwässert)	10,318	10,391	- 0.7 %	(in 1,000) (diluted)
Mitarbeiter zum 30.09.	2,018	1,742	+ 15.8 %	Employees as of 30 September
			Veränderungen/
in Mio. €	09/30/2010	12/31/2009	Change	in € million
Bilanzsumme	140.0	134.9	+ 3.8 %	Balance sheet total
Eigenkapital	46.9	43.9	+ 6.8 %	Equity
Eigenkapitalquote in %	33.5 %	32.5 %	+ 1.0 %	Equity ratio

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 three largest independent integrated systems providers in Germany, the CANCOM Group has steadily been transformed over the last few years through strategic acquisitions from a systems house focusing primarily on hardware and software, into an IT architect, IT systems integrator and Managed Service Provider. As a provider of integrated services, its central focus is now on providing IT ser-vices in addition to selling hardware and software from prestigious manufacturers. Its IT services range includes design and integration of IT systems, as well as sys-tem operation.

The CANCOM Group's customer base therefore includes primarily commercial end-users, from independent professionals to medium and large-sized companies and public-sector institutions. Through the e-commerce platform of HOH Home of Hardware GmbH at www.hoh.de, the CANCOM Group provides products and ser-vices to private as well as business customers.

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 performance of the IT sector – as well as forecasts for these – for the purpose of management control. The cash management procedures include a daily status investigation.

Research and development activities

Innovation is very important for economic momentum and growth. CANCOM concentrates its research and development activities on IT growth segments such as Cloud Computing, virtualisation solutions, managed services, online technologies, systems development and process optimisation.

Overview of the CANCOM Group's business performance

The CANCOM Group continued on its path of growth in the first nine months of 2010, with significant year-on-year increases in sales revenues and profits.

Consolidated sales revenues were 24.9 percent higher in the first nine months of 2010 than in the same period of 2009, at € 380.2 million compared with € 304.4 million. The consolidated gross profit was up 26.8 percent, from € 85.4 million to € 108.3 million. The gross profit margin was up from 28.1 percent to 28.5 percent. Consolidated EBITDA earnings for the first nine months of the cur-rent financial year amounted to € 10.7 million – an increase of 105.8 percent – and consolidated EBIT rose by 153.3 percent to € 7.6 million.

Note: some adjustments to the figures for the first half of 2009 have been necessary to take into ac-count businesses that were classified as discontinued operations in the first half of 2009 in compliance with IFRS 5.

CANCOM Group sales revenues: year-on-year comparison of first half figures, 2009 and 2010 (in € million)

Significant events and investments

On 27 July 2010, CANCOM Bürotex GmbH, Nürtingen, Germany was merged into CANCOM SCC GmbH, Stuttgart, Germany with retroactive effect from 1 January 2010.

Employees

As at 30 September 2010 the Group employed 2,018 people.

The employees worked in the following areas (as at 30 September 2010):

Professional services:	1,332
Sales and distribution:	358
Marketing and product services:	31
Purchasing, logistics and order processing:	127
Central services:	170

The personnel expenses in the first six months were as follows (in € '000):

	01/01/-09/30/2010	01/01/-09/30/2009
Wages and salaries	62,906	51,766
Social security contributions	11,554	9,335
Pensium provisions	205	125
Total	74,665	61,226

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

a) Earnings position

There was a considerable year-on-year increase in sales revenues and profit in the first nine months of 2010. The significant growth is partly owing to the improved general economic conditions and the increasing IT spending on part of the com-panies, but also to the inclusion of the recently acquired CANCOM Bürotex and CANCOM SCC in the consolidated financial statements. However, in the third quarter of 2010 alone, the CANCOM Group recorded organic growth of 26.4 per-cent. The consolidated sales revenues of the CANCOM Group in the first nine months of the current year rose by 24.9 percent year on year, from € 304.4 million to € 380.2 million.

In Germany, the sales revenues for the first nine months of 2010 were up 24.4 percent year on year, from € 278.2 million to € 346.2 million. This growth is partly owing to the acquisition of CANCOM Bürotex and CANCOM SCC.

In international business, the CANCOM Group's sales revenues rose by 29.8 percent, from € 26.2 million to € 34.0 million.

In the e-commerce/trade segment, sales revenues were up 9.7 percent, from € 156.1 million to € 171.3 million. In the IT solutions segment they were up 40.8 percent, from € 148.3 million to € 208.8 million.

The consolidated gross profit for the first nine months of 2010 was up 26.8 percent year on year, from € 85.4 million to € 108.3 million.

The gross profit margin rose from 28.1 percent to 28.5 percent, mainly as a result of the concentrated focus on high-income and high-growth market segments such as IT solutions, consulting and managed services.

CANCOM Group's gross profit: year-on-year comparison of first half figures, 2009 and 2010 (in € million)

Consolidated EBITDA for the first nine months of 2010 was up 105.8 percent on the same period in 2009, at € 10.7 million compared with € 5.2 million.

CANCOM Group's EBITDA: year-on-year comparison of first half figures, 2009 and 2010 (in € million)

Consolidated EBIT for the first nine months of 2010 amounts to € 7.6 million, as compared with € 3.0 million in the first nine months of 2009, equivalent to a growth of 153.3 percent.

CANCOM Group's EBIT: year-on-year comparison of first half figures, 2009 and 2010 (in € million)

The net income for the first nine months of 2010 amounted to € 4.7 million, in comparison with € 1.8 million in 2009. As a result, earnings per share were € 0.45, compared with € 0.18 for the first nine months of 2009.

The order position

In the e-commerce/trade segment and parts of the IT solutions segment, 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 business, which is why they are not published.

In the IT solutions segment, orders are often given over long periods. At present, the volume of orders is rising slightly.

Because of the stable services business – which now accounts for about two thirds of the gross profits (total output less material costs and services rendered) – as well as the healthy condition of the balance sheet, the management feels the Group is in a strong position within the IT sector.

Explanations of individual items on the income statement

Further details on items in the income statement are given in the Notes to the consolidated income statement.

b) Financial and assets 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 refinancing rates.

Notes on the capital structure

On the assets side of the consolidated balance sheet, there was a 2.7 percent decrease in current assets between 31 December 2009 and 30 September 2010, from € 93.2 million to € 90.7 million. Cash and cash equivalents are down from € 25.8 million to € 6.7 million owing to seasonal effects. Inventories are up 21.4 percent, from € 12.6 million to € 15.3 million, mainly owing to growth and acquisitions. Trade accounts receivable were also up, from € 47.2 million to € 61.6 million.

