AIXTRON profitable in 2017 / Strategic reorientation implemented / Positive development in operating business continues / Special effects by sale of ALD/CVD product line

AIXTRON profitable in 2017

Strategic reorientation implemented / Positive development in operating business continues

Special effects by sale of ALD/CVD product line

Herzogenrath/Germany, February 27, 2018 - AIXTRON SE (FSE: AIXA), a leading provider of deposition equipment to the semiconductor industry, today announced its financial results for fiscal year 2017 and the fourth quarter 2017.

Driven by the continued demand for MOCVD systems for the production of surface emitting lasers (VCSEL, Vertical-Cavity Surface-Emitting Laser) and other lasers, red-orange-yellow (ROY) and special LEDs as well as power electronics and memory chips, order intake including spare parts and service in 2017 amounted to EUR 263.8m, 17% higher than in the previous year.

The equipment order backlog as of December 31, 2017 increased to EUR 108.6m, an increase of 39% over the previous year's figure and 9% over the value per September 30, 2017.

The positive development in order intake and order backlog was also reflected in revenues, which rose by 17% year-on-year to EUR 230.4m in 2017. The largest revenue contribution came from MOCVD systems for the production of LEDs with 42% of equipment revenues, including red-orange-yellow and specialty LEDs, followed by systems for the production of optoelectronics with 25%.

Gross profit and gross margin also improved significantly year-on-year in 2017 to EUR 74.0m or 32%. In the sequential quarterly comparison of Q4/2017 to Q3/2017, both figures were almost stable.

The operating result (EBIT) improved year-on-year totaling EUR 4.9m in the financial year 2017. In Q4/2017, EBIT rose sequentially to EUR 24.4m.

Net result in the financial year 2017 improved to EUR 6.5m and in Q4/2017 exceptionally rose to EUR 27.2m in the sequential quarter-on-quarter comparison. Included in that figure were positive special effects from the sale of the ALD/CVD product line which brought the company to the profit zone one year earlier than planned.

In 2017, a cash flow from operating activities of EUR 70.1m was recorded (2016:
EUR -37.7m). The improvement in operating cash flow in 2017 is mainly driven by the improved profitability, reductions in working capital and the sale of the ALD/CVD product line.

Cash and cash equivalents (including cash deposits with a maturity of more than 90 days) increased to EUR 246.5m as of December 31, 2017 compared to EUR 203.9m as of September 30, 2017. Compared to EUR 160.1m as of December 31, 2016, the difference of EUR 86.4m is mainly attributable to the positive business development in combination with the sale of the ALD/CVD product line of EUR 51.0m.

Key Financials

Business Development

Last year, AIXTRON implemented the Company's reorientation while concluding fiscal year 2017 with a net profit of EUR 6.5m, thanks to the sale of the ALD/CVD product line. For 2018, AIXTRON continues to pursue its goal of returning to sustainable profitability in its operating business. This process is supported by the continuing market demand for MOCVD systems for the production of VCSEL and other laser applications, ROY and special LEDs as well as for power electronics.

On October 1, 2017, APEVA SE, a wholly-owned subsidiary of AIXTRON SE for its OLED deposition technology, officially commenced operations. AIXTRON is currently negotiating with potential industrial and financial partners to form a joint venture with APEVA.

Last year, the company's cost structure continued to improve. In 2017, although cost of sales increased year-on-year they did not increase as fast as revenues, which grew by 12% from EUR 140.2m to EUR 156.4m. This was mainly due to a larger portion of higher margin products which more than offset a number of effects. Those included low margin sales of AIX R6 tools from inventory as well as write downs from having frozen further technology development of products for three-five on silicon materials (TFOS: EUR 1.0m in Q1/2017) as well as for thin film encapsulation (TFE: EUR 1.3m in Q2/2017). Consequently, 2017 cost of sales relative to revenues decreased to 68%.

At EUR 69.1m, total operating expenses in 2017 were 11% lower than the previous year's figure (2016: EUR 77.7m). The operating costs included restructuring effects of EUR 12.8m from the previously described freezing of TFOS and TFE activities as well as positive effects from the sale of the ALD/CVD product line for memory chips. The operating costs relative to revenues decreased in 2017 to 30% (2016:40%).

Management Review

Dr. Bernd Schulte, Executive Board member of AIXTRON SE, said: "We are pleased that AIXTRON has already achieved a positive result in 2017 and that we were able to achieve our financial targets at the upper end of the specified range. This was mainly due to the demand for MOCVD systems for optoelectronics and power electronics, which benefited from numerous new applications such as face recognition on smartphones and was reflected in the very pleasing order situation. In addition, we successfully sold our ALD/CVD product line for memory products to Eugene Technology, which resulted in both a one-off gain and lower R&D costs."

