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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

o

REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934ORý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2013ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                             to           
                  or?ORo

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Date
of event requiring this shell company
report

Commission
file number: 000-51196

AIXTRON SE(Exact Name of Registrant as Specified in Its Charter)

Federal Republic of Germany
(Jurisdiction of Incorporation or Organization)

Kaiserstr. 98
52134 Herzogenrath
Federal Republic of Germany
(Address of Principal Executive Offices)

Guido Pickert, +49 241 8909-444, +49 241 8909-445, AIXTRON SE, Kaiserstr. 98, 52134 Herzogenrath, Federal Republic of Germany

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

American Depositary Shares, each representing one Ordinary Share
Ordinary shares, no par value (not for trading, but only in connection with the listing of its American Depositary Shares on
The NASDAQ Global Select Market)
(Title of Class)

The NASDAQ Global Select Market
(Name of each Exchange on which registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of December 31, 2013: 112,613,445 ordinary shares,
no par value.

Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ý    No o

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934. Yes o    No ý

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files) Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer
and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý

Accelerated filer o

Non-accelerated filer o


Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

U.S. GAAP o

International Financial Reporting
Standards as issued by the
International Accounting Standards Board ý

Other o


If
"Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 o    Item 18 o

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No ý



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Table of Contents



Table of Contents



PART I


3Item 1:

Identity of Directors, Senior Management and Advisers


3Item 2:

Offer Statistics and Expected Timetable


3Item 3:

Key Information


3A.

Selected Financial Data


3Five Year Financial Summary


3Exchange Rate Information


3B.

Capitalization and Indebtedness


4C.

Reasons for the Offer and Use of Proceeds


4D.

Risk Factors


4Company-Related Risk


4Risks Relating to Holding AIXTRON's ADSs and Ordinary Shares


11Item 4:

Information on the Company


13A.

History and Development of the Company


13Introduction


13Important Events


13Capital Expenditures


14B.

Business Overview


14Business Model


14Employees


15Technology, Products and Services


16Research and Development


18Intellectual Property


18Manufacturing


19Marketing Channels


19Customers and Principal Markets


19Seasonality


20Competitive Positioning


20Key Performance Indicators


21Government Regulation


21C.

Organizational Structure


22D.

Property, Plant and Equipment


22Item 4A:

Unresolved Staff Comments


23Item 5:

Operating and Financial Review and Prospects


23Global Economy


23The Semiconductor Equipment Market


23Management Assessment of Company Situation


24A.

Operating Results


24Development of Revenues


25Development of Results


26Development of Orders


28B.

Liquidity and Capital Resources


29Corporate Financial Management


29Funding


30Investments


31Cash Flow


32Assessment of Liquidity and Capital Resources


33C.

Research and Development, Patents and Licenses, etc.


33D.

Trend Information


33E.

Off-Balance Sheet Arrangements


34F.

Tabular Disclosure of Contractual Obligations


34Preparation of Consolidated Financial Statements under IFRS


34Critical Accounting Policies and Key Sources of Estimation and Uncertainty


35Recently Issued Accounting Standards


35Item 6:

Directors, Senior Management and Employees


36A.

Directors and Senior Management


36Supervisory Board


36Executive Board


37B.

Compensation


38


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Table of Contents

Executive Board Remuneration


38Supervisory Board Remuneration


41C.

Board Practices


43Audit Committee


43Compliance with NASDAQ Listing Standards on Corporate Governance


44D.

Employees


44E.

Share Ownership


44Beneficial Ownership


44Employee Options


45Item 7:

Major Shareholders and Related Party Transactions


46A.

Major Shareholders


46B.

Related Party Transactions


46C.

Interests of Experts and Counsel


46Item 8:

Financial Information


47A.

Consolidated Statements and Other Financial Information


47Export Revenues


47Legal Proceedings


47Policy on Dividend Distributions


47B.

Significant Changes


47Item 9:

The Offer and Listing


47A.

Offer and Listing Details


47Trading Markets


47Market Price Information


47B.

Plan of Distribution


49C.

Markets


49D.

Selling Shareholders


49E.

Dilution


49F.

Expenses of the Issue


49Item 10:

Additional Information


50A.

Share Capital


50B.

Memorandum and Articles of Association


50Articles of Association


50Corporate Governance


52Sarbanes-Oxley Act Requirements and NASDAQ Rules


53C.

Material Contracts


55Employment contracts of current members of the Executive Board


55Intellectual Property Agreements


56D.

Exchange Controls


56E.

Taxation


56German Taxation


56U.S. Federal Taxation


59F.

Dividends and Paying Agents


62G.

Statement by Experts


62H.

Documents on Display


63I.

Subsidiary Information


63Item 11:

Quantitative and Qualitative Disclosure about Market Risk


63Foreign Currency Exchange Rate Risk


63Interest Rate Risk


64Item 12:

Description of Securities other than Equity Securities


64PART II


66Item 13:

Defaults, Dividend Arrearages and Delinquencies


66Item 14:

Material Modifications to the Rights of Security Holders and Use of Proceeds


66Item 15:

Controls and Procedures


66Item 16A:

Audit Committee Financial Expert


68Item 16B:

Code of Ethics


68Item 16C:

Principal Accountant Fees and Services


68Item 16D:

Exemptions from the Listing Standard for Audit Committees


69Item 16E:

Purchases of Equity Securities by the Issuer and Affiliated Purchasers


69Item 16F:

Change in Registrant's Certifying Accountant


69Item 16G:

Corporate Governance


69Item 16H:

Mine Safety Disclosure


69


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Table of Contents

PART III


70Item 17:

Financial Statements


70Item 18:

Financial Statements


70Item 19:

Exhibits


70Signatures


71Report of Independent Registered Public Accounting Firm


72Consolidated Income Statement


F-1Consolidated Statement of Other Comprehensive Income or
Loss


F-2Consolidated Statement of Financial Position


F-3Consolidated Statement of Cash Flow


F-4Consolidated Statement of Changes in Equity


F-5Notes to the Consolidated Financial Statements


F-61.    General principles


F-62.    Significant accounting policies


F-63.    Segment reporting and revenues


F-144.    Research and development


F-165.    Other operating income


F-176.    Other operating expenses


F-177.    Personnel expense


F-178.    Net finance income


F-189.    Income tax expense/benefit


F-1810.    Current tax receivable and payable


F-1911.    Property, plant and equipment


F-2012.    Intangible assets


F-2213.  Other non-current assets


F-2414.  Deferred tax assets and liabilities


F-2415.  Long-term receivable from current tax


F-2616.  Inventories


F-2617.  Trade receivables and other current assets


F-2618.  Other financial assets


F-2719.  Cash and cash equivalents


F-2820.  Shareholders' Equity


F-2821.  Earnings/Loss per share


F-2922.  Employee benefits


F-3023.  Share-based payment


F-3124.  Provisions


F-3425.  Trade payables and other current liabilities


F-3526.  Financial instruments


F-3527.  Operating leases


F-3928.  Capital commitments


F-3929.  Contingencies


F-3930.  Identity of related parties


F-4031.  Consolidated entities


F-4632.  Events after the reporting period


F-4633.  Auditors' fees


F-4634.  Employees


F-4735.  Statement of compliance with the German Corporate Governance Code


F-4736.  Supervisory Board and Executive Board


F-4737.  Critical accounting judgments and key sources of estimation and uncertainty


F-48


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Presentation of Information

In this Annual Report on Form 20-F (this "report"), unless the context otherwise requires, references to "AIXTRON," "the AIXTRON
Group", the "Group" or "the Company" are to AIXTRON SE and its consolidated subsidiaries. References to "Management" are to the Executive Board of AIXTRON SE. Throughout this report, whenever a
reference is made to AIXTRON's website, such reference does not incorporate information from the website by reference into this report.

The
Company's audited Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting
Standards Board (IASB).

AIXTRON
publishes its audited Consolidated Financial Statements in Euros. As used in this report, "EUR", "Euro" or "€" means the lawful currency of the Federal Republic
of Germany and other participating member states of the European Union. "US-Dollar", "U.S$" or "USD" means the lawful currency of the United States of America. "Pound Sterling", "British Pounds", "GB
Pounds" or "GBP" means the lawful currency of the United Kingdom.

For
convenience only (except where noted otherwise), some of the Euro amounts have been translated into US-Dollar amounts at the noon buying rate in New York for cable transfers in Euros
certified by the Federal Reserve Bank of New York for customs purposes. You should not construe these translations as a representation that Euro amounts actually represent these US-Dollar amounts or
that the Euro amounts could have been, or could be, converted into US-Dollars at those rates or at any other rate. Refer to "Key InformationSelected Financial DataExchange
Rate Information" for certain exchange rates between the Euro and the US-Dollar.

Due
to rounding, numbers presented throughout this report may not add up precisely to the totals we provide and percentages may not precisely reflect the absolute figures.

Except
where AIXTRON otherwise attributes market or industry data to another source, all such data included in this report are its own estimates. These estimates are based upon the
Company's experience in its industry and its familiarity with the relevant markets. While AIXTRON believes these estimates to be reliable, the Company has not verified them with independent sources.

Forward-Looking Statements

AIXTRON believes that various statements in this report may constitute forward-looking statements. You can identify these statements by
forward-looking words such as "may", "will", "could", "expect", "anticipate", "contemplate", "believe", "estimate", "intends" and "continue" or similar words. You should read statements that contain
these words carefully because they:



AIXTRON
believes it is important to communicate its expectations. There may be events in the future that AIXTRON is unable to predict accurately or over which the Company has no control.
The risk factors and cautionary language discussed in this document provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations
described by AIXTRON in its forward-looking statements, including among other things:



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You
are cautioned not to place undue reliance on these forward-looking statements.

All
subsequent written and oral forward-looking statements attributable to AIXTRON or to any person acting on its behalf are expressly qualified in their entirety by the foregoing
cautionary statements. AIXTRON does not undertake and expressly disclaim any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after
the date of this report or to reflect the occurrence of unanticipated events.

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Table of Contents

PART I

Item 1:    Identity of Directors, Senior Management and Advisers

Not
applicable.

Item 2:    Offer Statistics and Expected Timetable

Not
applicable.

Item 3:    Key Information

A.    Selected Financial Data

Five Year Financial Summary

You should read the selected consolidated financial data set forth below in conjunction with "Item 5Operating and
Financial Review and Prospects" and AIXTRON's Consolidated Financial Statements included in this report. The historical results included below and elsewhere in this report are not necessarily
indicative of AIXTRON's future performance.

As of or For the Year Ended December 31,

2013
IFRS

2012
IFRS

2011
IFRS

2010
IFRS

2009
IFRS(thousand EUR, except share and per share data)Consolidated Income Statement Data:Revenues


182,863


227,832


610,960


783,775


302,857Operating result


(95,741
)

(132,267
)

112,880


275,510


62,725Profit/Loss attributable to the equity holders of AIXTRON SE (after taxes)


(101,016
)

(145,436
)

79,536


192,496


44,766Basic earnings per share


(0.98
)

(1.44
)

0.79


1.93


0.49Diluted earnings per share


(0.98
)

(1.44
)

0.78


1.89


0.48Dividend payments(1)


0


25,155


60,708


15,100


8,181Dividends declared per common share(1) (EUR)


0.00


0.25


0.60


0.15


0.09Dividends declared per common share(1) (USD(2))


0.00


0.32


0.84


0.20


0.13Consolidated Statement of Financial Position Data:Total assets


563,193


559,971


777,259


823,432


573,094Total liabilities


97,790


89,951


148,919


223,108


159,565Total shareholders' equity and net assets


465,403


470,020


628,340


600,324


413,529Fully paid capital


111,535


100,896


100,711


100,101


99,588Other Data:Adjusted weighted average number of shares outstandingbasic


103,016,618


100,805,804


100,530,006


99,871,834


91,609,912diluted


103,016,618


100,805,804


101,834,717


101,746,466


93,015,677


(1)Dividends
paid/declared in each year relate to prior year earnings. For information regarding dividend, refer to Item 5.A. "Operating and Financial
Review and ProspectsOperating ResultsNet Income AIXTRON SEUse of Results"(2)Dividend
amounts given in Euros have been translated for convenience only into US-Dollar amounts at the average noon buying rate in New York for cable
transfers in Euros certified by the Federal Reserve Bank of New York for customs purposes for the applicable fiscal year. Refer to "Presentation of Information."


Exchange Rate Information

The following tables set forth, for the periods indicated, information concerning the exchange rates for Euros per US-Dollar. AIXTRON
has provided these rates solely for your convenience and you should not construe these translations as a representation that Euro amounts actually represent these US-Dollar amounts or that the Euro
amounts could have been, or could be, converted into US-Dollars at those rates or at any other rate. AIXTRON did not use these rates in the preparation of its financial statements included elsewhere
in this report. Fluctuations in the exchange rate between the US-Dollar and the Euro

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will
affect the US-Dollar equivalent of the Euro price of the Company's ordinary shares traded on the Frankfurt Stock Exchange and are likely to affect the market price of the Company's American
Depositary Shares ("ADSs") traded on the NASDAQ Global Select Market.

As
used in this report, the term "noon buying rate" refers to the rate of exchange for Euro, expressed in US-Dollar per Euro, as announced by the Federal Reserve Bank of New York for
customs purposes as the rate in The City of New York for cable transfers in foreign currencies.

The
table below shows the average noon buying rates in The City of New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New
York for US-Dollar per Euro for AIXTRON's last five fiscal years. The average is computed using the noon buying rate on the last business day of each month during the period indicated.

Year ended December 31,

Average
Rate2013


1.32812012


1.28592011


1.39312010


1.32612009


1.3933


The
following table shows the noon buying rates for Euros in US-Dollars for the last six months.

Month ended

High

LowFebruary 2014 (through February 12, 2014)


1.3654


1.3507January 2014


1.3682


1.3500December 2013


1.3552


1.3816November 2013


1.3357


1.3606October 2013


1.3490


1.3810September 2013


1.3120


1.3537August 2013


1.3196


1.3426


On
February 12, 2014, the noon buying rate was USD 1.3592 per € 1.00.

B.    Capitalization and Indebtedness

Not
applicable



C.    Reasons for the Offer and Use of Proceeds

Not
applicable



D.    Risk Factors

Any of the following risks could have a material adverse effect on AIXTRON's financial position, results of operations, liquidity and the actual outcome of
matters that the forward-looking statements contained in this annual report refer to. The risks described below are not the only ones the Company faces. There may be additional risks AIXTRON is
currently unaware of, and risks that are common to most companies. There may also be risks that AIXTRON now believes are immaterial, but which may ultimately have a material adverse effect on the
Company's financial position, results of operations, liquidity and the actual outcome of matters that the forward-looking statements contained in this annual report refer to. For additional
information regarding forward-looking statements, see "Forward-looking statements" included in this annual report.

Company-Related Risk

The compound semiconductor and the semiconductor industries can be highly volatile and unpredictable, which may adversely affect AIXTRON's operating results and result in
significant volatility in the market price of its ordinary shares and American Depositary Shares.

The compound semiconductor and the semiconductor manufacturing equipment industry can be affected by the cyclical nature of the
semiconductor industry and its sensitivity to general economic conditions. Although semiconductors are used in many different products, the markets for those products

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are
interrelated to various degrees. The industry has historically experienced sudden changes in supply and demand for semiconductors based on general economic conditions. The timing, length and
severity of these industry cycles are difficult to predict. The cyclical nature of AIXTRON's operations tends to reflect and be amplified by changes in economic conditions, both in Asia and
internationally, supply/demand imbalances and foreign currency exchange fluctuations. Economic downturns or a prolonged period of slow growth in Asia and foreign markets or any of the industries in
which AIXTRON operates that are contributing to a softer demand environment for the Company's products could have a material adverse effect on the Company's results of operations, financial condition
and cash flows. During periods of declining demand for semiconductor manufacturing equipment, AIXTRON needs to be able to quickly and effectively align its cost structure with prevailing market
conditions, to manage its inventory levels to reduce the possibility of future inventory write-downs resulting from obsolescence, and to motivate and retain key employees. Because a high proportion of
AIXTRON's costs are fixed in the near term, the Company's ability to reduce expenses quickly in response to revenue shortfalls is limited. During periods of rapid growth, AIXTRON's business must be
able to acquire and/or develop sufficient manufacturing capacity and inventory to meet customer demand, and to attract, hire, assimilate and retain a sufficient number of qualified people. The
Company's customers often accelerate or delay expenditures, as well as attempt to cancel or reschedule their orders, in reaction to variations in their businesses or market conditions. As a result,
AIXTRON must be able to react quickly to these changes in supply and demand. A failure to quickly align the Company's cost structure and manufacturing capabilities with industry fluctuations could
lead to significant losses or a failure to capitalize on increased demand. In either event, the results of operations may be adversely affected, which could result in significant volatility in the
market price of the Company's ordinary shares and ADSs.

Uncertainties of economic and political conditions, in particular by the global macroeconomic situation, may adversely impact AIXTRON's financial position and results of
operations.

While the global economy did not face major new challenges throughout the year 2013, global growth remained slow as a result of
moderate recovery in the developed economies and a significantly diminished growth dynamic in major emerging and developing countries. However, major challenges of the previous years, including the
sovereign debt crisis in certain Eurozone countries as well as the fiscal cliff and public debt ceiling debates in the U.S., have not been solved yet and could flare up again. During the year 2013,
there were growing concerns about when and how the Federal Reserve, the central bank of the United States, will start tightening its monetary policy. This has already led to a large increase in
long-term yields and spurred the fear of significant capital outflows from emerging economies. Although the Federal Reserve has planned for a slow and cautious exit from quantitative easing, there is
no guarantee that this will hold true in the future and a faster exit might impact the global economic environment. Although AIXTRON has no bank borrowings, it has cash bank deposits. AIXTRON monitors
carefully the financial condition of its banking partners, but if one of AIXTRON's banking partners were to default before AIXTRON detected the problem or took appropriate measures, this could
adversely impact AIXTRON's financial position. A subdued global economic development might adversely affect the business prospects of AIXTRON's customers and suppliers and thus also harm AIXTRON's
business development as a capital goods producer. In addition to the potential for pricing pressure and reduced demand, AIXTRON customers might delay or cancel orders and suppliers might delay or
cancel deliveries, which could adversely affect AIXTRON's ability to align its production capacity with its sales and could result in inventory write downs. These conditions might make it challenging
for AIXTRON to plan and adapt, which could adversely impact AIXTRON's results of operations.

AIXTRON depends on a limited number of customers that operate in concentrated industries.

