AIXTRON SE

Quarterly Report • Apr 26, 2018

Quarterly Group Statement Q1/2018

Interim consolidated financial statements for the three months ended March 31, 2018

Key Financials

(in EUR million)	Q1/2018	Q1/2017	+/- %	Q1/2018	Q4/2017*	+/- %
Order intake	78.6	61.9	27%	78.6	65.7	20%
Order backlog (Equipment only)	114.9	87.6	31%	114.9	108.6	6%
Revenues	62.4	53.6	16%	62.4	54.1	15%
Gross profit	26.8	13.6	97%	26.8	21.0	28%
%	43	25	18pp	43	39	4pp
EBIT	7.9	-12.7	n.m.	7.9	24.4	-68%
%	13	-24	37pp	13	45	-32pp
Net result	12.3	-13.5	n.m.	12.3	27.2	-55 %
%	20	-25	45pp	20	50	-30pp
Net result per share (EUR)	0.11	-0.12	n.m.	0.11	0.24	-54%
Cash flow from operating activities	-21.1	34.6	n.m.	-21.1	13.6	n.m.

* Operating Expenses, EBIT and net profit in Q4/2017 were significantly influenced by the positive effects from the sale of the ALD/CVD product line and are therefore not comparable.

Positive quarter with increases in order intake and revenues / improved gross margin / improved profitability/ 2018 Guidance confirmed

Due to the continuing demand for MOCVD systems, mainly for the manufacturing of lasers such as vertical cavity surface emitting lasers (VCSELs) for 3D sensing or optical datacom applications, order intake and revenues in Q1/2018 (both year-on-year and quarter-on-quarter) increased.

Order Intake in Q1/2018 increased year-on-year by 27% to EUR 78.6 million and quarter-on-quarter by 20%.

The increase in revenues and an increased gross margin compared to the same quarter last year supported the improvement in earnings. In addition, a low proportion of US dollar-based sales resulted in reduced currency effects on revenues. The gross margin in Q1/2018 rose to 43% and EBIT to 13%. At EUR 18.9m, operating expenses including R&D in Q1/2018 were lower than in the same quarter of the previous year (Q1/2017: EUR 26.4 million). Net profit in Q1/2018 including a tax credit of EUR 5.0m improved to EUR 12.3m. Operating Expenses, EBIT and net profit in Q4/2017 were significantly influenced by the positive effects from the sale of the ALD/CVD product line and are therefore not comparable.

AIXTRON Management therefore confirms its 2018 annual guidance of revenues and order intake in the range of EUR 230 to 260 million, and gross margin between 35% and 40%. EBIT margin is expected to be in the range of 5% to 10% of revenues. However, due to positive development of the business, revenues and EBIT margin are expected to be close to the upper end of the guidance. Furthermore, a positive Operating Cash Flow for the year is also expected.

Key Balance Sheet Data

(in EUR million)	March 31, 2018	December 31, 2017
Inventories	46.2	43.0
Advance Payments	28.5	30.3
Trade Receivables	30.0	19.3
Trade Payables	14.3	14.3
Cash	223.2	246.5
Equity	380.7	368.9
Equity Ratio	84%	81%

Key Share Data

in EUR	Q1/2018	Q1/2017
Closing Price (end of period)	15.68	3.48
Period High Price	19.27	3.80
Period Low Price	11.00	3.15
Number of shares issued (end of period)	112,924,730	112,804,105
Market capitalization (end of period) million EUR, million USD	1,770.7	392.6

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 the current assessments, expectations and assumptions of the executive board of AIXTRON, of which many are beyond control of AIXTRON, based on information available at the date hereof and 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 those discussed by AIXTRON in public reports and statements, including but not limited those reported in the chapter "Risk Report". 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.

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

This financial report should be read in conjunction with the interim financial statements and the additional disclosures included elsewhere in this report.

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

Table of Contents

Key Financials	1
Key Balance Sheet Data	1
Key Share Data	2
Interim Management Report	4
1. Business Activity and Strategy	4
2. Business Performance and Key Developments	4
2.1. Development of Orders	4
2.2. Exchange Rate Development of the US Dollar	4
2.3. Development of Revenues	4
2.4. Development of Results	5
3. Financial Position and Net Assets (Highlights)	6
3.1 Assets	6
3.2. Equity and Liabilities	6
4. Cash Flow	6
5. Opportunities and Risks	7
6. Outlook	7
Interim Financial Statements	8
1. Consolidated Income Statement	8
2. Consolidated Statement of other Comprehensive Income	8
3. Consolidated Statement of Financial Position	9
4. Consolidated Statement of Cash Flows	10
5. Consolidated Statement of Changes in Equity	11
Additional Disclosures	12
1. Accounting Policies	12
2. Segment Reporting	12
3. Stock Option Plans	12
4. Employees	13
5. Management	13
6. Related Party Transactions	13
7. Post-Balance Sheet Date Events	13

Interim Management Report

1. Business Activity and Strategy

AIXTRON's business activity and strategy are described in detail in the sections "1.1. Strategy" and "1.2. Business Model" of its 2017 Group Financial Report. The Report is publicly available for download on the Company's website at http://www.aixtron.com/en/investors/ financial-reports/.