Non-current assets are up 18.2 percent, from € 41.7 million at 31 December 2009 to € 49.3 million at 30 September 2010. Property, plant and equipment increased by € 6.5 million to € 8.6 million as a result of investments. Intangible assets are up from € 6.7 million to € 10.3 million. Financial assets overall were up from € 0.2 million to a total of € 3.0 million, mainly as a result of the equity investment in Plaut Ak-tiengesellschaft, in which the Group now holds an interest of more than 20 percent. The company is shown under financial assets accounted for using the equity method.

On the liabilities side of the balance sheet, current liabilities are only slightly up on the figure at 31 December 2009, from € 67.5 million to € 68.1 million.

Non-current liabilities, which comprises liabilities with a residual term of at least one year, are up from € 23.5 million to € 25.0 million.

The balance sheet total was up to € 140.0 million as at 30 September 2010, com-pared with € 134.9 million at 31 December 2009.

The nominal equity capital has been increased from € 43.9 million to € 46.9 million since the start of the year, mainly through transfers to net profits. Overall, this resulted in an improved equity ratio of 33.5 percent at 30 September 2010 compared with 31 December 2009.

Further details of the individual balance sheet items can be found in the Notes to the consolidated balance sheet.

Notes to the statement of cash flows

The cash flow from ordinary activities is typically highly negative during the course of the year, and there was a negative cash flow of € 6.2 million as at 30 September 2010 (2009: negative cash flow of € 7.3 million). The change in comparison with the same date in 2009 was influenced by various factors.

These include the expansion of business activities, the increase in trade accounts receivable, and the change in inventories following company takeovers, as well as replenishment of stocks to take advantage of favourable purchase conditions. The other factor was a reduction in trade accounts payable.

The negative cash flow from investing activities increased from a negative cash flow of € 3.1 million to a negative cash flow of € 12.0 million. The reasons for this were the payment of the purchase price for the acquisition of the Bürotex com-panies and the acquisition of an equity investment in Plaut Aktiengesellschaft. On top of this, the available cash was invested in fixed assets, resulting in a reduction in future financing and lease payments.

The negative cash flow from financing activities rose from € 0.8 million compared with € 0.9 million, mainly as a result of the dividend payment.

Overall, this results in cash and cash equivalents of € 6.7 million, compared with € 7.7 million in 2009.

3. Shares held by members of the Executive and Supervisory Boards as at 30 September 2010

10,390,751	100%
543,312	5.23%
75,000	0.72%
6,252	0.06%
1,500	0.01%
601,289	5.79%
720,891	6.94%
6,742	0.06%

4. Events of particular significance after the reporting date

There were no events of particular significance after the reporting date.

5. Risk report

There have been no major changes in the risks of future development at CANCOM since the start oft he current financial year. Details of the risks can be found in the annual report for 2009, starting on page 21. The annual report can be downloaded from www.cancom.de or obtained free of charge from the Company.

6. Opportunities report

There have been no major changes in the opportunities of future development at CANCOM since the start oft he current financial year. Details of the opportunities can be found in the annual report for 2009, starting on page 25.

7. Forecast

After the tough recession during the winter of 2008/2009, the German economy shifted to the fast lane in the spring of 2010. The second quarter of the year brought Germany its strongest quarterly growth since the reunification of the country 20 years ago, with GDP 2.2 percent higher than in the previous quarter. And all the signs indicate that this is not a short-lived economic mood swing, but a stable up-ward trend. Even at the somewhat more sedate pace that the German economy has settled into during the second half of the year, it should grow strongly overall.

The federal government expects real growth of 3.4 percent in the German economy in 2010, while for 2011 it expects continued significant growth of 1.8 to 2.0 percent averaged over the year.

According to the latest market figures from the German Federal Association for Information Technology, Telecommunications and New Media, BITKOM, the experts expect growth of about 2.7 percent in the western European IT market in 2010, after shrinkage of 6.5 percent in 2009.

They forecast 1.4 percent growth in the IT services segment following a decline of 4.2 percent in 2009, while they expect the software and hardware segments to grow by 2.4 percent and 5.1 percent respectively, after a decline of 4.9 percent and 11.7 percent respectively in 2009.

Trend in the German IT sector in 2011*

(real change in comparison to 2009 as a percentage)

This positive development will give particular impetus to our business as a provider of integrated high-tech solutions. CANCOM will profit especially from the cloud computing trend.

Cloud computing is the dynamic provisioning, management and billing of IT resources via a network, for example the internet or a company's internal network. This enables great savings to be made on local resources.

Sector experts and market research companies forecast huge global growth in the market for cloud computing over the next few years. In Germany alone, average annual growth rates of almost 50 percent are expected.

Large companies in particular will develop their own cloud environments, or private clouds. Expenditure on these will rise from the current € 400 million to € 2.6 billion in 2015, according to the latest forecasts by Experton (research, advis-ory and consulting company for large and mid-sized organisations) and the German Federal Association for Information, Technology, Telecommunications and New Media, BITKOM.

CANCOM is very well positioned in the private cloud environment with its own field-tested solution for small and medium-sized companies, the CANCOM AHP private cloud.

The U.S. market research company Forrester sees huge potential for growth in the e-commerce segment for the next two years, with annual growth rates of 7 percent, while it expects the consumer electronics segment to grow by as much as 11 percent. BITKOM's assessment is in line with Forrester's.

CANCOM geared its business policy to these future IT trends at an early stage and structured and concentrated the Group's sales and services activities consistently around proven high-profit and high-growth market segments such as IT solutions, consulting and managed services.

CANCOM has expanded its market presence as well as improving its customer proximity in the German-speaking countries, and is represented all over Germany and Austria by its many service and consulting locations.

The improvement and streamlining of logistics processes as well as the concentration of administrative tasks at the company's head office should result in major cost savings. By means of cross selling, synergies and best practices, we are reducing costs and pooling our resources, enabling CANCOM to operate even more competitively in the future. The resulting benefits will bring added value to CANCOM and to its customers and business partners.

Against the background of the improved economic outlook for 2010 and 2011, and in view of CANCOM's good position in the promising cloud computing market, the Executive Board expects further increases in sales revenues and profits, with a con-tinuation of the Company's good financial position. For the financial year 2010 as a whole, we expect consolidated sales revenues of € 525 million and consolidated EBITDA of at least € 15.0 million.

The Executive Board advises that actual results may deviate significantly from expectations.