AIXTRON's customer base has been in the past and may in the future be highly concentrated. Orders from a relatively limited number of
customers have accounted for, and likely will continue to account for, a substantial portion of the Company's revenues, which may lead customers to demand pricing and other terms less favorable to the
Company. If a principal customer discontinues its relationship with AIXTRON or suffers economic setbacks, AIXTRON's business, financial condition and operating results could be materially and
adversely affected. AIXTRON's ability to increase revenues in the future will depend in part upon its ability to obtain orders from new customers. AIXTRON cannot be certain that it will be able to do
so. In addition, because a relatively small number of large manufacturers, many of whom are AIXTRON's customers, dominate the industries in which they operate, it may be especially difficult for the
Company to replace these customers if it loses their business. A large portion of orders in AIXTRON's order backlog are orders from its principal customers. Furthermore, AIXTRON does not have
long-term

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contracts
with many of its customers. The Company's customers may delay existing or new orders because of raw material shortages, credit/liquidity tightness or delays in preparing their facilities.
Any such delays could have a negative impact on customer acceptance of AIXTRON's systems, and ultimately, on its ability to generate revenues. As a result, the Company's agreements with its customers
do not provide any assurance of future revenues and AIXTRON is exposed to competitive price pressure on most new orders it attempts to obtain. The Company's failure to obtain new orders from new or
existing customers would have a negative impact on its results of operations. Because of the significant size of some orders and the limited ability of the Company to reduce expenses quickly in
response to such delays, the Company may experience volatility in its results of operations.

AIXTRON is dependent on a limited number of suppliers and the Company's operating results could be affected if it loses access to sources of materials or services.

The systems that AIXTRON produces are complex and require the Company to manufacture or obtain through third party sources many
critical components. Many of these components are only available from a limited number of suppliers or, in some cases, a single supplier. Because of the cost of AIXTRON's systems, the Company
generally aims to keep its inventories at minimum levels. AIXTRON generally does not have long-term supply agreements with many of its suppliers. Consequently, the Company could experience significant
price increases and/or may not be able to obtain replacement components in a timely manner or at all. Such price increases would increase the cost of goods which could adversely affect the Company's
gross margins and operating results. Because AIXTRON often does not account for a significant part of its suppliers' business, the Company may not have access to sufficient capacity from these
suppliers in periods of high demand. In addition, AIXTRON risks having important suppliers terminate product lines, change business focus or even go out of business. If AIXTRON were required to change
any of its suppliers, it would be required to re-qualify each new supplier. In the near term, the Company's supplier qualification processes could prevent or delay component shipments, which could in
turn prevent the Company from delivering products to its customers in a timely manner. AIXTRON estimates that it could take approximately six to eighteen months to replace suppliers of certain
critical components used in its systems. In addition, in connection with third-party manufacturing activities, it is possible
that AIXTRON may encounter unforeseen technical complexities that it may be unable to resolve, or that the resolution of such complexities may lead to delays in the implementation of these third-party
manufacturing activities.

AIXTRON's business operates in a highly competitive industry characterized by increasingly rapid technological changes, and if the Company does not develop new products in a
timely manner, it may not be able to compete successfully in this market.

The introduction of new products and technologies occurs at a continuously increasing pace and grows increasingly complex over time. If
AIXTRON's business does not develop and introduce new products and technologies in a timely manner in response to changing market conditions or customer requirements, its financial condition and
results of operations could be materially and adversely affected. AIXTRON's competitive advantage and future success depend on its ability to:



In order to compete, AIXTRON must attract, retain and motivate key employees, and its failure to do so could have an adverse effect on its results of operations.

In order to compete, AIXTRON must attract, retain and motivate executives and other key employees, including those in managerial,
technical, sales, marketing and support positions. Hiring and retaining qualified executives, scientists, engineers, technical staff and
sales representatives are critical to the Company's business, and competition for experienced employees in the semiconductor industry can be intense. To attract, retain and motivate qualified
employees, AIXTRON relies heavily on paying cash compensation at market-competitive rates and offering additional incentives and bonus payments. If such cash payments cease to be viewed as a valuable
benefit by the Company's key employees, the Company's

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ability
to attract, retain and motivate its employees could be adversely impacted, which could negatively affect its results of operations and/or require AIXTRON to increase the amount it expends on
cash and other forms of compensation.

AIXTRON's competitors may have greater resources than AIXTRON, or may otherwise be better suited to compete in the Company's markets, and AIXTRON's failure to compete
successfully with these companies would seriously affect its business.

Some of AIXTRON's competitors have greater financial, engineering, manufacturing and marketing resources than the Company. In addition,
AIXTRON faces competition from smaller emerging equipment companies whose strategy is to provide a portion of the products and services that the Company's semiconductor equipment business offers,
using innovative technology to sell products into specialized markets. New product introductions or enhancements by AIXTRON's competitors could cause a decline in revenues or loss of market acceptance
of AIXTRON's existing products. Increased competitive pressure could also lead to intensified price competition resulting in lower margins. The Company's failure to compete successfully with these
other companies would seriously affect its business.

AIXTRON faces lengthy sales and qualification cycles for its products and, in many cases, must invest a substantial amount of time and funds with no assurance that these
efforts or expenditures will result in revenues.

Revenues from AIXTRON's systems primarily depend upon the decision of a prospective customer to invest in or upgrade its manufacturing
capabilities, which typically involves a significant capital commitment by the customer. Customers usually place orders with AIXTRON between three to nine months, or longer, after the Company's
initial contact with them regarding a particular system. AIXTRON often experiences delays in obtaining system orders while customers evaluate and receive internal approvals for the purchase of these
systems. These delays may include the time necessary to plan, design or complete a new or expanded semiconductor fabrication facility. Due to these factors, the Company expends substantial funds as
well as marketing and management efforts to sell its semiconductor production systems. These expenditures and efforts may not result in revenues.

In
order to expand its materials production capabilities, the Company has dedicated a number of its systems to the manufacture of wafers and devices. At any given time, some of AIXTRON's
products are being tested to determine whether they meet customer or industry specifications. During such a qualification period, AIXTRON invests significant resources and dedicates substantial
production
capacity to the manufacture of these new products, prior to any commitment to purchase by the prospective customer and without generating significant revenues from the qualification process. If
AIXTRON was unable to meet these specifications or does not receive sufficient customer orders to profitably use the dedicated production capacity, its business, financial condition, results of
operations and cash flows could be materially and adversely affected.

AIXTRON's
future budgets for operating expenses, capital expenditures, operating leases and service contracts are based upon the Company's assumptions as to the anticipated market
acceptance of its products. If AIXTRON's products do not meet the expected customer demand, the Company's business, financial condition, results of operations and cash flows could be materially and
adversely affected.

AIXTRON's quarterly operating results fluctuate significantly, which may cause the market price of its ordinary shares and its ADSs to increase or decrease significantly.

AIXTRON has historically experienced significant fluctuations in its quarterly operating results and the Company anticipates that such
fluctuations will continue. AIXTRON's results may vary significantly depending on a number of factors, including:



7

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In addition, the Company derives a substantial portion of its revenues in any fiscal period from the sale of a relatively small number of high-priced systems. As
a result, the timing of recognition of revenue for a single transaction could have a material effect on total revenues and operating results for a particular reporting period. A delay of only a week
or two can often shift the related realization of revenues into the next quarter, which could adversely affect the Company's ability to meet expectations. In addition, customers at times attempt to
cancel or reschedule orders, even when not permitted to do so under the contractual terms of the purchase order.

As
stated above, AIXTRON has experienced long and unpredictable sales cycles. The timing of an order often depends on the capital expenditure budget cycle of customers. In addition, the
time it takes the Company to build a product to customer specifications, which the Company refers to as the build cycle, typically ranges from four to nine months, followed in certain cases by a
period of customer acceptance during which the customer evaluates the performance of AIXTRON's system and may potentially reject such system. As a result of the build cycle and evaluation periods, the
period between a customer's initial purchase decision and revenue recognition on an order often varies widely, and variations in length of this period can cause further fluctuations in operating
results.

The
factors described above, together with the cyclical nature of the semiconductor industry, could cause the market price of AIXTRON's ordinary shares and its ADSs to fluctuate
significantly.

AIXTRON's business is exposed to the risks of operating an international business.

AIXTRON's business has operations located in many countries throughout the world to support the Company's sales and services to the
global semiconductor industry. Managing international operations located in many countries throughout the world presents complex management challenges. These challenges may make it more difficult for
AIXTRON to implement business strategies and enforce centralized business processes and controls across its enterprise.

AIXTRON is highly dependent on international revenues, particularly revenues from Asian countries.

Revenues outside of Europe accounted for 86.76% of the Company's total revenues for the year ended December 31, 2013, versus
90.63% for the year ended December 31, 2012, and 95.69% of total revenues for the year ended December 31, 2011. Revenues from AIXTRON's Asian-based customers accounted for 77.54% for the
year ended December 31, 2013, versus 77.90% for the year ended December 31, 2012, and 89.66% of total revenues for the year ended December 31, 2011. AIXTRON anticipates that
international revenues, including revenues from Asia, will continue to account for a significant portion of its revenues. As a result, a significant portion of the Company's revenues will be subject
to risks, including:



Wherever
currency devaluations occur abroad, AIXTRON's products become more expensive for its customers in that country. In addition, difficult economic conditions may limit capital
spending by the Company's customers. These circumstances may also affect the ability of AIXTRON's customers to meet their payment obligations, resulting in cancellations or deferrals of existing
orders and the limitation of additional orders.

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Exchange rate fluctuations, in particular between the Euro, the US-Dollar and the Pound Sterling, could adversely affect AIXTRON's ability to price its products
competitively and its operating results.

The Company's operations are conducted by entities in many countries and a substantial portion of its sales and production costs are
denominated in currencies other than the Euro. As a result, fluctuations between the value of the Euro and other major currencies, in particular
the US-Dollar and the Pound Sterling, may affect the Company's operating results. In addition, changes in monetary or other policies, including as a result of the sovereign debt crisis in certain
Eurozone countries, respective spillover effects and the fiscal cliff and public debt ceiling debates in the U.S., would also likely affect foreign currency exchange rates. AIXTRON may not be able to
effectively reduce or eliminate the risk that fluctuations in foreign currencies will adversely affect its operating results.

Further
details can be found in "Item 11, Quantitative and Qualitative Disclosure about Market Risk."

Because AIXTRON's operating income is subject to taxation in differing jurisdictions, the Company is exposed to a number of different tax risks.

Because AIXTRON operates in a number of countries throughout the world, including the U.S., its operating income is subject to taxation
in differing jurisdictions and at differing tax rates. AIXTRON seeks to organize its affairs in a tax efficient and balanced manner, taking into account the applicable regulations of the jurisdictions
in which it operates. As a result of the Company's multi-jurisdictional operations, it is exposed to a number of different tax risks, including tax risks related to: income tax, value added tax,
payroll tax, social security tax, customs and excise duties, sales and use tax, U.S. state tax, withholding tax requirements, tax treaty interpretation, tax credits, permanent establishments, transfer
pricing on internal deliveries of goods and services (including benefit tests and requirements to prove the arm's length character of internal transactions), loss carry-forwards, multi-jurisdictional
double taxation, acquisitions, dispositions, reorganizations, and internal restructurings.

The
tax authorities in the jurisdictions in which AIXTRON operates may audit the Company's tax returns and may disagree with the positions taken in those returns. An adverse outcome
resulting from any settlement or future examination of AIXTRON's tax returns may subject the Company to additional tax liabilities and may adversely affect its effective tax rate which could have a
material adverse effect on its financial position, results of operations and liquidity. In addition, any examination by the tax authorities could cause AIXTRON to incur significant legal expenses and
divert the Company's management's attention from the operation of its business.

AIXTRON is exposed to risks associated with acquisitions.

AIXTRON has in the past and may in the future undertake acquisitions of, or significant investments in, other businesses with
complementary products, services or technologies. Acquisitions, or other significant investments, involve many risks, including:



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AIXTRON
may not be successful in addressing the risks that its past or future acquisitions may present and the Company may fail to realize the perceived benefits of such acquisitions.

AIXTRON may increase production in anticipation of customer orders that may not materialize, which would negatively affect the Company's operating results.

AIXTRON schedules production of its systems based upon order backlog and customer commitments. Based on the complexity of the systems
that AIXTRON produces, the Company must expend considerable efforts in hiring, training and retaining qualified manufacturing personnel. AIXTRON has in the past experienced delays in customer delivery
schedules, as well as outright cancellations of orders. As a consequence, the Company may incur significant near term expenses for manufacturing capabilities that it may not be able to fully utilize,
which would negatively affect its gross margins and its profitability. Moreover, industry analysts evaluate AIXTRON's backlog in determining the Company's prospects. If AIXTRON experiences significant
reductions in its backlog as a result of cancellations or the Company's failure to obtain new orders, it could experience negative ratings from analysts which could adversely impact the trading value
of the Company's stock.

The semiconductor industry and AIXTRON's operations are characterized by a high percentage of costs that are fixed or otherwise difficult to reduce in the short-term, and by
product demand that is highly variable and is subject to significant downturns that may adversely affect the Company's business, results of operations and financial condition.

The semiconductor industry and AIXTRON's operations are characterized by high costs, such as those related to facility construction and
equipment, research and development, and employment and training of a highly skilled workforce, that are either fixed or difficult to reduce in the short-term. At the same time, demand for the
Company's products is highly variable and downturns have been experienced, often in connection with maturing product cycles and downturns in general economic market conditions. These downturns have
been characterized by reduced product demand, manufacturing overcapacity, high inventory levels and decreased average selling prices. The combination of these factors may cause AIXTRON's revenue,
gross margin, cash flow and profitability to vary significantly both in the short-term and over the long-term.

AIXTRON's businesses use potentially harmful chemicals and other hazardous materials. AIXTRON is subject to environmental risks and regulations which could affect the
Company's results of operations and financial condition.

The Company's research and development activities, as well as the manufacturing and demonstration of AIXTRON's products, involve the
use of potentially harmful chemical and other hazardous or potentially hazardous materials and radioactive compounds. AIXTRON cannot completely eliminate the risk of contamination or injury from the
use, storage, handling or disposal of these materials. In the event of contamination or injury, AIXTRON could be held liable for damages that result, and any liability could exceed the Company's
resources. AIXTRON is subject to the laws and regulations of numerous jurisdictions governing the use, storage, handling and disposal of these materials and specified waste products. The Company's
cost of compliance with these laws and regulations include local, state and federal fees and costs related to the installation and maintenance of safeguards to mitigate the risk of potential release
of hazardous materials (including equipment safeguards, such as scrubbers). The amounts expended in compliance with these laws and regulations to date have not had a material effect on the Company's
capital expenditures, earnings and competitive position. However, if stricter laws were passed or applicable environmental laws were more strictly enforced, AIXTRON may incur significant additional
capital expenditure to address compliance with such environmental laws and regulations.

Failure
or inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines and/or the suspension or
termination of production, each of which could materially and adversely affect the Company's business, financial condition, results of operations and cash flows.

In
addition, new climate change regulations could require AIXTRON to change its manufacturing processes or obtain substitute materials that may cost more or be less available for its
manufacturing operations. Furthermore, new restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs for AIXTRON. The Company expects increased worldwide
regulatory activity in the future. The cost of complying, or of failing to comply, with these and other climate change and emissions regulations could have an adverse effect on AIXTRON's business
plans and operating results.

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AIXTRON is exposed to the risk that third parties may violate the Company's proprietary rights or accuse the Company of infringing upon their proprietary rights.

AIXTRON's success in the markets in which it operates may depend on its ability to operate without infringing the intellectual property
rights of others and to prevent others from infringing the Company's intellectual property rights.

There
has been substantial litigation regarding patents and other intellectual property rights in the semiconductor industry. AIXTRON may become a party to patent litigation or
proceedings to determine its patent rights with respect to third parties, including, potentially, its customers. Infringement proceedings may be necessary to establish which party was the first to
discover certain intellectual property. AIXTRON may also become involved in patent litigation against third parties to enforce the Company's patent rights, to invalidate patents held by third parties
or to defend against similar claims by others. The cost to AIXTRON of any patent litigation or similar proceeding could be substantial, and it may require significant management time. Any patent
infringement litigation may also adversely affect the Company's ADS or ordinary share prices. If infringement litigation against the Company was resolved unfavorably, AIXTRON may be enjoined from
providing some of its products or services, or the Company may be required to obtain a license from a third party. AIXTRON may not be able to obtain the requisite license on commercially acceptable
terms, which could require the Company to cease selling systems that contain infringing technology until it can identify and implement subsystems that do not infringe on third party technology.
AIXTRON may not be successful in developing non-infringing solutions and may be prevented from selling its systems, which could result in a significant reduction in the Company's revenues and a
reduction in the value of its ordinary shares and ADSs.

The Company's competitive position may depend on its ability to protect its intellectual property rights and trade secrets. If AIXTRON was unable to protect such rights and
secrets, other companies may be able to compete more effectively against it, and the Company's business could suffer.

AIXTRON's success is dependent upon the protection of the Company's proprietary rights. In the high-tech industry, intellectual
property is an important asset that is always at risk of infringement. AIXTRON incurs costs to file for patents and defend its intellectual property and AIXTRON relies upon the laws of Germany and of
foreign countries in which it develops, manufactures or sells its products to protect its proprietary rights. However, there can be no assurance that these proprietary rights will provide competitive
advantages, or that other parties will not challenge, invalidate or circumvent these rights. Moreover, the laws of some foreign countries may not be as protective of intellectual property rights as
those in Germany and the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Infringement upon the Company's proprietary rights by a third party could
result in lost market and revenue opportunities for AIXTRON.

AIXTRON
relies on trade secret protection for its confidential and proprietary information and procedures. AIXTRON currently protects this information and these procedures as trade
secrets through recognized practices, including confidentiality agreements with employees, consultants, collaborators and customers. These confidentiality agreements may be breached, however, and
AIXTRON may not have adequate remedies for any breach. In addition, these trade secrets may otherwise become known to, or be independently discovered by, competitors. If AIXTRON's trade secrets were
to become known to, or be independently discovered by, competitors, the Company's competitive position and its business may be negatively impacted.

Risks Relating to holding AIXTRON's ADSs and Ordinary Shares

You may be unable to enforce a judgment against AIXTRON or members of its Executive Board or Supervisory Board.

AIXTRON is a stock corporation organized under the laws of the Federal Republic of Germany. None of the members of its Supervisory or
Executive Boards is currently a citizen or resident of the United States. Substantially all of the assets of these individuals and most of the assets of the Company are located outside the United
States. As a result, it may not be possible for you to enforce against AIXTRON judgments obtained in the United States. You may also encounter difficulties in connection with the enforcement in
Germany of liabilities based solely upon United States laws in original actions or in actions for the enforcement of judgments of United States courts.

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You may have access to less information about AIXTRON and fewer opportunities to exercise your rights as a shareholder if you hold AIXTRON's ordinary shares through its
ADSs.