2. Business Performance and Key Developments

2.1. Development of Orders

Orders (in EUR million)	Q1/2018	Q1/2017	+/- m EUR	%
Order intake incl. Spares & Service	78.6	61.9	16.7	27
Order backlog (equipment only)	114.9	87.6	27.3	31

In a year-on-year comparison, Q1/2018 order intake increased 27% to EUR 78.6m. This development is mainly attributable to the strong demand for equipment used for laser applications such as Vertical Cavity Surface Emitting Lasers ("VCSEL") for 3D sensing or optical datacom. In a quarterly sequential comparison, order intake increased by 20% (Q4/2017: EUR 65.7m).

2.2. Exchange Rate Development of the US Dollar

The average exchange rate used by AIXTRON to translate income and expenses denominated in US dollars in the first three months of 2018 was 1.22 USD/EUR (Q1/2017: 1.07 USD/EUR). Relative to the previous year, the average US dollar exchange rate weakened by 12% reducing the Euro value of US dollar denominated revenues in the first quarter. However, due to a low share of such revenues, currency effects had a minor overall impact on the quarterly sales. As of March 31, 2018, the US-Dollar/Euro exchange rate was 1.23.

2.3. Development of Revenues

Total revenues recorded during the first quarter of 2018 improved to EUR 62.4m compared to EUR 53.6m of the same period last year (Q4/2017: EUR 54.1m). Equipment revenues in Q1/2018 increased by 17% to EUR 50.8m and accounted for 81% of the total Q1/2018 revenues (Q4/2017: EUR 42.6m). These developments were mainly driven by the strong demand from laser applications as previously described.

EUR 11.6m or 19% of total revenues were generated by the sale of spares and services in Q1/2018, (Q4/2017: EUR 11.5m).

Revenues by Equipment, Spares & Service	Q1/2018		Q1/2017		+/-
	m EUR	%	m EUR	%	m EUR	%
Equipment revenues Revenues through service, spare parts, etc.	50.8	81	43.5	81	7.3	17
	11.6	19	10.1	19	1.5	15
Total	62.4	100	53.6	100	8.8	16

		Q1/2018		Q1/2017		+/-
Revenues by Region	m EUR	%	m EUR	%	m EUR	%
Asia	29.0	46	43.5	81	-14.5	-33
Europe	23.5	38	4.1	8	19.4	n.m.
Americas	9.9	16	6.0	11	3.9	65
Total	62.4	100	53.6	100	8.8	16

2.4. Development of Results

	Q1/2018		Q1/2017		+/-
Cost Structure	m EUR	% Rev.	m EUR	% Rev.	m EUR	%
Cost of sales	35.6	57	40.0	75	-4.4	-11
Gross profit	26.8	43	13.6	25	13.2	97
Operating costs	18.9	30	26.4	49	-7.4	-28
Selling expenses	2.3	4	2.6	5	-0.3	-13
General and administration expenses	4.3	7	4.3	8	0.0	0
Research and development costs	13.7	22	19.7	37	-5.9	-30
Net other operating (income) and Expenses	(1.4)	2	(0.2)	0	1.2	n.m.

An improved product mix together with an increase in sales resulted in a gross profit in Q1/2018 of EUR 26.8m (43%). This is an improvement in both a year-on-year and a quarterly comparison (Q1/2017: EUR 13.6m, 25%; Q4/2017: EUR 21.0m, 39%).

Operating costs in Q1/2018 at EUR 18,9m were lower year-on-year, compared to the previous year's period adjusted by write-downs (Q1/2017 adjusted: EUR 20.8m). The quarterly sequential development is not meaningful, as this is distorted by the EUR 23.9m profit on disposal of the ALD/CVD product line in Q4/2017.

R&D expenses in Q1/2018 were EUR 13.7m (Q1/2017 adjusted: EUR 14.1m; Q4/2017: EUR 16.5m).