Jettingen-Scheppach, November 2010 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 beyond the legal requirements, nor does it make any commitment to do so.

Consolidated balance sheet (ifrs) – assets

Zahlenangaben in T€					Figures in € '000
Aktiva	Notes	09/30/2010	12/31/2009	01/01/2009	Assets
Kurzfristige Vermögenswerte					Current assets
Zahlungsmittel und Zahlungsmitteläquivalente		6,678	25,836	18,282	Cash and cash equivalents
Zur Veräußerung gehaltene Vermögenswerte		0	0	3,378	Assets held for sale
Forderungen aus Lieferungen und Leistungen		61,622	47,191	44,175	Trade accounts receivable
Sonstige kurzfristige finanzielle Vermögenswerte	B.1.	4,107	3,223	4,141	Other current financial assets
Vorräte		15,253	12,589	10,080	Inventories
Aufträge in Bearbeitung		1,017	990	1,140	Orders in process
Rechnungsabgrenzungsposten und					Prepaid expenses and
sonstige kurzfristige Vermögenswerte	B.2.	2,022	3,384	2,099	other current assets
Kurzfristige Vermögenswerte, gesamt		90,699	93,213	83,295	Total current assets
Langfristige Vermögenswerte					Long-term assets
Sachanlagevermögen		8,640	6,529	5,401	Property, plant and equipment
Immaterielle Vermögenswerte		10,312	6,730	4,544	Intangible assets
Geschäfts- oder Firmenwert		24,968	24,812	23,787	Goodwill
Finanzanlagen		164	157	129	Investments
Nach der Equity-Methode bilanzierte Finanzanlagen	B.3.	2,848	0	13	Investments accounted for by the equity method
Ausleihungen		0	0	199	Notes receivable/loans
Sonstige finanzielle Vermögenswerte		863	822	766	Other financial assets
Latente Steuern aus temporären Differenzen	B.4.	358	338	394	Deferred taxes arising from temporary differences
Latente Steuern aus steuerlichem Verlustvortrag	B.4.	1,015	2,224	2,088	Deferred taxes arising from tax loss carryover
Sonstige Vermögenswerte		177	77	58	Other assets
Langfristige Vermögenswerte, gesamt		49,345	41,689	37,379	Total long-term assets
Aktiva, gesamt		140,044	134,902	120,674	Total assets

Consolidated balance sheet (ifrs) – Equity and liabilities

Zahlenangaben in T€ Passiva	Notes	09/30/2010	12/31/2009	01/01/2009	Figures in € '000 Equity and liabilities
Kurzfristige Schulden					Current liabilities
Kurzfristige Darlehen und kurzfristiger Anteil an					Short term debt and
langfristigen Darlehen		1,876	707	1,800	current portion of long-term debt
Verbindlichkeiten aus Lieferungen
und Leistungen		47,342	47,852	39,257	Trade accounts payable
Erhaltene Anzahlungen		378	1,140	1,951	Advanced payments redeived
Sonstige kurzfristige finanzielle Schulden	B.5.	1,641	3,158	2,547	Other current financial liabilities
Rückstellungen	B.6.	3,114	3,905	2,630	Accrued expenses
Rechnungsabgrenzungsposten		1,038	908	835	Deferred revenues
Verbindlichkeiten aus Ertragssteuern		822	438	529	Income tax payable
Sonstige kurzfristige Schulden	B.7.	11,926	9,437	9,690	Other current liabilities
Schulden im Zusammenhang mit zur Veräußerung
gehaltenen Vermögenswerten		0	0	1,590	Liabilities associated with held for sale
Kurzfristige Schulden, gesamt		68,137	67,545	60,829	Total current liabilities
Langfristige Schulden Langfristige Darlehen		5,743	5,194	5,014	Long-term liabilities Long-term debt, less current portion
Genussrechtskapital und nachrangige Darlehen		12,849	12,784	11,571	Profit-participation capital and subordinated loans
Rechnungsabgrenzungsposten		1,973	1,767	381	Deferred revenues
Latente Steuern aus temporären Differenzen	B.8.	2,736	1,967	1,287	Deferred taxes from temporary differences
Pensionsrückstellungen		26	26	150	Pension provisons
Sonstige langfristige finanzielle Schulden		315	491	1,207	Other long-term financial liabilities
Sonstige langfristige Schulden		1,356	1,259	1,319	Other long-term liabilities
Langfristige Schulden, gesamt		24,998	23,488	20,929	Total Long-term liabilities
Eigenkapital					Equity
Gezeichnetes Kapital	B.9.	10,391	10,391	10,391	Shared capital
Kapitalrücklage		15,441	15,441	15,441	Additional paid-in capital
Bilanzgewinn/Bilanzverlust					Net profit
(inklusive Gewinnrücklagen)		21,587	18,476	13,416	(incl. retained earnings)
Eigenkapitaldifferenz aus Währungsumrechnung		-277	-279	-324	Currency translation difference
Eigene Anteile zu Anschaffungskosten	B.9.	-259	-165	0
Minderheitenanteile		26	5	-8	Minority interests
Eigenkapital, gesamt		46,909	43,869	38,916	Total equity
Passiva, gesamt		140,044	134,902	120,674	Total equity and liabilities

Income statement (IFRS)