The rights and terms of AIXTRON's ADSs are designed to replicate, to the extent reasonably practicable, the rights applicable to the
Company's ordinary shares, for which there is no active trading market in the United States. However, because of aspects of German law, the Company's Articles of Association and the contractual terms
of the deposit agreement under which AIXTRON's ADSs are issued, your rights as a holder of ADSs will differ in various ways from a shareholder's rights, and you may be affected in other ways,
including:



As a holder of AIXTRON's ADSs you may have fewer or less well-defined shareholders' rights compared to a holder of common stock of a U.S. company.

AIXTRON's corporate affairs are governed by its Articles of Association (Satzung) and German law. German law is generally less specific
than U.S. law in terms of governance of corporate operations. Under German law, as a holder of AIXTRON's ADSs you may have fewer or less well-defined rights than you would as a shareholder of a U.S.
company. For example, a shareholder of a U.S. corporation may institute lawsuits on behalf of the corporation and class actions. In Germany the company must assert claims for damages against members
of the Executive Board or the Supervisory Board upon a respective shareholders' resolution requiring a simple majority of the votes cast. Moreover, in Germany, shareholders whose shares represent 1%
or a proportional amount of € 100,000 of the stated share capital of the stock corporation may apply in court for authorization to assert claims for damages of the Company
against members of the Executive Board and/or the Supervisory Board in their own name. However, the Company may at any time assert its claims for damages on its own behalf; in such case any pending
authorization or court proceeding initiated by a shareholder of the Company related to the same claims for damages will then be inadmissible. As a result, a shareholder of a German stock corporation
may not be able to protect his or her interest in the shares as well as a shareholder of a U.S. corporation could.

AIXTRON may in the future be considered a passive foreign investment company.

The United States Internal Revenue Code contains special rules relating to passive foreign investment companies ("PFICs"). A United
States holder who owns stock in a PFIC is generally subject to adverse tax consequences under these rules. These rules do not apply to non-United States holders. A company is treated as a PFIC if at
least 75% of the company's gross income for a taxable year consists of "passive income", defined generally as income from passive investments, as opposed to operating income. A company is also treated
as a PFIC if the average percentage of the value of its assets, including cash balances that produce or are held for the production of passive income is at least 50%. While AIXTRON believes it is
currently not a PFIC, because a company's status as a PFIC is a complex, factual determination made on an annual basis, there can be no assurance that the Company will not become a PFIC in the future.
Further details about the PFIC rules and their consequences to United States holders can be found under "Item 10 Additional InformationTaxation."

If
AIXTRON was classified as a PFIC, unless a U.S. holder made a timely specific election, a special tax regime would apply to any "excess distribution", which would be such holder's
share of distributions in any year that are greater than 125% of the average annual distributions received by such holder in the three preceding years or such holder's holding period, if shorter; and
any gain realized on the sale or other disposition of the ADSs. Under this regime, any excess distribution and realized gain would be treated as ordinary income and would be subject to tax as if the
excess distribution or gain had been realized ratably over such holder's holding period for the ADSs. A U.S. holder will generally be required to pay taxes on

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the
amount allocated to a year at the highest marginal tax rate and pay interest on the prior year's taxes, unless such U.S. holder is able to ameliorate the tax consequences somewhat by making a
mark-to-market election or "QEF election". You should consult your tax advisor of the consequences of AIXTRON's classification as a PFIC.

Because AIXTRON is not obligated to continue to have its ADSs listed on the NASDAQ Global Select Market, your ability to trade the ADSs may be eliminated in the future, and
the market prices of the Company's ADSs and ordinary shares may be negatively affected and it may become more difficult to sell the ordinary shares.

Because AIXTRON is not obligated to continue to have the ADSs listed on the NASDAQ Global Select Market, AIXTRON could delist its ADSs,
which could adversely affect the market price for the ADSs and ordinary shares. In addition, if the ADSs are no longer listed on the NASDAQ Global Select Market, there can be no assurance that a
market will develop for the ADSs and it will be more difficult for a United States holder to sell the underlying ordinary shares.

Identification of deficiencies or weaknesses in AIXTRON's internal control over financial reporting may have an adverse impact on the Company's financial condition and
results of operations and the trading price of its securities.

The Company's Management is required to prepare a report relating to its evaluation of the Company's internal control over financial
reporting, as required pursuant to Section 404 of the U.S. Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). AIXTRON intends to take prompt measures to eliminate any identified
deficiencies or weaknesses in the Company's internal control structure. Such measures may involve significant effort and expense. Depending on the nature and extent of any identified deficiency or
weakness, AIXTRON could be required to restate previously issued financial statements. Any of such actions may have an adverse impact on the Company's financial condition and results of operations and
the trading price of its securities.

Item 4:    Information on the Company

A.    History and Development of the Company

Introduction

AIXTRON SE was incorporated as a German limited liability corporation in 1983 and converted to a stock corporation under the laws of
the Federal Republic of Germany in 1997. In 2010, AIXTRON converted from a German stock corporation ("Aktiengesellschaft" or "AG") to a stock corporation in the form of a European Company ("Societas
Europaea" or "SE"). As such, AIXTRON SE is subject not only to the German stock corporation law, but also to the superseding European SE regulations and the German SE Implementation Act
("SE-Ausführungsgesetz"). As a result of such conversion, AIXTRON will continue to be treated to a large extent like a German stock corporation, including with respect to capital
measures, shareholders' meetings and accounting. AIXTRON is headquartered in Herzogenrath, Germany and has wholly-owned subsidiaries in the United Kingdom, China, Japan, South Korea, Sweden, Taiwan
and the United States. AIXTRON's principal executive office is located at Kaiserstrasse 98, D-52134 Herzogenrath, Germany, and the Company's telephone number there is +49-241-8909-0. AIXTRON's agent
for service of process in the United States is AIXTRON, Inc., 1139 Karlstad Drive, Sunnyvale, California 94089.

Important Events

Disclosure of changes in the Executive Board

Paul Hyland (Chairman, President and CEO) resigned from office by mutual agreement effective as of February 28, 2013. On
March 1, 2013, Martin Goetzeler joined AIXTRON as Chairman, President and CEO of AIXTRON.

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Disclosure of changes in the Supervisory Board

Effective as of January 30, 2013, Dr. Holger Jürgensen (deputy chairman of the Supervisory Board) and
Karl-Hermann Kuklies (ordinary member of the Supervisory Board) resigned from office. Therefore, the Supervisory Board consisted of four persons until two new members were elected, but still
constituted a quorum. The Supervisory Board proposed Dr. Andreas Biagosch and Dr. Martin Komischke for election at the Annual General Meeting on May 23, 2013, following the
recommendation of the Nomination Committee. The shareholders approved these proposals by a large majority.

Execution of a capital increase

On October 23, 2013, AIXTRON announced that the Executive Board had, with the consent of the Supervisory Board, agreed to
increase the Company's share capital by partially utilizing its authorized capital of up to € 10,223,133 by issuing up to 10,223,133 new no-par value shares, corresponding
to approximately 10.0% of the Company's share capital, for cash. Shareholders' subscription rights were excluded. On October 24, 2013, AIXTRON announced that the 10,223,133 new shares (shares
without par value) were subscribed by investors via an accelerated book building process. The placement price was € 9.90 per share. The gross proceeds for the Company from
the capital increase amounted to approximately € 101 million. The proceeds from the issue will be used to further strengthen the Company's technological leadership
by selectively investing in additional growth areas for the Company, including projects related to technologies for the manufacturing of Power Electronics, Organic LEDs (OLEDs) and Silicon
Semiconductor applications. Additionally, the capital increase will strengthen the financial flexibility of AIXTRON by reinforcing its balance sheet and cash position.

Amendments to Articles of Association

For information regarding amendments to AIXTRON's Articles of Association, refer to Item 10.B. "Additional
InformationMemorandum and Articles and Association" in this report.

Capital Expenditures

For information regarding capital expenditures, refer to Item 5.B. "Liquidity and Capital ResourcesInvestments" in
this report.

B.    Business Overview

Business Model

AIXTRON is a leading provider of deposition equipment to the semiconductor industry. The Company's technology solutions are used by a
diverse range of customers worldwide to build advanced components for electronic and optoelectronic applications based on compound, silicon, or organic semiconductor materials. Such components are
used in displays, signaling, lighting, fiber optic communication systems, wireless and mobile telephony applications, optical and electronic storage devices, computing, as well as a range of other
leading-edge applications.

AIXTRON's
business activities include developing, producing and installing equipment for the deposition of semiconductor materials, process engineering, consulting and training,
including ongoing customer support.

AIXTRON
supplies its customers with both production-scale material deposition systems and small scale systems for Research & Development ("R&D") or small scale production.

Demand
for AIXTRON's products is driven by increased processing speed, improved efficiency, and reduced cost of ownership demands for current and emerging microelectronic and
optoelectronic components. The ability of AIXTRON's products to precisely deposit thin material films and the ability to control critical surface dimensions in these components, enables manufacturers
to improve performance, yield and quality in the fabrication process of advanced microelectronic and optoelectronic devices.

Environmental
protection and the responsible use of resources are an essential part of AIXTRON's business strategy. AIXTRON underlines its strategic commitment to a responsible
management and control of the Company, oriented to long-term value creation, with the planned implementation of an energy management system and is contributing to the sustained support of the various
national and international climate and environmental protection initiatives by its efficient use of energy and the careful use of resources. The Company's engineers work diligently to continuously
improve AIXTRON's systems,

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both
in terms of resource conservation and environmental-friendly design and function. Moreover, AIXTRON provides targeted support to local social institutions.

For
more information regarding potential factors that could adversely affect the described Company's business activities, model and strategy going forward, refer to Item 3.D. "Key
InformationRisk Factors" in this report.

Employees

AIXTRON's success very much depends on the achievements and motivation of the Company's staff. The employees are recruited on the basis
of professional and personal qualifications and experience. Apart from the direct advertising of job opportunities to attract new employees, AIXTRON regularly participates in job fairs and other
career events, has local press coverage, and enjoys close collaborative relationships with universities worldwide, including locally: the RWTH Aachen University and the University of Cambridge.

As
a global Company with an international corporate culture, AIXTRON places great value on diversity and sees it also as a competitive advantage. The overall aim is to create a
productive work atmosphere, to prevent social discrimination of minorities, and to cultivate equal opportunities.

Management
and leadership quality of an organization also have great impact on the success of a company. Therefore, AIXTRON targets to promote these qualities in the course of its 5-Point-Programthat was
introduced at the Annual General Meeting on May 23, 2013, by the newly appointed President and CEO of AIXTRON,
Mr. Martin Goetzeler. The 5-Point-Program aims at restoring the Company's sustainable profitability even under difficult market conditions. A number of targeted individual projects were
designed to address the following topics: 1) focus on customer benefits; 2) utilization of technology and product portfolio; 3) processes; 4) attention to clearly defined
financial targets; 5) strengthening of AIXTRON's management and corporate culture. A pivotal element of this program is the increase of the Company's cost and asset efficiency.

AIXTRON
considers its labor relations to be satisfactory.

In
2013, the total number of employees decreased by 20%, from 964 employees at the end of 2012 (2011: 978) to 776 at December 31, 2013. This was mainly attributable to the global
staff reductions of approximately 20% in the course of the Company's 5-Point-Program to reduce its cost base and return to profitability. In 2012, the total number of employees decreased slightly by
1%, from 978 employees at December 31, 2011 to 964 at December 31, 2012. Due to the staff reduction program and the continuously subdued business volume the biggest absolute
decrease in personnel was recorded in the Manufacturing & Service department while the biggest relative decrease was seen in the Sales department. The largest group of permanent employees
continue to be employed in Manufacturing and Service positions. In 2012, the biggest individual increase in employees occurred in R&D, which grew by 5%, and the largest number of permanent employees
were those in Manufacturing and Service positions.

2013

2012

2011

Development from
2012 to 2013Employees by Function

Dec 31.

%

Dec 31.

%

Dec 31.

%

abs.

%Sales


66


8


88


9


85


9


(22
)

(25
)Research and Development


264


34


333


35


318


32


(69
)

(21
)Manufacturing and Service


338


44


427


44


450


46


(89
)

(21
)Administration


108


14


116


12


125


13


(8
)

(7
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


776


100


964


100


978


100


(188
)

(20
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


As
of December 31, 2013, the majority of AIXTRON's worldwide permanent employees were based in Europe. However, this region was also most affected by the global staff reductions.
As of December 31, 2012, the majority of AIXTRON's worldwide permanent employees were based in Europe. The decrease

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of
the US headcount by 15% or 21 employees in 2012 was mainly due to cost reduction measures having been applied.

2013

2012

2011

2012 to - 2013Employees by Region

Dec 31.

%

Dec 31.

%

Dec 31.

%

abs.

%Asia


168


22


188


20


181


19


(20
)

(11
)Europe


491


63


660


68


660


67


(169
)

(26
)USA


117


15


116


12


137


14


1


1​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


776


100


964


100


978


100


(188
)

(20
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Technology, Products and Services

AIXTRON's product range includes systems capable of depositing material films on a diverse range of different substrate sizes and
materials.

The
deposition process technologies include Metal-Organic Chemical Vapor Deposition ("MOCVD") for the deposition of compound materials as for the production of LEDs, power electronics or
processors as well as thin film deposition of organic materials. These include Polymer Vapor Phase Deposition ("PVPD") and Organic Vapor Phase Deposition ("OVPD®"), especially
for large area deposition, for Organic Light Emitting Diodes ("OLED") applications. Plasma Enhanced Chemical Vapor Phase Deposition ("PECVD") is being employed for the deposition of complex Carbon
Nanostructures (Carbon Nanotubes, Nanowires or Graphene).

For
silicon semiconductor applications, AIXTRON systems are capable of depositing material films on wafers of up to 300mm in diameter, by employing technologies such as: Chemical Vapor
Deposition ("CVD") and Atomic Layer Deposition ("ALD").

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The
following table summarizes the products and technologies AIXTRON offers to its customers for use in specific applications and devices:

Material

Compound
Semiconductors

Organic Semiconductors

Silicon SemiconductorsSystems Technology

MOCVD

OVPD®

CVDCVD

PVPD

ALDPECVDProducts

Planetary Reactor®

OEC-200 (Cluster Environment for R&D Platform)

Lynx CVDClose Coupled Showerhead®

OVPD-200 (OVPD system for OEC-200 cluster platform)

QXP-8300Nano CVD Reactors BM Series

PRODOS-200 (PVPD system for OEC-200 cluster platform)OVPD Production Systems (Gen2 and larger)PRODOS Production Systems (Gen2 and larger)Potential Applications/Devices

LEDs

OLEDs for displays

Metal and Oxide films for CMOS gate stacksOptoelectronics (photo diodes, lasers, modulators for telecom/datacom)

OLEDs for solid state lighting

Metal and Oxide films for capacitor structures in DRAMs, NAND and PCRAMsLaser devices for consumer electronics (CDs, DVDs)

Organic transparent thin film solar cellsHigh-Frequency devices (such as Hetero Bipolar Transistors and High Electron Mobility Transistors) for wireless datacom

Electronic semiconductor structures, e.g. for flexible displaysSilicon Carbide (SiC) based High Power Devices

Functional polymer layersGallium Nitride (GaN) based power devices

Dielectric or passivating polymer filmsSolar cellsCarbon Nanostructures for electronic, display & heat sink applicationsGraphene structures for electronic applications


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AIXTRON
also offers a comprehensive range of peripheral equipment and services. Additionally, the Company offers its customers training, consulting and support services.

AIXTRON
is constantly working on the improvement of existing technologies and products. In the course of the last three years, AIXTRON has introduced several new system generations and
technologies, such as the QXP-8300 silicon semiconductor technology, the G5 planetary reactor® platform family, including its latest member, the G5+, the CRIUS® II-XL Close
Coupled Showerhead® reactor technology and the PRODOS line of PVPD systems in the organic semiconductor material space.

Research and Development

In addition to the state-of-the-art R&D center at its headquarters in Herzogenrath, AIXTRON also operates R&D laboratories in Aachen
(Germany), in Cambridge (United Kingdom) and in Sunnyvale (United States). These in-house research laboratories are equipped with the latest version of AIXTRON systems and are used to research and
develop new equipment, materials and processes for the production of semiconductor structures.

As
the Company's R&D capability remains a factor of key strategic significance, AIXTRON is committed to investing continuously in research and development projects to not only further
pursue the Company's leading technology position in MOCVD equipment but also to penetrate growth markets in the fields of power electronics, organic semiconductors and next generation memory and
process applications. A thorough analysis of AIXTRON's technology fields confirmed the Management's view on targeted future opportunities and the R&D investments in these fields, and further
technology areas with great market potential have been identified. R&D expenditures are monitored closely and are being made specifically in the defined growth areas. Moreover, a newly developed
product development process is being successfully implemented in all new development projects, leading to more controlled and defined development processes. The Company's R&D program comprised a team
of on average 297 dedicated and highly skilled R&D employees in 2013 (2012: 337; 2011: 279).

In
2013, R&D expenditures were reduced significantly to € 57.2 million (2012: € 72.9 million; 2011:
€ 50.4 million), reflecting efficiency gains and a
more focused R&D approach. Such R&D activities serve to further pursue the technological leadership in MOCVD systems and to secure leading positions in other forward-looking technologies.

In
2012, R&D expenses were up by 45% reflecting AIXTRON's continued high level of commitment to strategic investments in research and development.

For
more information regarding R&D expenses from fiscal year 2011 through 2013, refer to Item 5.A "Operating ResultsDevelopment of ResultsOperating
Costs" in this report.

Underlining
the commitment to remain a recognized technology and market leading Company, R&D activities in 2013 included continual improvement programs for AIXTRON's existing products
and markets, i.e. the delivery of more process capabilities, factory integration, increased automation and the development of new system architectures, all of which are targeted at enabling
customers, who are faced with increasing margin pressure, to achieve improvements in throughput efficiencies and total cost of ownership.

Specific
examples for AIXTRON's research and development activities that are targeted to develop new technology and market opportunities outside of the LED industry include a number of
new publicly funded research projects launched in 2013. In all of these projects, AIXTRON acts as the industry partner responsible for deposition technology. In the "GrapheneFET flagship"
project, for example, a graphene deposition technology is being developed for numerous future applications, such as in wireless communications, display technology, sensors, and for energy saving. The
"SMARTONICS" project targets the future market for organic electronics (e.g. for OLEDs, sensors). In the "MoWSeS" project, new 2D nanostructures/materials are being developed and could be put
to future use in transistor technology.

