CANCOM SE — Interim / Quarterly Report 2013

May 20, 2014

INTERIM REPORT 31 MARCH 2013

CANCOM – Leading Cloud Transformation Partner

CANCOM is a cloud architect, systems integrator and managed services provider. The CANCOM Group delivers an advanced, business-oriented range of solutions providing significant added value for companies, so contributing to their business success. With its own private cloud solution, CANCOM has a first-mover advantage in the cloud computing market. It leads the field in the cloud computing segment with its analysis, advice, implementation and services, making it a trusted IT and business transformation partner for clients.

CANCOM has been awarded the title of Mobile Enterprise Leader 2014 by the Experton Group on the basis of its Mobile Enterprise Vendor Benchmark study. The award recognizes CANCOM's excellent portfolio and very strong market and competitive position in the enterprise mobility segment – a major driver of growth in cloud computing.

GROUP KEY FIGURES

in € million	Jan. 01 - Mar. 31, 2014	Jan. 01 - Mar. 31, 2013	Changes
Sales revenues	185.4	135.1	+ 37.2%
Gross profit	61.1	43.8	+ 39.,5%
EBITDA adjusted	10.6*	7.0	+ 51.4%
EBITDA margin adjusted in %	5.7%*	5.2%	+ 0.5%
EBITA adjusted	7.7*	5.1	+ 51.0%
Earnings per share in € (dilluted) adjusted**	0.33**	0.30**	+ 10.0%
average number of shares (in 1.000) (dilluted)	14,616	11,430	+ 27.9%
Employees as as at March 31	2,750	2,034	35.2%
in € million	Mar. 01, 2014	Dec. 31, 2013	Changes
Balance sheet	378.4	321.5	17.7%
Equity	182.3	162.9	11.9%
Equity ratio in %	48.2%	50.7%	-2.5%

* q1/2014 adjusted for one-off effects of € 500k, which were external costs related to acquisitions, not to be capitalized pursuant to IFRS.

** adjusted for one-off effects mentioned above and amortization on intangible assets for purchase price allocation (PPA)

Note:

This overview of key figures is not part of the interim report. Adjusted EBITDA, adjusted EBITA and adjusted earnings per share are not defined in IFRS. CANCOM considers adjusted key figures to be more suitable indicators of operating performance. It is intended to give readers a clearer picture of the results of operations and ensures greater comparability of data over time.

Table of contents

2	Key figures
3	Table of contents
4 - 5	Preface
6 - 11	Consolidated Interim Management Report Q1 1) Fundamental information about the Group 06 2) Economic report 06-07 3) Earnings, financial and assets position of the CANCOM Group 08-09 4) Stocks held by members of the Executive and Supervisory Boards as at March 31, 2014 09 5) Events of particular significance after the end of the reporting period 10 6) Risks of future development 10 7) Opportunities for future develpoment 10 8) Forecast 10-11
12 - 13	Balance Sheet
14	Consolidated statement of income
15	Consolidated statement of comprehensive income
16	Statement of cash flows

• 17 Consolidated statement of changes in equity
• 18 19 Segment information
• 20 27 Notes to the consolidated accounts

Dear Stockholders,

Following a strong fiscal year for the CANCOM Group in 2013, there was a considerable acceleration in the growth rate of our sales revenues and EBITDA again in the first quarter of 2014. Consolidated sales revenues were up by 37,2 percent, while EBITDA rose by 51,4 percent, again significantly increasing the Group's long-term profitability.

Our most recent acquisitions have consolidated our market position further. Pironet NDH, which has been included in the financial statements since January 1, 2014, strengthens the CANCOM Group's position in the high-potential cloud computing market. CANCOM's combined Business Cloud Portfolio gives us our own cloud architecture and cloud data centers in Germany, enabling us to offer our clients high-availability integrated cloud services tailored to their individual needs.

Our acquisition of HPM Networks in Silicon Valley is the first step in our entry into the U.S. market, and also opens up growth opportunities for the cloud computing business within the Group. The largest HP Enterprise Group Partner on the west coast of the United States, HPM Networks, operates as a value-added reseller in the cloud infrastructure environment and was one of the first certified HP Cloud Center of Excellence Partners. With its access to the market as well as to partners and clients, HPM Network offers a good platform for positioning the CANCOM Business Cloud Portfolio in the United States with a view to selling both to clients of HPM Networks and to potential new clients.

For the purpose of financing our growth, which we plan to continue both organically and by acquisitions, we successfully placed a convertible bond for € 45 million with institutional investors in March. There is a high level of interest in CANCOM on the capital market, and this confirms that we are on the right track with our continuous development of the business model, our focus on cloud computing and managed services and our growth strategy. We have recently set up an ADR program in the United States to provide an uncomplicated, cost-efficient facility especially for U.S. investors to invest in our company. This will further broaden the investor base of the enterprise and make it more international.

We are grateful to you, our stockholders, for your confidence in CANCOM. We intend to continue our proactive approach to managing our high-growth and robust enterprise, taking advantage of the opportunities that arise.

Sincerely yours

Klaus Weinmann

"Our growth continues unabated."

Consolidated interim management report

1. Fundamental information about the Group

The CANCOM Group is one of the leading providers of IT infrastructure and IT services in Germany and in Austria. Its integrated range of products and services covers the entire IT added value chain, from analysis and advice to implementation and services.

Legal structure of the CANCOM Group

CANCOM SE, based in Munich, Germany, performs the central financial and management role for the equity investments held by the CANCOM Group.

Areas of business

The IT solutions business segment of the CANCOM Group offers comprehensive support for IT infrastructure and IT applications. The range of services offered includes IT strategy consulting, project planning and implementation, system integration, IT procurement via e-procurement services or as part of a project, as well as professional IT services and support.

The cloud solutions segment includes the CANCOM Group's cloud and managed services business, which ranges from analysis and advice to implementation and services. Clients are thus offered the necessary orientation and support for their transformation from traditional corporate IT systems to cloud computing. As part of its range of services, the CANCOM Group is able to run entire IT departments for its clients, with scalable cloud and managed services.

Focus of activities and sales markets

The CANCOM Group is one of the three largest independent integrated IT systems providers in Germany. It offers IT architecture, systems integration and managed services. As a provider of integrated solutions, CANCOM mainly focuses on IT services, in addition to distributing hardware and software in its transaction-based and product-related business. Its comprehensive range of IT services includes design of IT architectures and IT landscapes, IT strategy advice and consulting, design and integration of IT systems, and system operation.

The CANCOM Group's client base therefore primarily includes commercial end-users. These range from small and medium-sized companies to large companies, corporate Groups and public-sector clients.