Zahlenangaben in T€		07/01/2010	07/01/2009	01/01/2010	01/01/2009	Figures in € '000
Gewinn- und Verlustrechnung	Notes	-09/30/2010		-09/30/2009 -09/30/2010	-09/30/2009	Income Statement
Umsatzerlöse		140,987	99,849	380,163	304,397	Revenues
Sonstige betriebliche Erträge	C.2.	247	172	1,692	947	Other operating income
Andere aktivierte Eigenleistungen		513	442	713	442	Other capitalised services rendered for own account
Gesamtleistung		141,747	100,463	382,568	305,786	Total operating revenue
Materialaufwand /						Cost of purchased
Aufwand für bezogene Leistungen		-104,455	-71,195	-274,241	-220,340	materials and services
Rohertrag		37,292	29,268	108,327	85,446	Gross profit
Personalaufwand	C.3.	-24,516	-20,364	-74,665	-61,226	Personnel expenses
Abschreibungen auf Sachanlagen						Depreciation of property, plant and equipment
und immaterielle Vermögensgegenstände		-1,066	-805	-3,112	-2,136	and amortisation of intangible assets
Sonstige betriebliche Aufwendungen	C.4.	-7,753	-6,640	-22,937	-19,059	Other operating expenses
Betriebsergebnis		3,957	1,459	7,613	3,025	Operating income
Zinsen und ähnliche Erträge		26	32	99	131	Interest and similar income
Zinsen und ähnliche Aufwendungen		-500	-361	-1,436	-1,071	Interest and other expenses
Beteiligungserträge		0	0	1	0	Income from investments
Abschreibungen auf Finanzanlagen		0	0	0	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		0	0	0	0	accounted for by the equity method
Währungsgewinne / -verluste		15	-17	-5	-7	Foreign currency exchange income / losses
Ergebnis vor Ertragsteuern		3,498	1,113	6,272	2,078	Profit before taxes
Ertragsteuern	C.5.	-907	-158	-1,595	-238	Income tax expense
Ergebnis nach Steuern aus						After tax profit
aus fortzuführenden Geschäftsbereichen		2,591	955	4,677	1,840	from continuing operations
Ergebnis aus aufgegebenen Geschäftsbereichen		0	0	0	0	Loss from discontinued operations
Periodenergebnis		2,591	955	4,677	1,840	Net income for the year
davon entfallen auf Gesellschafter						thereof attributable to the
des Mutterunternehmens		2,586	923	4,658	1,838	shareholders of the parent
davon entfallen auf Minderheiten	C.6.	5	32	19	2	thereof attributable to minority interests
Durchschnittlich im Umlauf befindliche						Average number of
Aktien (Stück) unverwässert		10,316,422		10,390,751 10,318,073	10,390,751	shares outstanding (basic)
Durchschnittlich im Umlauf befindliche						Average number of
Aktien (Stück) verwässert		10,316,422	10,390,751	10,318,073	10,390,751	shares outstanding (diluted)
Ergebnis je Aktie aus						Earnings per share
fortzuführenden Geschäftsbereichen (unverwässert)		0.25	0.09	0.45	0.18	from continuing operations (non-diluted)
Ergebnis je Aktie aus						Earnings per share
fortzuführenden Geschäftsbereichen (verwässert)		0.25	0.09	0.45	0.18	from continuing operations (diluted)
Ergebnis je Aktie aus						Earnings per share
aufgegebenen Geschäftsbereichen (unverwässert)		0.00	0.00	0.00	0.00	from discontinued operations (non-diluted)
Ergebnis je Aktie aus						Earnings per share
aufgegebenen Geschäftsbereichen (verwässert)		0.00	0.00	0.00	0.00	from discontinued operations (diluted)

Consolidated cash flow statement (IFRS)

Zahlenangaben in T€		01/01/2010	01/01/2009	Figures in € '000
Kapitalfluss	Notes	-09/30/2010	-09/30/2009	Cashflow
Cashflow aus gewöhnlicher Geschäftstätigkeit:				Cash flow from ordinary activities:
Periodengewinn vor Steuern- und Minderheitenanteilen Berichtigungen:		6,272	2,078	Net profit for the period before taxes and minority interests Adjustments:
+/- Abschreibungen auf Sachanlagen und immaterielle				+/- Depreciation of property, plant and
Vermögensgegenstände		3,112	2,136	equipment, and amortisation of intangible assets
+/- Veränderungen der langfristigen Rückstellungen		982	-274	+/- Changes in long-term accruals
+/- Veränderungen der kurzfristigen Rückstellungen		-1,692	171	+/- Changes in current accruals
+/- Ergebnis aus dem Abgang von Anlagevermögen		12	-10	+/- Profit/ losses on the disposal of fixed assets
+/- Zinsaufwand		1,337	940	+/- Interest expense
+/- Veränderungen der Vorräte		-1,579	-45	+/- Changes in inventories
+/- Veränderungen der Forderungen aus Lieferungen				+/- Changes in trade accounts receivable
und Leistungen sowie anderer Forderungen		-8,548	1,739	and other accounts receivables
+/- Veränderungen der Verbindlichkeiten aus Lieferungen				+/- Changes in trade accounts payables
und Leistungen sowie anderer Schulden		-5,372	-13,476	and other accounts payable
+/- Gezahlte Zinsen		-465	-246	+/- Interest paid
+/- Gezahlte und erstattete Ertragsteuern		-126	-197	+/- Income tax payments and rebates
+/- Zahlungsunwirksame Aufwendungen und Erträge		-147	0	+/- Non-cash expenses and income
+/- Einzahlungen / Auszahlungen aufgegebene Geschäftsbereiche		0	-89	+/- Cash inflow / outflow from discontinued operations
Nettozahlungsmittel aus betrieblicher Tätigkeit		-6,214	-7,273	Net cash from operating activities
Cashflow aus Investitionstätigkeit				Cash flow from investing activities
+/- Erwerb von Tochterunternehmen		-5,656	-262	+/- Acquisition of subsidiaries
+/- Beim Kauf von Anteilen erworbene Zahlungsmittel		-724	0	+/- Cash from acquisitions
+/- Zahlungen für Zugänge zu immateriellen				+/- Payments for additions to intangible assets as
Vermögenswerten sowie Sachanlagen		-5,872	-2,994	well as property, plant and equipment
+/- Zahlungen für Zugänge und Abgänge				+/- Payments for additions to and disposal
zu anderen Finanzanlagen		68	0	of financial assets
+/- Erlöse aus dem Abgang von Sachanlagen				+/- Proceeds from disposal of property, plant and
und Finanzanlagen		66	12	equipment as well as financial assets
- Beim Verkauf von Anteilen hingegebene Zahlungsmittel		0	0	- Cash used in disposal of equity holdings
+/- Erhaltene Zinsen		99	131	+/- Interest received
+/- Einzahlungen / Auszahlungen aufgegebene Geschäftsbereiche		0	0	+/- Cash inflow / outflow from discontinued operations
Für Investitionstätigkeit eingesetzte Nettozahlungsmittel		-12,019	-3,113	Net cash used in investing activities
Cashflow aus Finanzierungstätigkeit				Cash flow from financing activities
+/- Ein/Auszahlungen für aufgenommene Kredite		1,749	79	+/- Inflows/ outflows from borrowings
+/- Gezahlte Zinsen		-971	-825	+/- Interest paid
+/- Gezahlte Dividenden		-1,547		+/- Dividends payed
+/- Erwerb eigener Anteile		-94	0	+/- Purchases of own shares
+/- Ein- / Auszahlungen aus Finanzierungs-Leasingverträgen		-160	-170	+/- Cash inflow/outflow finance lease
+/- Einzahlungen / Auszahlungen aufgegebene Geschäftsbereiche		100	123	+/– Cash inflow/ outflow from discontinued operations
Für Finanzierungstätigkeit eingesetzte Nettozahlungsmittel		-923	-793	Net cash used in financing activities
Nettozu-/abnahme von Zahlungsmitt. u. Zahlungmittelaquivalente		-19,156	-11,179	Net change in cash and cash equivalents
+/- Wechelkursbedingte Wertänderungen		-2	28	+/- Changes in value resulting from foreign currency exchange
+/- Finanzmittelbestand am Anfang der Periode		25,836	18,877	+/- Cash and cash equivalents as at beginning of period
Finanzmittelbestand am Ende der Periode		6,678	7,726	Cash and cash equivalent sat end of period
Zusammensetzung:				Breakdown:
Liquide Mittel		6,678	7,726	Cash
Liquide Mittel aus aufgegebene Geschäftsbereiche			0	Cash from discontinued operations
		6,678	7,726

