Interim Report Q3

9-months-report 2011

»Leading provider of IT infrastructure and professional services«

T a ble of contents

Section	Page

Table of contents	02
Key figures	03
Preface	04
Consolidated interim management report Q3	05-11
1) CANCOM's business and the generel 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 reoprting date 5) Risk report 6) Opportunities report 7) Forecast Balance sheet	06-07 07-10 10 10 10 10 10-11 12-13
Income statement
Consolidated cash flow statement – IFRS	15
Consolidated statement of changes in equity – IFRS	16
Statement of comprehensive income – IFRS	17
Segment information – IFRS	18-19
Appendix	20-23

CONTENT

Key figures

Overview of key figures CANCOM group
in € million	01/01/ - 30/09/2011	01/01/ - 30/09/2010	Changes
Revenue	387.0	326.8	18.4%
Gross profit	117.2	102.3	14.6%
EBITDA	17.6	10.7	64.5%
EBIT	12.8	7.9	62.0%
Net profit for the period	8.5	4.7	80.9%
Earnings per share (in €)
from continuing operations
(diluted)	0.75	0.47	59.6%
Average number of shares
(in 1,000) (diluted)	10,391	10,318	0.7%
Employees as of 30 September	2,045	1,928	6.1%

in € million	30/09/2011	30/09/2010	Changes

Balance sheet total	155.1	140.0	10.8%
Equity	57.7	46.9	23.0%
Equity ratio	37.2	33.5	3.7%

CANCOM Group's sales revenues

9 months (01/01 - 30/09) (in € million)

CANCOM Group's EBITDA

9 months (01/01 - 30/09) (in € million)

CANCOM Group's EBIT

9 months (01/01 - 30/09) (in € million)

Preface

Dear Shareholders,

The past few weeks have seen marked fluctuations on the stock markets, and the German blue-chip index DAX is now significantly below its 2011 peak. So it is no surprise that the CANCOM share price has also suffered. The next few months will tell the development of the Germany economy. The stock market is currently anticipating a slump and therefore a fall in prices. As far as the real economy and our business are concerned, we do not expect a sharp decline.

The CANCOM Group's business figures for the third quarter and for the first nine months of 2011 show a year-on-year increase yet again. There has been further organic growth in our sales revenues, and our profitability has improved significantly. Our strong positioning and our long years of experience in, for instance, the growth market of cloud computing, also give us reason for confidence in the future. Our customers have voted CANCOM the Best Integrated Systems Provider in Germany for the third consecutive year, so also confirming that the Group is well positioned on the basis of the portfolio of services it offers.

As mentioned above, it is difficult to predict how the economy in general and the IT market in particular will perform in the next few months, in view of recent developments. However, market research institutions and IT sector associations agree that cloud computing providers are in a particularly good position to profit from the ever-shortening economic cycles and the corresponding rise in demand for flexible company networks. The strength of our balance sheet also provides good opportunities to continue our growth as an active market consolidator and so increase our profits at a faster rate than our sales in the medium term.

Many thanks for your confidence in CANCOM and for your continued support.

Kind regards,

Klaus Weinmann, CEO

1. CANCOM's business and the general economic situation

Organisational and legal structure of the CANCOM Group

CANCOM AG, based in Munich, 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 CAN-COM Group is an IT architect, systems integrator and managed services provider. As a provider of integrated services, its central focus is on providing IT services in addition to selling hardware and software from prestigious manufacturers. Its range of IT services includes designing of IT architectures and landscapes, and designing and integration of IT systems, as well as systems 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.

Explanation of the control system used within the Group

To control and monitor the performance of the individual subsidiaries, once a month, CANCOM inter alia analyses key figures such as their sales revenues, gross profit, operating expenditure and operating profit, and compares these 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

As it is purely a services and trading company, CANCOM does not undertake any research activities. Development work is very limited and is principally for the Group's own purposes. Its focus includes software solutions and applications in IT growth areas such as cloud computing, virtualisation, mobility, IT security and managed services. In addition to further development work on the CANCOM AHP Private Cloud, developments in the first nine months of 2011 focused on the online segment and on additional modules for a new ERP system of a subsidiary.

Overview of the CANCOM Group's business performance

In the first nine months of 2011, the CANCOM Group again recorded a significant jump in sales revenues and profits year-on-year, with the results for the third quarter building on the positive performance of the first six months.

The figures for the first nine months of 2011 and the comparative figures for 2010 had to be adjusted in compliance with the International Financial Reporting Standards (IFRS) to take into account the sale of HOH Home of Hardware GmbH in the second quarter of 2011 and the proposed sale of CANCOM Ltd. UK, so that these business units are now accounted for as discontinued operations. Details can be found in the notes to the consolidated accounts.

