CANCOM SE — Interim / Quarterly Report 2012

Aug 3, 2012

6-months-report 2012

»Leading provider of IT infrastructure and professional services«

CANCOM Group

CANCOM – integrated solutions for IT infrastructure, system integration, consulting & services

Since its foundation in 1992, CANCOM AG seated in Munich, Germany, has grown to become one of the largest full IT service providers in Germany. The integrated product and service portfolio ranges from consulting and IT architecture design to IT procurement, integration and system operation. Several partnerships and certifications with leading manufacturers are expression of CANCOMs expertise in the trend-setting IT topics of the future such as cloud and mobile computing, collaboration or security.

Group key figures
in € million	01/01 - 30/06/2012	01/01 - 30/06/2011	Changes
Revenue	268.1	251.5	+ 6.6 %
Gross profit	82.4	77.3	+ 6.6 %
EBITDA	13.4	10.8	+ 24.1 %
EBITDA margin as a percentage	5.0 %	4.3 %	+ 0.7 %
EBIT	10.2	7.6	+ 34.2 %
Net profit for the period	5.0	4.5	+ 11.1 %
Earnings per share (in €)
from continuing operations (diluted)	0.60 *	0.44	+ 36.4 %
Average number of shares
(in 1,000) (diluted)	10,391	10,391	0.0%
Employees as of 30 June	1,976	2,011	- 1.7 %
in € million	30 Jun 2012	31 Dec 2011	Changes
Balance sheet total	165.7	194.9	- 14.9 %
Equity	63.0	60.9	+ 3.4 %
Equity ratio in %	38.0 %	31.2 %	+ 6.8 %

* adjusted for a fiscal one-time effect as a result of a tax audit and in consideration of a current fiscal court proceeding in the amount of € 0.06.

CANCOM Group's sales revenues

6 months (01/01 - 30/06) (in € million)

CANCOM Group's EBITDA

6 months (01/01 - 31/06) (in € million)

CANCOM Group's EBIT

6 months (01/01 - 30/06) (in € million)

Table of contents

Section	Pag e
CANCOM Group	02
Tab le of con tents	03
Trends 2012	04
Prefac e	05
Con ement report Q2 solidated interim	06-11
1) 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 8) Responsibility statement Balanc e sheet	06-07 08-09 10 10 10 10 10-11 11 12-13
Statement of com prehensive incom e	14
Con solidated ca sh flow statement	15
Con solidated statement of chang es in equity	16
Statement of com prehensive incom e	17
Segm ent informa tion	18-19
Appendix	20-23

Trends 2012

CANCOM at the forefront of IT megatrends

Cloud computing is shaping the most important developments in the IT sector in recent years. Information and data are available everywhere and all the time, communication is changing, and the boundary between the professional and private spheres is rapidly becoming more blurred. This development calls for flexible, high-performance, efficient and secure IT structures and environments. An IT architect, systems integrator and managed services provider, CANCOM has for years been successfully helping its customers manage the growing opportunities of latest developments in IT.

Preface

Dear Shareholders,

CANCOM is continuing to grow, as the figures for the first half of 2012 demonstrate. Although there was a slight easing of momentum in the second quarter, there is no doubt that we are well placed to achieve a further increase in sales revenues and profits in 2012.

Some major developments and events in the second quarter have played a role in moving us further in the right direction. One of these was CANCOM's success in obtaining certification as a Cisco Gold Certified Partner, which provided impetus for the Group's operational activities. Cisco awards Gold Status to partners with the most comprehensive technical expertise. The certification gives us great credibility and enormous prestige in the IT market. Many local authorities and large companies require Cisco Gold certification as a precondition for the awarding of more demanding contracts.

In June, CANCOM acquired a 49 percent stake in Glanzkinder GmbH, one of the German market leaders in the field of app programming. The objective of the acquisition was to expand our activities in the high-growth mobile business environment. CANCOM and Glanzkinder are already working together successfully on several customer projects.

The outlook for the second half of the year also looks positive. According to the latest IT sector barometer from BITKOM – the German Association for Information Technology, Telecommunications and the New Media – the great majority of IT companies expect sales revenues to be higher than in 2011. We have already made a successful start to the third quarter, with a good month in July.

At the start of June, Deutsche Börse decided to include CANCOM in its TecDAX stock index. This has generated increased interest and attention from investors and the financial press in particular, giving new groups of investors access to the CANCOM share.

We would like to thank all our shareholders for their confidence in us. All of us at CANCOM are committed to continuing our positive performance.