Intellectual Property

AIXTRON aims to secure its technology by patenting and protecting inventions and know-how, provided it is strategically expedient and
possible for the Company to do so. As of December 31, 2013, 198 patent-protected inventions were in use, of which 24 were registered in the reporting period. Patent protection for these
inventions applies in those sales markets relevant for AIXTRON, specifically in Europe, China, Japan, South Korea, Taiwan and the United States. These patents are maintained and

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renewed
annually and will expire between 2014 and 2033. As of December 31, 2012, 157 patent-protected inventions were in use, of which 14 were registered in the reporting period.

AIXTRON
also has exclusive and non-exclusive licenses to patents owned by others covering certain AIXTRON's products, as well as SAP Software licenses.

AIXTRON
is the licensee of certain patents owned by Centre National de la Recherche Scientifique and Universal Display Corporation which are important to the Company's operations in the
fields of deposition technologies. Under the terms of those licenses, AIXTRON sells epitaxial reactors that manage the layering of materials, produced by thin film deposition processes that enable the
high precision liquid injection, evaporation and gas phase deposition of metal organic materials required to produce photoelectric and electronic devices. Similar principles are employed in the design
of Organic Vapor Phase Deposition equipment for use in the manufacture of organic light emitting devices. Management finds it impractical to quantify the portion of revenues attributable to products
that incorporate the technology governed by these agreements because all product sales can be aggregated into one group based upon the common technology.

Manufacturing

The AIXTRON Manufacturing operation is principally involved in the final assembly stage of production, including equipment
configuration and tuning as well as the final inspection. The Company purchases all of the components and most of the assemblies required to manufacture the equipment from third-party contractors and
suppliers. AIXTRON's contractors and suppliers are carefully selected and qualified to be able to source, supply and/or partially assemble and test individual equipment parts and sub-assemblies. For
strategic reasons, there are typically several suppliers for each AIXTRON equipment component/assembly. However, AIXTRON single sources some key components for its systems and is therefore dependent
on contracts with the specific supplier of such components. AIXTRON's own staff manages the whole manufacturing process and in conjunction with external contractors executes the final manufacturing
steps as described above.

In
1994, AIXTRON was awarded the international quality management standard certification DIN EN ISO 9001. In 2003, the process-oriented management system was successfully
certified in accordance with worldwide quality standard DIN EN ISO 9001:2000. In October 2009, this certification was upgraded to DIN EN ISO 9001:2008.

The
Company complies with all national and international standards and procedures for the equipment industry that are applicable to AIXTRON products. The "CE" label qualification
confirms the conformity of AIXTRON products with the applicable European directives and standards. Moreover, the "UL" standard for admission of AIXTRON products to the US market and the
recommended requirements of the SEMI organization are also complied with. When developing new AIXTRON equipment and upgrades, amongst others the international "Restriction of Hazardous Substances
Directive, RoHS" is strictly adhered to, as are the internal compliance requirements to meet these specific national and international rules and standards. The certifications from several independent
institutions, such as "TÜV" and "ETL" also confirm compliance of AIXTRON's products with national and international requirements and specifications.

Marketing Channels

The Company markets and sells its products worldwide, principally through its own direct sales organization, but also through appointed
dealers and sales representatives. The relationships with these appointed sales and service representatives are generally terminable at the Company's will. These arrangements typically require that
AIXTRON reimburse the representatives for their business expenses as well as pay specified service rates or sales commissions, which vary by geographic region.

AIXTRON's
own Sales and Service Organization provides a full range of customer services, from the initial support of the customized development of an AIXTRON system, through to the final
installation and the ongoing customer training as well as the operational support of its systems.

Customers and Principal Markets

Amongst others, AIXTRON's semiconductor device customers are engaged in the manufacturing of LEDs, integrated circuits, wireless
devices, power electronics, optoelectronics, logic and data storage components. Some of these customers are vertically integrated device manufacturers who serve the entire

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value
chain down to the end consumer. Others are independent component suppliers who deliver chips and components produced on AIXTRON equipment to the next link in the value chain, namely, the
electronic device manufacturers. The Company's customers also include research centers and universities. Most of the world's leading electronic device manufacturers produce in Asia and consequently,
the majority of AIXTRON sales continue to be delivered into this region.

One
AIXTRON customer represented 14% of total revenues in 2013.

For
more information regarding a breakdown of revenues by technology and region for each of the last three fiscal years, refer to Item 5.A. "Operating and Financial Review and
ProspectsOperating ResultsDevelopment of Revenues" in this report.

Seasonality

AIXTRON's business is currently not materially affected by seasonality.

Competitive Positioning

AIXTRON's main competitor in MOCVD applications is still Veeco Instruments Inc. (USA) ("Veeco") with part of its "LED &
Solar" business segment. AIXTRON also competes with a number of Asian manufacturers including Taiyo Nippon Sanso (Japan), amongst others. As a consequence of the rising LED end-market expectations and
positive prospects for MOCVD equipment demand, there is evidence that equipment companies from adjacent industries continue to attempt to qualify their own MOCVD tools with customers. For example,
Jusung Engineering Co. Ltd. (South Korea), Nuflare Technology Inc. (Japan) and Valence Process Equipment (USA) are known to have been active in the development of in-house
equipment solutions for the production of LEDs. Some local Chinese companies are also working on the development and production of MOCVD equipment, supported by respective government initiatives.

Based
on the latest published market share research by Gartner Dataquest (April 2013), it was estimated that the share of the worldwide MOCVD equipment market (estimated 2012 total
market value: USD 446 million) held by AIXTRON in 2012 was around 45%. In the same report, the Company's strongest competitor in terms of sales, Veeco Instruments Inc., had an
estimated market share of approximately 52%. Viewed in the mid to long term, AIXTRON continues to target a market leading position in the global MOCVD market. In a more recent report (December 2013)
Gartner Dataquest anticipated that the total value of the 2013 MOCVD equipment market would decrease to approximately USD 314 million with AIXTRON and Veeco remaining to be the main
players in this market.

For
emerging Organic Semiconductor applications, AIXTRON competes with established manufacturers such as Ulvac, Inc. (Japan), Tokki Corporation (Japan), SNU Precision (South
Korea), Sunic System (South Korea) and a number of other smaller companies. While these competitors use established vacuum thermal evaporation ("VTE") technology or polymer technology to produce
organic light emitting diodes (OLEDs), AIXTRON offers OLED manufacturers its own highly innovative organic vapor phase deposition (OVPD®) and PVPD (polymer vapor phase
deposition) large area deposition technologies. In AIXTRON's opinion, due to a perceived superior process technology and the potential for reducing OLED manufacturing costs, these technologies have
the potential to compete successfully with VTE and polymer technologies, especially in the field of large area displays. AIXTRON is well positioned as a potential deposition system supplier for next
generation OLEDs and large area deposition applications that are anticipated to be used in displays as well as future potential lighting, solar cell, and other electronic OLED applications.

As
AIXTRON's system technology and customer applications are still in the market entry phase, Organic Semiconductor market share information is neither available nor meaningful at this
point in time.

For
CVD and ALD applications, AIXTRON competes with a variety of other equipment companies, including Applied Materials, Inc. (USA), Tokyo Electron Ltd. (Japan), ASM
International N.V. (Netherlands), IPS Technology (South Korea), Jusung Engineering Co. Ltd. (South Korea), and Hitachi Kokusai Electric Co. Inc. (Japan).
Applied Materials, Inc. (USA) and Tokyo Electron Ltd. (Japan) have signed an agreement to merge. With the Company's currently available silicon semiconductor manufacturing technologies, AIXTRON is
potentially well positioned to offer advanced films for 28nm node and below for memory and logic integrated circuits (ICs). These technologies enable extremely high precision in depositing very thin
material layers and facilitate the consistent coating of complex three-dimensional microelectronic device structures. Moreover, they offer the semiconductor

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industry
new material deposition possibilities for the next generation of semiconductor devices, and, in AIXTRON's opinion, present high development potential for the future.

The
specific market niche to be addressed by AIXTRON's system technologies for the production of specialized applications such as gate stacks and capacitors was estimated by Gartner
Dataquest in December 2013 to be valued at USD 247 million for 2013. For memory device production systems of the 28nm node and below, AIXTRON still experienced relatively low order
intake and revenue levels during 2013. AIXTRON's market share in this area is therefore still not considered meaningful at this point in time. For more information regarding a breakdown of revenues by
technology and region for each of the last three fiscal years, refer to Item 5.A. "Operating and Financial Review and ProspectsOperating ResultsDevelopment of
Revenues" in this report.

Key Performance Indicators

The Executive Board has implemented numerous control systems and procedures to manage, monitor, analyze, and document Company risks and
opportunities, including a Key Performance Indicator system addressing relevant business areas, with a primary focus on the "Market", "Finance" and "Technology Development" control areas.

In
the "Market" control area, using third party reports and direct customer dialog, AIXTRON pursues a market-led product development strategy through the careful examination of market
trends and customer requirements. The objective of this strategy is to ensure the timely market availability of new and appropriately competitive product generations in line with customer
requirements.

In
the "Finance" control area, the Executive Board uses a range of internal and external key performance indicators to monitor the progress of key research and development projects, with
particular focus on: order intake, total sales, contribution margins, net result data and cash flow. The
objective of these controls is to ensure that profitable revenue growth is matched with cost and asset efficiency to achieve sustainable value generation.

In
the "Technology Development" control area, the Executive Board uses a range of internal and external key performance indicators to evaluate the progress and success of internal
projects. The Management regularly reviews compliance with project plans and pre-defined targets such as timelines, cost and margin targets. Following the release of new products for example, the
Management monitors closely the development of sales revenues and margin profiles. The objective of this review process is to ensure that ongoing projects retain the necessary level of technological
and commercial competitiveness throughout the life of the product.

Government Regulation

Due to the nature of AIXTRON's products, the shipment of some products to customers in certain countries requires the Company to obtain
an export license from statutory authorities in Germany, the UK and the US, including, for example, the Bundesamt für Wirtschaft und Ausfuhrkontrolle ("BAFA") in Germany, the Department
for Business, Innovation and Skills in the UK as well as the Department of State and the Department of Commerce in the US.

Research
and development activities, as well as the manufacturing and demonstration of the Company's products involve the use of potentially harmful chemical and hazardous materials and
radioactive compounds and as a result, AIXTRON is subject to stringent environmental and safety regulations in connection with its business operations.

Because
AIXTRON's securities are publicly traded in the US, the Company is also subject to the rules and regulations promulgated by the SEC, including those defined under the
Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010. In addition, AIXTRON is subject to other regulations, for example the provisions of the US Foreign Corrupt Practices Act and the UK Bribery
Act relating to the maintenance of books and records and anti-bribery controls.

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C.    Organizational Structure

The table below shows a list of the AIXTRON subsidiaries as of December 31, 2013:

Name

Jurisdiction of
Incorporation

Ownership
InterestAIXTRON Ltd.

England and Wales


100
%AIXTRON AB

Sweden


100
%AIXTRON China Ltd.

China


100
%AIXTRON Korea Co. Ltd.

South Korea


100
%AIXTRON KK

Japan


100
%AIXTRON Taiwan Co. Ltd.

Taiwan


100
%AIXTRON, Inc.

USA


100
%Nanoinstruments Ltd

England & Wales


100
%Genus Trust*

USA


n.a.


*The
shares in the Genus Trust are attributed to AIXTRON as the beneficial owner, as control exists due to the trust relationship with AIXTRON SE


D.    Property, Plant and Equipment

The Company has its registered office in Herzogenrath, Germany, and had a total of 15 facilities worldwide owned or rented as of
December 31, 2013:

Facility location

Use

Approx. size

Lease expiry(m2)Herzogenrath, Germany (owned)

Headquarters, Manufacturing, Service, Engineering


12,457


Herzogenrath, Germany (owned)

Research & Development, Manufacturing, Engineering


16,000


Aachen, Germany (leased)

Research & Development


200


2/28/2016Cambridge, UK (leased)

Manufacturing, Engineering, Research & Development


2,180


9/13/2019Cambridge, UK (leased)

Sales, Service, Engineering


1,386


6/27/2020Lund, Sweden (leased)

Engineering, Service


449


12/31/2014Sunnyvale, CA, USA (leased)

Manufacturing, Sales, Service, Engineering, Research & Development


9,338


10/31/2017Seoul, South Korea (leased)

Sales, Service


1,032


12/31/2015Shanghai, China (leased)

Sales, Service


755


7/31/2014Suzhou, China (leased)

Sales, Service


537


6/21/2014Yangzhou, China (leased)

Sales, Service


90


10/14/2014Hsinchu, Taiwan (leased)

Sales, Service


1,417


12/31/2014Hsinchu, Taiwan (leased)

Sales, Service


476


3/31/2014Tainan, Taiwan (leased)

Service


203


5/27/2016Tokyo, Japan (leased)

Sales, Service


364


9/30/2014


Environmental Issues

The research and development activities, as well as the manufacturing and demonstration of AIXTRON's products conducted in some of its
facilities, involve the use of potentially harmful chemical and other hazardous or potentially hazardous materials and radioactive compounds. Failure or inability to comply with existing or future
environmental regulations could result in significant remediation liabilities, the imposition of fines and/or the suspension or termination of production.

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AIXTRON
underlines its strategic commitment to a responsible management and control of the Company, oriented to long-term value creation, with the planned implementation of an energy
management system and is contributing to the sustained support of the various national and international climate and environmental protection initiatives by its efficient use of energy and the careful
use of resources. The Company's engineers work diligently to continuously improve AIXTRON's systems, both in terms of resource conservation and environmental-friendly design and function. Moreover,
AIXTRON provides targeted support to local social institutions.

Item 4A:    Unresolved Staff Comments

None.

Item 5:    Operating and Financial Review and Prospects

Global Economy

As a producer of capital goods the AIXTRON Group is affected by the global economic development as far as it has an effect on its
customers' sales projections and therefore also on their investment behavior.

While
the global economy did not face major new challenges throughout the fiscal year 2013, global growth according to the International Monetary Fund (IMF) remained subdued at 3.0%. The
reason for this is a moderate recovery in the developed economies while growth dynamic in major emerging and developing countries diminished significantly. Financial markets have also experienced a
further stabilization throughout the fiscal year 2013. Therefore, there was no significant impulse for AIXTRON's business development from the global economic environment.

Following
a slight increase of the US dollar exchange rate in the course of the first half of fiscal year 2013, the US currency showed a weaker development in the second half of fiscal
year 2013. Among other things, this development was attributable to the monetary policy of the US Federal Reserve and the political controversy over the increase of the authorized federal debt
ceiling. Consequently, compared to the closing price at the end of fiscal year 2012, the US dollar depreciated by approximately 4% to 1.377 USD/EUR as of December 31, 2013 (2012:
1.319 USD/EUR). The average exchange rate used by AIXTRON to translate income and expenses denominated in US dollars of 1.328 USD/EUR in 2013 (2012: 1.286 USD/EUR) was
approximately 3% below the previous year's figure. AIXTRON's revenue and earnings were negatively affected by the decline in the US dollar.

AIXTRON
Management continues to carefully monitor the developments in the global economy and financial markets, and regularly examines what can be potentially done to mitigate negative
exogenous effects on AIXTRON's business.

The Semiconductor Equipment Market

In 2013, the electronics equipment industry in total grew by 2% (according to Gartner Dataquest, December 2013) which was below the
recorded world real GDP growth (according to the IMF World Economic Outlook update published on January 21, 2014).

In
comparison, the subset, semiconductor capital spending, showed a decline of about 4.6% in 2013. A further subset, specific spending on Wafer Fab equipment (WFE), which includes
spending on deposition tools supplied by AIXTRON, declined by 9.1% year on year (according to Gartner Dataquest, December 2013). The worldwide MOCVD equipment market as subset of the WFE market
declined by 30% to approximately USD 314 million in 2013, from an estimated total market value of USD 446 million in 2012 (Gartner Dataquest, March 2013 and December 2013).

The
largest revenue driver for AIXTRON in 2013 continued to be the sale of MOCVD systems for the manufacturing of High Brightness ("HB") LEDs, which represented 39% (2012: 48%; 2011:
83%), of its total equipment revenues.

The HB LED Market

The market for Gallium nitride based, high brightness LED devices which can be produced with AIXTRON's compound semiconductor
equipment, was expected to have grown by 17% measured in units in 2013 according to a report from IHS (an independent semiconductor market research institute), published in January 2014. However,
according to industry sources, LED prices have dropped by 20-30% throughout the year and are expected to decline at the same rate in 2014. Concurrently, the market for

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Gallium
nitride based, high brightness LED devices was predicted to grow in 2014 by only 4% to USD 12.9 billion from USD 12.4 billion in 2013 (IHS).

The
continuous reduction of LED prices, governmental policy changes and efforts from the supply chain, have all contributed positively to increasing the momentum for LED lighting
adoption across commercial, industrial and consumer segments.

According
to the market research institute IHS (December 2013), the market for LEDs for general lighting is expected to grow from 495 million shipped units in 2013 to
3.6 billion shipped units in 2020. The penetration of LED-lamps relative to total lamps is expected to rise from 3% in 2013 to 31% in 2020, supported by the increasing availability of
attractively priced, quality LED lighting products.

Management Assessment of Company Situation

Against the backdrop of the expected general lighting cycle with LED penetration in general lighting still being on very low levels and
the continuously subdued customer demand for new production equipment, 2013 was another challenging year for AIXTRON. At the beginning of the year 2013, Management expected fiscal year 2013 to become
better than 2012. The first quarter 2013 though was characterized by a deterioration of future prospects and the Management had to initiate a comprehensive restructuring program to adapt the Company
to the new market conditions. Amongst others, this included significant inventory write-downs totaling € 35 million. While high capacity utilization rates at
leading LED manufacturers suggested that the overcapacity of MOCVD deposition equipment was further diminishing, there has still been no significant pick-up in the demand for new AIXTRON equipment.

As
a consequence, the new President and CEO, Martin Goetzeler, who took office on March 1, 2013, introduced a 5-Point-Program to restore the Company's sustainable profitability.
The ongoing program went along with a global staff reduction of about 20%, cost reductions and the optimization of the Company's structures and processes. For more information regarding the Company's
5-Point-Program refer to Item 5.A. "Operating and Financial Review and ProspectsOperating ResultsDevelopment of Results".

AIXTRON
customers are in the course of optimizing their processes for the production of more powerful and cost-efficient devices and AIXTRON is actively supporting the industry in this
development with its newly implemented technical key account structure and its own product roadmap. Moreover, AIXTRON is reducing significantly both its lead times and the timeframe from the
conception of a product to its volume production.

Although
the market demand for AIXTRON's production equipment is still on low levels, it is Management's opinion that the overall prospects for the various end-markets and industries
that AIXTRON is offering its deposition technologies to remain positive and that the measures comprised in the 5-Point-Program will contribute to a further stabilization of the Company's earnings
situation in the fiscal year 2014.