The CANCOM Group's consolidated sales revenues for the first nine months of 2011 were up 18.4 percent year-on-year to € 387.0 million, compared with € 326.8 million in the first nine months of 2010. The consolidated gross profit was up 14.6 percent from € 102.3 million to €

117.2 million. The gross profit margin fell from 31.3 percent to 30.3 percent. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) were up 64.5 percent year-on-year, at € 17.6 million compared with € 10.7 million, with an EBITDA margin of 4.5 percent. Consolidated earnings before interest and tax (EBIT) were up 62.0 percent from € 7.9 million to € 12.8 million. The consolidated profit for the first nine months of 2011 was € 8.5 million, compared with € 4.7 million year-on-year. This resulted in earnings per share from continuing operations of € 0.75 compared with € 0.47 in the first nine months of 2011 – an increase of 59.6 percent.

Significant events and investments

On 5 July 2011, CANCOM AG sold its entire shareholding in HOH Home of Hardware GmbH for € 3 million. HOH is an online shop offering information technology, telecommunications and home entertainment. By selling HOH, which operates predominantly in the business-to-consumer (B2C) environment, CANCOM plans to concentrate on the highermargin business-to-business (B2B) segment.

On 19 September 2011, CANCOM AG sold its entire shareholding in the Austrian company Plaut Aktiengesellschaft over the counter at € 0.92 per share. The proceeds from the sale of the shares totalled € 4.2 million. CANCOM made a gain of around € 360k after deduction of the average acquisition costs.

Employees

As at 30 September 2011, the CANCOM Group employed 2,045 people.

The employees worked in the following areas:

Professional services:	1.428
Sales and distribution:	325
Marketing and product management:	25
Purchasing, logistics and order processing:	100
Central services:	167

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

	First 9 months 2011	First 9 months 2010
Wages and salaries	68,153	60,737
Social security contributions	11,982	11,365
Pension provisions	222	194
Total	80,357	72,29

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

a) Earnings position

The CANCOM Group achieved a significant increase in sales revenues and profits in the first nine months of 2011. Consolidated sales revenues were up 18.4 percent year-on-year, from € 326.8 million to € 387.0 million. The organic growth was 17.0 percent.

CANCOM Group sales revenues:

nine-month figures (01/01 - 30/09) (in € million)

In the opinion of CANCOM's Executive Board the good business results were driven by the persistently strong demand as well as the steady growth of the cloud computing segment.

In Germany sales revenues were up 17.9 percent, from € 303.7 million to € 358.0 million.

In international business, the CANCOM Group's sales revenues were up 26.5 percent, from € 23.0 million to € 29.1 million.

In the e-commerce/trade segment, sales revenues were up 11.1 percent year-on-year, from € 118.0 million to € 131.1 million. In the IT solutions segment they were up 22.6 percent, from € 208.8 million to € 256.0 million.

The consolidated gross profit for the first nine months of the year was up 14.6 percent year-on-year, from € 102.3 million to € 117.2 million. The gross profit margin fell from 31.3 percent to 30.3 percent. This can be attributed to the growth of the trade business due to the sustained upturn in the economy.

CANCOM Group gross profit:

nine-month figures (01/01 - 30/09) (in € million)

Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) were up 64.5 percent year-on-year in the first nine months of 2011, from € 10.7 million to € 17.6 million.

CANCOM Group EBITDA:

nine-month figures (01/01 - 30/09) (in € million)

Consolidated earnings before interest and tax (EBIT) were up 62.0 percent year-on-year, from € 7.9 million to € 12.8 million.

CANCOM Group EBIT:

nine-month figures (01/01 - 30/09) (in € million)

The net income for the first nine months of 2011 was € 8.5 million, compared with € 4.7 million in 2010. As a result, earnings per share from continuing operations in the first nine months of 2011 were € 0.75, compared with € 0.47 in the same period of 2010.

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 healthy and steady.

Due to the stable services business – which now accounts for around two thirds of the gross profits (total output less materials 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 statement of income

Details on items in the statement of income are given in the notes to the consolidated statement of income.

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 the highest possible credit standing to ensure favourable refinancing rates.

Notes on the capital structure

On the assets side of the consolidated balance sheet, there was a 15.3 percent decrease in current assets between 31 December 2010 and 30 September 2011, from € 120.3 million to € 101.9 million. Cash and cash equivalents were down from € 31.5 million to € 5.5 million, partly owing to seasonal variations.

Trade accounts receivable rose to € 77.2 million, compared with € 68.0 million at 31 December 2010. Inventories were reduced significantly from € 13.4 million to € 9.6 million at 30 September 2011.

Non-current assets were down to € 53.1 million as at 30 September 2011, compared with € 57.2 million as at 31 December 2010.

The liabilities side of the balance sheet shows a significant reduction in current liabilities, which are down 25.6 percent from € 89.8 million to € 66.8 million. This is mainly the result of a reduction in trade accounts payable from € 64.4 million to € 39.2 million.

Non-current liabilities, consisting of liabilities with a residual term of at least one year, are down from € 36.6 million to € 30.6 million.

The total assets are down to € 155.1 million as at 30 September 2011, compared with € 177.4 million as at 31 December 2010.