Yours sincerely

Klaus Weinmann, CEO

1. Business and operating environment

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 largest independent integrated systems providers in Germany, the CANCOM 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 distributing 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 primarily includes commercial end-users, from independent professionals and medium-sized companies to large 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 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

Innovation is of the utmost importance in stimulating economic momentum and growth. However, as CANCOM is purely a services and trading company, it 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, mobile solutions, IT security and managed services.

Development work in the first half of 2012 focused on the online segment and a new ERP system for a subsidiary.

The performance of the IT sector and the economy as a whole

Following a decline in GDP in Germany in the fourth quarter of 2011, in the first quarter of the current year the early indications are for slight year-on-year growth of 0.1 percent.

According to the latest economic survey by the Federal Association for Information Technology, Telecommunications and New Media (BITKOM), just under three-quarters of German providers of IT, telecommunications and electronic entertainment equipment recorded a year-on-year increase in sales revenues in the first quarter of 2012. In the first quarter of 2012 the BITKOM sector index was up on the fourth quarter of 2011, and it is currently significantly higher than the Ifo Business Climate Index for the German economy as a whole.

Overview of the CANCOM Group's business performance

In the first six months of 2012, the CANCOM Group recorded significant growth in comparison with the same period of 2011. The high level of both sales revenues and profits continued in the second quarter.

The CANCOM Group's consolidated sales revenues for the first half of 2012 were up 6.6 percent to € 268.1 million, in comparison with € 251.5 million in the first half of 2011. Consolidated gross profits were up 6.9 percent in the same period, from € 252.0 million to € 269.5 million. At € 13.4 million, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) were up 24.1 percent year on year, from last year's € 10.8 million. The EBITDA margin was 5.0 percent, compared with 4.3 percent in the first half of 2011. Consolidated EBIT was up 34.2 percent, from € 7.6 million in the first half of 2011 to € 10.2 million. The consolidated profit for the period was € 5.0 million, compared with € 4.5 million in the first half of 2011. This resulted in earnings per share from continuing operations of € 0.54, compared with € 0.44 in the same period of 2011.

Significant events and investments during the reporting period

In their meeting on 21 June 2012, the Executive and Supervisory Boards of CANCOM AG resolved to start the process for the conversion of CANCOM AG into a European public company, or Societas Europaea (SE), which would include changing its name to CANCOM SE. Among other things, the SE legal structure would promote the development of a more modern corporate culture and improve access to international capital markets.

CANCOM AG has acquired a 49 percent stake in Glanzkinder GmbH (app-programmierung. com), one of the market leaders in the field of app programming in Germany. The acquisition is documented in a notarised contract dated 22 June 2012. CANCOM's objective in acquiring the stake is to expand its activities in the mobile business environment.

Employees

As at 30 June 2012, the CANCOM Group employed 1,976 people.

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

Professional services:	1,349
Sales and distribution:	346
Central services:	281

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

	First half 2012	First half 2011
Wages and salaries	48,034	45,764
Social security contributions	8,321	8,067
Pension provisions	141	153
Total	56,496	53,984

2. The earnings, financial and assets position of the CANCOM Group

a) Earnings position

Both the sales revenues and the profits of the CANCOM Group were up in the first six months of 2012 from the same period of 2011. Consolidated sales revenues were up 6.6 percent in comparison with the first half of 2011, from € 251.5 million to € 268.1 million.

CANCOM Group sales revenues:

Year-on-year comparison of figures for the first six months (in € million)

In Germany, sales revenues were up 9.1 percent, from € 232.0 million to € 253.2 million.

In international business, the Group's sales revenues fell 24.1 percent, from € 19.5 million to € 14.8 million.

In the e-commerce segment, sales revenues were down 11.3 percent to € 74.9 million, in comparison with € 84.4 million in 2011. In the IT solutions segment they were up 15.6 percent, from € 167.1 million to € 193.2 million.

The consolidated gross profit for the first six months of 2012 was up 6.6 percent in comparison with 2011, from € 77.3 million to € 82.4 million. The gross profit margin stayed unchanged at 30.7 percent.

CANCOM Group gross profit:

Year-on-year comparison of figures for the first six months (in € million)

100 75 50 25 0 77.3 2011 82.4 2012

Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) were up 24.1 percent in the first six months of 2012, from € 10.8 million to € 13.4 million.

CANCOM Group EBITDA:

Year-on-year comparison of figures for the first six months (in € million)

Consolidated earnings before interest and tax (EBIT) were up 34.2 percent in the same period, from € 7.6 million to € 10.2 million.

CANCOM Group EBIT:

Year-on-year comparison of figures for the first six months (in € million)

The net income rose to € 5.0 million in the first six months of 2012, compared with € 4.5 million in the same period of 2011. As a result, earnings per share from continuing operations for the first six months were € 0.54, compared with € 0,44 in 2011.