"With AIXTRON's comprehensive reorientation, the Company is focusing on its core MOCVD equipment business. We supply systems in various end markets with attractive growth potential and expect to be clearly profitable again in our operating business in 2018. This is supported by a strong order backlog and stable order intake. Our OLED subsidiary APEVA is working on the qualification for one of the major Asian display manufacturers. In addition, we are in discussions with several companies about a partnership in the OLED sector, which should complement APEVA's range of products and services", adds Dr. Felix Grawert, Executive Board member of AIXTRON SE.

Guidance

For 2018, the Executive Board expects growth in its core business, in particular from MOCVD systems for the production of lasers for applications in 3D sensor technology or optical data transmission. In the medium term, the adoption of power components based on the wide-band gap materials SiC and GaN (silicon carbide, gallium nitride) opens up further potential.

Based on the current corporate structure and estimated orders, Management expects both revenues and total orders in a range between EUR 230m and EUR 260m for 2018 at the budget rate of USD/EUR 1.20. This represent a growth between 20% and 35% based on the revenues of the continuing business of EUR 191.6m, excluding the sold ALD/CVD product line. Hence, AIXTRON expects to achieve a gross margin of 35% to 40% and an EBIT of 5% to 10% of revenues in 2018. Furthermore, Management expects to achieve a positive operational cash flow which will be lower compared to 2017. This is due to the positive effects from the sale of the ALD/CVD product line in the amount of EUR 51.0m which were included in cash flow 2017. Cash flow in 2018 will include the settlement of liabilities towards third parties of the ALD/CVD business in the amount of EUR 11.7m. These expectations for 2018 include the results of the AIXTRON subsidiary APEVA with all planned investments to further develop the OLED activities.

Financial Tables

The full year 2017 results presentation is available at http://www.aixtron.com/en/investors/ir-presentation. The consolidated financial statements (income statement, statement of comprehensive income, balance sheet, cash flow statement, statement of changes in equity) relating to this press release are part of AIXTRON's Annual Report 2017 and are available at http://www.aixtron.com/en/investors/financial-reports/. AIXTRON's interactive online Annual Report 2017 is available at http://annualreport2017.aixtron.com.

Investor Conference Call

AIXTRON will host a financial analyst and investor conference call on Tuesday, February 27, 2018, 3.00 p.m. CET (6.00 a.m. PST, 9.00 a.m. EST) to review its 2017 results. You can dial into the call at +49 (30) 23 25 31 411 or +1 (862) 701-2734 from 2.45 a.m. CET (5.45 p.m. PST, 8.45 a.m. EST). An audio replay or transcript will be available after the conference call at http://www.aixtron.com/en/investors/events/conference-call/.

Contact:

Guido Pickert
Investor Relations and Corporate Communications
T: +49 (2407) 9030-444
F: +49 (2407) 9030-445

Andrea Su
Investor Relations US
T: +1 (669) 228-3895
invest@aixtron.com

For further information on AIXTRON (FSE: AIXA, ISIN DE000A0WMPJ6) please consult our website at: www.aixtron.com.

Our registered trademarks: AIXACT^(R), AIXTRON^(R), APEVA^(R), Atomic Level SolutionS^(R), Close Coupled Showerhead^(R), CRIUS^(R), EXP^(R), EPISON^(R), Gas Foil Rotation^(R), Optacap(TM), OVPD^(R), Planetary Reactor^(R), PVPD^(R), STExS^(R), TriJet^(R)

Due to rounding, numbers presented throughout this document may not add up precisely to the totals indicated and percentages may not precisely reflect the absolute figures for the same reason.

Forward-Looking Statements
This document may contain forward-looking statements regarding the business, results of operations, financial condition and earnings outlook of AIXTRON. These statements may be identified by words such as "may", "will", "expect", "anticipate", "contemplate", "intend", "plan", "believe", "continue" and "estimate" and variations of such words or similar expressions. These forward-looking statements are based on our current assessments, expectations and assumptions, of which many are beyond control of AIXTRON, and are subject to risks and uncertainties. You should not place undue reliance on these forward-looking statements. Should these risks or uncertainties materialize, or should underlying expectations not occur or assumptions prove incorrect, actual results, performance or achievements of AIXTRON may materially vary from those described explicitly or implicitly in the relevant forward-looking statement. This could result from a variety of factors, such as actual customer orders received by AIXTRON, the level of demand for deposition technology in the market, the timing of final acceptance of products by customers, the condition of financial markets and access to financing for AIXTRON, general conditions in the market for deposition plants and macroeconomic conditions, cancellations, rescheduling or delays in product shipments, production capacity constraints, extended sales and qualification cycles, difficulties in the production process, the general development in the semi-conductor industry, increased competition, fluctuations in exchange rates, availability of public funding, fluctuations and/or changes in interest rates, delays in developing and marketing new products, a deterioration of the general economic situation and any other factors discussed in any reports or other announcements , in particular in the chapter Risks in the Annual Report, filed by AIXTRON. Any forward-looking statements contained in this document are based on current expectations and projections of the executive board based on information available the date hereof. AIXTRON undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise, unless expressly required to do so by law.

This document is an English language translation of a document in German language. In case of discrepancies, the German language document shall prevail and shall be the valid version.