The nominal equity capital has been increased from € 51.0 million to € 57.7 million since the start of the year, mainly through transfers to net profits. Overall, this resulted in an equity ratio of 37.2 percent at 30 September 2011 compared with 28.7 percent at 31 December 2010.

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

There is typically a negative cash flow from ordinary activities during the year, and there was a negative cash flow of € 16.8 million as at 30 September 2011. This is mainly the result of a reduction in the trade accounts payable.

There was a negative cash flow from investing activities of € 5.2 million, compared with a negative cash flow of € 12.0 million in the first nine months of 2010.

There was a negative cash flow from financing activities of € 3.8 million, compared with a negative cash flow of € 1.1 million in the first nine months of 2010.

Overall, this resulted in cash and cash equivalents from continuing operations of € 5.5 million, compared with € 6.7 million in 2010.

3. Shares held by members of the Executive and Supervisory Boards as at 30 September 2011

Total number of shares:	10,390,751	100%
Executive Board:
Klaus Weinmann	209,864	2.02%
Rudolf Hotter	0	0.00%

Supervisory Board
Walter von Szczytnicki	6,252	0.06%
Stefan Kober	261,289	2.51%
Raymond Kober	260,891	2.51%
Walter Krejci	0	0.00%
Regina Weinmann	0	0.00%
Petra Neureither	11,511	0.11%

4. Events of particular significance after the reporting date

There were no events of particular importance after the reporting date of 30 September 2011.

5. Risks of future development

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 2010, starting on page 20. The annual report can be downloaded from www.cancom. de or obtained free of charge from the Company.

6. Opportunities for future development

There have been no major changes in the opportunities for future development at CANCOM since the start of the current financial year. Details of the opportunities can be found in the annual report for 2010, starting on page 25.

7. Forecast

Economic forecasts are guarded in view of the continuing matter of debt in the eurozone. Nevertheless, the autumn forecasts of the leading German research institutions and trade associations indicate that there will be an increase in gross domestic product (GDP) in Germany over the year 2011 as a whole, despite an anticipated fall in the fourth quarter. The German government shares this opinion. Overall, GDP is expected to grow by 2.9 percent in the current year. And according to economists the economy will start growing again as early as the first quarter of 2012. GDP is expected to grow by 1 percent over the year 2012 as a whole.

According to a study by the market research company IDC, experts assume that the German IT market will grow by more than 6 percent in 2011. The latest economic survey by the German Association of the Information Industry, Telecommunications and New Media, BITKOM, reveals that 74 percent of IT companies expect sales revenues to rise in 2011, underlining the positive outlook for the sector.

The hardware segment is expected to grow by 9.9 percent, the software segment by 4.3 percent and the IT services segment by 3.3 percent.

The German IT market in 2011* (real change in comparison to 2010 as a percentage) Forecast: IDC, October 2011

The cloud computing segment – in which services are obtained flexibly in realtime via the Internet or within a company network – is particularly booming, so the business prospects for cloud providers such as CANCOM are especially promising. According to experts at IDC, EITO and BITKOM, the German market for cloud computing and outsourcing as a whole is set to grow to around € 20 billion.

In view of the opportunities for future growth in e-commerce, CANCOM is stepping up its activities in the areas of e-procurement and customised shops. Customised shops are web-based shops providing a fixed, individual product range. They offer customers the advantage of ensuring that the infrastructure will be consistent for all orders. This in turn offers CANCOM the opportunity for sustained strengthening of customer loyalty.

CANCOM was early in gearing its business policy to future IT trends, and designed its sales and services structure around them. CANCOM has also significantly expanded its market presence as well as improving its customer proximity in the German-speaking areas, and is represented all over Germany and Austria by its many service and consulting locations.

From the current perspective, therefore, against the background of the acquisitions made and in consideration of the Group's positive performance, the Executive Board expects the financial year 2011 to bring further growth in sales revenues and profits, with a continued positive financial situation. This estimate is based on sustained strong demand, the Group's good positioning in the growth market of cloud computing and its focus on the higher-margin business-to-business segment.

Munich, November 2011 CANCOM 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 AG. These statements are identifiable by words and phrases such as "plan", "intend", "will", "expect", "feel" etc. and are based on current expectations, assumptions and assessments. Although we feel that these expectations are realistic, we cannot guarantee their correctness, especially in our forecast. 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

Current assets Cash and cash equivalents 5,542 31,472 Assets held for sale B.1. 2,503 0	6,678 0




Trade accounts receivable 77,218 68,014	61,622
Other current financial assets B.2. 4,449 4.663	4,107
Inventories 9,589 13,363	15,253
Orders in process 1,312 730	1,017
Prepaid expenses and other current assets B.3. 1,332 2,025	2,022
Total current assets 101,945 120,267	90,699