Consolidated statement of changes in equity (IFRS)

	Aktien / Shares units'000	Gezeichnetes Kapital / Share capital in €'000	Kapitalrücklagen / Additional paid-in capital in €'000	Gewinnrücklagen / Retained earnings in €'000	Foreign currency translation reserve Rücklage Währungsumrechnung / in €'000	Neubewertungsrücklage / Revaluation reserve in €'000	Bilanzgewinn / Net profit loss in €'000	Summe Eigenkapitalgeber Mutterunternehmen / Total investors parent company in €'000	Minderheitenanteile / Minority interest in €'000	Eigenkapital gesamt / Total equity cash in €'000
31. Dezember 2008	10,391	10,391	15,441	122	-324	-153	13,447	38,924	-8	38,916	31 December 2008
Erwerb eigene Anteile								-165		-165	Purchase of own shares
Gesamtergebnis der Periode					45		5,060	5,105	39	5,144	Comprehensive income for the period
Effekt aus Abgang Minderheiten								0	-26	-26	Impact of derecognition of minority interests
31. Dezember 2009	10,391	10,391	15,441	122	-279	-153	18,507	43,864	5	43,869	31 December 2009
Umbuchung Bilanzgewinn/Gewinnrücklage				10,483			-10,483	0		0	Transfer netprofit/retained earnings
Erwerb eigene Anteile								-94		-94	Purchase of own shares
Ausschüttung im Geschäftsjahr							-1,547	-1,547		-1,547	Distribution
Gesamtergebnis der Periode					2		4,658	4,660	19	4,679	Comprehensive income for the period
Erwerb Minderheitenanteile								0	158	158	Purchase of minority interests
Effekt aus Abgang Minderheiten								0	-156	-156	Impact of derecognition of minority interests
30. September 2010	10,391	10,391	15,441	10,605	-277	-153	11,135	46,883	26	46,909	30 September 2010

Statement of comprehensive income (IFRS)

(in €'000)	07/01/2010 -09/30/2010	07/01/2009 -09/30/2009	01/01/2010 -09/30/2010	01/01/2009 -09/30/2009
Periodenergebnis	2,591	955	4,677	1,840	Net income for the period
Übriges Ergebnis					Other income
Unerschied aus Währungsumrechnung	-28	-56	3	51	Currency translation difference
Ertragsteuern auf übriges Gesamtergebnis	9	17	-1	-15	Income tax expense on other compehensive income
Übriges Ergebnis der Periode (nach Steuern)	-19	-39	2	36	Other after-tax income for the period
Gesamtergebnis der Periode	2,572	916	4,679	1,876	Comprehensive income for the period
davon entfallen auf Gesellschafter desMutterunternehmens	2,567	884	4,660	1,874	thereof attributable to the shareholder of the parent
davon entfallen auf Minderheiten	5	32	19	2	thereof attributable to the minority interests

Segment information (IFRS)

	e-commerce/trade			IT Solutions
	09/30/10	09/30/09	09/30/10	09/30/09
	€'000	€'000	€'000	€'000
Sales revenues
– External sales	171,349	156,059	208,814	148,338
– Intersegment sales	5,235	2,624	27,009	13,633
– Total sales revenues	176,584	158,683	235,823	161,971
– Cost of purchased materials and services	-150,033	-135,744	-149,065	-97,670
– Personnel expenses	-13,719	-13,139	-58,209	-46,126
– Other operative income and expenses	-7,063	-6,766	-19,439	-13,079
EBITDA	5,769	3,034	9,110	5,096
– calculated depreciation and amortisation	1,322	1,219	1,661	826
Operating income (EBIT)	4,447	1,815	7,449	4,270
– Interest income	36	56	74	135
– Interest expenditure	-448	-296	-343	-134
– Income from investments
– Write-downs of financial assets
– Share in profit or loss of joint ventures
accounted for by the equity
Result from ordinary activities	4,035	1,575	7,180	4,271
– Result from extraordinary activities	0	0	0	0
– Foreign currency exchange gains / losses
Pre-tax profit	4,035	1,575	7,180	4,271
– Income taxes
– discontinued operations		0
Consolidated income for the year
thereof attributable to the shareholders
of the parent
thereof attributable to minority interest
Other information
– Assets 1)	90,067	49,002	43,470	50,183

1) Segment assets and investments including goodwill from consolidation of capital

2) Tax assets

Segment information (IFRS)

09/30/09	konsolidiert		Überleitungsrechnung		sonstige Gesellschaften		Summe Geschäftssegmente
	09/30/10	09/30/09	09/30/10	09/30/09	09/30/10	09/30/09	09/30/10
€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
				0	0	304,397	380,163
		-20,816	-36,703	4,559	4,459	16,257	32,244
304,397	380,163	-20,816	-36,703	4,559	4,459	320,654	412,407
-220,340	-274,241	13,074	24,857	0	0	-233,414	-299,098
-61,226	-74,665	0	0	-1,961	-2,737	-59,265	-71,928
-17,670	-20,532	7,742	11,846	-5,567	-5,876	-19,845	-26,502
5,161	10,725	0	0	-2,969	-4,154	8,130	14,879
2,136	3,112	0	0	91	129	2,045	2,983
3,025	7,613	0	0	-3,060	-4,283	6,085	11,896
131	99	-241	-405	181	394	191	110
-1,071	-1,436	241	405	-882	-1,050	-430	-791
0	1	0	1
0	0	0	0	0		0	0
0	0	0	0	0	0	0	0
2,085	6,277	0	1	-3,761	-4,939	5,846	11,215
0	0	0	0			0	0
-7	-5	-7	-5	0		0	0
2,078	6,272	-7	-4	-3,761	-4,939	5,846	11,215
-238	-1,595	-238	-1,595
0	0	0	0	0	0	0	0
1,840	4,677
1,838	4,658
2	19		Überleitung 2)
108,352 3,044	140,044 12,849	2,936	1,868	6,231 521	4,639 3,541	99,185 2,523	133,537 9,308

NOTES

to the consolidated accounts for the quarter ended 30 September 2010

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 2009 were drawn up according to the International Financial Reporting Standards or the International Accounting Standards (IFRS/IAS).