Explanation of the control system used within the Group

To control and monitor the performance of the individual subsidiaries, CANCOM analyses their monthly figures for, among other things, sales revenues, gross profit, operating expenditure and operating profit, and compares these key figures with the original plan as well as the quarterly forecast. For the purpose of management control, the company also regularly uses external indicators such as inflation rates, interest rates, the general economic trend and the performance of the IT sector, including forecasts. Cash management procedures include daily status assessments.

Research and development activities

Innovation is very important for economic momentum and growth. However, as it is purely a service and trading enterprise, CANCOM does not conduct any research. Its development work focuses, for example, on software solutions and applications in IT growth segments such as cloud computing, virtualization, mobile solutions, IT security and managed services. Development activities are very limited in scope and are mainly used for the Group's own purposes.

2. Economic report

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

According to economic research institutes, the German economy started the first quarter of 2014 on a high note. The economy gained momentum from the industrial sector, the construction sector, private consumption and the labor market.

The mood in the IT sector also continues to be good. According to the latest IT sector barometer from BITKOM (the German Association for Information Technology, Telecommunications and the New Media), the majority of IT companies expect sales revenues to rise in the first half of the year.

Impact on the CANCOM Group's business performance

The first three months of 2014 saw a continuation of CANCOM SE's consistent growth, along with an increase in the consolidated profit. Sales revenues and profits both exceeded the relevant values for the same period of 2013. The increase in the Group's sales revenues and profits is driven by the cloud and managed services business as well as related solutions, such as IT mobility and security, which contributed to the positive performance of the integrated systems business.

Significant events and investments during the first quarter

CANCOM SE's total interest in the capital stock and voting rights of Pironet NDH Aktiengesellschaft, Cologne, Germany, reached 74.85 percent after the end of the additional acceptance period in the takeover offer to the stockholders on January 7, 2014. As it now holds the majority of the capital stock, CANCOM SE has included Pironet NDH Aktiengesellschaft in its consolidated financial accounts with effect from January 1, 2014.

CANCOM has acquired all the stocks of HPM Networks. The transaction is documented in a contract of sale dated February 27, 2014. Based in Pleasanton, California/USA, HPM operates as a value-added reseller (VAR) in the cloud infrastructure environment and has long-standing relationships with partners such as HP, VMware Cisco, Microsoft, EMC and Palo Alto Networks, as well as big-name clients such as Twitter, Workday, GAP, Williams-Sonoma and Juniper Networks. In 2013, HPM Networks generated sales revenues of \$ 55 million (approx. € 40 million). Part of this consisted of agency fees paid for direct supplies to clients as part of HP's agent program.

The external revenues in 2013 including the \$ 82 million under the agent program with HP totaled \$ 133 million (approx. € 98 million) in 2013. The EBITDA after adjustment for non-recurring items was \$ 4.5 million (approx. € 3.3 million). The company is included in the consolidated accounts with effect from 1 March 2014.

On March 18, 2014, CANCOM SE signed a memorandum of understanding with Allgeier SE regarding the purchase of the entirety of the shares in DIDAS Business Services GmbH, a wholly-owned subsidiary of Allgeier IT Solutions AG. Based in Langenfeld in North-Rhine-Westphalia/Germany, the company offers IT services and solutions in the professional, managed and cloud services segments and is represented in eight locations throughout Germany. Its clients include both medium-sized companies and multinational corporations. The company employs 260 people and in 2013 it generated sales revenues of around € 56 million and EBITDA of approximately € 1.8 million. Most of the purchase price is to be paid in CANCOM shares issued from the authorized capital of CANCOM SE by means of a capital increase against non-cash contributions. The memorandum of understanding also provides for a compensation payment if the price of the CANCOM share falls below a defined threshold between the closing date and the date on which the shares are admitted to stock exchange trading.

On March 20, 2014, CANCOM SE issued a convertible bond for a total nominal amount of € 45 million. The bond matures on March 27, 2019. The denomination per unit is € 100,000, and the holder is entitled to convert the bond into up to 1,055,510 new no-par-value bearer stocks in CANCOM SE. The initial conversion price is € 42.63 per stock. The conversion ratio is therefore 2,346 stocks per individual unit of € 100,000. The conversion right for the convertible bond can be exercised throughout its term to maturity. The bond has a coupon of 0.875 percent per annum. Interest payments will be made annually on March 27, starting on March 27, 2015.

CANCOM SE has repurchased the rented business premises that it occupies in Jettingen-Scheppach, Germany, for € 8.7 million plus incidental costs. The transaction is recorded, in a notarized agreement dated March 27, 2014 and is effective retroactively from March 1, 2014. The building and its attached logistics center were sold in a sale-and-lease-back transaction for € 9.5 million in the financial year of 2007. The purchase will result in an annual increase in earnings before interest and tax (EBIT) totaling around € 530 thousand, taking into account the saving of € 800 thousand on rental costs up to 2021 (the end of the term of the tenancy agreement) and the costs and expenses (depreciation) connected with the purchase.

Employees

As at March 31, 2014 the CANCOM Group employed 2,750 people.

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

	Jan. 01 - Mar. 31, 2014 €'000	Jan. 01 - Mar. 31, 2013 €'000
Wages and salaries	35,468	26,011
Social security contributions	5,825	4,481
Pension provisions	60	60
Total	41,353	30,552

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

a) Earnings position

The CANCOM Group's sales revenues and profits were up in the first three months of 2014 in comparison with the same period of 2013.

Consolidated sales revenues were up 37.2 percent, from € 135.1 million to € 185.4 million. The organic growth was 13.1 percent.

Consolidated earnings before interest, tax, depreciation and amortization (EBITDA) for the first three months of the fiscal year 2014 were up 44.3 percent year on year, from € 7.0 million in 2013 to € 10.1 million in 2014. As a result, the EBITDA margin rose to 5.4 percent, compared with 5.2 percent in 2013.

Consolidated earnings before interest, tax and amortization (EBI-TA) amounted to € 7.2 million, an increase of 41.2 percent on the figure of € 5.1 million for the same period of 2013.

In Germany, sales revenues were up 34.1 percent, from € 128.9 million to € 172.9 million.

In international business, the Group's sales revenues were up 103.2 percent, from € 6.2 million to € 12.6 million.

In the IT solutions segment, sales revenues were up by 32.5 percent, from € 124.3 million in 2013 to € 164.7 million in 2014. In the cloud solutions segment, sales revenues were up by 91.7 percent, from € 10.8 million to € 20.7 million.

The CANCOM Group's consolidated gross profit was up 39.5 percent year on year, from € 43.8 million in 2013 to € 61.1 million in 2014. This was as a result of the successful expansion of the high-margin services business. The gross profit margin was up from 32.4 percent to 33.0 percent.