Long-term assets
Property, plant and equipment 11,880 9,677	8,640
Intangible assets 15,829 18,860	10,312
Goodwill 23,667 23,682	24,968
Investments B.4. 68 3,211	164
Financial assets accounted for using the equity method 0 0	2,848
Notes receivable/loans 49 43	0
Other financial assets 1,248 920	863
Deferred taxes arising from temporary differences B.5. 318 406	358
Deferred taxes arising from tax loss carryover B.5. 34 294	1,015
Other assets 29 81	177
Total long-term assets 53,122 57,174	49,345

Total assets 155,067 177,441	140,044

Consolidated balance sheet (ifrs) – Equity and liabilities

Figures in €'000
Equity and liabilities	Notes	30/09/2011	31/12/2010	30/09/2010

Current liabilities
Short term debt and current portion of long-term debt		1,397	1,196	1,876
Profit participation capital and subordinated loans short-term portion		3,825	413	0
Trade accounts payable		39,189	64,437	47,342
Advanced payments redeived		640	1,525	378
Other current financial liabilities	B.6.	1,941	3,460	1,641
Accrued expenses	B.7.	1,749	1,579	3,114
Deferred revenues		817	989	1,038
Income tax payable		3,982	1,634	822
Other current liabilities	B.8.	11,648	14,614	11,926
Liabilities for assets held for sale		1,631	0	0
Total current liabilities		66,819	89,847	68,137

Long-term liabilities
Long-term debt, less current portion		8,996	9,607	5,743
Profit participation capital and subordinated loans		10,723	14,364	12,849
Deferred revenues		4,665	5,048	1,973
Deferred taxes from temporary differences	B.9.	3,421	4,309	2,736
Pension provisions		80	80	26
Other long-term financial liabilities		925	1,519	315
Other long-term liabilities		1,742	1,654	1,356
Total Long-term liabilities		30,552	36,581	24,998

Equity
Shared capital		10,391	10,391	10,391
Additional paid-in capital		15,904	15,904	15,441
Net profit (incl. retained earnings)		31,551	24,768	21,587
Currency translation difference and exchange rate difference		-290	-134	-277
Own shares at acquisition costs		0	0	-259
Minority interests		140	84	26
Total equity		57,696	51,013	46,909

Total equity and liabilities		155,067	177,441	140,044

Income statement (IFRS)

			Q3	First 9 months
Figures in €'000		01/07/2011	01/07/2010	01/01/2011	01/01/2010
Income statement	Notes	-30/09/2011	-30/09/2010	-30/09/2011	-30/09/2010

Revenues		135,499	122,393	387,022	326,777
Other operating income	C.2.	471	246	908	1,573
Other capitalised services rendered for own account		199	513	270	713
Total operating revenue		136,169	123,152	388,200	329,063
Cost of purchased
materials and services		-96,259	-87,934	-270,960	-226,779
Gross profit		39,910	35,218	117,240	102,284
Personnel expenses	C.3.	-26,373	-23,743	-80,357	-72,296
Depreciation of property, plant and equipment
and amortisation of intangible assets		-1,697	-967	-4,861	-2,808
Other operating expenses	C.4.	-6,708	-6,654	-19,249	-19,257
Operating income		5,132	3,854	12,773	7,923
Interest and similar income		55	23	120	96
Interest and other expenses		-476	-457	-1,569	-1,276
Income from equity investments		0	0	0	1
Foreign currency exchange income / losses		6	15	5	-27
Profit before taxes		4,717	3,435	11,329	6,717
Income tax expense	C.5.	-1,444	-994	-3,448	-1,835
After tax profit
from continuing operations		3,273	2,441	7,881	4.882
Loss from discontinued operations	C.6.	722	150	592	-205
Net income for the year		3,995	2,591	8,473	4,677
thereof attributable to the
shareholders of the parent		3,946	2,586	8,342	4,658
thereof attributable to minority interests	C.7.	49	5	131	19
Average number of
shares outstanding (basic)		10,390,751	10,316,422	10,390,751	10,318,073
Average number of
shares outstanding (diluted)		10,390,751	10,316,422	10,390,751	10,318,073

Earnings per share
from continuing operations (non-diluted)		0.31	0.24	0.75	0.47
Earnings per share
from continuing operations (diluted)		0.31	0.24	0.75	0.47
Earnings per share
from discontinued operations (non-diluted)		0.07	0.01	0.06	-0.02
Earnings per share
from discontinued operations (diluted)		0.07	0.01	0.06	-0.02

Consolidated cash flow statement (IFRS)

Figures in €'000 Cashflow	01/01/2011 -30/09/2011	01/01/2010 -30/09/2010

Cash flow from ordinary activities:
Net profit for the period before taxes and minority interests	11,329	6,717
Adjustments:
+/- Depreciation of property, plant and equipment, and amortisation of intangible assets	4,861	2,808
+/- Changes in long-term accruals	88	-268
+/- Changes in current accruals	224	-1,686
+/- Gains/losses on the sale of intangible assets,
property, plant and equipment and financial assets	-387	24
+ Interest expense	1,449	1,180
+/- Changes in inventories	-852	-114
+/- Changes in trade accounts receivable and other accounts receivables	-10,634	-8,740
+/- Changes in trade accounts payables and other accounts payable	-21,215	-4,454
+/- Interest payments and rebates	-131	-204
+/- Income tax payments and rebates	-1,242	-231
+/- Non-cash expenses and income	-108	-146
+/- Cash inflow/outflow from discontinued operations	-216	-959
Net cash from operating activities	-16,834	-6,073