CANCOM Group earnings per share

Year-on-year comparison of figures for the first six months (in € million)

The order position

In the e-commerce 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 continues to be healthy.

Due to the stable services business – which now accounts for around two-thirds of the consolidated 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 good 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 maximise its profitability and credit standing to ensure favourable refinancing rates.

Notes on the capital structure

On the assets side of the consolidated balance sheet, there was a decrease in current assets between 31 December 2011 and 30 June 2012, from € 140.4 million to € 108.7 million. Cash and cash equivalents were down from € 44.4 million to € 14.4 million, owing to seasonal variations. Trade accounts receivable rose from € 72.2 million to € 77.0 million, while inventories were reduced from € 15.0 million to € 10.0 million.

Non-current assets as at 30 June 2012 were up slightly, at € 57.0 million, compared with € 54.5 million as at 31 December 2011.

The liabilities side of the balance sheet shows a significant reduction in current liabilities, which are down from € 109.8 million to € 81.3 million. This is mainly the result of a reduction in trade accounts payable from € 72.9 million to € 43.5 million.

Non-current liabilities, consisting of liabilities with a residual term of at least one year, are down from € 24.2 million to € 21.3 million.

The total assets are down from € 194.9 million as at 31 December 2011 to € 165.7 million as at 30 June 2012.

The nominal equity capital has been increased from € 60.9 million to € 63.0 million since the start of the year, mainly through transfers to net profits. Overall, this resulted in an equity ratio of 38.0 percent at 30 June 2012, compared with 31.2 percent at 31 December 2011.

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 negative during the year, and there was a negative cash flow of € 19.8 million as at 30 June 2012, compared with € 12.4 million in the same period of 2011. This change is mainly the result of a reduction in trade accounts payable.

There was a negative cash flow from investing activities of € 4.0 million, compared with a negative cash flow of € 5.3 million in the first half of 2011.

There was a negative cash flow from financing activities of € 6.2 million, compared with a negative cash flow of € 3.7 million in the first half of 2011.

Overall, this resulted in cash and cash equivalents of € 14.4 million, compared with € 10.0 million in 2011.

3. Shares held by members of the Executive and Supervisory Boards as at 30 June 2012

Total number of shares:	10,390,751	100%
Executive Board:
Klaus Weinmann	209,864	2.00%
Supervisory Board:
Walter von Szczytnicki	6,252	0.1%
Stefan Kober	261,289	2.5%
Petra Neureither*	13,711	0.1%
* Shares for PEN GmbH

4. Events of particular significance after the reporting date

There were no events of particular importance after the reporting date of 30 June 2012 up to the time of this management report.

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 2011, starting on page 25.

7. Forecast

Exports and private consumption are buoying the German economy and have so far saved it from entering into recession. According to the German Federal Statistical Office, gross domestic product (GDP) grew by 0.5 percent in the first quarter of 2012. By comparison, at the end of 2011 the economy had shrunk by 0.5 percent. The leading German economic research institutes are forecasting growth of 0.5 to 1.3 percent for the year 2012 as a whole.

Gross domestic product, Germany, 2012

(real change compared with 2011, as a percentage)

Forecast: Deutsche Bank Economic Research, 10 July 2012

According to the latest market figures from the German IT sector organisation BITKOM, experts anticipate that growth in the German IT market will remain steady at 3.1 percent.

They forecast growth of 3.0 percent for the IT hardware segment and 4.4 percent for the software segment, compared with 1.3 percent and 5.1 percent respectively in 2011. The IT services segment is expected to grow by 2.5 percent, compared with 3.2 percent in 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 2011, starting on page 20. The annual report can be downloaded from www.cancom. de under the Investor Relations tab and/or obtained free of charge from the Company (Investor Relations Department, CANCOM AG).

Performance of the German IT sector in 2012

(real change in comparison with 2011, as a percentage)

Forecast: Bitkom e.V., February 2012

Developments in the fields of cloud computing and mobile computing are driving growth in the IT sector. The trend towards the flexible use of IT as a service through the internet brings enhanced business prospects for cloud providers such as CANCOM. According to the latest study by market research company Experton Group, by 2016 the business cloud market in Germany will be worth more than € 10 billion, more than three times as much as in 2012.

CANCOM was early in gearing its business policy to future IT trends, and designed its sales and services structure around them. The expansion of the e-commerce business and the new CANCOM webshop have brought further reductions in process and transaction costs both for customers and for the CANCOM Group, which should result in greater profitability for the Group's trading business.