CANCOM Group EBITA Year-on-year comparison of figures for the first three months (in € million) 2013 5.1 2014 7.2

Consolidated earnings before interest and taxes (EBIT) amounted to € 4.8 million on previous year's level due to increased amortization on intangible assets because of acquisitions.

At € 3.1 million, the net income for the period was slightly down from € 3.2 million in 2013. Earnings per share for the first three months of 2014 were € 0.21, compared with € 0.28 in 2013.

The order position

In the IT solutions business 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, and for this reason they are not published.

In the cloud solutions business segment, orders are often placed over long periods. For this reason, the reporting figures do not give a good indication of the order situation of this segment either.

Explanations of individual items on the statement of income

Further 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 in such a way that day-to-day business activities can be continued. In addition, the Group aims to achieve optimum profitability as well as a high credit status to ensure favorable refinancing rates.

Notes on the capital structure

On the assets side of the consolidated balance sheet, there was an increase in current assets from € 212.1 million to € 225.2 million between December 31, 2013 and March 31, 2014. Cash and cash equivalents were also up, from € 77.7 million to € 79.7 million. Trade accounts receivable were up from € 113.0 million to € 120.6 million owing to the expansion of business activities. Inventories were down from € 15.5 million to € 14.1 million.

Non-current assets rose from € 109.3 million as at December 31, 2013 to € 153.2 million as at March 31, 2014. This was mainly owing to acquisitions.

On the liabilities side of the balance sheet, there was a significant reduction in current liabilities from € 134.7 million to € 117.8 million. This is mainly the result of a reduction in trade accounts payable from € 99.0 million to € 79.9 million.

Non-current liabilities – consisting of liabilities with a residual term of at least one year – were up from € 23.9 million as at December 31, 2013 to € 78.3 million as at March 31, 2014. This was mainly as a result of the issuing of a convertible bond.

The total assets grew from € 321.5 million as at December 31, 2013 to € 378.4 million as at March 31, 2014.

There was an increase in nominal equity capital owing to the retention of profits as well as the inclusion of new subsidiaries in the consolidated financial statements from € 162.9 million to € 182.3 million. Overall, this resulted in an equity ratio of 48.2 percent at March 31, 2014 compared with 50.7 percent as at December 31, 2013.

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 € 19.6 million as at March 31, 2014 compared with € 25.6 million in the same period of 2013.

There was a negative cash flow from investing activities of € 22.5 million, compared with € 2.5 million in 2013. This was owing to the company acquisitions and the purchase of the business premises in Jettingen-Scheppach.

There was a cash flow from financing activities of € 44,1 million due to the convertible bond issued in March, compared with a negative cash flow of € 0.3 million in 2013.

Overall, this resulted in cash and cash equivalents of € 79.7 million, compared with € 16.3 million in 2013.

4. Stocks held by members of the Executive and Supervisory Boards as at March 31, 2014

Total number of stocks	14,615,791	100%
Executive Board
Klaus Weinmann	185,270	1.3 %
Supervisory Board
Stefan Kober	270,000	1.8 %

5. Events of particular significance after the end of the reporting period

CANCOM SE has established a sponsored Level 1 American depositary receipt (ADR) program in the United States. ADRs are securities denominated in U.S. dollars representing stocks in a non-U.S. company traded in the U.S.A. They enable U.S. investors to buy CANCOM SE common bearer stocks listed on the FWB Frankfurt Stock Exchange indirectly on the U.S. market. The custodian for CANCOM SE's ADR program is Deutsche Bank Trust Company Americas ('Deutsche Bank'). CANCOM SE's Level 1 ADRs are traded over the counter in the United States. Four ADRs represent one CANCOM stock (ratio 4 ADRs: 1 stock).

On April 10, 2014 CANCOM SE signed a notarized contract of sale for the acquisition of all the stocks of DIDAS Business Services GmbH from Allgeier IT Solutions AG. CANCOM's intention to purchase DIDAS had previously been announced on March 18, 2014 after it signed a memorandum of understanding with Allgeier.

On March 29, 2014 CANCOM and HP Enterprise Services signed a general agreement on the use of CANCOM AHP Private Cloud in HP's cloud services portfolio. HP Enterprise Services will offer its virtual client service to medium-sized clients (approximately 500-7,000 users) on the basis of the CANCOM AHP Private Cloud architecture. HP will operate the solution in its data centers, adding further services where necessary, and market it jointly with CANCOM. The aim is to provide medium-sized clients with a turnkey solution as a service for virtual clients in line with HP's 'new style of IT'.

6. Risks of future development

There have been no major changes in the risks of future development at CANCOM since the start of the current fiscal year. Details of the risks can be found in the annual report for 2013, starting on page 31. The annual report can be downloaded from www. cancom.com/corporate/company/investor-relations or obtained free of charge from the company.

7. Opportunities for future development

There have been no major changes in the opportunities for future development at CANCOM since the start of the current fiscal year. Details of the opportunities can be found in the annual report for 2013, starting on page 31. The annual report can be downloaded from www.cancom.com/corporate/company/investor-relations or obtained free of charge from the company.

8. Forecast

According to the leading research institutes, the German economy should grow in 2014; forecasts for GDP growth for 2014 range from 1.2 to 2.0 percent.

Forecast: Deutsche Bank Economic Research, May 2, 2014

According to the latest market figures from the German Association for Information Technology, Telecommunications and New Media (BITKOM), the turnover in IT products and services should grow by 2.9 percent to € 76.3 billion in 2014 – considerably more strongly than the rest of the economy.

Trading in software is likely to grow by 5.3 percent to € 19.1 billion in the current fiscal year. Turnover in IT services is expected to rise by 3.2 percent to € 36.5 billion. Experts anticipate a weaker performance from the IT hardware market, which they expect to grow by only 0.2 percent to € 20.8 billion this year.

Forecast: BITKOM, March 2014

Anticipated performance of the CANCOM Group

CANCOM aims to continue growing at a faster rate than the IT market, on the basis of its proven expertise and outstanding market position in the IT growth areas described. Further acquisitions are also planned to contribute to the steady expansion of the Group's market share.

To achieve this aim, CANCOM geared its business policy to the IT growth areas from an early stage, and designed its sales and services structure around them. The expansion of the e-commerce business and the optimized e-supply chain, which enables process and transaction costs to be reduced both for clients and for the CANCOM Group, is intended to make the Group's trading business more profitable.

CANCOM has significantly expanded its market presence and improved its client proximity in the German-speaking countries. The Group is represented all over Germany and Austria by its many service and consulting locations. As a Group, for instance through its U.S. subsidiary HPM Networks, CANCOM is able to design, configure and roll out IT infrastructure for international companies. CANCOM's collaboration with HP Enterprise Services enables it to offer clients remote managed services, in which it manages clients' ongoing IT operation in the private cloud from HP's worldwide hosting data centers, using the CANCOM AHP Private Cloud platform. The distribution partnership could accelerate the growth of the Group's business in the cloud environment.