Cash flow from investing activities
+/- Acquisition of subsidiaries and equity instruments of other companies	-3,606	-5,689
+/- Cash from acquisitions	0	-724
- Payments for additions to intangible assets aswell as property, plant and equipment	-6,496	-5,789
+ Income from disposal of intangible assets, property, plant and equipment and financial assets	4,463	125
- Cash used in disposal of equity holdings	-643	0
+ Interest received	120	96
+/- Cash inflow/ outflow from discontinued operations	1,000	0
Net cash used in investing activities	-5,162	-11,981

Cash flow from financing activities
+ Take-up of long-term financial liabilities	0	1,500
- Repayment of long-term financial liabilities (incl. short-term portions)	-1,496	-548
+/- Changes in short-term liabilities	580	651
- Interest paid	-1,161	-971
- Dividends payed	-1,634	-1,547
Outflows from purchases of own shares -	0	-94
+/- Cash inflow / outflow finance lease	-80	-173
+/- Cash inflow/ outflow from discontinued operations	0	100
Net cash used in financing activities	-3,791	-1,082

Net change in cash and cash equivalents	-25,787	-19,136
+/- Changes in value resulting from foreign currency exchange	2	-22
+/- Cash and cash equivalents as at beginning of period	31,472	25,836
Cash and cash equivalent sat end of period	5,687	6,678

Breakdown:
Cash	5,542	6,678
Cash from discontinued operations	145
	5,687	6,678

Consolidated statement of changes in equity (IFRS)

	Shares	Share capital	Additional paid-in capital	Retained earnings	Foreign currency translation reserve	Exchange rate difference reserve	Revaluation reserve	Net profit loss	Own shares at acquisition costs	Total investors parent company	Minority interest	otal equity cash
	units'000 in €'000		in €'000	in €'000		in €'000 in €'000 in €'000		in €'000 in €'000		in €'000 in €'000		in €'000
31 December 2009		10.391 10.391	15.441	122	-279	0	-153	18.507	-165	43.864	5	43.869
Changes in reserves:
Transfer netprofit/retained earnings				10,483				-10,483		0		0
Purchase of own shares									-94	-94		-94
Sales of own shares			463						259	722		722
Distribution								-1,546		-1,546		-1,546
Comprehensive income for the period					-10	155		7,820		7,965	78	8,043
Purchase of minority interests				18						18	129	147
Impact of derecognition of minority interests										0	-128	-128
31 December 2010		10,391 10,391	15,904	10,623	-289	155	-153	14,298	0	50,929	84	51,013
Changes in reserves:
Transfer netprofit/retained earnings				6,465				-6,465		0		0
Distribution								-1,559		-1,559	-75	-1,634
Comprehensive income for the period					0	-156		8,342		8,186	131	8,317
30 September 2011		10,391 10,391	15,904	17,088	-289	-1	-153	14,616	0	57,556	140	57,696

Statement of comprehensive income (IFRS)

		Q3	first 9 months
in €'000	01/07/2011 -30/09/2011	01/07/2010 -30/09/2010	01/01/2011 -30/09/2011	01/01/2010 -30/09/2010
Net income for the period	3,995	2,591	8,473	4,677

Other income

Currency translation difference	1	-28	0	3
Exchange rate difference	-80	0	-224	0
Income taxes	24	9	68	-1

Other after-tax income for the period	-55	-19	-156	2

Comprehensive income for the period	3,940	2,572	8,317	4,679

thereof attributable to the shareholder of the parent	3,891	2,567	8,186	4,660
thereof attributable to the minority interests	49	5	131	19

Segment information (IFRS)

		e-commerce/trade		IT Solutions
	30/09/11	30/09/10	30/09/11	30/09/10
	€'000	€'000	€'000	€'000
Sales revenues
– External sales	131,035	117,963	255,987	208,814
– Intersegment sales	2,378	5,168	46,489	27,009
– Total sales revenues	133,413	123,131	302,476	235,823

– Cost of purchased materials and services	-110,761	-102,504	-194,732	-149,065
– Personnel expenses	-12,293	-11,350	-64,943	-58,209
– Other operative income and expenses	-3,552	-3,501	-28,008	-19,440

EBITDA	6,807	5,776	14,793	9,109
– scheduled depreciation and amortisation	963	1,018	3,770	1,661

Operating Income (EBIT)	5,844	4,758	11,023	7,448

– Interest income	58	33	50	74
– Interest expenditure	-483	-288	-479	-343
– Income from equity investments
– Write-downs of financial assets	0	0	0	0
– Share in profit or loss of joint ventures
accounted for by the equity method