CANCOM has also significantly expanded its market presence and improved its customer proximity in the German-speaking areas, and is represented all over Germany and Austria by its many service and consulting locations. CANCOM plans to continue consolidating its market position in the IT environment in the German-language areas through targeted acquisitions. The market environment continues to offer good conditions for this strategy.

Owing to the investments in the e-commerce segment and the Group's good positioning in the growth market of cloud computing, the Executive Board expects the sales revenues and profits of the e-commerce division and the IT solutions segment to rise further and the demand for IT products and services to remain steady or indeed rise.

In view of the Group's positive performance in 2011, the Executive Board currently expects that, provided economic conditions continue to be positive in 2012, the sales revenues and profits of the Group as a whole will rise, and that its financial situation will continue to be positive.

8. Responsibility statement

We confirm, to the best of our knowledge, that the consolidated interim financial statements, prepared in accordance with the applicable principles of financial reporting, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and that the interim management report gives a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks of the anticipated development of the Group for the remaining six months of the financial year.

Consolidated Interim Management Report

Munich, August 2012

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

Figures in €'000 Assets	Notes	30/06/2012	31/12/2011	30/06/2011
Current assets
Cash and cash equivalents		14,362	44,365	9,176
Assets held for sale		0	2,080	8,831
Trade accounts receivable		76,951	72,212	68,462
Other current financial assets	B.1.	4,405	5,297	2,397
Inventories		9,978	14,992	10,248
Orders in process		1,688	572	1,804
Prepaid expenses and other current assets	B.2.	1,321	861	1,595
Total current assets		108,705	140,379	102,513
Long-term assets
Property, plant and equipment		14,657	12,901	10,482
Intangible assets		16,537	15,928	15,864
Goodwill		23,667	23,667	23,667
Investments		70	70	3,628
Notes receivable/loans		52	52	49
Other financial assets		1,148	1,229	889
Deferred taxes arising from temporary differences	B.3.	753	628	339
Deferred taxes arising from tax loss carryover	B.3.	29	8	57
Other assets		43	29	30
Total long-term assets		56,956	54,512	55,005
Total assets		165,661	194,891	157,518

Consolidated balance sheet (ifrs) – Equity and liabilities

Figures in €'000
Equity and liabilities	Notes	30/06/2012	31/12/2011	30/06/2011
Current liabilities
Short term debt and current portion of long-term debt		2,287	2,324	666
Profit participation capital and subordinated loans short-term portion		6,825	6,824	825
Trade accounts payable		43,468	72,906	42,360
Advanced payments redeived		1,297	1,872	754
Other current financial liabilities	B.4.	1,391	1,487	2,751
Accrued expenses	B.5.	1,553	1,555	1,379
Deferred revenues		1,163	1,042	1,182
Income tax payable		9,446	6,008	2,684
Other current liabilities	B.6.	13,883	13,666	11,093
Liabilities for assets held for sale		0	2,080	6,343
Total current liabilities		81,313	109,764	70,037
Long-term liabilities
Long-term debt, less current portion		5,557	7,358	9,310
Profit participation capital and subordinated loans		6,454	6,797	14,072
Deferred revenues		4,101	4,538	4,689
Deferred taxes from temporary differences	B.7.	2,491	2.653	3,440
Pension provisions		87	87	80
Other long-term financial liabilities	B.8.	1,082	1,081	404
Other long-term liabilities	B.5.	1,536	1,701	1,655
Total Long-term liabilities		21,308	24,215	33,650
Equity
Shared capital		10,391	10,391	10,391
Additional paid-in capital		15,904	15,904	15,904
Net profit (incl. retained earnings)		36,547	34,735	27,605
Currency translation difference and exchange rate difference		-11	-291	-235
Minority interests		209	173	166
Total equity		63,040	60,912	53,831
Total equity and liabilities		165,661	194,891	157,518

Statement of comprehensive income (IFRS)