CANCOM plans to continue consolidating its market position in the IT environment, in the German-speaking countries as well as in other countries, through selective acquisitions. The market continues to offer favorable conditions for this policy.

Owing to the Group's good positioning in the growth market of cloud computing, the Executive Board expects further growth in the company and an improvement in profits in the medium term if the demand for IT products and services remains steady or even rises.

For the Group as a whole, the Executive Board currently expects a significant increase in the gross profit and EBITDA in the fiscal year 2014.

Munich, Germany, May 2014

CANCOM SE

The Executive Board

This document contains forward-looking statements and information based on the current expectations, assumptions and estimates of the Executive Board of CANCOM SE, and other information currently available to the management. The words 'expect', 'assume', 'believe', 'estimate', 'presume', 'intend', 'could', 'plan', 'project', 'should', or similar, are used to indicate forward-looking statements. All statements with the exception of facts regarding the past are forecasts. These forward-looking statements include inter alia: forecasts on the availability of products and services, the financial and earnings position, the business strategy and the Executive Board's plans for future operating activities, current and future economic performance and all statements regarding expectations and assumptions. Although we feel that these statements and comments are based on realistic expectations, we cannot guarantee their correctness, especially in our forecast. Various known and unknown risks, uncertainties and other factors may lead to the actual events deviating significantly from those contained in the forward-looking statements.

The following influencing factors are, among others, relevant in this respect: changes in the general economic and business situation; changes in the competitive position and situation, for instance by the emergence of new competitors, new products and services or new technologies; changes in the investment behavior of target client Groups etc. and changes to the business strategy. CANCOM cannot guarantee the pertinence, accuracy, completeness or correctness of the information or opinions in this document. 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

(in € 000)	Notes	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Current assets
Cash and cash equivalents		79,727	77,733	16,254
Trade accounts receivable		120,586	112,949	84,003
Other current financial assets	B.1.	4,969	3,508	4,123
Inventories		14,098	15,481	8,487
Orders in process		1,148	791	2,474
Prepaid expenses and other current assets	B.2.	4,683	1,687	2,738
TOTAL current assets		225,211	212,149	118,079
Non-current assets
Property, plant and equipment		33,983	20,493	18,561
Intangible assets		44,661	22,611	16,231
Goodwill		64,595	32,703	24,336
Long-term financial assets		62	62	71
Long-term equity investments		363	28,940	0
Loans		60	60	56
Other financial assets		3,074	2,502	1,601
Deferred tax resulting from temporary differences	B.3.	2,624	1,571	1,136
Deferred tax resulting from tax loss carryforwards	B.3.	4,940	196	298
Other assets		258	169	137
TOTAL non-current assets		154,620	109,307	62,427
Total assets		379,831	321,456	180,506

EQUITY AND LIABILITIES

(in € 000)	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013
Current liabilities
Short-term loans and current portion of long-term loans		1,662	770	1,393
Trade accounts payable		79,857	98,987	50,933
Prepayments received		3,735	6,560	2,553
Other current financial liabilities	B.4.	2,734	1,947	1,697
Provisions	B.5.	4,671	2,491	1,376
Deferred income		3,123	1,397	1,285
Income tax liabilities		2,907	1,889	2,282
Other current liabilities	B.6.	19,511	20,624	13,816
Total current liabilities		118,200	134,665	75,335
Non-current liabilities
Long-term loans		4,197	4,813	4,937
Convertible bond	B.7.	38,218	0	0
Profit participation capital and subordinated loans		6,018	5,926	5,671
Deferred income		3,067	3,249	3,987
Deferred taxes from temporary differences	B.8.	13,705	5,210	2,801
Pension provisions		169	110	123
Other non-current financial liabilities	B.9.	3,486	1,744	1,611
Other non-current liabilities	B.5.	10,506	2,866	2,076
TOTAL non-current liabilities		79,366	23,918	21,206
Equity capital
Capital stock		14,616	14,616	11,430
Capital reserves		100,530	94,578	26,086
Net retained profits (including revenue reserves)		56,729	53,616	46,254
Equity difference resulting from currency translation and price changes		-28	-32	-9
Minority interests		10,418	95	204
Total equity capital		182,265	162,873	83,965
Total liabilities		379,831	321,456	180,506

CONSOLIDATED STATEMENT OF INCOME

(in € 000)	Notes	Jan. 1 - Mar. 31, 2014	Jan. 1 - Mar. 31, 2013
Sales revenues		185,436	135,091
Other operating income	D.1.	306	165
Other own work capitalized		339	128
Gross revenue for the period		186,081	135,384
Cost of materials and purchased services		-125,279	-91,589
Gross profit		60,802	43,795
Personnel expenses	D.2.	-41,353	-30,552
Depreciation on property, plant and equipment and amortization of intangible assets		-5,344	-2,154
Other operating expenses	D.3.	-9,326	-6,267
Operating result		4,779	4,822
Interest and similar income		99	71
Interest and similar expenses		-362	-294
Share in profit or loss of joint ventures accounted for by the equity method		89	0
Currency translation gains/ losses		-61	6
Earnings before taxes		4,544	4,605
Income tax	D.4.	-1,466	-1,415
Earnings after taxes from continuing operations		3,078	3,190
Earnings from discontinued operations		0	0
Net income/ loss for the period		3,078	3,190
thereof attributable to the stockholders of the parent company		3,113	3,167
thereof attributable to minority interests	D.5.	-35	23
Average number of stocks outstanding (basic)		14,615,791	11,429,826
Average number of stocks outstanding (diluted)		14,615,791	11,429,826
Earnings per stock from continuing operations (basic) in EUR		0.21	0.28
Earnings per stock from continuing operations (diluted) in EUR		0.21	0.28
Earnings per stock from discontinued operations (basic) in EUR		0.00	0.00
Earnings per stock from discontinued operations (diluted) in EUR		0.00	0.00

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in € 000)	Jan. 1, - Mar. 31, 2014	Jan. 1, - Mar. 31, 2013
Net income/ loss for the period	3,078	3,190
Other comprehensive income
Currency translation differences	6	1
Income tax	-2	0
Other comprehensive income for the period (after taxes)	4	1
Comprehensive income for the period	3,082	3,191
thereof attributable to the stockholders of the parent company	3,117	3,168
thereof attributable to minority interests	-35	23

STATEMENT OF CASH FLOWS (IN ACCORDANCE WITH IAS 7)