The interim consolidated financial statements of the CANCOM Group are drawn up and published in euro.

This interim consolidated financial report is condensed and was drawn up in compliance with IAS 34 Interim Financial Reporting. It should be read in conjunction with the IFRScompliant consolidated financial statements for the financial year 2009, which can be downloaded from www.cancom.de.

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.

In December 2009, CANCOM IT Systeme Aktiengesellschaft purchased all the shares of CANCOM Bürotex GmbH (formerly BT IT-Systemhaus GmbH), nominally valued at € 120,000. The acquisition is documented by a contract of sale drawn up by notary Dr Thomas Braun under deed no. B1937/2009, dated 21/22 December 2009.

The provisional price is € 3,541,852, of which € 2,500,000 was paid on 5 January 2010. The price is still subject to change.

The company is included in the consolidated financial statements from 1 January 2010.

The company sells and distributes computer, telecommunications, IT and document management systems, as well as providing related services including consultancy, maintenance, repairs, support and project management.

The company has shares in BT IT-Solutions GmbH, Nürtingen, Germany (100 percent) and live Netzwerk & Computer GmbH, Munich, Germany (75.0 percent).

Change in the reporting entity in 2010:

Name and registered office of the company+	Date of first consolidation	Equity	Share of investment % voting rights%
CANCOM Bürotex GmbH, Nürtingen and its subsidiaries	01/01/10	100.0	100.0
• CANCOM Bürotex IT solutions GmbH, Nürtingen	01/01/10	100.0	100.0
• live Netzwerk & Computer GmbH, Munich	01/01/10	75.0	75.0

The change in the reporting entity had the following effects on the consolidated financial statements at the date on which CANCOM Bürotex GmbH was first included, on 1 January 2010:

		Fair values Carrying amount
	€'000	€'000
Cash and cash equivalents	776	776
Trade accounts receivable	3,667	3,667
Other current financial assets	571	571
Group accounts receivable	1,255	1,255
Inventories	760	760
Prepaid expenses, deferred charges
and other current assets	714	714
Current Assets	7,743	7,743
Property, plant and equipment	493	493
Intangible assets	2,518	43
Financial Assets	8	8
Deferred taxes from temporary differences	0	0
Deferred taxes from tax loss carryover	0	0
Other assets	100	100
Non-current assets	3,119	544
Total assets	10,862	8,287
Short-term loans and current
component of long-term loans	34	34
Trade accounts payable	2,865	2,865
Other current financial liabilities	262	262
Accrued expensed	107	107
Deferred revenues	136	136
Taxes on income	102	102
Other current liabilities	603	603
Current liabilities	4,109	4,109
Long-term debt	1,500	1,500
Deferred taxes from temporary differences	743	4
Other long-term liabilities	280	280
Non-current liabilities	2,523	1,784
Total liabilities	6,632	5,893
Net assets acquired	4,230	2,394

The company acquisition, and the newly valued assets acquired and liabilities assumed resulted in a negative difference of € 530k as well as intangible assets of € 2,475k. The negative difference was recognised in the income statement and shown under other operating income.

CANCOM SYSDAT GmbH has been merged into CANCOM IT Solutions GmbH. The merger is documented in a merger agreement drawn up on 11 February 2010 by notary Dr Braun under deed no. B178/2010 and was entered in the commercial register file of CANCOM IT Solutions GmbH on 22 July 2010.

CANCOM IT Systeme Aktiengesellschaft has sold its interest in CANCOM NSG SCS GmbH (formerly CANCOM Service Center Süd GmbH) to CANCOM NSG GmbH with immediate effect under a share purchase and transfer agreement drawn up by notary Dr Braun on 7 May 2010 (deed no. B640/2010) for the nominal sum of € 25,000. The purchase price amounted to € 75,605 and was paid on 10 May 2010.

CANCOM physical infrastructure GmbH has sold its interest in CANCOM NSG GIS GmbH (formerly Novodrom People Value Service GmbH) to CANCOM NSG GmbH for the nominal sum of € 25,000 with effect from midnight on 31 December 2010. The transaction is documented in a share purchase and transfer agreement drawn up by notary Dr Braun on 7 May 2010 under deed no. B643/2010. The purchase price of € 328,318 was paid on 10 May 2010.

CANCOM IT Systeme Aktiengesellschaft has sold its interest in CANCOM NSG ICP GmbH (formerly NSG Datacenter Services GmbH) to CANCOM NSG GmbH with immediate effect for the nominal sum of € 25,000. The transaction is documented by a share purchase and transfer agreement drawn up by notary Dr Braun on 7 May 2010 under deed no. B645/2010. The purchase price of € 24,494.49 was paid on 10 May 2010.

CANCOM Bürotex GmbH has acquired the remaining shares in live Netzwerk & Computer GmbH for the nominal sum of € 37,500. The acquisition is documented by a share purchase and transfer agreement drawn up by notary Dr Braun on 7 May 2010 under deed no. B656/2010. The purchase price of € 110,000 was paid on 17 May 2010.

live Netzwerk & Computer GmbH has been merged into CANCOM Bürotex GmbH. The merger is documented by a merger agreement drawn up by notary Dr Braun on 7 May 2010 under deed no. B658/2010 and was entered in the commercial register file of CANCOM Bürotex GmbH on 8 July 2010.

CANCOM Bürotex IT solutions GmbH has been merged into CANCOM Bürotex GmbH. The merger is documented by a merger agreement drawn up by notary Dr Braun on 7 May 2010 under deed no. B663/2010 and was entered in the commercial register file of CANCOM Bürotex GmbH on 8 July 2010.

Under a merger agreement drawn up by notary Dr Braun on 27 July 2010 CANCOM Bürotex GmbH was merged into CANCOM SCC GmbH. The transaction was entered in the commercial register file of CANCOM SCC GmbH on 13 August 2010.