			Q2	6 months
Figures in €'000		01/04/2012	01/04/2011	01/01/2012	01/01/2011
	Notes	-30/06/2012	-30/06/2011	-30/06/2012	-30/06/2011
Revenues		126,952	126,903	268,052	251,523
Other operating income	D.1.	141	206	330	437
Other capitalised services rendered for own account		615	71	1,086	71
Total operating revenue		127,708	127,180	269,468	252,031
Cost of purchased/
materials and services		-87,464	-87,729	-187,107	-174,701
Gross profit		40,244	39,451	82,361	77,330
Personnel expenses	D.2.	-27,655	-27,034	-56,496	-53,984
Depreciation of property, plant and equipment
and amortisation of intangible assets		-1,522	-1,600	-3,224	-3,164
Other operating expenses	D.3.	-6,213	-6,292	-12,474	-12,541
Operating income		4,854	4,525	10,167	7,641
Interest and similar income		101	34	209	65
Interest and other expenses		-594	-518	-1,167	-1,093
Foreign currency exchange income / losses		2	-9	1	-1
Profit before taxes		4,363	4,032	9,210	6,612
Income tax expense	D.4.	-1,474	-1,210	-3,569	-2,004
After tax profit
from continuing operations		2,889	2,822	5,641	4,608
Loss from discontinued operations	D.5.	-2	-67	-676	-130
Net income for the year		2.887	2,755	4,965	4,478
thereof attributable to the
shareholders of the parent		2,884	2,712	4,929	4,396
thereof attributable to minority interests	D.6.	3	43	36	82
Average number of
shares outstanding (basic)		10,390,751	10,390,751	10,390,751	10,390,751
Average number of
shares outstanding (diluted)		10,390,751	10,390,751	10,390,751	10,390,751
Earnings per share
from continuing operations (non-diluted)		0.28	0.27	0.54	0.44
Earnings per share
from continuing operations (diluted)		0.28	0.27	0.54	0.44
Earnings per share
from discontinued operations (non-diluted)		-0.00	-0.01	-0.07	-0.01
Earnings per share
from discontinued operations (diluted)		-0.00	-0.01	-0.07	-0.01

Consolidated cash flow statement (IFRS)

Figures in € '000	01/01/2012 -30/06/2012	01/01/2011 -30/06/2011
Cash flow from ordinary activities:
Net profit for the period before taxes and minority interests	9,210	6,612
Adjustments:
+/- Depreciation of property, plant and equipment, and amortisation of intangible assets	3,224	3,164
+/- Changes in long-term accruals	-1,384	1
+/- Changes in current accruals	-2	-146
+/- Gains/losses on the sale of intangible assets,
property, plant and equipment and financial assets	-482	139
+ Interest expense	958	1,028
+/- Changes in inventories	5,014	-1,511
+/- Changes in trade accounts receivable and other accounts receivables	-6,674	-1,843
+/- Changes in trade accounts payables and other accounts payable	-29,278	-18,399
+/- Interest payments and rebates	-231	-130
+/- Income tax payments and rebates	-471	-1,199
+/- Non-cash expenses and income	0	27
+/- Inflow/outflow from discontinued operations	271	-147
Net cash from operating activities	-19,845	-12,404
Cash flow from investing activities
+/- Acquisition of subsidiaries and equity instruments of other companies	0	-2,193
+/- Cash from acquisitions	0	0
- Payments for additions to intangible assets as well as property, plant and equipmen	-5,686	-3,433
+ Income from disposal of intangible assets, property, plant and equipment and financial assets	579	270
- Cash used in disposal of equity holdings	-415	0
+ Interest received	209	65
+/- Inflow/outflow from discontinued operations	1,350	0
Net cash used in investing activities	-3,963	-5,291
Cash flow from financing activities
+ Take-up of long-term financial liabilities	0	0
- Repayment of long-term financial liabilities (incl. short-term portions)	-2,661	-893
+/- Changes in short-term liabilities	208	4
- Interest paid	-663	-781
- Dividends payed	-3,117	-1,559
+ Inflows from sale of own shares	0	0
- Outflows from purchases of own shares	0	0
+/- Cash inflow / outflow finance lease	36	-504
+/- Cash inflow / outflow from discontinued operations	0	0
Net cash used in financing activities	-6,197	-3,733
Net change in cash and cash equivalents	-30,005	-21,428
+/- Changes in value resulting from foreign currency exchange	2	-99
+/- Cash and cash equivalents as at beginning of period	44,365	31,472
Cash and cash equivalent sat end of period	14,362	9,945
Breakdown:
Cash	14,362	9,176
Cash from discontinued operations	0	769
	14,362	9,945

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	Minority interest	Total equity cash
	units'000 in €'000		in €'000	in €'000		in €'000 in €'000 in €'000		in €'000 in €'000		in €'000 in €'000
31. December 2010		10,391 10,391	15,904	10,623	-289	155	-153	14,298	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					-2	-155		11,526	11,369		164 11,533
31. December 2011		10,391 10,391	15,904	17,088	-291	0	-153	17,800	60,739		173 60,912
Changes in reserves:
Transfer netprofit/retained earnings				8,118				-8,118	0		0
Distribution								-3,117	-3,117		-3,117
Comprehensive income for the period					280	0		4,929	5,209	36	5,245
30 June 2011		10,391 10,391	15,904	25,206	-11	0	-153	11,494	62,831		209 63,040

Statement of comprehensive income (IFRS)