(in € 000)	Jan. 1 - Mar. 31, 2014	Jan. 1 - Mar. 31, 2013
Cash flow from ordinary activities
Profit for the period before taxes and minority interests	4,544	4,605
Adjustments
+/- Depreciation on property, plant and equipment and amortization of intangible assets	5,344	2,154
+/- Changes in non-current provisions	-170	36
+/- Changes in current provisions	-309	-350
+/- Income/ loss on the sale of intangible assets, property, plant and equipment and long-term financial assets	6	22
+ Interest expenses	263	223
+/- Changes in inventories	2,319	257
+/- Changes in trade accounts receivable and other accounts receivable	-1,832	169
+/- Changes in trade accounts payable and other accounts payable	-29,153	-29,875
+/- Interest paid and refunded	-92	-28
+/- Income taxes paid and refunded	-420	-2,832
+/- Non-cash expenses/ income	-89	0
Net cash from operating activities	-19,589	-25,619
Cash flow from investing activities
+/- Acquisition of subsidiaries and equity instruments of other companies	-30,504	0
+/- Cash acquired on the purchase of stocks	18,884	0
- Acquisition of long-term financial assets	0	0
- Payments for additions to intangible assets and property, plant and equipment	-11,115	-2,542
+ Income from disposal of intangible assets, property, plant and equipment, and long-term financial assets	141	15
+ Interest received	99	71
Net cash used in investing activities Cash flow from financing activities	-22,495	-2,456
+/- Capital stock increase expenses	12	0
+ Cash inflow from convertible bond	45,000	0
- Repayment of long-term borrowings (including current portion)	-218	-590
+/- Changes in short-term borrowings	5	457
- Interest paid	-1,023	-156
- Dividends paid	0	0
+/- Cash inflow/ outflow from finance lease	298	-21
Net cash used in financing activities	44,074	-310
Net increase/ decrease in cash and cash equivalents	1,990	-28,385
+/- Exchange rate-related changes in cash	4	1
+/- Cash and cash equivalents at beginning of period	77,733	44,638
Cash and cash equivalents at end of period	79,727	16,254
Breakdown:
Cash and cash equivalents	79,727	16,254

79,727 16,254

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS)

	Stock	Capital stock	Capital reserves	Retained earnings	Reserves for currency translation	Reserves for securities price changes	Revaluation reserve	Net retained profits	Total investors parent company	Minority interests	Total equity capital
December 31, 2012	units'000 11,430	in €'000 11,430	in €'000 26,086	in €'000 25,206	in €'000 -11	in €'000 1	in €'000 -153	in €'000 18,034	in €'000 80,593	in €'000 181	in €'000 80,774
Capital stock increase	3,186	3,186	69,529						72,715		72,715
Change in reserves: Capital stock increase costs			-1,037						-1,037		-1,037
Transfer net retained profits / revenue reserves				3,391				-3,391	0		0
Distribution in fiscal year								-4,000	-4.000	-40	-4,040
Comprehensive income for the period					-21	-1		14,529	14,507	-46	14,461
December 31, 2013	14,616	14,616	94,578	28,597	-32	0	-153	25,172	162,778	95	162,873
Change in reserves: Capital stock increase costs			8						8		8
Convertible bonds			5,944						5,944		5,944
Comprehensive income for the period					4			3,113	3,117	-35	3,082
Acquisition of minority interests										10,358	10,358
March 31, 2014	14,616	14,616	100,530	28,597	-28	0	-153	28,285	171,847	10,418	182,265

Segment information – IFRS

Segment information	Cloud solutions		IT solutions
	Mar. 31, 2014 €'000	Mar. 31, 2013 €'000	Mar. 31, 2014 €'000	Mar. 31, 2013 €'000
Sales revenues
- External sales	20,748	10,769	164,688	124,322
- Intersegment sales	419	19	84	319
- Total sales revenues	21,167	10,788	164,772	124,641
- Cost of materials and purchased services	-10,310	-5,558	-115,418	-86,349
- Personnel expenses	-5,138	-2,049	-34,229	-27,345
- Other income and expenses	-1,372	-1,000	-6,497	-4,539
EBITDA	4,347	2,181	8,628	6,408
- Depreciation and amortization	-1,460	-236	-3,832	-1,867
Operating income (EBIT)	2,887	1,945	4,796	4,541
- Interest income	13	8	67	49
- Interest expenses	-6	-44	-374	-270
- Share in profit or loss of joint ventures accounted for by the equity method	89	0	0	0
Result from ordinary activities	2,983	1,909	4,489	4,320
- Currency translation gains/ losses
Earnings before taxes	2,983	1,909	4,489	4,320
- Income tax
- Discontinued operations	0	0	0	0
Consolidated net income
thereof attributable to the stockholders of the parent company
thereof attributable to minority interests
Other information
- Assets1	57,904	13,944	245,554	154,094
- investments1	34,691	79	70,840	2,439

1) Assets and investments including goodwill from capital consolidation

2) Tax assets

Totals			Other companies			Reconciliation		Consolidated
Mar. 31, 2014 €'000	Mar. 31, 2013 €'000	Mar. 31, 2014 €'000	Mar. 31, 2013 €'000	Mar. 31, 2014 €'000	Mar. 31, 2013 €'000	Mar. 31, 2014 €'000	Mar. 31, 2013 €'000
185,436	135,091	0	0
503	338	0	0	-503	-338
185,939	135,429	0	0	-503	-338	185,436	135,091
-125,728	-91,907	0	0	449	318	-125,279	-91,589
-39,367	-29,394	-1,986	-1,158	0	0	-41,353	-30,552
-7,869	-5,539	-866	-455	54	20	-8,681	-5,974
12,975	8,589	-2,852	-1,613	0	0	10,123	6,976
-5,292	-2,103	-52	-51	0	0	-5,344	-2,154
7,683	6,486	-2,904	-1,664	0	0	4,779	4,822
80	57	170	166	-151	-152	99	71
-380	-314	-133	-132	151	152	-362	-294
89	0	0	0	0	0	89	0
7,472	6,229	-2,867	-1,630	0	0	4,605	4,599
0	0		0	-61	-8	-61	6
7,472	6,229	-2,867	-1,630	-61	-8	4,544	4,605
				-1,466	-1,415	-1,466	-1,415
0	0	0	0	0	0	0
						3,078	3,190
						3,113	3,167
						-35	23
					Reconciliation 2
303,458	168,038	66,744	10,651	9,629	1,817	379,831	180,506 2,542
105,531	2,518	5,100	24			110,631

A. The principles adopted for the consolidated financial statements

1. General information

The consolidated financial statements of CANCOM SE and its subsidiaries ('the CANCOM Group' or 'the Group') for the fiscal year 2014 were drawn up according to the International Financial Reporting Standards or the International Accounting Standards (IFRS/IAS).