Net other operating income and expenses in Q1/2018 resulted in an income of EUR 1.4m (Q4/2017: EUR 24.7m income) mainly due to R&D grants. Net operating income and expenses in Q4/2017 were significantly influenced by the above mentioned positive effects from the sale of the ALD/CVD product line.

Operating result (EBIT) improved year-on-year from an adjusted EUR -6.1m in Q1/2017 to EUR 7.9m in Q1/2018 (Q1/2017 reported: EUR -12.7m; Q4/2017: EUR 24.4m). This positive year-on-year development is mainly attributable to the previously mentioned business and cost development. The operating result in Q4/2017 was significantly influenced by the above mentioned positive effects from the sale of the ALD/CVD product line.

The Company's net profit in Q1/2018 amounted to EUR 12.3m (Q1/2017 adjusted: EUR -6.9m; Q1/2017 reported: EUR -13.5m; Q4/2017: EUR 27.2m). Net Profit in Q1/2018 benefitted from a EUR 5.0m credit of deferred taxes (Q1/2017 nil; Q4/2017 EUR 2.3m) resulting from the transition from losses in the past to expected profits in 2018. Net profit in Q4/2017 was significantly influenced by the above mentioned positive effects from the sale of the ALD/CVD product line.

3. Financial Position and Net Assets (Highlights)

3.1 Assets

Cash and cash deposits were at EUR 223.2m (EUR 223.2m + EUR 0m cash deposits) as of March 31, 2018 compared to EUR 246.5m (EUR 219.8m + EUR 26.7m cash deposits) as of December 31, 2017. As expected, payments of EUR 9.3 m in conjunction with the sale of the ALD/CVD product line were made in the quarter. Collections of receivables were low in the quarter reflecting the higher volume of shipments towards the end of the quarter.

Trade receivables amounted to EUR 30.0m as of March 31, 2018, compared to EUR 19.3m as of December 31, 2017, representing 43 days sales outstanding.

Inventories, including components and work in progress, increased to EUR 46.2m at March 31, 2018 (December 31, 2017: EUR 43.0m) because of increased order backlog.

3.2. Equity and Liabilities

Total equity as of March 31, 2018 increased to EUR 380.7m compared to EUR 368.9m as of December 31, 2017 mainly due to the period's net profit. The equity ratio was 84% as of March 31, 2018 (81% as of December 31, 2017).

Advance payments from customers were EUR 28.5m as of March 31, 2018 compared to EUR 30.3m as of December 31, 2017.

4. Cash flow

The cash flow from operating activities in Q1/2018 amounted to EUR - 21m (Q1/2017: EUR 34.6m; Q4/2017: EUR 13.6m). This development is mainly attributable to the scheduled payments in conjunction with the sale of the ALD/CVD product line in Q4/2017 and the timing of sales, and therefore collections, in the quarter.

5. Opportunities and Risks

AIXTRON expects the following market trends and opportunities in the relevant end user markets could possibly have a positive effect on future business:

Short- and Mid Term

• Increasing adoption of compound semiconductor-based lasers for 3D sensor systems in mobile devices as well as sensors for infrastructure applications.
• Further increasing demand for lasers for ultra-fast optical data transmission of large volumes, such as for video streaming and Internet-of-Things (IoT) applications.
• Increasing use of LEDs and specialty LEDs (esp. red-orange-yellow, UV or IR) in displays and other applications.
• Increasing use of wide-band gap GaN- or SiC-based components for energy-efficient communication and power management in autos, consumer electronics and mobile devices.
• Progress in the development of OLED displays that require an efficient deposition technology.

Long-Term

• Development of new applications based on wide-band gap materials such as high-frequency chips or system-on-chip architectures with integrated power management.
• Increased use of compound semiconductor-based sensors for autonomous driving.
• Increased development activities for high performance solar cells made of compound semi-conductors.
• Development of new materials with the help of carbon nanostructures (carbon nanotubes, -wires and graphene).
• Development of alternative LED applications, such as visual-light communication technology or micro LED displays.

A description of the Opportunities and Risks of the Company can be found in the chapters "3.2. Risk Report" and "3.3. Opportunities Report" of the Annual Report 2017 which is publicly available for download on the Company's website at http://www.aixtron.com/en/ investors/financial-reports/.

During the first three months of 2018, AIXTRON Management was not aware of any significant additions or changes in the risks as described in the 2017 Annual Report referred to above.

6. Outlook

Based on the results for the first three months of the fiscal year 2018 and the internal assessment of the development of demand, AIXTRON Management confirms its 2018 full year guidance given in February 2018.