		Q2		6 months
in €'000	01/04/2012 -30/06/2012	01/04/2011 -30/06/2011	01/01/2012 -30/06/2012	01/01/2011 -30/06/2011
Net income for the period	2,887	2,755	4,965	4,478
Other income
Currency translation difference	0	0	-3	-1
Exchange rate difference	0	137	0	-144
Income taxes	0	-41	0	44
Other after-tax income for the period	0	96	-3	-101
Comprehensive income for the period	2,887	2,851	4,962	4,377
thereof attributable to the shareholder of the parent	2,884	2,808	4,926	4,295
thereof attributable to the minority interests	3	43	36	82

Segment information (IFRS)

		e-commerce			IT Solutions
		30/06/12	30/06/11	30/06/12	30/06/11
		€'000	€'000	€'000	€'000
	Sales revenues
	– External sales	74,857	84,424	193,195	167,099
	– Intersegment sales	3,305	1,550	34,019	30,536
	– Total sales revenues	78,162	85,974	227,214	197,635
	– Cost of purchased materials and services	-63,439	-70,889	-150,105	-126,862
	– Personnel expenses	-8,358	-8,292	-45,960	-43,684
	– Other operative income and expenses	-1,270	-2,255	-19,767	-18,000
EBITDA		5,095	4,538	11,382	9,089
	– scheduled depreciation and amortisation	-523	-654	-2,611	-2,429
	Operating Income (EBIT)	4,572	3,884	8,771	6,660
	– Interest income	113	19	18	34
	– Interest expenditure	-323	-279	-338	-318
	– Income from equity investments
	Profit/loss from ordinary activities	4,362	3,624	8,451	6,376
	– Foreign currency exchange gains / losses
	Pre-tax profit/loss	4,362	3,624	8,451	6,376
	– Income taxes
	– Discontinued operations	-676	-130	0	0
	Consolidated profit/loss for the period
	hereof attributable to the shareholders
	of the parent
	thereof attributable to minority interest
	Other information – Assets 1)
	– Investments 1)	55,688	66,994	98,251	82,331
		1,781	1,416	3,797	1,947

Segment information (IFRS)

	consolidated		Reconcilation		Other companies		Total operating segments
30/06/11	30/06/12	30/06/11	30/06/12	30/06/11	30/06/12	30/06/11	30/06/12
€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
				0	0	251,523	268,052
		-32,086	-37,324	0	0	32,086	37,324
251,523	268,052	-32,086	-37,324	0	0	283,609	305,376
-174,701	-187,107	23,050	26,437	0	0	-197,751	-213,544
-53,984	-56,496	0	0	-2,008	-2,178	-51,976	-54,318
-12,033	-11,058	9,036	10,887	-814	-908	-20,255	-21,037
10,805	13,391	0	0	-2,822	-3,086	13,627	16,477
-3,164	-3,224	0	0	-81	-90	-3,083	-3,134
7,641	10,167	0	0	-2,903	-3,176	10,544	13,343
65	209	-180	-245	192	323	53	131
-1,093	-1,167	180	245	-676	-751	-597	-661
0	0	0	0
6,613	9,209	0	0	-3,387	-3,604	10,000	12,813
-1	1	-1	1	0		0	0
6,612	9,210	-1	1	-3,387	-3,604	10,000	12,813
-2,004	-3,569	-2,004	-3,569
-130	-676	0	0	0	0	-130	-676
4,478	4,965
4,396	4,929
82	36
			Reconcilation 2)
157,518	165,661	735	899	7,458	10,823	149,325	153,939

A. The principles adopted for the consolidated financial statements

1. General information

The consolidated interim financial statements of CANCOM AG and its subsidiaries ('the CANCOM Group' or 'the Group') for the financial year 2012 were drawn up according to International Financial Reporting Standards or International Accounting Standards (IFRS/ IAS).

The consolidated interim financial statements were drawn up in euro. Unless otherwise stated, all amounts are shown in thousands of euro (€ '000). Rounding of figures may result in apparent inconsistencies between totals and sums of constituent parts. For the same reason, percentages may not total 100 percent.

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 2011, 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 CANCOM Ltd. The sale is documented by a purchase and transfer agreement signed on 16 March 2012, which is also the effective date of transfer.

The sale price was GBP 1.

The impact on various items in the balance sheet of the elimination of CANCOM Ltd. from the list of companies included in the consolidated financial statements is shown below:

	Balance as at
(€ '000)	16 March 2012
Assets held for sale	-2,253
Total current assets	-2,253
Total assets	-2,253
Liabilities associated with held-for-sale assets	-1,673
Total current liabilities	-1,673
Total liabilities	-1,673
Net assets disposed of	-580

CANCOM AG has bought 49 percent of the shares of Glanzkinder GmbH (formerly Glanzkinder Verwaltungs GmbH) for the nominal sum of € 12,740. The acquisition is documented in a share purchase and transfer agreement drawn up on 22 May 2012 by notary Dr Thomas Braun.