The consolidated financial statements were drawn up in euro. All amounts are shown in thousand euro (€ thousand) unless otherwise stated. Rounding of figures may result in apparent inconsistencies between totals and sums of constituent parts. For the same reason, percentage may not exactly match the aggregate values shown or 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 IFRS-compliant consolidated financial statements for the financial year 2013, which can be downloaded from www.cancom.de.

2. Reporting entity

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

CANCOM's acquisition of a further 4,666,492 stocks in Pironet NDH Aktiengesellschaft, Cologne, Germany, on January 7, 2014 increased its share of the voting rights by 32.0 percent, from 42.9 percent to 74.9 percent. This constitutes a controlling interest in the company. The purchase price was € 4.80 per stock, or € 22,399 thousand in total.

The company is included in the consolidated financial statements from January 1, 2014, as the period between January 1 and January 7, 2014 had only two working days, and these are considered unimportant as a proportion of the year as a whole.

A 42.9 percent revaluation of the equity capital, which was valued at equity as at December 31, 2013, is not necessary owing to the recentness of the acquisition of the at-equity investment, which was acquired at the same stock price of € 4.80. This is because the fair value of the interest in the equity of Pironet NDH Aktiengesellschaft is unchanged.

The company performs the role of a managerial holding company, i.e. acquiring, holding, managing and selling equity interests in companies focusing on consulting, development, operational and supplementary IT services in Germany and other countries. Included in this role is the provision of administrative services for these companies, in addition to the management of the companies by taking over strategic control and coordination, including defining business segments and corporate policy, exercising a uniform management policy, coordination of activities, monitoring of results and co-decision on such measures taken by the companies in which Pironet NDH Aktiengesellschaft has a direct or indirect interest.

Change in the reporting entity in 2014:

Name and registered office of the company	Date from which included in the consolidated financial statements	Equity investment (in percent)	Voting rights (in percent)
Pironet NDH Aktien gesellschaft, Cologne, Germany	January 1, 2014	74.9	74.9

The table below shows the impact on the consolidated financial statements of the change in the reporting entity as at January 1, 2014, the date from which Pironet NDH Aktiengesellschaft was included in the consolidated financial statements:

	Fair value	Carrying
	€'000	amount €'000
Cash and cash equivalents	17,538	17,538
Trade accounts receivable	8,521	8,521
Other current financial assets	342	342
Inventories	299	299
Prepaid expenses and other current assets	631	631
Current assets	27,331	27,331
Property, plant and equipment	4,169	4,169
Intangible assets	16,381	4,976
Long-term equity investments	274	274
Deferred taxes from temporary differences	817	817
Deferred tax resulting from tax loss carryfor wards	4,753	4,753
Other assets	187	187
Non-current assets	26,581	15,176
Total assets	53,912	42,507
Trade accounts payable	2,678	2,678
Prepayments received	399	399
Other current financial liabilities	260	260
Provisions	240	240
Deferred income	310	310
Income tax liabilities	635	635
Other current liabilities	2,321	2,321
Current liabilities	6,843	6,843
Deferred taxes	5,161	1,460
Pension provisions	59	59
Non-current liabilities	5,220	1,519
Total liabilities	12,063	8,362
Net assets acquired	41,849	34,145

The acquisition of the company resulted in goodwill of € 21,516 thousand, which is not tax-deductible. The main reason for the acquisition itself, and for recognizing goodwill, was to expand the Group's business, especially in the cloud computing environment.

The non-controlling interests in Pironet NDH Aktiengesellschaft were recognized at the pro-rata fair value of the assets and liabilities, which amounts to € 10,358 thousand.

CANCOM SE has bought all the stocks (10,000) of HPM Incorporated, based in Pleasanton, California/USA, through its subsidiary CANCOM, Inc. The purchase is documented in a contract of sale dated February 27, 2014. The purchase price consists of a fixed component of € 6,486 thousand (\$ 8,878 thousand), which comprises € 417 thousand (\$ 572 thousand) in consulting costs, € 6,069 thousand (\$ 8,306 thousand) in purchase price payment, and a variable purchase price component (an earn-out component) of € 10,056 thousand. The variable component of the purchase price consists of four payments, each of 50 percent of the EBITDA generated in the fiscal years 2014, 2015, 2016 and 2017.

HPM Incorporated trades under the name of HPM Networks. The company operates as a value-added reseller (VAR) in the cloud infrastructure environment.

The company was included in the consolidated financial statements with effect from March 1, 2014.

Change in the reporting entity in 2014:

Name and registered office of the company	Date from which included in the consolidated financial statements	Equity investment (in percent)	Voting rights (in percent)
CANCOM, Inc. and subsidiary · HPM Incorporated	March 1, 2014	100	100

The table below shows the preliminary impact on the consolidated financial statements of the change in the reporting entity as at March 1, 2014, the date from which HPM Incorporated was included in the consolidated financial statements:

Fair value	Carrying amount
	€'000
	1,346
	2,822
	3
	637
91	91
4,899	4,899
901	901
8,465	0
23	23
9,389	924
14,288	5,823
462	462
996	996
597	597
190	190
364	364
2,609	2,609
3,626	0
1,935	1,935
5,561	1,935
8,170	4,544
6,118	1,279
	€'000 1,346 2,822 3 637

The acquisition of the company resulted in goodwill of € 10,376 thousand, which is not tax-deductible. The main reason for the acquisition itself, and for recognizing goodwill, was to position CANCOM's business cloud portfolio in the U.S. market with a view to selling to clients of HPM Incorporated and potential new clients. CANCOM SE has acquired all the stocks of DIDAS Business Services GmbH, based in Langenfeld, Germany, for the nominal sum of € 1,000 thousand. The acquisition is documented in a purchase and contribution agreement dated April 10, 2014. The purchase price was € 10,000 thousand and will be paid by the granting of new no-par-value stocks to be issued to the sellers as a contribution in kind from the authorized capital of CANCOM SE. The stocks are admitted to the FWB Frankfurt Stock Exchange and are eligible for trading. If, within a defined period of time, there is a movement in the stock price to the detriment of the seller, up to a maximum of € 1,000 thousand will be payable in cash on the computed loss on € 10,000 thousand as a variable purchase price.

DIDAS is an integrated IT systems provider with eight locations in Germany. The company employs 240 people and according to preliminary figures it generated EBITDA of € 1.8 million and sales revenues of around € 56 million in 2013.

The date with effect from which the company will be included in the consolidated financial statements will be established when the date of share issuance has been determined.