In
order to support and secure the Company's competitive position the Management also decided on the execution of a capital increase in October 2013. Gross proceeds for the Company from
the capital increase amounted to approximately € 101 million. For more information on the capital increase, refer to Item 4.A. "Information on the
CompanyHistory and Development of the CompanyExecution of a capital increase".

Management
believes that the Company is well positioned to seize the future opportunities in its markets and to retain a leading position in its industry.

A.    Operating Results: 2011-2013

The following operating and financial review of AIXTRON's results of operations and financial condition should be read together with
AIXTRON's Consolidated Financial Statements prepared in accordance with IFRS included under Item 8. of this report.

The
following discussions include "forward-looking statements" that involve risks and uncertainties that are discussed more fully in "Risk Factors" and "Forward-looking statements
notice" included in this annual report. Actual results could differ materially from future results expressed or implied by the forward-looking statements.

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Development of Revenues

In fiscal year 2013, AIXTRON recorded total revenues of € 182.9 million, a decrease of
€ 45.0 million, or 20%, compared to € 227.8 million in 2012 (2011: € 611.0 million). Despite
noticeably increasing capacity utilization rates in AIXTRON's target industries, for example at leading Taiwanese and Korean LED chip manufacturers, demand for AIXTRON's production equipment remained
at a very low level throughout the fiscal year 2013. The 2013 decrease in revenues was mainly driven by a generally reluctant investment behavior of AIXTRON's customers in light of the prevailing
excess capacity in LED production that could not yet be fully absorbed by the growing demand for LED products. Therefore, one of the consequences of such behavior was a significantly lower demand for
AIXTRON's MOCVD deposition equipment than AIXTRON expected at the beginning of the year. The low market demand lead to a lower price level for these tools. The 2013 equipment revenues declined by 22%
to € 138.0 million (2012: € 176.9 million; 2011: € 556.3 million). In fiscal year 2013,
MOCVD equipment for LED production, continued to account for the largest portion of AIXTRON's total equipment revenues, representing 39%. With the release of a new generation product in the current
fiscal year, AIXTRON expects selling prices and margin contributions in this segment to increase. Order intake for the full year 2013 remained flat year-on-year at
€ 133.2 million (2012: 131.4 million; 2011: € 513.4 million).

The
deposition equipment and upgrades bought by AIXTRON's customers are predominantly used for the production of LEDs, which in turn are primarily employed as backlighting devices for
LCD displays, but also increasingly in general lighting applications. The next biggest end-market in terms of revenues for AIXTRON equipment in the fiscal year 2013 was ALD equipment for the
production of DRAM memory chips. Total equipment sales generated 75% of total revenues in 2013 (2012: 78%; 2011: 91%). The 2012 decrease in revenues was mainly driven by a generally reluctant
investment
behavior of AIXTRON's customers in the light of uncertain end-market conditions. This reluctance was particularly evident in the LED TV and LED lighting equipment markets where we experienced
significantly lower demand for MOCVD deposition equipment than anticipated.

The
decrease in full year 2012 revenues was mainly attributable to the 68% reduction in the Company's deposition equipment revenues.

25%
of total revenues in 2013 were generated by sales of spare parts and service, which is 3 percentage points higher than in 2012 (2012: 22%; 2011: 9%) and mainly due to the low
equipment revenues baseline. In absolute terms, sales of spare parts and service were 12% lower in 2013 compared to 2012, despite a larger installed base of manufacturing equipment (2013:
€ 44.8 million; 2012: € 51.0 million; 2011: € 54.7 million). The described pattern is
typically a result of prior years' equipment sales as spare part revenues usually lag behind the revenue development from equipment, since services and spare part packages are typically included or
covered by warranty provided to customers in the after sales period.

2013

2012

2011

2013-2012Revenues by Technology

million
EUR

%

million
EUR

%

million
EUR

%

million
EUR

%Equipment revenues


138.0


75


176.9


78


556.3


91


(38.9
)

(22
)Other revenues (service, spare parts, etc.)


44.8


25


51.0


22


54.7


9


(6.2
)

(12
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


182.9


100


227.8


100


611.0


100


(44.9
)

(20
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


The
major part of total revenues, 78%, of total revenues in 2013, continues to be generated by sales to customers in Asia, which, despite generally decreasing sales revenues, was the
same percentage as in the previous year (2012: 78%; 2011: 90%). 13% of revenues in 2013 were generated in Europe (2012: 9%; 2011: 4%) and the remaining 9% in the USA (2012: 13%; 2011: 6%).

2013

2012

2011

2013-2012Revenues by Region

(million
EUR)

(%)

(million
EUR)

(%)

(million
EUR)

(%)

(million
EUR)

(%)Asia


141.8


78


177.5


78


547.8


90


(35.7
)

(20
)Europe


24.2


13


21.4


9


26.3


4


2.8


13USA


16.9


9


29.0


13


36.9


6


(12.1
)

(42
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


182.9


100


227.8


100


611.0


100


(44.9
)

(20
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


25

---



Table of Contents

Development of Results

2013

2012

2011

2013-2012Cost Structure

(million
EUR)

(%
Revenues)

(million
EUR)

(%
Revenues)

(million
EUR)

(%
Revenues)

(million
EUR)

(%)Cost of Sales


190.3


104


227.4


100


379.5


62


(37.1
)

(16
)Gross profit


(7.4
)

(4
)

0.4


0


231.4


38


(7.8
)

n.a.Operating Costs


88.4


48


132.7


58


118.5


19


(44.4
)

(33
)Selling expenses


29.0


16


34.8


15


32.1


5


(5.8
)

(17
)General and administration expenses


18.2


10


19.6


9


34.0


6


(1.4
)

(7
)Research and development costs


57.2


31


72.9


32


50.4


8


(15.7
)

(22
)Net other operating (income) and expenses


(16.0
)

(9
)

5.5


2


2.0


0


(21.5
)

n.a.


At
the Annual General Meeting on May 23, 2013, the newly appointed President and CEO of AIXTRON, Mr. Martin Goetzeler, introduced a 5-Point-Program to restore the Company's
sustainable profitability even under difficult market conditions. Inventory write-downs and restructuring costs were consequently € 6 million higher than in fiscal
year 2012. For more information regarding the Company's 5-Point-Program refer to Item 4.B. "Business Overview".

Cost of Sales

In 2013, cost of sales decreased year on year by 16% in absolute terms from € 227.4 million to
€ 190.3 million (2011: € 379.5 million). The decrease is particularly attributable to lower revenue-related costs. Due to a
negative effect of € 5.2 million in connection with a fire in a third-party warehouse in the UK, cost of sales relative to revenues was 104% in 2013 (2012: 100%;
2011: 62%).

2012
cost of sales decreased year on year by 40% in absolute terms from € 379.5 million in 2011 to
€ 227.4 million in 2012. This cost base was only slightly below the revenues booked in 2012, principally due to the significant third quarter of 2012 inventory
write-downs, against the backdrop of the slower than expected recovery of orders and business volume within the second half of 2012, which in turn led to a continued under-recovery of production
overhead costs.

Gross Profit, Gross Margin

Against the background of the aforementioned items as well as lower selling prices for MOCVD equipment and despite numerous cost
reduction measures taken per the 5-Point-Program, the Company's gross profit in 2013 decreased year-on-year to € -7.4 million (2012:
€ 0.4 million; 2011: € 231.4 million), resulting in a negative gross margin of 4% after 0% in 2012 (38% in 2011). Due to the
high relative cost of sales base in 2012, the Company's gross profit decreased to € 0.4 million in 2012, resulting in a 0% gross margin after 38% in 2011.

Operating Costs

As part of the above-mentioned 5-Point-Program the Executive Board decided amongst others to reduce the operating costs (excluding
restructuring and transformation expenses) compared with the previous year, which included a staff reduction of approximately 20% across all functional areas worldwide. The majority of the employees
affected in Germany, i.e. more than 100 employees, were released through termination agreements. A positive effect of these measures was the initial optimization of the Company's cost
structures which is partially reflected in the decrease of selling, general and administration expenses from € 54.4 million in 2012 to
€ 47.2 million in 2013.

This
development was influenced by the following factors:

In
line with the revenue development, selling expenses in 2013 decreased in absolute terms by 17% from € 34.8 million to
€ 29.0 million (2011: € 32.1 million). Selling expenses relative to revenues were stable at 16% (2012: 15%; 2011: 5%). 2012
selling expenses were up slightly year on year in absolute terms to € 34.8 million (2011: € 32.1 million), which, in spite of
the lower sales volume, is mainly due to increased provisions for after sales services. 2012 selling expenses relative to revenues were also up year on year from 5% in 2011, by 10 percentage
points, to 15% in 2012. In 2013, general and administration expenses declined by 7% to € 18.2 million (2012: € 19.6 million;
2011: € 34.0 million) and were mainly influenced by reduced costs for external services as well as lower software license fees. The significant 2012 decrease of

26

---



Table of Contents

general
and administration expenses was principally attributable to lower profit related elements of the administration costs, a reduced number of temporary staff and lower fees for external services
and consulting. General and administration expenses relative to revenues were virtually stable at 10% in 2013 (2012: 9%; 2011: 6%), which was due to the included restructuring expenses which contained
severance payments. 2012 general and administration expenses, relative to revenues, increased by 3 percentage points from 6% in 2011 to 9% in 2012, principally due to the lower sales volume
effect relative to the cost reduction.

Key R&D Information

2013

2012

2011

20132012%R&D expenses (million EUR)


57.2


72.9


50.4


(22
)R&D expenses, % of sales


31


32


8R&D employees (period average)


297


337


279


(12
)R&D employees, % of total headcount (period average)


35


34


32


As
the Company's R&D capability remains a factor of key strategic significance, research and development expenses were carefully analyzed in the course of the 5-Point-Program and are
focused on specific growth areas such as OLED and Power Electronics. Thus, 2013 R&D expenditures were reduced significantly to € 57.2 million (2012:
€ 72.9 million; 2011: € 50.4 million), reflecting efficiency gains and a more focused R&D approach. In 2012, R&D expenses were
up by 45% reflecting AIXTRON's continued high level of commitment to strategic investments in research and development. AIXTRON's R&D activities serve to further pursue the technological leadership in
MOCVD systems and to secure leading positions in other forward-looking technologies.

2013

2012

2011

2013-2012Personnel Costs

(million
EUR)

(million
EUR)

(million
EUR)

(million
EUR)

(%)Cost of Sales


25.7


30.9


26.5


(5.2
)

(17
)Selling, General and Administrative expenses


17.8


19.3


25.9


(1.4
)

(8
)Research and Development costs


24.0


30.9


24.2


(6.9
)

(22
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


67.5


81.1


76.6


(13.5
)

(17
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


As
a result of the global staff reductions across all operating areas the average number of Group employees declined from 983 in 2012 to 847 in 2013 (2011: 864), also resulting in 17%
lower personnel costs of € 67.5 million, including severance payments, compared to € 81.1 million in 2012 (2011:
€ 76.6 million). With the average number of Group employees increasing from 864 in 2011 to 983 in 2012, mainly in R&D and regional sales, personnel expenses
increased by 6% in total from € 76.6 million in 2011 to € 81.1 million in 2012. Due to lower revenues, personnel expenses as a
percentage of revenues were stable at 37% in 2013 (2012: 36%; 2011: 13%). Mainly due to the lower revenue figure, personnel expenses, as a percentage of sales, were up 23 percentage points from
13% in 2011 to 36% in 2012. At the end of the period on December 31, 2013, in absolute terms, the number of employees decreased from 964 as of December 31, 2012 to 776 as of
December 31, 2013 (December 31, 2011: 978). 2013 net other operating income and expenses gave an operating income of € 16.0 million (2012:
€ 5.5 million expense; 2011: € 2.0 million expense). The write-down of a building expected to be put on the market for sale in
the near future amounting to € 9.9 million was more than offset by the insurance proceeds of € 22.5 million resulting from a
fire. The 2012 net expense was mainly attributable to the impact from currency effects not being offset by increased R&D grants received during the year. In 2013, the Company recorded a net currency
income of € 0.5 million (2012: € 6.9 million net expense; 2011: € 2.1 million net expense)
resulting from currency and translation differences. The 2012 net currency expense was incurred largely from USD/EUR hedging contracts (€ 6.8 million). The
€ 2.5 million of R&D grants received in 2013 (2012: € 2.7 million; 2011: € 1.4 million),
were recorded as "other operating income". In 2013, total operating costs decreased year-on-year by 33% to € 88.4 million (2012:
€ 132.7 million; 2011: € 118.5 million). Operating costs relative to revenues were 48% in 2013, 10 percentage points
lower than the 58% in 2012 (19% in 2011).

Operating Result

The absolute operating result improved in a year-on-year comparison by € 36.6 million and came in
at € -95.7 million in 2013 (2012: € -132.3 million; 2011: € 112.9 million) resulting in an
EBIT margin of

27

---



Table of Contents

-52%
(-2012: -58%; 2011: 18%). This development is mainly due to realized operating cost savings and the previously mentioned insurance proceeds leading to the EBIT
improvement over the previous year. The significant decrease of the 2012 operating result was principally due to the significantly reduced gross profit, resulting from the previously described cost of
sales development coupled with an increased absolute operating cost base.

Result Before Taxes

Result before taxes improved year-on-year by € 34.7 million from €
-129.9 million in 2012 (2011: € 115.0 million) to € -95.2 million in 2013, with a net finance income of
€ 0.5 million (2012: € 2.3 million income; 2011: € 2.1 million income).

2013

2012

2011

2013-2012Interest & Taxes

(million
EUR)

(million
EUR)

(million
EUR)

(million
EUR)

(%)Net Finance Income/Expense


0.5


2.3


2.1


(1.8
)

(78
)Finance Income from financial assets


0.8


2.3


3.4


(1.5
)

(65
)Finance Expenses from financial liabilities


(0.3
)

0.0


(1.3
)

(0.3
)

n.a.Taxes on Income


(5.8
)

(15.5
)

(35.4
)

9.7


(63
)


In
2013, AIXTRON recorded a country specific tax expense of € 5.8 million (2012: tax expense of € 15.5 million;
2011: tax expense of € 35.4 million). The 2012 tax expense resulted mainly from the derecognition of previously capitalized tax assets that had become necessary due
to the lack of visibility persisting throughout the year in combination with a still pending meaningful recovery of market demand for LED manufacturing equipment. Unrecognized
deferred tax assets related to tax losses at December 31, 2013 totaled € 88.7 million (2012: € 90.9 million; 2011:
€ 16.1 million).

Profit/Loss Attributable to the Equity holders of AIXTRON SE (after taxes)

The 2013 after-tax result attributable to the equity holders of AIXTRON SE was € -101.0 million or
55% of revenues, and € -145.4 million (-64% of revenues) in 2012 (2011: € 79.5 million or 13% of revenues).

Net Result AIXTRON SEUse of Results

AIXTRON SE, the parent company of the AIXTRON Group, recorded a net accumulated loss in accordance with German generally accepted
accounting principles, (German GAAP) based on the German Commercial Code, HGB, of € -1.1 million as of December 31, 2013 (accumulated loss 2012:
€ -51.6 million; accumulated profit 2011: € 77.0 million).

As
they did with the 2012 loss, AIXTRON's Executive and Supervisory Boards will propose to the annual general meeting that the 2013 loss should be carried forward and consequently no
dividend payment should be made for 2013 (2012: no dividend; 2011: dividend of € 0.25 per share or a total of € 25.4 million).

Development of Orders

2013

2012

2011

2013-2012Equipment Orders

(million
EUR)

(million
EUR)

(million
EUR)

(million
EUR)

(%)Equipment order intake


133.2


131.4


513.4


1.8


1​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Equipment order backlog (end of period)


59.6


79.4


141.0


(19.8
)

(25
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Equipment Order Intake

In 2013, equipment order intake at € 133.2 million was broadly unchanged year-on-year compared to
€ 131.4 million of the fiscal year 2012 (2011: € 513.4 million). This is a result of the continuously subdued demand for new
production equipment from AIXTRON customers and lower selling prices for MOCVD equipment sold out of excess inventories, throughout the fiscal year 2013. During the fiscal year 2012, AIXTRON customers
were hesitant in adding significant LED-manufacturing capacity as a result of th e uncertain development of consumer markets in an uncertain global economic environment. The 2012 total order intake
included € 19.0 million which was subsequently removed from the order backlog on September 30, 2012.

28

---





Table of Contents

As a matter of internal policy, order intake in US Dollars was recorded at a budget exchange rate for 2013, which had been set at 1.30 USD/EUR at the
beginning of the year (2012: 1.40 USD/EUR; 2011: 1.35 USD/EUR).

Equipment Order Backlog

The total equipment order backlog of € 59.6 million at December 31, 2013 was 25% lower than
the € 79.4 million at the same point in time in 2012 and 29% lower than the 2013 opening backlog of € 83.8 million, revalued as
of January 1, 2013, at the US-Dollar exchange rate of 1.30 USD/EUR valid at that time. The total equipment order backlog of € 79.4 million at
December 31, 2012 was 44% lower than at the same point in time in 2011 (2011: € 141.0 million).

As
of year-end 2013, the US Dollar denominated order backlog was recorded at a 2013 budget exchange rate, which had been set at 1.30 USD/EUR at the beginning of the year (2012:
1.40 USD/EUR; 2011: 1.35 USD/EUR). In the course of fiscal year 2013, the order backlog was corrected downwards by approximately € 18.8 million to
reflect the backlog's current risk profile. This order backlog was revalued at the 2014 budget rate of 1.35 USD/EUR as per January 1, 2014, leading to an opening equipment order backlog
of € 58.1 million for 2014.

As
a matter of strict internal policy, AIXTRON follows clear internal requirements before recording and reporting received equipment orders as order intake and order backlog. These
requirements comprise of all of the following minimum criteria:



In
addition and reflecting current market conditions, the Company's Management reserves the right to assess whether the actual realization of each respective system order is sufficiently
likely to occur in a timely manner according to Management's opinion. When Management concludes, that there is sufficient likelihood of realizing revenue on any specific system or that there is an
unacceptable degree of risk of not realizing revenue on any specific system, Management will include or exclude the order, or a portion of the order, into or from the recorded order intake and order
backlog figures, regardless of compliance with requirements of the points 1-4 above.

Currency Fluctuation

Fluctuations between the value of the Euro and other major currencies, in particular the US-Dollar and the Pound Sterling can affect
the Company's operating results. The Company generally monitors if and to what extent currency hedging instruments shall be used to manage its exposure to foreign currency risk. See
"Item 11Quantitative and Qualitative
Disclosure about Market Risk" for further details. Please also see "Item 3DRisk Factors" for further details.