Accordingly, AIXTRON Management expects revenues and order intake in the range of EUR 230 to 260 million, and Gross margin between 35% and 40%. EBIT margin is expected to be in the range of 5% to 10% of revenues. However, due to positive development of the business, revenues and EBIT margin are expected to be close to the upper end of the guidance. Furthermore, a positive Operating Cash Flow for the year is also expected which will be lower compared to 2017.

Further details can be found in chapter "3.1. Expected Developments " of the Annual Report 2017, which is publicly available for download on the Company's website at http://www.aixtron.com/en/investors/financial-reports/.

AIXTRON SE © 2018, QUARTERLY GROUP STATEMENT Q1/2018 7

Interim Financial Statements

1. Consolidated Income Statement*

*unaudited

in EUR thousands	Q1/2018	Q1/2017	+/-
Revenues	62,393	53,597	8,796
Cost of sales	35,575	39,981	-4,406
Gross profit	26,818	13,616	13,202
Selling expenses	2,251	2,593	-342
General administration expenses	4,292	4,297	-5
Research and development costs	13,726	19,668	-5,942
Other operating income	2,000	474	1,526
Other operating expenses	645	275	370
Operating expenses	18,914	26,359	-7,445
Operating result	7,904	-12,743	20,647
Finance Income	305	187	118
Finance Expense	2	6	-4
Net Finance Income	303	181	122
Profit or Loss before taxes	8,207	-12,562	20,769
Taxes on income	-4,121	924	-5,045
Profit or Loss for the year	12,328	-13,486	25,814
Thereof attributable to the owners of AIXTRON SE	12,328	-13,486	25,814
Basic earnings or loss per share (EUR)	0,11	-0,12	0,23
Diluted earnings or loss per share (EUR)	0,11	-0,12	0,23

2. Consolidated Statement of other Comprehensive Income*

*unaudited

in EUR thousands	Q1/2018	Q1/2017	+/-
Net profit/loss for the period	12,328	-13,486	25,814
Currency translation adjustment	-781	225	-1,006
Other comprehensive income/loss	-781	225	-1,006
Total comprehensive income/loss for the year	11,547	-13,261	24,808

3. Consolidated Statement of Financial Position*

*unaudited

in EUR thousands	Mar. 31, 2018	Dec. 31, 2017
Assets
Property, plant and equipment	63,842	64,322
Goodwill	71,136	71,229
Other intangible assets	1,617	1,763
Other non-current assets	410	391
Deferred tax assets	8,707	3,588
Total non-current assets	145,712	141,293
Inventories	46,189	43,021
Trade receivables less allowance kEUR 255 (2017: kEUR 239)	29,985	19,289
Current tax receivables	176	171
Other current assets	7,287	4,817
Other financial assets	0	20,000
Cash and cash equivalents	223,234	226,526
Total current assets	306,871	313,824
Total assets	452,583	455,117
Liabilities and shareholders' equity
Fully paid capital, number of shares: 111,802,372 (2017: 111,802,372)	111,802	111,802
Additional paid-in capital	373,176	372,912
Accumulated losses	-104,961	-117,289
Accumulated comprehensive income and expense recognised in equity	700	1,481
Total shareholders' equity	380,717	368,906
Other non-current payables	347	345
Other non-current provisions	1,175	1,624
Total non-current liabilities	1,522	1,969
Trade payables	14,299	14,265
Advance payments from customers	28,541	30,266
Other current provisions	19,429	21,093
Other current liabilities	6,936	15,878
Current tax payables	1,139	2,740
Total current liabilities	70,344	84,242
Total liabilities	71,866	86,211
Total liabilities and shareholders' equity	452,583	455,117

4. Consolidated Statement of Cash Flows*

*unaudited

in EUR thousands	Q1/2018	Q1/2017	+/-
Cash inflow / outflow from operating activities
Profit / Loss for the year	12,328	-13,486	25,814
Reconciliation between profit/loss and cash inflow/outflow from operating activities
Expense from share-based payments	264	221	43
Depreciation, amortization and impairment expense	2,225	6,772	-4,547
Net result from disposal of property, plant and equipment	-344	-3	-341
Deferred income taxes	-5,155	351	-5,506
Change in
Inventories	-3,101	4,351	-7,452
Trade receivables	-10,702	30,687	-41,389
Other assets	-2,639	-381	-2,258
Trade payables	36	592	-556
Provisions and other liabilities	-11,954	1,052	-13,006
Non-current liabilities	-449	50	-499
Advance payments from customers	-1,567	4,391	-5,958
Cash inflow /outflow from operating activities	-21,058	34,597	-55,655
Cash inflow/outflow from investing activities
Capital expenditures in property, plant and equipment	-1,548	-1,071	-477
Capital expenditures in intangible assets	-44	-219	175
Proceeds from disposal of fixed assets	344	3	341
Bank deposits with a maturity of more than 90 days	20,000	9,383	10,617
Cash inflow/outflow from investing activities	18,752	8,096	10,656
Cash inflow/outflow from financing activities
Effect of changes in exchange rates on cash and cash equivalents	-986	258	-1,244
Net change in cash and cash equivalents	-3,292	42,951	-46,243
Cash and cash equivalents at the beginning of the period	226,526	120,031	106,495
Cash and cash equivalents at the end of the period	223,234	162,982	60,252
Interest received	225	146	79
Income taxes paid	-2,771	-370	-2,401
Income taxes received	82	494	-412