Profit/loss from ordinary activities	5,419	4,503	10,594	7,179

– Profit/loss from extraordinary activities	0	0	0	0
– Foreign currency exchange gains / losses

Pre-tax profit/loss	5,419	4,503	10,594	7,179

– Income taxes
– Discontinued operations	-440	-205	0	0

Consolidated profit/loss for the period
thereof attributable to the shareholders
of the parent
thereof attributable to minority interest
Other information
– Assets 1)
– Investments 1)	89,409	90,586	59,901	42,951
	2,749	1,740	3,553	7,568

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

2) Tax assets

Segment information (IFRS)

	consolidated		Reconcilation		Other companies		Total operating segments
30/09/10	30/09/11	30/09/10	30/09/11	30/09/10	30/09/11	30/09/10	30/09/11
€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000

				0	0	326,777	387,022
		-32,177	-48,867	0	0	32,177	48,867
326,777	387,022	-32,177	-48,867	0	0	358,954	435,889

-226,779	-270,960	24,790	34,533	0	0	-251,569	-305,493
-72,296	-80,357	0	0	-2,737	-3,121	-69,559	-77,236
-16,971	-18,071	7,387	14,334	-1,417	-845	-22,941	-31,560

10,731	17,634	0	0	-4,154	-3,966	14,885	21,600
2,808	4,861	0	0	129	128	2,679	4,733

7,923	12,773	0	0	-4,283	-4,094	12,206	16,867

96	120	-405	-418	394	430	107	108
-1,276	-1,569	405	418	-1,050	-1,025	-631	-962
1	0	1	0
0	0	0	0	0	0	0	0

0	0	0	0	0	0	0	0

6,744	11,324	1	0	-4,939	-4,689	11,682	16,013

0	0	0	0	0	0	0	0
-27	5	-27	5
6,717	11,329	-26	5	-4,939	-4,689	11,682	16,013

-1,835	-3,448	-1,835	-3,448
-205	592	0	0	0	1,032	-205	-440

4,677	8,473

4,863	7,750
19	131
			Reconcilation 2)
	155,067	1,868	700	4,639	5,057	133,537	149,310

140,044 12,849	7,558			3,541	1,256	9,308	6,302

NOTES

to the consolidated accounts for the quarter ended 30 September 2011

A. The principles adopted for the consolidated financial statements

1.General information

The consolidated interim financial statements of CANCOM AG (formerly CANCOM IT Systeme Aktiengesellschaft) and its subsidiaries ('the CANCOM Group' or 'the Group') for the financial year 2011 were drawn up according to International Financial Reporting Standards or International Accounting Standards (IFRS/IAS).

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

This consolidated interim 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 2010, which can be downloaded from www.cancom.de.

2. Reporting entity – scope of consolidation

The consolidated financial statements include CANCOM AG and all subsidiaries in which CANCOM AG 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.

CANCOM AG has sold its shares in HOH Home of Hardware GmbH. The sale is documented by a purchase and transfer agreement drawn up by notary Klaus Racky and signed on 5 July 2011. The effective date of transfer is 31 July 2011.

The sale price was € 3,000,000.

The impact on various items in the balance sheet of the elimination of HOH Home of Hardware GmbH from the list of companies included in the consolidated financial statements is shown below:

	Balance as at	Balance as at
(€´000)	31 July 2011	31 Dec. 2010
Cash and cash equivalents	-643	-714
Trade accounts receivable	-2.826	-1.491
Other current financial assets	-382	-513
Accounts receivable from related parties	-3	-6
Inventories	-263	-3.788
Prepaid expenses and other current assets	-32	-19
Total current assets	-4.149	-6.531
Property, plant and equipment	-84	-109
Intangible assets	-1.996	-2.131
Deferred taxes arising from tax loss carryover	0	-137
Total non-current assets	-2.080	-2.377
Total assets	-6.229	-8.908
Trade accounts payable	-2.779	-5.048
Accounts payable to related parties	-77	-441
Advance payments received	-139	-164
Other current liabilities	-31	-385
Accrued expenses	-96	-11
Other current liabilities	-611	-404
Total current liabilities	-3.733	-6.453
Deferred taxes from temporary differences	-508	-521
Other non-current financial liabilities	-242	0
Total non-current liabilities	-750	-521
Total liabilities	-4.483	-6.974
Net assets disposed of	-1.746	-1.934

(All figures in German data format)

3. Accounting and valuation policies

The consolidated interim financial report is compiled using basically the same accounting and valuation methods as those used for the consolidated financial statements for the financial year 2010.

B. Notes to the consolidated balance sheet

1. Assets held for sale

Since the Company plans to sell CANCOM Ltd. in the near future, all the assets of this company are recorded under assets held for sale.

2. Other current financial assets

This item includes a purchase price receivable (€ 1,700k), bonuses due from suppliers (€ 1,182k), purchase price receivables in connection with leasing (€ 903k), marketing revenue (€ 266k), creditors with a debit balance (€ 244k) and receivables from employees (€ 154k).