B.    Liquidity and Capital Resources

Corporate Financial Management

AIXTRON has a central financial management system to control its global liquidity, interest and currency management.

Due
to the volatile nature of the semiconductor business, a sufficient level of cash is essential to expeditiously finance potential business needs. The Company's need for cash is
generally provided for through operating cash flows and, to a smaller extent, through grants. In order to secure future financing and support the indispensable R&D activities, the Company has access
to a strong equity capital base. Furthermore, approved by the Annual General Meeting, and subject to Supervisory Board approval, the Company has the authority to issue equity instruments to be able to
raise additional liquidity on the capital market if required.

AIXTRON
conducts a large part of its business in foreign currencies, i.e., in currencies other than the Euro. The most prevalent foreign currency relevant to AIXTRON is the US
Dollar. Unfavorable exchange rate movements, especially the US Dollar/Euro exchange rate, will adversely affect the Company's results

29

---



Table of Contents

of
operation. In order to manage foreign exchange risks, the Company routinely monitors if and to what extent currency hedging instruments should be used. In 2013, no currency hedging instruments were
used.

Funding

The Company made use of the authorizations to issue equity instruments in October 2013.

On
October 23, 2013, AIXTRON announced that the Executive Board had, with the consent of the Supervisory Board, agreed to increase the Company's share capital by partially
utilizing its authorized capital of up to € 10,223,133 by issuing up to 10,223,133 new no-par value shares, corresponding to approximately 10% of the Company's share
capital, for cash. Shareholders' subscription rights were excluded. On October 24, 2013, AIXTRON announced that the 10,223,133 new shares (shares without par value) were subscribed by investors
via an accelerated book building process. The placement price was € 9.90 per share and the gross proceeds for the Company from the capital increase amounted to
approximately € 101 million. For more information on the capital increase, refer to Item 4.A. "Information on the CompanyHistory and Development
of the CompanyExecution of a capital increase".

Taking
into account the execution of the capital increase, the Company's stated share capital (Grundkapital) as of December 31, 2013 amounted to
€ 112,613,445 (December 31, 2012: € 101,975,023; December 31, 2011: € 101,789,527) divided into
112,613,445 registered shares with a proportional interest in the share capital of € 1.00 per no-par value registered share. AIXTRON has an American Depositary Share
("ADS") program. The Company's ADSs, each representing one ordinary share, trade on the NASDAQ Global Select Market. For more information on the Company's capital increase, please refer to
Item 4.A. "Information on the CompanyHistory and Development of the CompanyImportant EventsExecution of a capital increase".

The
Company has a number of stock option programs in place that grant the members of the Executive Board and employees the right to purchase AIXTRON shares or ADS under certain
conditions. In fiscal year 2013, 415,289 stock options (2012: 185,496; 2011: 609,661 options) were exercised, resulting in delivery of in total 415,289 ordinary shares. In fiscal year 2013, no new
stock options were granted (2012 tranche of the 2007 stock option plan: 31,000 options; 2011 tranche of the AIXTRON stock option plan 2007: 14,000 options respectively). For a more detailed
description of the different stock option plans and a summary of all the stock option transactions, refer to Item 18 "Financial StatementsNote 23. Share-based payment".

The
Company recorded no bank borrowings as of December 31, 2013, 2012 and 2011.

Where
necessary, AIXTRON SE provides loans and financial security facilities to its subsidiaries to enable the business to continue to operate efficiently. The Company has granted no
security interests in its own land and buildings.

The
equity ratio at 83% as of December 31, 2013, compared to 84% as of December 31, 2012 (December 31, 2011: 81%) was broadly stable, principally due to the
positive effect of the capital
increase virtually compensating the fiscal year's net loss. In 2012, the equity ratio was up from 81% to 84%, mainly as a result of a 28% lower balance sheet total than in 2011.

In
2013, the return on equity (ROE) based on the negative 2013 Group's net result in proportion to the average total shareholders' equity at the start and end of the year
was -22% (2012: -26%; 2011: 13%).

In
order to support future developments, the Company regularly explores and assesses on an ongoing basis, potential funding opportunities available in the market. Additional funding
needs could also be

30

---



Table of Contents

covered
by the additional capital as authorized by the annual general meeting and laid out in the following table:

Funding Sources
(€ or number of shares)

2013
31-Dec

Approved
since

Expiry
Date

2012
31-Dec

2011
31-Dec

2013-2012Issued shares


112,613,445








101,975,023


101,789,527


10,638,422Authorized Capital 2012Capital increase for cash or contribution in kind with existing shareholders' preemptive rights


10,422,817


16/05/2012


15/05/2017


10,422,817


0


0Authorized Capital 2011Capital increase for cash or contribution in kind with or without existing shareholders' preemptive rights


30,248,813


19/05/2011


18/05/2016


40,471,946


40,471,946


(10,223,133
)Conditional Capital I 2012Authorization to potentially issue convertible notes or warrants in future


40,715,810


16/05/2012


15/05/2017


40,715,810


0


0Conditional Capital I 2007Authorization to potentially issue convertible notes or warrants in future


Cancelled


22/05/2007


21/05/2012


cancelled


35,875,598


Conditional Capital II 2012Stock Options Program 2012


4,208,726


16/05/2012


15/05/2017


4,208,726


0


0Conditional Capital II 2007Stock Options Program 2007


2,927,226


22/05/2007


31/12/2018


3,136,628


3,298,774


(209,402
)Conditional Capital 4Stock Options Program 2002


516,210


22/05/2002


31/12/2016


722,097


745,447


(205,887
)Conditional Capital 2Stock Options Program 1999


1,926,005


26/05/1999


31/12/2017


1,926,005


1,926,005


0


In
accordance with section 71 (1) no. 8 German Corporations Act, AktG, the Company is authorized until May 17, 2015, with the approval of the Supervisory
Board, to purchase its own shares representing an amount of up to € 10,088,195 of the share capital. This authorization may not be used by the Company for the purpose of
trading in own shares. The authorization may be exercised in
full, or in part, once, or on several occasions by the Company. The shares may be purchased (1) on the stock market or (2) by way of a public offer to all shareholders made by the
Company.

Any
amendment to the Articles of Association related to capital measures requires a 75% majority of the share capital represented at the Annual General Meeting (Article 59 SE
Regulation, SE-VO; §179 German Corporations Act, AktG). Other amendments to the Articles of Association require a majority of two thirds of the votes cast or, if at least one half
of the share capital is represented, a simple majority of the votes cast.

Investments

The AIXTRON Group's total capital expenditures in fiscal year 2013 amounted to € 10.1 million
(2012: € 16.5 million; 2011: € 30.2 million). In 2013, € 9.6 million (2012:
€ 15.8 million; 2011: € 27.2 million)

31

---



Table of Contents

were
related to property, plant and equipment (including testing and laboratory equipment). In 2012, € 3.8 million of the total of
€ 15.8 million were related to investments mainly for the MOCVD training and demonstration facility in Suzhou/China as well as for laboratory equipment. In 2014,
investments will be made mainly for laboratory and test equipment.

The
remaining € 0.5 million (2012: € 0.7 million; 2011: € 3.0 million) were
related to intangible assets including software licenses.

The
majority of capital expenditures (82%) for the year 2013 (2012: 63%; 2011: 88%) were invested in Germany and such expenditures for 2014 are also generally expected to be invested
primarily in Germany.

The
increase of € 30.4 million in bank deposits with a maturity of at least three months in 2013 was recorded as cash outflow from investing
activities. In 2012 bank deposits with a maturity of at least three months decreased by € 11.9 million and were recorded as cash inflow from investing activities.

All
2013, 2012 and 2011 expenditures were funded out of operating cash flow and available cash resources.

Capital
commitments are disclosed in Item 18 "Financial StatementsNote 28. Capital commitments" and are expected to be funded out of available cash resources.

Cash Flow

A cash inflow from operating activities of € 8.2 million (2012: cash outflow of
€ 45.2 million; 2011: cash outflow of € 6.3 million) was recorded in 2013. The increase in operating cash flow in 2013 was
mainly caused by insurance proceeds of € 22.5 million resulting from a fire in a third-party warehouse and the successful sale of goods out of excess inventory
(2012: net loss of € 145.4 million coupled with decreases in working capital; 2011: net profits of € 79.5 million, together with
increases in working capital). In 2012, the decrease in operating cash flow was mainly caused by significant net losses incurred in 2012 compared to 2011.

A
cash outflow of € 39.7 million was recorded from investment activities in 2013 (2012: cash outflow of
€ 4.4 million; 2011: cash inflow of € 50.5 million). Money market deposits were liquidated in the amount of
€ 30.4 million (2012: € 11.9 million; 2011: € 80.5 million), which were previously
classified as "other financial assets".

In
2013, capital expenditures amounted to € 10.1 million (2012: € 16.5 million; 2011:
€ 30.2 million) mainly on property, plant and equipment (including testing and laboratory equipment). In 2012, capital expenditure amounted to
€ 16.5 million whereof € 3.8 million were related to investments mainly for the MOCVD training and demonstration facility in
Suzhou/China as well as for laboratory equipment.

A
cash inflow from financing activities of € 101.6 million (2012: cash outflow of € 24.3 million; 2011: cash
outflow of € 57.5 million) was recorded mainly from the gross proceeds resulting from the previously described capital increase (2012:
€ 883 thousand; 2011: € 3.2 million). In 2013, no dividends were paid to AIXTRON shareholders. The 2012 cash outflow included
the dividend payments to shareholders of € 25.2 million (2011: € 60.7 million) and cash received from the issue of new shares of
€ 883 thousand (2011: 3.2 million).

Cash
and cash equivalents including cash deposits with a maturity of at least three months, most of which is held in Euros (also see "Investments"), increased by 46% or
€ 96.8 million to € 306.3 million
(€ 167.5 million + € 138.9 million financial assets) as of December 31, 2013 (December 31, 2012:
€ 99.7 million + € 109.8 million; December 31, 2011:
€ 172.9 million + € 122.3 million).

Specific
items that lowered the 2013 year end liquidity came, amongst other factors, from the 2013 net loss (€ -101.0 million) and the above
mentioned capital expenditures.
The capital increase with gross proceeds of € 101.2 million and the sale of goods from inventory had a positive impact. Specific items that lowered the 2012 year end
liquidity came, amongst other factors, from the 2012 net loss (€ -145.4 million), reduced advance payments from customers, the dividend payment for the fiscal
year 2011 and the above mentioned capital expenditures. These cash outflows were not offset by factors including stock option exercises (€ 883 thousand) and reduced
trade receivables.

There
are currently no restrictions on the Company's use of cash resources.

32

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Assessment of Liquidity and Capital Resources

The Company's liquidity is affected by many factors, some of which are related to its ongoing operations and others which are related
to the nature of the semiconductor equipment industry and to the economics of the countries in which the Company operates. Although the cash requirements fluctuate based on the timing and extent of
these factors, the Company believes that the liquidity provided by operating cash flows, grants, existing cash resources and financing arrangements, is sufficient to fund working capital, capital
expenditures and other ongoing business requirements. In the market and economic environment currently experienced by AIXTRON characterized by lower customer demand for the Company's products and
services, cash generated by operations could be lower than forecasted and not be sufficient. In such a situation, the Company might need to pursue obtaining short-term credit facilities or additional
equity financing offerings. There can be no assurance that any such supplemental funding, if sought, could be obtained, or if obtained, would be adequate or on terms acceptable to AIXTRON. However,
AIXTRON believes that its balance sheet at December 31, 2013 should provide additional sources of liquidity if required.

As
of December 31, 2013, € 138.9 million (2012: € 109.8 million; 2011:
€ 122.3 million) of the Company's cash resources were held, mostly in Euros, in bank deposits with a maturity of at least three months at inception.

C.    Research and Development, Patents and Licenses, etc.

For information regarding research and development, patents and licenses, refer to Item 4.B. "Information on the
CompanyBusiness OverviewResearch and Development", "Intellectual Property" and Item 5.A. "Operating and Financial Review and
ProspectsOperating ResultsDevelopment of ResultsOperating Costs" in this report.

D.    Trend Information

The development of state-of-the-art material deposition technology remains AIXTRON's core competency. It is an area where the Company
has developed a global leadership position. AIXTRON Management intends to keep this focus and positioning while at the same time expanding this core know-how into both existing and emerging markets.
AIXTRON remains committed to investing in R&D to not only maintain the Company's leading technology position in MOCVD equipment but also to enable greater penetration into markets such as for power
management, organic semiconductors and next generation memory applications.

A
key milestone in the field of MOCVD technology will be the release of a new generation equipment in the course of fiscal year 2014, which is also expected to enable a more stable price
level and higher margin contribution.

Another
important market segment for AIXTRON is Power Electronics based on compound semiconductor materials such as Gallium Nitride (GaN) and Silicon Carbide (SiC). Electronic devices
based on these material combinations are especially suitable for high voltage applications and are extremely energy efficient. Such device applications can be found in electric vehicles, transformers,
converters or feed-in of renewable energy into the grid.

AIXTRON
will also continue to implement its strategy to address the large area organic semiconductor application markets with the Company's deposition technology for organic materials,
OVPD® and PVPD. The patented OVPD® technology allows a highly efficient deposition of organic material especially on large area substrates and offers a number of
advantages over other technologies in terms of material consumption and throughput. Shortly, AIXTRON will start to operate a research cluster tool for the production of OLEDs in its laboratory so that
interested customers can observe the capabilities of the OVPD® technology. Moreover, AIXTRON is working on a new demonstration system for efficient organic layer deposition up to a
substrate size of Gen8 (2,300 mm × 2,500 mm) based on AIXTRON's OVPD® process technology. The new demonstration system will for the first time demonstrate the
advantages of this technology with regard to efficient production of organic light-emitting diodes for displays and lighting applications on an industrial scale.

The
Company also aims to make further inroads into the research community with its PECVD technology, aimed at manufacturing Carbon Nanostructures including Carbon Nanotubes, Carbon
Nanowires and Graphene.

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AIXTRON's
Silicon team has developed the high throughput QXP-8300 ALD deposition tool aimed specifically at providing innovative solutions for memory applications and integrated
circuits.
AIXTRON's QXP tool has been production qualified by a major Korean chip manufacturer and is in the process of production qualification at two other memory chip manufacturers. In the mid- to long-term,
AIXTRON therefore sees further growth potential with this technology. In addition, AIXTRON sees chances to promote further the miniaturization of logic device structures with the use of compound
semiconductor materials. This outlook may vary, positively or negatively from our expectations due to the risks and opportunities described elsewhere in the Report. See "Item 3: Key
InformationRisk Factors" and "Forward Looking Statements" at the beginning of the Report.

E.    Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its
financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

F.     Tabular Disclosure of Contractual Obligations

In the ordinary course of business, AIXTRON's primary contractual obligations regarding cash involve purchase commitments, operating
lease commitments and capital expenditures.

The
following table summarizes contractual obligations for future cash outflows as of December 31, 2013:

(million EUR)

Total

Less than
1 year

1-3 years

3-5 years

More than
5 yearsOperating lease commitments


8.27


3.34


3.23


1.44


0.26Purchase commitments


30.27


30.27​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total contractual obligations


38.54


33.61


3.23


1.44


0.26​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Commitments
for capital expenditures were € 831 thousand as of December 31, 2013 (December 31, 2012:
€ 437 thousand; December 31, 2011: € 4.2 million).

No
obligations for funding of pension plans existed as of December 31, 2013, December 31, 2012 and December 31, 2011.

The
Company's net pension commitments to two former members of the AIXTRON Executive Board were outsourced to a third party insurance company in 2010.

The
Company outsources a substantial portion of the manufacturing of its operations to third party suppliers. As the Company's products are technologically complex, the lead times for
purchases from its suppliers can vary up to six months. Principally, but not exclusively, contractual commitments are made for specific customer orders or forecast orders. In some circumstances, where
contractual commitments to suppliers for multiple modules or systems reduce the Company's purchase prices per module or system, purchase commitments may be made against anticipated demand. For the
majority of purchase commitments, the Company has flexible delivery schedules depending on the market conditions, which allow the Company, to a certain extent, to delay delivery beyond originally
planned delivery schedule estimates, if necessary.

The
Company leases certain office and plant facilities, office furniture and motor vehicles under various operating leases. Regarding most of the lease commitments for office and plant
facilities, the Company has options to renew the leasing contracts. The leases typically run for a period between one and 15 years. None of the leases includes contingent rentals.

Preparation of Consolidated Financial Statements under IFRS

The Consolidated Financial Statements of AIXTRON SE and its subsidiaries ("AIXTRON" or "Company") have been prepared in accordance
with, and fully comply with



34

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Critical Accounting Policies and Key Sources of Estimation and Uncertainty

The preparation of AIXTRON's Consolidated Financial Statements requires the Company to make certain estimates, judgments and
assumptions that the Company believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts and related disclosures and are made in order to
fairly present the Company's financial position and results of operations. The following accounting policies are significantly impacted by these estimates and judgments that AIXTRON believes are the
most critical to aid in fully understanding and evaluating its reported financial results:

Revenue Recognition

Revenue is generally recognized in two stages for the supply of equipment to customers, partly on delivery and partly on final
installation and acceptance (see note 2 (n)). The Company believes, based on past experience, that this method of recognizing revenue fairly states the revenues of the Company. The
judgments made by management include an assessment of the point at which substantially all of the risks and rewards of ownership have passed to the customer. For more information regarding revenue
recognition, refer to Item 18 "Financial StatementsNote 2. Significant accounting policies".

Valuation of Inventories

Inventories are stated at the lower of cost and net realizable value. This requires the Company to make judgments concerning
obsolescence of materials. This evaluation requires estimates, including both forecasted product demand and pricing environment, both of which may be susceptible to significant change. The carrying
amount of inventories is disclosed in Item 18 "Financial StatementsNote 16. Inventories".

As
disclosed in Item 18 "Financial StatementsNote 3. Segment Reporting" and Item 18 "Financial StatementsNote 16. Inventories",
during the years 2013, 2012 and 2011 the Company incurred expenses of € 35,012 thousand, € 40,947 thousand and
€ 41,602 thousand respectively arising mainly from changes to past assumptions concerning net realizable value of inventories and excess and obsolete inventories.

In
future periods, write-downs of inventory may be necessary due to (1) reduced demand in the markets in which the Company operates, (2) technological obsolescence due to
rapid developments of new products and technological improvements, or (3) changes in economic or other events and conditions that impact the market price for the Company's products. These
factors could result in adjustment to the valuation of inventory in future periods, and significantly impact the Company's future operating results.