The purchase price is € 288,235. Incidental acquisition costs of € 9 thousand were incurred and are shown in the statement of income under other operating expenses.

The company will be included in consolidated financial statements with effect from 1 July 2012.

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 2011.

B. Notes to the consolidated balance sheet

1. Other current financial assets

This item includes bonuses due from suppliers (€ 2,133 thousand), a purchase price receivable (€ 1,561 thousand), marketing revenue (€ 329 thousand), creditors with a debit balance (€ 288 thousand) and receivables from employees (€ 94 thousand).

2. Prepaid expenses and other current assets

This item mainly consists of other current assets such as tax refunds (€ 205 thousand), commission income (€ 75 thousand), compensation for damages (€ 46 thousand), rent receivables (€ 44 thousand), interest income (€ 39 thousand), receivables from social security carriers (€ 28 thousand) and receivables from the German Federal Employment Agency (€ 18 thousand).

Prepaid expenses (€ 832 thousand) also include deferred insurance premiums.

3. Deferred tax assets

The deferred tax assets are as follows:

Deferred tax resulting from	Temporary	Tax loss
	differences	carryforward
	€ '000	€ '000
As at 1 January 2012	628	8
Tax expenditure from profit and loss calculation	125	21
As at 30 June 2012	753	29

As at 30 June 2012, the CANCOM Group had corporation tax loss carryforwards of € 6.0 million and trade tax loss carryforwards of € 5.3 million. The unused corporate tax losses for which no deferred tax claim was recognised in the balance sheet amounted to € 5.8 million, and the trade tax losses for which no deferred tax claim was recognised amounted to € 5.3 million. These amounts relate to loss carryforwards that 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 therefore cannot be claimed as tax exempt at present.

The deferred taxes from temporary differences are mainly the result of differences in other provisions (€ 266 thousand), property, plant and equipment (€ 170 thousand), intangible assets (€ 134 thousand), goodwill (€ 114 thousand), and elimination of sales within the Group (€ 67 thousand).

4. Other current financial liabilities

This item includes debtors with a credit balance (€ 568 thousand), outstanding bills of costs (€ 521 thousand), Supervisory Board remuneration (€ 166 thousand) and purchase price liabilities (€ 136 thousand).

5. Other provisions

The provisions mainly include guarantees and warranties (€ 1,383 thousand), severance payments (€ 947 thousand), salaries (€ 337 thousand), additional leasing costs (€ 274 thousand) and financial statement costs (€ 91 thousand).

The total provisions include long-term provisions of € 1,536 thousand disclosed under other non-current liabilities. They comprise guarantees and warranties (€ 690 thousand), a provision for severance payments which is legally mandatory in Austria (€ 456 thousand), anniversaries (€ 200 thousand), provisions for partial retirement (€ 122 thousand) and additional leasing costs (€ 68 thousand).

6. Other current liabilities

Other current liabilities mainly include holiday and overtime (€ 3,698 thousand), sales tax (€ 3,530 thousand), bonus payments to Board members and employees (€ 3,288 thousand), tax on wages and salaries and church tax (€ 1,938 thousand), social security contributions (€ 293 thousand), trade association payments (€ 260 thousand), wages and salaries (€ 109 thousand), and the compensation levy for non-employment of the severely handicapped (€ 85 thousand).

7. Deferred tax liabilities

The deferred tax liabilities are as follows:

As at 30 June 2012	2,491
Tax ependiture from profit and loss calculation	-162
As at 1 January 2012	2,653
	€ '000

The deferred tax liabilities arise from deviations from the tax balance sheets. They result from the recognition and revaluation of intangible assets (€ 2,271 thousand), other financial assets (€ 185 thousand), orders in process (€ 16 thousand), capital from profit-participation rights and subordinated loans (€ 11 thousand) and other provisions (€ 7 thousand).

The provisions are valued at the relevant tax rate, which ranges between 25 percent (for the Austrian subsidiary) and 32.98 percent (German subsidiary).

8. Other non-current financial liabilities

Other non-current financial liabilities comprise debtors with a credit balance (€ 663 thousand) and purchase price liabilities (€ 419 thousand).