3. Prepaid expenses and other current assets

This item mainly consists of other current assets such as tax refunds (€ 475k), rental receivables (€ 40k), compensation for damages (€ 37k) and receivables from social security carriers (€ 11k).

Prepaid expenses (€ 735k) also include deferred insurance premiums.

4. Financial assets

The financial assets as at 31 December 2010 mainly related to shares in Plaut Aktiengesellschaft. The entire shareholding was sold in the third quarter of 2011.

5. Deferred tax assets

The deferred tax assets are as follows:

Deferred taxes resulting from	Temporary	Tax loss
	differences	carryforward
	€'000	€'000
As at 1 January 2011	406	294
Tax expenditure from profit and loss calculation	-88	-30
Tax saving from profit and loss calculation
included in discontinued operations	0	-230
As at 30 September 2011	318	34

As at 30 September 2011, the CANCOM Group had corporation tax loss carryovers of € 9.6 million and trade tax loss carryovers of € 8.2 million. The unused corporate tax losses for which no deferred tax claim was recognised in the balance sheet amounted to € 9.4 million, and the trade tax loss carryovers for which no deferred tax claim was recognised amounted to € 8.1 million. These amounts include components of € 8.7 million (corporate tax) and € 8.1 million (trade tax), which have been called into question because of the EU Commission's legal interpretation of the restructuring clause in Section 8 c of the German Corporate Tax Act (Körperschaftsteuergesetz, KStG) and cannot be used at present. If this amount cannot ultimately be used, the loss carryovers will amount to € 0.3 million (corporate tax) and € 0.9 million (trade tax).

The deferred taxes from temporary differences are the result of differences in other provisions (€ 121k), goodwill (€ 117k), elimination of sales within the Group (€ 66k), intangible assets (€ 12k) and pension provisions (€ 2k).

6. Other current financial liabilities

This item includes debtors with a credit balance (€ 984k), outstanding bills of costs (€ 863k), purchase price liabilities in connection with leasing (€ 77k) and liabilities to the Supervisory Board (€ 17k).

7. Other provisions

The provisions mainly include guarantees and warranties (€ 1,565k), severance payments (€ 757k), additional leasing costs (€ 452k), salaries (€ 443k), financial statement costs (€ 125k) and contingent risks (€ 105k).

The total provisions include long-term provisions of € 1,742k which are disclosed under other non-current liabilities. They comprise guarantees and warranties (€ 816k), a provision for severance payments which is legally mandatory in Austria (€ 466k), anniversaries (€ 184k), additional leasing costs (€ 146k), provisions for partial retirement (€ 108k) and provisions for contingent risks (€ 22k).

8. Other current liabilities

Other current liabilities mainly include bonus payments to Board members and employees (€ 3,670k), sales tax (€ 3,024k), holiday and overtime entitlements (€ 2,340k), tax on wages and salaries and church tax (€ 1,345k), trade association payments (€ 421k), wages and salaries (€ 357k), social security contributions (€ 149k) and compensation levy for non-employment of the severely handicapped (€ 137k).

9. Deferred tax liabilities

The deferred tax liabilities are as follows:

	€'000
As at 1 January 2011	4.309
Derecognition from revaluation of
financial instruments recognised directly in equity	-68
Derecognition from sale of HOH Home of Hardware GmbH	-507
Tax expenditure from profit and loss calculation	-183
Tax saving from profit and loss calculation
included in discontinued operations	-130
As at 30 September 2011	3.421

(All figures in German data format)

The deferred tax liabilities arise from deviations from the tax balance sheets. They are the result of the revaluation of intangible assets (€ 3,375k), capital from profit-participation rights and subordinated loans (€ 16k), orders in process (€ 13k), other provisions (€ 10k), other assets (€ 5k) and pension provisions (€ 2k).

They are recognised at the relevant individual tax rate, which ranges between 25 percent (for the Austrian subsidiary) and 32.98 percent.

C. Notes to the consolidated statement of income

1. Segment information (see page 18 - 19)

A description of the segments subject to mandatory reporting can be found on page 70 of CANCOM's annual report for 2010.

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 revenue by customer location		Sales revenue by company location
	1 Jan to 30 Sep 2011		1 Jan to 30 Sep 2010 1 Jan to 30 Sep 2011	1 Jan to 30 Sep 2010
	€'000	€'000	€'000	€'000
Germany	348.439	297.883	357.957	303.732
Outside Germany	38.583	28.894	29.065	23.045
Group	387.022	326.777	387.022	326.777

		Non-current assets
	30 September 2011	31 December 2010
	€'000	€'000
Germany	50.584	50.795
Outside Germany	2.069	2.425
Group	52.653	53.220

(All figures in German data format)

Non-current assets include 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:

€'000	First nine months 2011	First nine months 2010
Rent		5 34
Negative goodwill from capital consolidation	142	530
Income from acquisition of minority interests		0 46
Income not relating to the period	426	480
Government grants	300	242
Compensation		1 133
Other operating income		34 108
Total	908	1.573

(All figures in German data format)

Income not relating to the period mainly includes income from written-down receivables, the proceeds of the sale of non-current assets and income from the reduction of allowances for bad debts on accounts receivable. In 2010, the item also included income from the derecognition of debtors with a credit balance.