		Company' Shareholding registered office	(percent)
1.	CANCOM Deutschland GmbH	Jettingen-Scheppach, Germany 100.0
	and its subsidiaries
	• CANCOM (Switzerland AG)	Caslano, Switzerland	100.0
	• CANCOM Computersysteme GmbH and its subsidiary	Grambach, Austria	100.0
	– CANCOM a + d IT solutions GmbH	Perchtoldsdorf, Austria	100.0
2.	CANCOM NSG GmbH	Jettingen-Scheppach, Germany 100.0
	• CANCOM NSG SCS GmbH	Jettingen-Scheppach, Germany 100.0
	• CANCOM NSG ICP GmbH	Jettingen-Scheppach, Germany 100.0
	3. CANCOM IT Solutions GmbH	Jettingen-Scheppach, Germany 100.0
	and its subsidiary
	• acentrix GmbH	Jettingen-Scheppach, Germany	51.0
	4. HOH Home of Hardware GmbH	Jettingen-Scheppach, Germany 100.0
	5. CANCOM SCC GmbH	Stuttgart, Germany	100.0
	6. CANCOM physical infrastructure GmbH	Jettingen-Scheppach, Germany 100.0
	and its subsidiary
	• CANCOM NSG GIS GmbH	Jettingen-Scheppach, Germany 100.0
	7. CANCOM Ltd.	Guildford, UK	100.0
	8. CANCOM Financial Services GmbH	Jettingen-Scheppach, Germany 100.0
	9. CANCOM IT Services GmbH	Jettingen-Scheppach, Germany 100.0
	10. Plaut Aktiengesellschaft	Vienna, Austria	) * 20.87

* Reporting at equity

3. Accounting and valuation policies

The interim consolidated financial report is compiled using basically the same accounting and valuation methods as those used for the consolidated financial statements for the financial year 2009.

However, the amendment to IFRS 3 Business Combinations was not applicable in the financial year 2009, so this interim report is the first in which it is applied. The acquisition method is applied in accounting for all business combinations. Identifiable assets acquired and liabilities assumed are measured and shown in the balance sheet at their acquisitiondate fair values. Incidental costs in relation to the acquisition are recorded as expenses at the date on which they were incurred.

B. Notes to the consolidated balance sheet

1. Other current financial assets

This item includes bonuses due from suppliers (€ 1,413k), creditors with a debit balance (€563k), receivables from employees (€ 525k), a claim to the payment of a purchase price (€ 466k), claims in respect of loans (€ 462k), marketing revenue (€ 418k), receivables due from suppliers for returned goods (€ 158k), property, plant and equipment classified as held for sale (€ 55k) and receivables from former shareholders (€ 47k).

2. Prepaid expenses, deferred charges and other current assets

This item mainly consists of other current assets such as tax refunds (€ 673k), compensation damages (€ 397k), accounts receivable from insurance companies (€ 115k) and receivables from the German Federal Employment Agency (€ 43k).

The prepaid expenses and deferred charges (€ 741k) also include deferred insurance premiums.

3. Financial assets accounted for using the equity method

In the first half of 2010, CANCOM IT Systeme Aktiengesellschaft acquired shares in Plaut Aktiengesellschaft. As at 30 September 2010, CANCOM held a 20.87 percent interest. The investment in Plaut Aktiengesellschaft is reported as an associated company under financial assets accounted for using the equity method, as CANCOM IT Systeme Aktiengesellschaft holds more than 20 percent of the voting rights and therefore exercises a significant influence on Plaut Aktiengesellschaft.

4. Deferred tax assets

The deferred tax assets are as follows:

Deferred tax resulting form	Temporary	Tax loss
	differences	carryforward
	€'000	€'000
SAs at 1 January 2010	338	2,224
Inflow from capitalisation		-328
Tax expenditure from profit and loss calculation	20	-881
As at 30 September 2010	358	1,015

As at 30 September 2010, the CANCOM Group had corporation tax loss carryovers of € 13.3 million and trade tax loss carryovers of € 10.5 million. The unused corporation tax losses for which no deferred tax claim was recognised in the balance sheet amounted to € 9.3 million, and the trade tax loss carryovers for which no deferred tax claim was recognised amounted to € 8.1 million.

The deferred taxes from temporary differences are the result of differences in goodwill (€ 234k), other provisions (€ 88k) and intangible assets (€ 36k).

5. Other current financial liabilities

This item includes debtors with a credit balance (€ 511k), liabilities to former shareholders of a subsidiary (€ 427k), outstanding bills of charge (€ 365k), purchase price liabilities (€ 324k) and liabilities to the Supervisory Board (€ 17k).

6. Other provisions

Provisions mainly includes the price of shares in affiliated companies (€ 1,716k), guarantees and warranties (€ 1,153k), severance payments and salaries (€ 1,020k), additional leasing costs (€ 313k), provisions for financial statement costs (€196k) and contingent risks (€ 72k).

The total provisions include long-term provisions of € 1,356k, which are disclosed under other non-current liabilities. They are mainly a provision for guarantees and warranties (€ 555k), a provision for severance payments which are legally mandatory in Austria (€ 347k), provisions for part-time employment prior to retirement (€ 187k), anniversaries (€ 138k) and additional leasing costs (€ 129k).

7. Other current liabilities

Other current liabilities mainly include wages and salaries (€ 3.415k), sales tax (€ 3.078k), holiday and overtime entitlements (€ 2.093k), bonus payments to Board members and employees (€ 1.961k), tax on wages and salaries and church tax (€ 1,711k), trade association payments (€ 289k), social security contributions (€ 152k) and compensation levy for non-employment of the severely handicapped (€ 85k).

8. Deferred tax liabilities

The deferred tax liabilities are as follows:

	€'000
As at 1 January 2010	1,967
Addition from deferred tax liabilities	743
Profit and loss account - tax expenses	26
As at 30 September 2010	2,736

The deferred tax liabilities arise from deviations from the tax balance sheets. They are the result of the revaluation of intangible assets (€ 2,670k), orders in process (€ 27k), capital from profit-participation rights and subordinated loans (€ 19k), property, plant and equipment (€ 10k) and other provisions (€ 10k).

They are recognised at an individual tax rate of between 25 percent (for the Austrian subsidiary) and 32.98 percent.

9. Equity capital

Share capital

The Company's share capital at 30 September 2010 was € 10,390,751, divided into 10,390,751 notional no-par-value shares.