5. Consolidated Statement of Changes in Equity*

*unaudited

	Income and expense recognized directly in equity
in EUR thousands	Subscribed capital under IFRS	Additional paid-in-capital	Currency translation	Retained Earnings/ Accumulated deficit	Shareholders' equity attributable to the owners of AIXTRON SE
					Total
Balance January 1, 2018	111,802	372,912	1,481	-117,289	368,906
Share based payments		264			264
Net income for the year				12,328	12,328
Other comprehensive income			-781		-781
Total comprehensive loss for the year			-781	12,328	11,547
Balance at March 31, 2018	111,802	373,176	700	-104,961	380,717

Income and expense recognized directly in equity

in EUR thousands	Subscribed capital under IFRS	Additional paid-in-capital	Currency translation	Retained earnings/ Accumulated deficit	Shareholders' equity attributable to the owners of AIXTRON SE
					Total
Balance at January 1, 2017	111,657	373,452	10,160	-125,528	369,741
Share based payments		221			221
Net profit for the year				-13,486	-13,486
Other comprehensive income			225		225
Total comprehensive loss for the year			225	-13,486	-13,261
Balance at March 31, 2017	111,657	373,673	10,385	-139,014	356,701

Additional Disclosures

1. Accounting Policies

This consolidated interim financial report of AIXTRON SE has been prepared in accordance with International Financial Reporting Standards (IFRS) applicable for Interim Financial Reporting, IAS 34.

The accounting policies adopted in this interim financial report are consistent with those followed in the preparation of the Group's annual financial statements for the year ended December 31, 2017.

The consolidated interim financial statements of AIXTRON SE include the following subsidiaries (collectively referred to as "AIXTRON", "the AIXTRON Group", "the Group" or "the Company"): APEVA SE, Herzogenrath (Germany), AIXTRON, Inc., California (USA); AIXT-RON Ltd., Cambridge (United Kingdom); APEVA Co Ltd., Hwasung (South Korea); AIXTRON Korea Co. Ltd., Hwasung (South Korea); AIXTRON China Ltd., Shanghai (PR of China); AIXTRON KK, Tokyo (Japan) and AIXTRON Taiwan Co. Ltd., Hsinchu (Taiwan).

2. Segment Reporting

Geographical Segments (in EUR thousands)		Asia	Europe	Americas	Group
	Q1/2018	29,005	23,469	9,919	62,393
Revenues realized with third parties	Q1/2017	43,486	4,096 6,016		53,597
	31/03/18	355	63,387	100	63,842
Segment assets (property, plant and equipment)	31/12/17	388	63,838	96	64,322

3. Stock Option Plans

As of March 31, 2018, AIXTRON's employees and Executive Board members held stock options, representing the right to receive AIXTRON common shares. The status of these options developed as follows:

AIXTRON ordinary shares	Mar 31, 2018	Exercised	Expired/Forfeited	Allocation	Dec 31, 2017
Stock options	1,417,890	0	115,875	0	1,533,765
Underlying shares	1,417,890	0	115,875	0	1,533,765

4. Employees

The total number of employees decreased from 699 on March 31, 2017 to 594 persons on March 31, 2018.

Employees by Region	2018			2017		+/-
	Mar-31	%	Mar-31	%	abs.	%
Asia	96	16	114	16	-18	-16
Europe	462	78	452	65	10	2
Americas	36	6	133	19	-97	-73
Total	594	100	699	100	-105	-15

5. Management

As compared to December 31, 2017, there were no changes to the composition of the Company's Executive and Supervisory Boards as of March 31, 2018.

6. Related Party Transactions

During the reporting period, AIXTRON did not initiate or conclude any material transactions with related parties.

7. Post-Balance Sheet Date Events

There were no events of particular significance or with significant effects on AIXTRON's net assets, results of operations or financial position known to the Executive Board after the reporting date of March 31, 2018.