3. Personnel expenses

The personnel expenses consist of the following:

€'000	First nine months 2011	First nine months 2010
Wages and salaries	68.153	60.73
Social security contributions	11.982	11.365
Pension expenses	222	194
Total	80.357	72.296

(All figures in German data format)

4. Other operating expenses

The other operating expenses consist of the following:

First nine months 2011	First nine months 2010
3.665	4.009
555	658
4.509	4.518
870	628
301	508
2.067	1.607
1.655	1.520
1.431	1.307
726	901
1.411	1.282
379	583
287	307
1.393	1.429
19.249	19.257
	Stock exchange, entertainment expenses Communication and office expenses Fees/ charges, cost of money transaction

All figures in German data format)

5. Income tax

The rate of income tax for German companies was 30.3 percent (2010: 30.46 percent). This is made up of corporation tax, trade tax and the solidarity surcharge. The reduction in the income tax rate is owing to the reduction of the average rate of trade tax.

The divergence between the tax expenses reported and those at the tax rate of CANCOM AG is shown below:

€'000	First nine months 2011	First nine months 2010
Profit before tax	11.790	6.493
Expected tax expense at rate
for German companies
(30.3 percent; 2010: 30.46 percent)	3.572	1.978
- Difference from tax paid outside Germany	-6	-91
- Change in value adjustment of deferred tax assets
on loss carryforwards	246	-51
- Tax-free income/ non-tax-relevant capital losses	-445	0
- Actual income tax not relating to the period	-28	-106
- Permanent differences: non-deductible
operating expenses,	189	-67
and additions and reductions due to trade tax
- Negative goodwill from capital consolidation	-33	-45
- Other	53	-23
- Tax saving recognised under
discontinued operations	-100	240
Total Group income tax	3.448	1.835

(All figures in German data format)

The actual tax rate is calculated as follows:

Actual expense rate	29,25%
Income tax	3.448
Income before tax	11.790
	€'000

(All figures in German data format)

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

€'000	First nine months 2011	First nine months 2010
Actual income tax paid	3.513	815
Deferred taxes:
Assets	118	974
Liabilities	-183	46
	-65	1.020
Group income tax	3.448	1.835

(All figures in German data format)

6. Profit/ loss from discontinued operations

Discontinued operations are shown in the consolidated statement of income as a profit of € 592k (2010: loss of € 205k).

This amount includes income (including other operating income) of € 42,263k (2010: € 55,255k), expenditure of € 41,571k (2010: € 55,700k) and a pre-tax profit of € 692k (2010: pre-tax loss of € 445k). The related income tax expense was € 100k (2010: gain of € 240k).

The areas concerned are detailed below:

HOH Home of Hardware GmbH:

As the shares in HOH Home of Hardware GmbH were sold with effect from 31 July 2011, the company's profit is shown under discontinued operations. The figures for 2010 have been adjusted accordingly. The profit attributable to HOH Home of Hardware GmbH amounts to € 794k (2010: loss of € 188k). This includes the gain of € 1,254k realised by the sale.

The CANCOM Group sold HOH Home of Hardware GmbH, which operates predominantly in the business-to-consumer (B2C) environment, in order to concentrate on the highermargin business-to-business (B2B) segment.

CANCOM Ltd.:

The Group plans to sell its shares in CANCOM Ltd., UK, in the near future. The result of the company is therefore shown under discontinued operations, and the figures for 2010 have been adjusted accordingly. The loss attributable to CANCOM Ltd. amounted to € 202k (2010: € 17k).

The decision to sell the company was based on the CANCOM Group's intention to withdraw from its business-to-consumer activities.

7. Minority interests

Minority interests account for 49 percent of acentrix GmbH's net income for the year (€ 131k).

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 AG. Rudolf Hotter, the other Executive Board member, is also a related party for the purposes of IAS 24, as are the members of the Supervisory Board.

There were no receivables or payables with respect to related parties at the balance sheet date.

A consultancy agreement has been in place between CANCOM AG and the Chairperson of its Supervisory Board, Walter von Szczytnicki, since 1 July 2007. The contract was approved on 9 March 2007 in accordance with Section 114 of the German Stock Companies Act (Aktiengesetz, AktG), and provides for an annual remuneration of € 60,000. The remuneration paid in the financial year 2011 therefore amounts to € 60,000.

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)

A list of shareholdings can be found on page 10 of this interim report.

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

CANCOM AG did not receive written notice from any shareholder disclosing a majority shareholding as defined in Section 20 of the above Act in the first nine months of 2011.