Purchase of the Company's own shares

The Company bought back 23,010 of its own shares during the first half of 2010. As at 30 September 2010, the Company's holding of its own shares was 74,329 (nominally valued at € 74,329) with a book value of € 258,592.31.

Change of the number of shares outstanding:

Number of shares outstanding as at 30 September 2010	10,316,422
less purchased own shares in the first half 2010	-23,010
Number of shares outstanding as at 31 December 2009	10,339,432
	number of shares

As of 11 November 2010, no further CANCOM shares had been repurchased in the fourth quarter of 2010.

C. Notes to the consolidated income statement

1. Segment information (see page 16 – 17)

For a description of the segments subject to mandatory reporting, please see page 69 of CANCOM's annual report for 2009.

The subsidiaries included in the consolidated financial statements for the first time in this consolidated interim financial report are allocated to the IT solutions segment.

Reconciliation

Reconciliation shows items not directly connected with the operating segments and the other companies. They include sales within the segments, and the income tax expense.

The income tax expense is not a component of the profits of the operating segments. Since the tax expense is allocated to the parent company where the parent company is the taxable entity, the allocation of the income tax does not exactly correspond to the structure of the segments.

Information on geographical regions

	Sales revenues according to customer location			Sales revenues according to company location
	09/30/2010	09/30/2009	09/30/2010	09/30/2009
	€'000	€'000	€'000	€'000
Germany	339,796	184,208	346,194	278,201
Outside Germany	40,367	30,980	33,969	26,196
Group	380,163	304,397	380,163	304,397

		Long-term assets
	09/30/2010	09/30/2009
	€'000	€'000
Germany	41,236	32,880
Outside Germany	3,724	3,979
Group	44,960	36,859

Non-current assets includes property, plant and equipment, intangible assets, goodwill and other non-current assets. Financial instruments and deferred tax claims are not included.

2. Other operating income

The other operating income is made up of the following:

in €'000	01/01/ - 09/30/2010	01/01/ - 09/30/2009
Rent	42	78
Earnings from differences from
consolidation of capital	530	0
Earnings from acquisition of minority interests	46	0
Earnings from compensation of a former minority	0	89
Income not relating to the period	586	703
Deferrals for government grants	242	0
Compensation damages	133	35
Other operating income	113	42
Total	1,692	947

Income not relating to the period mainly includes income from derecognition of debtors with a credit balance.

3. Personnel expenses

The personnel expenses consist of the following:

Total	74,665	61,226
Pension Expenses	205	125
Social security contributions	11,554	9,335
Wages and salaries	62,906	51,766
in €'000	01/01/ - 09/30/2010	01/01/ - 09/30/2009

4. Other operating expenses

The other operating expenses consist of the following:

in €'000	01/01/ - 09/30/2010	01/01/ - 09/30/2009
Office space	4,463	3,869
Insurance and other charges	750	714
Motor vehicles	4,597	3,244
Advertising	1,612	1,383
Stock exchange and entertainment expenses	508	224
Hospitality and travelling expenses	1,654	1,271
Delivery costs	2,429	2,155
Third-party services	1,730	1,867
Repairs, maintenance, leasing	955	1,169
Communication and office expenses	1,391	1,235
Legal and consultancy expenses	901	438
Fees and charges, costs of money transactions	473	367
Allowance for bad debts	0	145
Expenses adjustment previous year from
differences from consolidation of capital	429	0
Other operating expenses	1,045	978
Total	22,937	19,059

5. Income tax

The rate of income tax for German companies was 30.46 percent (2009: 30.03 percent). This is made up of corporation tax, trade tax and the solidarity surcharge. The slight rise in the income tax rate is owing to the increase in the average rate of trade tax. The divergence between the tax expenses reported and those at the tax rate of CANCOM IT Systeme Aktiengesellschaft is shown below:

in €'000	01/01/ - 09/30/2010	01/01/ - 09/30/2009
Earnings before tax	6,253	2,076
Expected tax rate at to
German companies
(30,46 percent; 2009: 30,03 percent)	1,905	623
- Difference from tax paid abroad	-86	34
- Change in the value adjustment
of deferred tax assets on loss carryforwards	-51	-71
- Tax free income	0	-385
- Actual income tax not relating to the period	-106	-55
- permanent differences: non-deductible
operating expenses and additions and
reductions due to trade tax	-1	88
- Earnings from differences from
consolidation of capital	-45	0
- Others	-21	4
Total Group income tax	1,595	238

The actual tax rate is calculated as follows:

Actual tax expense rate	25.51 %
Income tax	1,595
Income before tax	6,253
	€'000

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

Group income tax	1,595	238
	887	192
Liabilities	26	104
Assets	861	88
deferred taxes:
Actual income tax paid	708	46
in €'000	01/01/ - 09/30/2010	01/01/ - 09/30/2009

6. Minority interests

Minority interests account for 49 percent of acentrix GmbH's net income for the year (€ 21k) and 25 percent of live Netzwerk & Computer GmbH's net loss for the period 1 January till 6 May 2010 (€ -2k).

D. Other disclosures

1. Related party disclosures

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, the other Executive Board members, are also 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.

Since 1 July 2007, a consultancy agreement has been in place between CANCOM IT Systeme Aktiengesellschaft and the Chairperson of its Supervisory Board, Walter von Szczytnicki. The contract was drawn up on 9 March 2007 and approved in accordance with Section 114 of the German Stock Companies Act (Aktiengesetz, AktG), and provides for an annual remuneration of € 60,000. Hence the remuneration paid in the financial year 2010 amounted to € 60,000.

On 27 June 2007 the Supervisory Board approved an M&A consultancy agreement with Auriga Corporate Finance GmbH, Munich, Germany on the occasion of the election to the Supervisory Board of CANCOM IT Systeme AG of Walter Krejci, managing director of Auriga Corporate Finance GmbH. The agreement had been signed on 7 March 2007 and required the approval of the Supervisory Board in accordance with Section 114 I of the German Stock Companies Act (Aktiengesetz, AktG). No payments were made to the company on the basis of the consultancy agreement from the first to the third quarter of the year 2010.

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)

From the first to the third quarter of 2010 CANCOM IT Systeme Aktiengesellschaft received no written notice from any shareholder disclosing a majority shareholding as defined in Section 20 of the above Act.

Interim report

3-Monatszahlen 2007 9-months-report

Masthead

CANCOM IT Systeme AG Investor Relations

Messerschmittstr. 20 89343 Jettingen-Scheppach

Germany