Change in the reporting entity in 2014:

Name and registered office of the company	Date from which included in the consolidated financial statements	Equity investment (in percent)	Voting rights (in percent)
DIDAS Business Services GmbH, Langenfeld, Germany	to be defined	100	100

The goodwill resulting from the acquisition, which cannot yet be determined, is not tax-deductible. The main reason for the acquisition itself, and for recognizing goodwill, was to gain access to the company's clients, and to promote the CANCOM business cloud portfolio to clients of DIDAS Business Services GmbH.

The disclosures required under IFRS 3.59 (b) in conjunction with IFRS 3 B66 and IFRS 3 B64 (h to n) regarding assets acquired and liabilities assumed cannot yet be made, owing to the fact that the date of inclusion in the consolidated financial statements has not yet been established.

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 2013.

B. Notes to the consolidated balance sheet

1. Other current financial assets

This item includes bonuses due from suppliers (€ 1,698 thousand), a purchase price receivable (€ 1,302 thousand), creditors with a debit balance (€ 926 thousand), marketing revenue (€ 522 thousand), purchase price for the sale of affiliated companies (€ 300 thousand), receivables from employees (€ 214 thousand) and receivables from former stockholders (€ 7 thousand).

2. Prepaid expenses and other current assets

This item mainly consists of other current assets such as tax refunds (€ 2,076 thousand), compensation for damages (€ 131 thousand), commission income (€ 130 thousand), receivables from social insurance institutions (€ 25 thousand) and rent receivables (€ 18 thousand).

The prepaid expenses (€ 2,273 thousand) include deferred insurance premiums.

3. Deferred tax assets

The deferred tax assets are as follows:

Deferred tax from	Temporary differences €'000	Tax loss carryforwards €'000
As at January 1, 2014	1,571	196
Addition from recognistion of assets directly in equity owing to first-time inclusion in consolidated financial statements	817	4,753
Tax revenue from profit and loss calculation	236	-9
As at March 31, 2014	2,624	4,940

As at March 31, 2014, the CANCOM Group had corporate tax loss carryovers of € 17.2 million and trade tax loss carryovers of € 16.0 million. The unused corporate tax losses for which no deferred tax claim was recognized in the balance sheet amounted to € 1.9 million. The trade tax loss carryovers for which no deferred tax claim was recognized amounted to € 1.5 million. On the basis of the planned tax results, it is expected that the capitalized deferred tax advantages from loss carryovers will be realized.

The deferred taxes from temporary differences are mainly the result of differences in intangible assets (€ 880 thousand), property, plant and equipment (€ 646 thousand), provisions (€ 618 thousand), other liabilities (€ 412 thousand), goodwill (€ 44 thousand) and pension provisions (€ 24 thousand).

4. Other current financial liabilities

This item includes liabilities to stockholders (€ 745 thousand), debtors with a credit balance (€ 697 thousand), outstanding bills of charges (€ 487 thousand), Supervisory Board remuneration (€ 478 thousand), purchase price liabilities (€ 245 thousand) and rent (€ 82 thousand).

5. Other provisions

The provisions mainly include the purchase price of stocks in affiliated companies (€ 12,077 thousand), guarantees and warranties (€ 1,383 thousand), severance payments (€ 753 thousand), salaries (€ 256 thousand), contingent risks (€ 169 thousand), provisions for financial statement costs (€ 155 thousand), additional leasing costs (€ 128 thousand) and archiving costs (€ 123 thousand).

The total provisions include non-current provisions of € 10,506 thousand, which are disclosed under other non-current liabilities. These provisions are for the purchase price of the stocks in HPM Incorporated, on line Datensysteme GmbH and CANCOM Unicorner GmbH (€ 9,172 thousand), the termination payments legally mandatory in Austria (€ 542 thousand), guarantees and warranties (€ 539 thousand), anniversaries (€ 172 thousand), additional leasing costs (€ 49 thousand) and part-time work for older employees (€ 32 thousand).

6. Other current liabilities

Other current liabilities mainly include bonus payments to Executive Board members and employees (€ 7,072 thousand), vacation and overtime entitlements (€ 4,139 thousand), sales tax (€ 3,259 thousand), tax on salaries and church tax (€ 2,331 thousand), capital gains tax (€ 1,064 thousand), trade association payments (€ 698 thousand), social security contributions (€ 210 thousand), and wages and salaries (€ 194 thousand).

7. Convertible bonds

In March 2014, CANCOM SE issued a convertible bond for a total nominal amount of € 45,000 thousand. The bond matures in March 2019. The denomination per unit is € 100,000, and holders are entitled to convert the bond into up to 1,055,510 new no-parvalue bearer stocks in CANCOM SE. The initial conversion price is € 42.6334 per share. The conversion ratio is therefore 2,345.5788 stocks per individual unit of € 100,000. The conversion right for the convertible bond can be exercised throughout its term to maturity. The bond has a coupon of 0.875 percent per annum. Interest payments will be made annually on March 27, starting on March 27, 2015.

On the balance sheet, the convertible bond will be split into an equity component and a debt component. The market value of the debt component to be recognized is € 39,000 thousand, taking into account the issuing costs. This value was calculated using the binomial model. The resulting value of the equity component is € 6,000 thousand. This takes into account deferred taxes in the additional capital reserves, and will not be changed before the maturity or conversion of the bond. An interest expense of € 5 thousand was recognized for the bond in the first quarter of 2014.

8. Deferred tax liabilities

The deferred tax liabilities are as follows:

	€'000
As at January 1, 2014	5,210
Addition from recognition of tax liabilities directly in equi ty owing to first-time inclusion of tax revenue in
consolidated financial statements	8,787
revenue from profit and loss calculation	-292
As at March 31, 2014	13,705

The deferred tax liabilities arise from deviations from the tax balance sheets. They are the result of the recognition and revaluation of intangible assets (€ 10,778 thousand), software development costs (€ 1,595 thousand), other financial assets (€ 750 thousand), convertible bonds (€ 231 thousand), orders in process (€ 146 thousand), property, plant and equipment (€ 87 thousand), provisions (€ 65 thousand), trade accounts receivable (€ 40 thousand), profit participation capital and subordinated loans (€ 8 thousand), stocks in associated companies (€ 3 thousand) and other assets (€ 2 thousand).

The deferred tax liabilities are recognized at an individual tax rate of between 25 percent (for the Austrian subsidiary) and 42.84 percent (for the U.S. subsidiary).

9. Other non-current financial liabilities

Other non-current financial liabilities include liabilities to stockholders, amounting to € 1,773 thousand, rent of € 656 thousand, purchase price liabilities of € 532 thousand and debtors with a credit balance amounting to € 525 thousand.