Income Taxes

At each balance sheet date, the Company assesses whether the realization of future tax benefits is sufficiently probable to recognize
deferred tax assets. This assessment requires the exercise of judgment on the part of management with respect to future taxable income. The recorded amount of total deferred tax assets could be
reduced if estimates of projected future taxable income are lowered, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of the Company's ability to
utilize future tax benefits. The carrying amount of deferred tax assets is disclosed in Item 18 "Financial StatementsNote 14. Deferred tax assets and liabilities".

Provisions

Provisions are liabilities of uncertain timing or amount. At each balance sheet date, the Company assesses the valuation of the
liabilities which have been recorded as provisions and adjusts them if necessary. Because of the uncertain nature of the timing or amounts of provisions, judgment has to be exercised by the Company
with respect to their valuation. Actual liabilities may differ from the estimated amounts. Details of provisions are shown in Note 24.

Recently Issued Accounting Standards

In the current year, the following new and revised standards have been adopted. Their adoption has not had any significant impact on
the amounts reported in these financial statements.

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IFRS 10Consolidated
Financial Statements

This
standard replaces the parts of IAS 27 that deal with consolidated financial statements and changes the definition of control.

IFRS 12Disclosures
of interests in Other Entities

The
standard generally increases the required disclosures for subsidiaries, joint arrangements, associates and unconsolidated entities.

Amendments
to IAS 1Presentation of Financial Statements

This
standard amends the presentation requirements when an entity applies accounting policies retrospectively, or makes a retrospective restatement or reclassification of items in its
financial statements.

Amendments
to IFRS 7 Disclosures

The
amendments to IFRS 7 require entities to disclose information about rights of offset and related arrangements.

At
the date of authorization of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not
yet effective

IFRS 9

Financial
Instruments

IAS 36
(amendments)

Recoverable
amount disclosures for Non-Financial Assets

IAS 39
(amendments)

Novation
of Derivatives and Continuation of Hedge Accounting

IFRIC
Interpretation 21

Levies

The
company does not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods.

For
more information regarding recently issued accounting standards, refer to Item 18 "Financial StatementsNote 2. Significant accounting policies".

Item 6:    Directors, Senior Management and Employees

A.    Directors and Senior Management

As a European Company, AIXTRON SE is subject not only to the German Stock Corporation Law, but also to the superseding European SE
regulations (SE VO) and the German SE Implementation Act (SE-Ausführungsgesetz). It has a dual management and supervisory board structure consisting of an Executive Board and a
Supervisory Board. The two boards are separated and no individual may simultaneously be a member of both boards.

Supervisory Board

The Supervisory Board is responsible for the appointment and employment terms of Executive Board members. It oversees and advises the
Executive Board regarding its management duties.

Pursuant
to Article 11 of AIXTRON SE's Articles of Association, the Supervisory Board consists of six members. The General Shareholders' Meeting can specify any other number of
Supervisory Board members divisible by three. The members of the Supervisory Board are generally appointed for terms that run until the end of the General Shareholders' Meeting, in which the
shareholders represented, resolve on the approval of the Supervisory Board's activities for AIXTRON SE's fourth fiscal year following the beginning of such term and not counting the fiscal year in
which the term began. The maximum term is six years and repeated appointments are permitted. The members of AIXTRON SE's first Supervisory Board were appointed in accordance with the SE Regulation.
The Supervisory Board elects a Chairman and a Deputy Chairman from its members. The Supervisory Board Chairman or, if he is prevented from doing so, his Deputy, convenes the meetings of the
Supervisory Board and leads them.

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As
of December 31, 2013 AIXTRON's Supervisory Board consisted of the following six individuals:

Name

Position

Member
since

End of
Term

Year of
birthKim Schindelhauer (1)(2)(3)(4)(5)

Chairman of the Supervisory Board, Chairman of the Capital Markets Committee


2002


AGM 2016


1953Prof. Dr. Wolfgang Blättchen (1)(4)

Deputy Chairman of the Supervisory Board, Chairman of the Audit Committee, Independent Financial Expert (6)


1998


AGM 2016


1953Dr. Andreas Biagosch (2)




2013


AGM 2016


1955Prof. Dr. Petra Denk (2)(3)

Chair of the Technology Committee


2011


AGM 2016


1972Dr. Martin Komischke




2013


AGM 2016


1957Prof. Dr. Rüdiger von Rosen (1)(3)(4)

Chairman of the Nomination Committee


2002


AGM 2016


1943


(1)Member
of the Audit Committee(2)Member
of the Technology Committee(3)Member
of the Nomination Committee(4)Member
of the 2013 Capital Markets Committee(5)Former
AIXTRON Executive Board Member(6)Since
2005


No
member of AIXTRON's Supervisory Board serves as a director of an SEC-reporting company in the United States.

The
Supervisory Board's business address is Kaiserstrasse 98, 52134 Herzogenrath, Germany.

For
more information regarding the members of the Supervisory Board, refer to Item 18 "Financial StatementsNote 36. Supervisory Board and Executive Board."

Executive Board

Pursuant to the guidelines set forth in the German Stock Corporation Act, to which AIXTRON SE is subject via the SE statutes, the
Executive Board of AIXTRON SE is responsible for the management of the Company and informs the Supervisory Board regularly, comprehensively and without delay, of any appropriate issues or developments
regarding business trends, corporate planning and strategy, and on the Company's risk status.

According
to Article 8 of AIXTRON SE's Articles of Association, the Executive Board is to comprise of two or more persons. The Supervisory Board determines the number of Executive
Board members and also decides whether there should be a Chairman and whether deputy members or a Deputy Chairman should be appointed.

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As
of December 31, 2013, AIXTRON's Executive Board ("Management") consisted of the following three individuals:

Name

Position

First
Appointment

End of Term

Date of BirthMartin Goetzeler(1)

Chairman, President and Chief Executive Officer


March 1, 2013


February 28, 2017


May 11, 1962Wolfgang Breme

Executive Vice President and Chief Financial Officer


April 1, 2005


March 31, 2016


May 15, 1960Dr. Bernd Schulte

Executive Vice President and Chief Operating Officer


April 1, 2002


March 31, 2015


August 22, 1962


(1)The
former Chairman, President and Chief Executive Officer, Paul Hyland, has resigned from office as of February 28, 2013




The
Executive Board's business address is Kaiserstrasse 98, 52134 Herzogenrath, Germany.

B.    Compensation

Executive Board Remuneration

The remuneration system summarized below pursuant to Section 120(4) of the German Stock Corporation Act was approved by the
General Shareholders' Meeting on May 18, 2010 and amended by the Supervisory Board in its Meeting on December 5, 2012. These amendments were approved by the General Shareholders' Meeting
on May 23, 2013.

The
Supervisory Board is responsible for establishing the structure of the remuneration system and the total remuneration for individual members of the Executive Board. It regularly
discusses and reviews the remuneration for appropriateness.

The
level of remuneration of AIXTRON's Executive Board members is aligned with the commercial and financial situation and future prospects of the Group and the level and structure of
Executive Board remuneration at comparable companies as well as the compensation structure in place in other areas of the Company. In addition, the responsibilities, experience and contribution of
each individual Executive Board member are taken into account when calculating the remuneration.

Executive
Board remuneration currently consists of three components: fixed remuneration (including benefits in kind and payments for individual private pension insurance plans), a
variable bonus, and a share-based payment.

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Table of Contents

The Executive Board employment contracts stipulate an annual income for the fixed remuneration component. The fixed remuneration component is
non-performance-related and is paid out on a monthly basis (13 times a year) as a salary. Payments in kind are made, chiefly consisting of company car usage and payments for individual private pension
insurance plans.

The
limited variable bonus scheme for the collective Executive Board (profit-sharing) is based on consolidated net income for the year and is paid from an "accrued internal bonus pool",
defined as up to 10% of the modified consolidated net income for the year, but not to exceed € 6.5 million in total. The modified consolidated net income for the
year is obtained from the Company's Consolidated Financial Statements (IFRS) certified by the auditor, less a consolidated loss carry forward figure and those amounts that are to be allocated to
retained earnings in the Annual Financial Statements of AIXTRON by law or in accordance with the Articles of Association. The consolidated loss carry forward is obtained from consolidated net losses
from previous years, less consolidated net income from subsequent fiscal years. For Executive Board members whose contracts were adjusted or newly issued in 2013, the variable bonuses which are
provided from the "accrued internal bonus pool" as defined above will be paid half through a monetary element and half in shares. The other member, with existing contract, will continue to receive a
full cash bonus if
applicable. That part of the variable bonus payable in shares will be converted into whole numbers of shares of the Company and will be deferred until the third bank working day following the ordinary
General Meeting in the third fiscal year after having been granted to the Board members. The number of the shares to be granted for the part of the variable bonus payable in shares will be determined
in accordance with the closing price of the share of the Company on the third bank working day following the ordinary General Meeting which is presented with the annual financial statements of the
Company and the consolidated financial statements for the fiscal year for which the bonus is granted. The shares will be delivered from treasury shares. Thus, during the multi-year waiting period, the
Executive Board members will take part in both positive and negative developments of the Company's share price so that the variable compensation structure is clearly oriented toward a sustainable
business development. This new compensation structure was approved by AIXTRON's shareholders at the Annual General Meeting held on May 23, 2013.

In
addition, as a variable component acting as a long-term incentive with an element of risk, the members of the Executive Board may receive a share-based payment in the form of options
that are granted under AIXTRON's stock option plans. The stock option plans, including the exercise thresholds, are adopted at each General Shareholders' Meeting. The number of options granted to the
Executive Board is stipulated by the Supervisory Board. Further details on the outstanding stock options of the Executive Board as well as comments on the respective stock option plans are set out
further in this report.

The
appropriateness of the above-mentioned remuneration components is regularly reviewed by the Supervisory Board. Attention is also paid to ensuring that the terms of the remuneration
components do not induce the Executive Board to take inappropriate risks.

In
fiscal year 2013, the total fixed and variable remuneration of the Executive Board (including benefits in kind and pension allowance) totaled € 2,584,833
(2012: € 1,124,274; 2011: € 7,623,754). In fiscal

39

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Table of Contents

year
2013, the Executive Board was not granted any options (2012: 0; 2011: 0). The division between the individual members of the Executive Board for the years 2011 to 2013 is presented in the table
below.

Executive Board Member

Year

Fixed*

Variable

Total fixed
and variable
remuneration

Options
granted

Grant date
fair value of
options

Total EB
Remuneration(EUR)

(EUR)

(EUR)

(number)

(EUR)

(EUR)Martin Goetzeler(1)


2013


517,730


500,000


1,017,730


0


0


1,017,7302012


0


0


0


0


0


02011


0


0


0


0


0


0Paul Hyland(2)


2013


848,063


0


848,063


0


0


848,0632012


437,334


0


437,334


0


0


437,3342011


436,814


2,888,888


3,325,704


0


0


3,325,704Wolfgang Breme


2013


341,514


0


341,514


0


0


341,5142012


309,413


0


309,413


0


0


309,4132011


309,413


1,805,556


2,114,969


0


0


2,114,969Dr. Bernd Schulte


2013


377,527


0


377,527


0


0


377,5272012


377,527


0


377,527


0


0


377,5272011


377,527


1,805,555


2,183,082


0


0


2,183,082Total


2013


2,084,833


500,000


2,584,833


0


0


2,584,8332012


1,124,274


0


1,124,274


0


0


1,124,2742011


1,123,754


6,500,000


7,623,754


0


0


7,623,754


*Incl.
benefits in kind and allowance for pensions(1)EB
member since March 1st, 2013(2)left
the company with effect as of February 28, 2013; remuneration of EB contract € 780.000


As
of December 31, 2013, the AIXTRON Executive Board held a total of 500,408 Company stock options to subscribe to a total of 505,116 ordinary shares of the Company
(December 31, 2012: 923.516;
December 31, 2011: 962,516 shares). The number of shares underlying the options are set out below. The actual profits from exercising the stock options may differ significantly from the figures
shown in the table.

Executive Board Member

Allocation

Outstanding

Exercisable

Option
value on
allocation

Exercise
price

Maturity(shares)

(shares)

(EUR)

(EUR)Wolfgang Breme


Nov 2010


52,000


26,000


461,240


26.60


Nov 2020Nov 2009


52,000


39,000


448,240


24.60


Nov 2019Nov 2008


13,000


13,000


23,010


4.17


Nov 2018Dec 2007


52,000


52,000


225,680


10.09


Dec 2017May 2006


0


0


84,150


3.83


Nov 2016Dr. Bernd Schulte


Nov 2010


52,000


26,000


461,240


26.60


Nov 2020Nov 2009


52,000


39,000


448,240


24.60


Nov 2019Nov 2008


52,000


52,000


92,040


4.17


Nov 2018Dec 2007


52,000


52,000


225,680


10.09


Dec 2017May 2006


55,000


55,000


84,150


3.83


Nov 2016May 2004


35,000


35,000


107,800


6.17


Nov 2014May 2003


0


0


48,950


3.10


Nov 2013May 2002


27,500


0


152,625


7.48


May 2017May 2001


5,000


0


106,500


26.93


May 2016May 2000


2,640


660


55,981


67.39


May 2015May 1999


2,976


2,976


35,640


18.70


May 2014Total





505,116


392,636


In
accordance with IFRS 2, the "grant-date fair value of the options" is also used as the basis for recognizing options issued after November 7, 2002 under expenses in the
Income Statement. For stock options issued after November 7, 2002, the fair value is calculated using a binomial lattice model, for stock options issued before November 7, 2002, the fair
value was calculated using the Black-Scholes model.

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In
fiscal year 2013, the Executive Board members exercised 211,500 options (2012: 39,000; 2011: 0), and 0 expired (2012: 0; 2011: 0).

The
current Executive Board members have no individual company pension benefits which would result in pension provisions being required to be made by the company. Instead, the combined
contractual Executive Board annual pension allowance (€ 160,000 per year in 2013, € 120,000 per year in 2012 and 2011) paid by AIXTRON and
included in fixed remuneration is transferred by the Executive Board members into independent insurance contracts with a benevolent fund allowance (or similar plan).

The
Company's net pension commitments to two former members of the AIXTRON Executive Board under defined benefit pension plans were outsourced to a third party pension fund in 2010. At
the end of 2010, the existing pension provisions were therefore released. There was no expenditure recorded in 2011, 2012 and 2013.

The
Executive Board members receive no loans from the Company.

Supervisory Board Remuneration

The remuneration of the Supervisory Board is regulated by the Articles of Association of AIXTRON SE, as defined and approved by the
General Shareholders' Meeting of May 19, 2011.

Accordingly,
the annual fixed compensation for individual members of the Supervisory Board is € 25,000. The Chairman's compensation is three times this
amount and the Deputy Chairman's one and a half times the amount received by a regular member of the Supervisory Board.

The
members of the Supervisory Board also receive, in aggregate, a limited variable compensation of 1% of the Company's net income, less an amount corresponding to 4% of the paid-in
contributions to the share capital. The Chairman of the Supervisory Board receives 6/17 of the variable compensation, the Deputy Chairman 3/17, and each other member of
the Supervisory Board 2/17. The variable compensation is limited to the fourfold of the fixed compensation per Supervisory Board member. In addition, committee members receive an
attendance fee of € 2,000 for attending a committee meeting, with the Chairman of the committee receiving twice this amount. The total annual attendance fee per
Supervisory Board member is limited to one and a half times that individual's fixed compensation.

In
a separate resolution approved by the AGM, the remuneration of the first Supervisory Board of AIXTRON SE was approved to reflect the above described provision for the period from
January 1, 2011 to May 19, 2011 inclusive.

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In
fiscal year 2013, the compensation of the Supervisory Board totaled € 290,042 (2012: € 302,500; 2011:
€ 1,024,933). The Supervisory Board compensation for the years 2011 to 2013 can be broken down as follows:

Supervisory Board Member

Year

Fixed

Variable

Attendance
Fee

Total(EUR)

(EUR)

(EUR)

(EUR)Kim Schindelhauer(1)(2)(3)(4)(5)
(Chairman of the Supervisory Board and Chairman of the 2013 Capital Markets Committee)


2013
2012
2011


75,000
75,000
75,000


0
0
257,333


20,000
18,000
16,000


95,000
93,000
348,333Dr. Holger Jürgensen(5)(6)(7)
(Deputy Chairman of the Supervisory Board)


2013
2012
2011


3,125
37,500
37,500


0
0
128,667


0
16,000
16,000


3,125
53,500
182,167Prof. Dr. Wolfgang Blättchen(1)(4)
(Deputy Chairman of the Supervisory Board since February 27, 2013, and Chairman of the Audit Committee)


2013
2012
2011


35,556
25,000
25,000


0
0
85,778


24,000
24,000
24,000


59,556
49,000
134,778Dr. Andreas Biagosch(2)
(since May 23, 2013)


2013
2012
2011


15,139
0
0


0
0
0


2,000
0
0


17,139
0
0Prof. Dr. Petra Denk(2)(3)
(Chair of the Technology Committee)
(since May 19, 2011)


2013
2012
2011


25,000
25,000
15,548


0
0
53,347


28,000
26,000
23,322


53,000
51,000
92,217Dr. Martin Komischke
(since May 23, 2013)


2013
2012
2011


15,139
0
0


0
0
0


0
0
0


15,139
0
0Karl-Hermann Kuklies(7)


2013
2012
2011


2,083
25,000
25,000


0
0
85,778


0
0
0


2,083
25,000
110,778Prof. Dr. Rüdiger von Rosen(1)(3)(4)
(Chairman of the Nomination Committee)


2013
2012
2011


25,000
25,000
25,000


0
0
85,778


20,000
6,000
0


45,000
31,000
110,778Joachim Simmroß(1)
(Supervisory Board Member until May 19, 2011)


2013
2012
2011


0
0
9,452


0
0
32,431


0
0
4,000


0
0
45,883Total


2013


196,042


0


94,000


290,0422012


212,500


0


90,000


302,5002011


212,500


729,111


83,322


1,024,933


(1)Member
of the Audit Committee(2)Member
of the Technology Committee(3)Member
of the Nomination Committee(4)Member
of the 2013 Capital Markets Committee(5)Former
Member of the AIXTRON Executive Board(6)Honorary
Chairman of the Supervisory Board(7)Resigned
from the Supervisory Board as of January 30, 2013


As
in previous years, there were no payments made to any Supervisory Board member for advisory services in the year 2013.

The
Supervisory Board members receive no loans from the Company.

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Table of Contents

C.    Board Practices

For general information of the Company's board practice, refer to Item 6.A. "Directors, Senior Management and
EmployeesDirectors and Senior Management" in this report. Also refer to Item 10.C. "Additional InformationMaterial Contracts" for further information regarding the
Company's directors' employment contracts.