C. 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 2011.

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 according to customer location 1 Jan. - 30 June 2012 1 Jan. - 30 June 2011	1 Jan. - 30 June 2012 1 Jan. - 30 June 2011	Sales revenue according to company location
	€ '000	€ '000	€ '000	€ '000
Germany	246,050	225,355	253,247	232,040
Outside Germany	22,002	26,168	14,805	19,483
Group	268,052	251,523	268,052	251,523
				Non-current assets
			30 June 2012	30 June 2011
			€ '000	€ '000
Germany			54,091	48,800
Outside Germany			1,961	2,132

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.

Group 56,052 50,932

D. Notes to the consolidated statement of income

1. Other operating income

The other operating income is made up of the following items:

€ '000	1 Jan. - 30 June 2012	1 Jan. - 30 June 2011
Rent	3	3
Income from repayment of non-current debts	0	136
Income not relating to the period	43	82
Government grants	269	208
Other operating income	15	8
Total	330	437

2. Personnel expenses

The personnel expenses consist of the following items:

€ '000	1 Jan. - 30 June 2012	1 Jan. - 30 June 2011
Wages and salaries	48,034	45,764
Social security contributions	8,321	8,067
Pension expenses	141	153
Total	56,496	53,984

3. Other operating expenses

The other operating expenses consist of the following items:

€ '000	1 Jan. - 30 June 2012	1 Jan. - 30 June 2011
Office space	2,620	2,445
Insurance and other charges	416	366
Motor vehicles	2,267	2,940
Advertising	664	576
Stock exchange and entertainment	150	220
Hospitality and travelling expenses	1,483	1,348
Delivery costs	864	1,086
Third-party services	931	872
Repairs, maintenance, leasing	455	418
Communication and office expenses	863	953
Professional development and training costs	645	471
Legal and consultancy expenses	428	243
Fees and charges; costs of money transactions	159	190
Adjustments on receivables	89	11
Other operating expenses	440	402
Total	12,474	12,541

4. Income tax

The rate of income tax for German companies was 30.69 percent (2011: 30.27 percent). This is made up of corporation tax, trade tax and the solidarity surcharge.

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

€ '000	1 Jan. - 30 June 2012	1 Jan. - 30 June 2011
Earnings before tax	9,210	6,612
Expected tax expense at
rate for German companies
(30.69 percent; 2011: 30.27 percent)	2,827	2,001
- Difference from tax paid outside Germany	8	-8
- Change in value adjustment of deferred tax assets
on loss carryforwards	72	-37
- Tax-exempt income/ non tax-relevant capital losses	-67	-1
- Actual income not relating to the period	649	-8
- Permanent differences:
non-deductible operating expenses; additions and
reductions due to trade tax	80	78
- Deferred taxes due to contingent
purchase price components	0	-33
- Miscellaneous	0	12
Total Group income tax	3,569	2,004

E. Other disclosures

The actual tax rate is calculated as follows:

Actual tax expense rate	38.75%
Income tax	3,569
Income before tax	9,210
	€ '000

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

€ '000	1 Jan. - 30 June 2012	1 Jan. - 30 June 2011
Actual income tax paid	3,877	2,235
Deferred taxes
Assets	-146	74
Liabilities	-162	-305
	-308	-231
Group income tax	3,569	2,004

5. Discontinued operations

The impact of discontinued operations on the consolidated statement of income is a loss of € 676 thousand and comprises the loss made by CANCOM Ltd. up to the time of its sale, and the loss on the sale.

6. Minority interests

Minority interests account for 49 percent of acentrix GmbH's net income for the year.

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. The following can also be considered to be related parties as defined by IAS 24.9 b:

• AL-KO Kober AG and its subsidiaries
• PEN GmbH
• WFO Vermögensverwaltung GmbH
• AURIGA Corporate Finance GmbH
• SNP Schneider-Neureither & Partner AG.

Related party transactions were made on terms equivalent to those that prevail in arm's length transactions, with payment due in full between 10 and 30 days after the invoice date.

The transaction volume of goods sold, and services provided, to related parties under IAS 24 in the first half of 2012 was € 1,126 thousand (gross), of which € 246 thousand was still outstanding at the balance sheet date. This amount relates to goods/services purchased by AL-KO Kober AG and its subsidiaries.

There were no goods and services purchased from related parties under IAS 24.

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 thousand. The consultancy agreement expired on 30 June 2012. The remuneration for the financial year 2012 amounts to € 30 thousand.

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 8 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 six months of 2012.

3-Monatszahlen 2007 6-months-report 2012

Publication details

CANCOM AG

Investor Relations

Ridlerstrasse 37 80339 München

GERMANY

Tel.: +49 82 25 / 9 96-1015 Fax: +49 82 25 / 9 96-4-1015 E-Mail: IR@CANCOM.DE