C. Segment information

Description of segments subject to mandatory reporting

The cloud solutions business segment comprises PIRONET NDH Datacenter AG & Co. KG, PIRONET NDH EDI-Services GmbH and PIRONET NDH Enterprise Solutions GmbH, in addition to the cost centers of CANCOM GmbH allocated to the cloud solutions segment. This business segment includes the CANCOM Group's cloud and managed services business, which ranges from analysis and advice to implementation and services. Clients are thus offered the necessary orientation and support for their transformation from traditional corporate IT systems to cloud computing. As part of its range of services, the CANCOM Group is able to run entire IT departments for its clients, with scalable cloud and managed services.

The IT solutions business segment comprises CANCOM GmbH, CANCOM Computersysteme GmbH, CANCOM a + d IT solutions GmbH, CANCOM (Switzerland) AG, CANCOM NSG GmbH, CANCOM NSG GIS GmbH, CANCOM NSG SCS GmbH, CANCOM NSG ICP GmbH, on line Datensysteme GmbH, Inperia AG, CANCOM physical infrastructure GmbH, acentrix GmbH, Glanzkinder GmbH, CANCOM GES Gesellschaft für elektronische Systeme mbH, CANCOM, Inc., HPM Incorporated and Verioplan GmbH less the cost centers of CANCOM GmbH allocated to the cloud solutions segment. This business segment of the CANCOM Group offers comprehensive support for IT infrastructure and IT applications. The range of services offered includes IT strategy consulting, project planning and implementation, system integration, IT procurement via e-procurement services or as part of a project, as well as professional IT services and support.

The other companies are CANCOM SE, Pironet NDH AG, CANCOM VVM GmbH and CANCOM Financial Services GmbH. CANCOM SE performs the staff and/or management function. As such, it provides a range of services for its subsidiaries. The costs of central management of the Group and investments in internal Group projects also fall within this company.

Reconciliation

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

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

Information on geographical regions

		Sales revenues according to customer location		Sales revenues according to company location
	Jan. 1 - Mar. 31, 2014 €'000	Jan. 1 - Mar. 31, 2013 €'000	Jan. 1 - Mar. 31, 2014 €'000	Jan. 1 - Mar. 31, 2013 €'000
Germany	165,125	125,003	172,871	128,907
Outside Germany	20,311	10,088	12,565	6,184
Group	185,436	135,091	185,436	135,091

	Non-current assets
	Mar 31, 2014 €'000	Mar 31, 2013 €'000
Germany	125,205	58,968
Outside Germany	21,366	1,898
Group	146,571	60,866

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.

D. Notes to the consolidated statement of income

1. Other operating income

The other operating income is made up of the following:

	Jan. 1 - Mar. 31, 2014 €'000	Jan. 1 - Mar. 31, 2013 €'000
Rent	2	11
Income not relating to the period	182	41
Government grants	116	107
Other operating income	6	6
Total	306	165

2. Personnel expenses

The personnel expenses consist of the following:

	Jan. 1 - Mar. 31, 2014	Jan. 1 - Mar. 31, 2013
Wages and salaries	€'000 35,468	€'000 26,011
Social security contributions	5,825	4,481
Pension expenses	60	60
Total	41,353	30,552

3. Other operating expenses

The other operating expenses consist of the following items:

	Jan. 1 - Mar. 31, 2014 €'000	Jan. 1 - Mar. 31, 2013 €'000
Office space costs	2,264	1,642
Insurance and other charges	275	169
Motor vehicle costs	1,227	850
Marketing costs	617	235
Stock exchange and entertainment costs	91	66
Hospitality and traveling expenses	1,234	804
Delivery costs	603	478
Third-party services	371	439
Repairs, maintenance, leasing	347	206
Communication and office expense	552	489
Professional development and training costs	337	322
Legal and consultancy expenses	745	141
Fees and charges, costs of money transactions	267	62
Adjustments on receivables	11	13
Other operating expenses	385	351
Total	9,326	6,267

4. Income tax

The rate of income tax for the German companies was 30.49 percent (2013: 30.21 percent). This is made up of corporate tax, trade tax and solidarity surcharge.

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

	Jan. 1 - Mar. 31, 2014 €'000	Jan. 1 - Mar. 31, 2013 €'000
Earnings before tax	4.544	4.605
Expected tax expense at rate for German companies (30.49 percent; 2013: 30.21 percent)	1,385	1,391
- Difference from tax paid outside Germany	-57	19
- Tax-exempt income / non tax-relevant losses on disposals	35	0
- Actual income tax not relating to the period	-33	-38
- Permanent differences: non-deductible operating expenses as well as additions and reductions in
relation to trade tax	134	38
- Other	2	5
Total Group income tax	1,466	1,415

The actual tax rate is calculated as follows:

	€'000
Income before tax	4,544
Income tax	1,466
Actual tax expense rate	32.26%

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

Jan. 1 - Mar. 31, 2014 €'000	Jan. 1 - Mar. 31, 2013 €'000
1,953	1,750
-227	-305
-260	-30
-487	-335
1,466	1,415

5. Minority interests

Minority interests account for 49 percent of acentrix GmbH's net loss (€ 34 thousand), 51 percent of Glanzkinder GmbH's net loss (€ 17 thousand) and 25.14 percent (for the period January 1 to February 28) / 22.93 percent (for the period March 1 to March 31) of the net income of the Pironet NDG AG sub-Group (€ 16 thousand).

E. 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 SE. 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. Other related parties under IAS 24.9 b are:

• AL-KO Kober SE and its subsidiaries;
• WFO Vermögensverwaltung GmbH;
• AURIGA Corporate Finance GmbH; and
• Dr. Vielberth Verwaltungsgesellschaft mbH.

Transactions with related parties were settled in the same way as arm's length transactions, and the payment terms are net 10 to 30 days.

The transaction volume of goods sold and services provided to related parties under IAS 24 in the first quarter of 2014 was as follows: € 913 thousand (gross) in relation to goods/services purchased by AL-KO Kober SE and its subsidiaries, of which € 304 thousand was still outstanding at the balance sheet date; € 1 thousand in relation to goods/services purchased by Walter von Szczytnicki, which had been paid for in full by the balance sheet date.

No goods or services were purchased from related parties under IAS 24 in the first quarter of 2014.

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

A list of stockholdings can be found on page 9 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 SE did not receive written notice from any stockholder disclosing a majority stockholding as defined in Section 20 of the above Act in the first three months of 2014.

This is a translation of CANCOM SE's interim report. Only the German version of the report is legally binding. Every effort was made to ensure the accuracy of the translation, however, no warranty is made as to the accuracy of the translation and the company assumes no liability with respect thereto. The company cannot be held responsible for any misunderstandings or misinterpretation arising from this translation.

CANCOM SE

Investor Relations Erika-Mann-Straße 69 80636 München Germany Phone +49 89 54054–5193 Fax +49 8225 996–45193 ir@cancom.de www.cancom.de