If
the employment contract of any of the Company's Executive Board Members is terminated without notice for good cause on the part of the Executive Board Member and for which he has to
bear responsibility, the entitlement to the profit sharing bonus lapses from the time that the termination becomes effective, but if it is not for an important reason or if the Executive Board Member
terminates the employment relationship after a change in control, each member of the Executive Board will
receive a severance pay in an amount equal to the fixed and variable compensation expected to be owed by the Company for the remaining term of the service contract, however, not exceeding an amount
equal to twice the annual compensation. A change of control situation exists if a third party or a group of third parties who contractually combine their shares in order to act subsequently as a third
party, directly or indirectly holds more than 50% of the Company's authorized capital. No additional benefits are generally paid to the Company's Executive Board Members upon regular termination of
their employment contracts.

None
of the members of the Supervisory Board has a service contract with the Company or any of its subsidiaries, providing for benefits upon termination of employment.

The
Company has a D&O insurance contract in place, covering the activities of members of the Executive Board and members of the Supervisory Board. Following the entry into force of the
Act on the Appropriateness of Executive Board Compensation (VorstAG), the D&O insurance policies for members of the Executive Board and members of the Supervisory Board of AIXTRON were adjusted to
reflect such new legal requirements. Effective January 1, 2010, the deductible amounts to a minimum of 10% of the respective potential loss incurred, but cannot exceed a factor of 1.5 of the
respective annual fixed remuneration.

Audit Committee

According to Article 16 of AIXTRON's Articles of Association, the Supervisory Board is authorized and, if prescribed by law,
required to form committees of its members.

The
by-laws for the Supervisory Board specify that the Audit Committee is responsible, in particular, for preparing, on behalf of the Supervisory Board, proceedings and resolutions
concerning accounting issues, the accounting process and the effectiveness of the internal control system, the risk management system and the internal audit system, as well as supervising the audit of
the financial statements (and especially the independence of the auditors and any additional services performed by the auditors) and the handling of compliance issues. In addition, the Audit Committee
is responsible for issuing the mandate to audit the annual accounts and the consolidated financial statements and to carry out any examination of interim reports of AIXTRON SE, for identifying the
main focus areas of the audit and for agreeing on the fee arrangements with the auditors. The Audit Committee forwards to the Supervisory Board its recommendation on which firm should be appointed as
auditor. The Chairman of the Committee regularly reports to the Supervisory Board with regard to the work performed.

AIXTRON's
Audit Committee operates under the terms of reference of a codified Audit Committee charter. The Audit Committee's charter includes the following terms of
reference:



43

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Table of Contents

Set
forth in the table below are the current members of the Audit Committee:

Committee

MembersAudit Committee

Prof. Dr. Wolfgang Blättchen (Chairman, independent financial expert)
Dr. Holger Jürgensen (until January 30, 2013)
Dipl.-Kfm. Kim Schindelhauer
Prof. Dr. Rüdiger von Rosen (from February 2, 2013)


Further Committees

AIXTRON does not have a Remuneration Committee that assists the Supervisory Board in establishing the structure of the remuneration
system. However, the structure of the Executive Board remuneration system is regularly approved by the shareholders at the General Shareholders' Meeting.

Since
May 19, 2011, the Company has established aTechnology Committee. The Technology Committee is composed of three members. It
deals in particular with issues involving AIXTRON's market positioning, product planning and developments, potential technology acquisitions or other diversification issues. The Committee Chair
regularly reports to the Supervisory Board on the activities of the Technology Committee. The members of the Technology Committee are currently Prof. Dr. Petra Denk, Kim Schindelhauer and
Dr. Andreas Biagosch.

The
Company has established aNomination Committee. The Nomination Committee is composed of three members. In the event of needing to
replace one of the Supervisory Board members, the Committee makes nomination proposals to the Supervisory Board. The Nomination Committee is currently composed of Prof.
Dr. Rüdiger von Rosen, Prof. Dr. Petra Denk and Kim Schindelhauer.

In
preparation for the previously mentioned capital increase executed at the end of October 2013, the Supervisory Board established aCapital Market
Committeeconsisting of its chairman Kim Schindelhauer and the two members Prof. Dr. Wolfgang Blättchen and Prof. Dr. Rüdiger von
Rosen and authorized it to make decisions and act independently in connection with the use of authorized capital. On October 23, 2013, the Capital Market Committee approved the resolution of
the Executive Board from the same day to increase in the Company's share capital utilizing the authorized capital 2011. On October 24, 2013, the Capital Market Committee advised on and approved
the resolution of the Executive Board from the same day to specify the final placement volume and placement price of € 9.90 per new share. Since the duties of the Capital Market
Committee were completed after the capital increase, it was formally dissolved in the Supervisory Board meeting on December 4, 2013 For more information on the capital increase refer to
Item 4.A. "Information on the CompanyHistory and Development of the CompanyExecution of a capital increase".

Compliance with NASDAQ Listing Standards on Corporate Governance

For information about the Company's compliance with the NASDAQ listing standards on Corporate Governance, refer to Item 10.B.
"Additional InformationMemorandum and Articles of AssociationSarbanes-Oxley Requirements and NASDAQ Rules" in this report.

D.    Employees

For information regarding employees of the Company, refer to Item 4.B. "Information on the CompanyBusiness
OverviewEmployees" in this report.

E.    Share Ownership

Beneficial Ownership

The following table sets forth certain information known to AIXTRON regarding beneficial ownership of the Company's ordinary shares and
options to acquire its equity securities as of February 25,

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Table of Contents

2014,
unless otherwise specified, by (i) each of the Company's Supervisory and Executive Board members and (ii) all Supervisory and Executive Board members of AIXTRON as a group:

Name and Address(1) of Beneficial Owner

Number of
Shares(2)

Percent of
Class(3)

Number of
Options to
Acquire
AIXTRON
Equity SecuritiesDr. Andreas Biagosch




*Prof. Dr. Wolfgang Blättchen




*Wolfgang Breme




*


169,000Prof. Dr. Petra Denk


129

*Martin GoetzelerDr. Martin Komischke




*Prof. Dr. Rüdiger von Rosen


1,300

*Kim Schindelhauer(4)


600,000

*Dr. Bernd Schulte




*


331,408​
​
​
​
​
​
​
​
​
​All Supervisory and Executive Board members as a group


601,429

0.53%


500,408


*Less
than 1%.(1)Unless
indicated otherwise, the address is: c/o AIXTRON SE, Kaiserstrasse 98, 52134 Herzogenrath, Germany.(2)Unless
indicated otherwise in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole
voting and investment power with respect to all shares of common stock shown as beneficially owned by them.(3)Applicable
percentage ownership is based on 112,613,445 shares of common stock outstanding as of December 31, 2013 (according to German GAAP rules
based on the German Commercial Code [Handelsgesetzbuch]) together with applicable options for such shareholder. Beneficial
ownership is determined in accordance with the rules of the SEC, based on factors including voting and investment power with respect to shares. (4)Mr. Schindelhauer,
directly or indirectly, beneficially owns 600,000 shares through his ownership stake in SBG Beteiligung GmbH.


Pursuant
to Section 15a of the German Securities Trading Act (WpHG), members of the Executive and Supervisory Boards were required to disclose significant purchases or sales of
shares of AIXTRON ("Directors Dealings"). In fiscal year 2013, Supervisory Board member Mr. Kim Schindelhauer reported he had sold through his ownership stake in SBG Beteiligung GmbH a
total of 166,500 shares of AIXTRON and Mr. Wolfgang Breme reported he had sold a total of 55,000 shares after exercising stock options from AIXTRON's stock option program 2006.

Employee Options

Share Option Programs

The Company has a number of stock option programs in place that grant the members of the Executive Board and employees the right to
purchase AIXTRON shares or ADS under certain conditions. Since the stock option programs have been installed as part of the variable remuneration, the stock options themselves are granted without
purchase price.

In
fiscal year 2013, 415,289 stock options (2012: 185,496; 2011: 609,661 options) were exercised, resulting in delivery of in total 415,289 ordinary shares. No new stock options were
granted in fiscal year 2013 (2012 tranche: 31,000 grants; 2011 tranche: 14,000 grants under the stock option plan 2007 respectively). Half of those granted options may be exercised after a waiting
period of not less than two years, an additional 25% may be exercised after three years and the remaining 25% of the granted options may be exercised after at least four years. The options expire
10 years after they have been granted. In accordance with the Act on the Appropriateness of Management Board Remuneration (VorstAG Gesetz zur Angemessenheit der
Vorstandsvergütung), the options under the 2012 Stock Option Plan can only be exercised, at the earliest point in time, after a waiting period of four years. In addition to an absolute
performance target, stock options issued to members of the Executive Board contain a relative exercise

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Table of Contents

threshold
with the TecDAX as a comparison parameter. The maximum term of the stock options is 10 years.

Dec 31,
2013

Exercise

Expired/
Forfeited

Allocation

Dec 31,
2012AIXTRON ordinary sharesstock options


2,659,701


415,289


536,108


0


3,611,098underlying shares


3,283,435


415,289


575,402


0


4,274,126AIXTRON ADSstock options


5,590


0


1,020


0


6,610underlying shares


5,590


0


1,020


0


6,610


See
Item 18 "Financial StatementsNote 23. Share-based payment" for a more detailed description of the different stock option plans and a summary of all the
stock option transactions.

Item 7:    Major Shareholders and Related Party Transactions

A.    Major Shareholders

In its capacity as AIXTRON's depositary bank as of December 31, 2013, the Bank of New York Mellon, N. Y. held 7,310,863 ordinary
shares as of December 31, 2013, represented by 7,310,863 ADSs, or 6.49% of AIXTRON's shares outstanding.

As
of December 31, 2013, the following investors had shareholdings in AIXTRON SE exceeding the 3% reporting threshold (shares held as of the reporting date, pursuant to
Section 26 (1) of the German Securities Trading Act/WpHG):

Camma B.V.,
Renesse, Netherlands, 7,650,000 shares or 6.79% of AIXTRON's shares outstanding

Allianz
Global Investors Europe GmbH, Frankfurt am Main, Germany, 6,808,396 shares or 6.05% of AIXTRON's shares outstanding

Generation
Investment Management LLP, London, UK, 5,815,261 shares or 5.16% of AIXTRON's shares outstanding

Baillie
Gifford & Co, Edinburgh, UK, 5,210,211 shares or 4.63% of AIXTRON's shares outstanding

Vanguard
International Growth Fund, Wayne, USA, 3,377,229 shares or 3.00% of AIXTRON's shares outstanding

To
the Company's knowledge and based on public filings, there was no other single natural or legal person that may be considered a beneficial owner of 3% or more of AIXTRON's outstanding
shares as of February 12, 2014.

As
of December 31, 2013, AIXTRON had 142 registered ADS holders, and an estimated 4,604 beneficial holders of ADSs. As of February 12, 2014, AIXTRON had 44,174 shareholders
registered in its share register of ordinary shares, and U.S. record holders held approximately 6,920,735 or 6.1% of AIXTRON's outstanding shares.

For
more information, refer to Item 6.E. "Directors, Senior Management and EmployeesShare Ownership" in this report.

The
Company's major shareholders do not have voting rights that are different from any other shareholder.

B.    Related Party Transactions

For related party transaction information, refer to Item 6.B. "Compensation" and Item 18 "Financial
StatementsNote 30. Identity of related parties". During 2013 there were no outstanding personal loans or guarantees to members of the Executive Board or the Supervisory Board.

C.    Interests of Experts and Counsel

Not applicable.

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Table of Contents

Item 8:    Financial Information

A.    Consolidated Financial Statements and Other Financial Information

For the Company's Consolidated Financial Statements and other financial information, refer to Item 5. "Operating and Financial
Review and Prospects" and Item 18. "Consolidated Financial Statements".

Export Revenues

Revenues outside of Europe accounted for € 158.7 million or 86.76% of the AIXTRON's total revenues
for the year ended December 31, 2013 (2012: € 206.5 million or 90.63%; 2011: € 584.6 million or 95.69%). Revenues from
AIXTRON's Asian-based customers accounted for € 141.8 million or 77.54% of the Company's total revenues for the year ended December 31, 2013 (2012:
€ 177.5 million or 77.90%; 2011: € 547.8 million or 89.66%).

Legal Proceedings

In the normal course of business, the Company is subject to various legal proceedings and claims. The Company believes that the matters
the Company is aware of are not likely to have a material adverse effect on its financial condition or results of operations. The Company is not aware of any unasserted claims that may have a material
adverse effect on its financial condition or results of operation.

Policy on Dividend Distributions

The maximum amount of dividends available for distribution to shareholders is based on the level of earnings, as determined in
accordance with the German Commercial Code HGB and the German Stock Corporation Act AktG. All dividends must be approved by the Company's shareholders.

AIXTRON
SE, the parent company of the AIXTRON Group, recorded a net accumulated loss in accordance with German generally accepted accounting principles (German GAAP), based on the German
Commercial Code HGB, of € -1.1 million for 2013 (2012: € -51.6 million loss; 2011:
€ 77.0 million profit).

AIXTRON's
Executive and Supervisory Boards will propose to the shareholders' meeting that the 2013 loss should be carried forward and consequently no dividend payment should be made for
2013. For the fiscal year 2012 the Company did not distribute any dividends (€ 25.4 million or € 0.25 for 2011).

B.    Significant Changes

For information regarding significant changes, refer to Item 18 "Financial StatementsNote 32. Events after
the reporting period".

Item 9:    The Offer and Listing

A.    Offer and listing details

Trading Markets

The principal trading market for AIXTRON's ordinary shares is the Frankfurt Stock Exchange, where the shares trade under the symbol
"AIXA." AIXTRON's ADSs, each evidencing one ADS, which represents one ordinary share, trade on the NASDAQ Global Select Market under the symbol "AIXG."

Market Price Information

The table below sets forth, for the calendar periods indicated, the high and low XETRA/Germany closing prices (Before 2010: trading on
XETRA, the Deutsche Börse's electronic trading system; from 2010: Trading on all German stock markets including XETRA) for AIXTRON's ordinary shares, and the high and low closing prices
per ADS as reported on the NASDAQ Global Select Market. See also the

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discussion
under "Item 3. Key InformationExchange Rate Information" for information with respect to rates of exchange between the US-Dollar and the Euro applicable during the
periods set forth below.

XETRA/Germany
closing price
per ordinary
share(EUR)High

LowAnnual2009


25.29


3.152010


28.87


18.992011


33.35


8.382012


14.45


8.712013


13.80


9.10Quarterly2012First quarter


14.45


10.26Second quarter


14.01


10.61Third quarter


12.54


9.81Fourth quarter


10.40


8.712013First quarter


11.57


9.10Second quarter


13.80


9.66Third quarter


13.34


11.84Fourth quarter


12.02


9.68Monthly2013July


13.19


11.86August


13.04


11.84September


13.34


12.00October


12.02


10.27November


10.50


9.68December


10.52


9.802014January


11.95


10.26February (through February 12, 2014)


11.90


10.81


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Closing Price
per ADR(USD)High

LowAnnual2009


38.24


3.882010


38.56


23.112011


44.88


11.262012


19.15


11.422013


17.91


11.57Quarterly2012First quarter


19.15


13.56Second quarter


18.80


13.24Third quarter


15.89


11.99Fourth quarter


13.40


11.422013First quarter


14.95


11.57Second quarter


17.91


12.62Third quarter


17.64


15.58Fourth quarter


16.31


12.98Monthly2013July


17.07


15.62August


17.42


15.58September


17.64


15.72October


16.31


13.51November


14.17


12.98December


14.52


13.372014January


16.38


14.08February (through February 12, 2014)


16.16


14.70


On
February 12, 2014, the closing price in Germany per ordinary share was € 11.90.

On
February 12, 2014, the closing price per ADS on NASDAQ Global Select Market was USD 16.16.

B.    Plan of Distribution

Not applicable

C.    Markets

See Item 9.A. "Offer and Listing Details".

D.    Selling Shareholders

Not applicable.

E.    Dilution

Not applicable

F.     Expenses of the Issue

Not applicable

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Item 10:    Additional Information

A.    Share Capital

Not applicable.

B.  Memorandum and Articles of Association

Articles of Association

This section summarizes the material provisions of AIXTRON's Articles of Association. This is only a summary and does not describe the
Articles of Association in their entirety. Copies of AIXTRON's Articles of Association are publicly available from the commercial register of the local court in Aachen, Germany under the entry number
HRB 16590, and an English translation of AIXTRON's Articles of Association as of January 29, 2013 is also available on the AIXTRON website and can be found in Exhibit 1.1 of this report.

Share Capital

The Company's share capital amounts to € 112,613,445 as per January 31, 2014. It is composed of
112,613,445 no-par value registered shares.

Purpose

According to Section 2 of AIXTRON's Articles of Association, the purpose of the Company is the manufacture and sale of products,
as well as research and development and services for the implementation of semiconductor technologies and other physicochemical technologies, particularly those bearing the AIXTRON trademark. The
Company is authorized to conduct all transactions suitable for promoting the Company's purpose indirectly and directly. The Company may establish branch offices in Germany and abroad, may acquire
equity interests in other companies in Germany and abroad, as well as purchase or establish such companies. The purpose of subsidiaries and investees may differ from that referred to above insofar as
it seems capable of promoting the purpose of the Company. The Company may outsource all or part of its operations to affiliates.

Future Share Capital; Preemptive Rights

AIXTRON's stated share capital may be increased against either contributions of cash or contributions-in-kind by a resolution of
AIXTRON's General Shareholders' Meeting with a 75% majority of the share capital represented at the meeting at which the resolution is adopted, or under AIXTRON's Articles of Association by a
resolution of the Executive Board with the consent of the Supervisory Board by using AIXTRON's authorized share capital.

In
accordance with the German Stock Corporation Law, an existing shareholder in a stock corporation has a preemptive right to subscribe for any issue of new shares, debt instruments
convertible into shares (Wandelschuldverschreibungen) and participating debt instruments (Genussrechte) in proportion to the number of shares held by that shareholder in the existing stated share
capital of the Company. The General Shareholders' Meeting may exclude this preemptive right by a majority of at least 75% of the share capital represented at the meeting at which the resolution
authorizing the capital increase is adopted. In addition to these formal procedural requirements, the exclusion requires a substantive justification. The Executive Board is required to submit a
written report concerning this justification to the General Shareholders' Meeting. The goal pursued by the corporation through the issuance of the new security must outweigh the elimination of this
preemptive right and that the goal could not be reasonably achieved without it.

The
preemptive rights are freely assignable and may be traded on German stock exchanges for a specified time within the subscription period. The preemptive rights lapse if they are not
exercised.

Dividend and Liquidation Rights

The ordinary shares underlying the AIXTRON ADSs are fully entitled to any dividends as and when declared by AIXTRON. Upon proposal by
AIXTRON's Executive Board and Supervisory Board, the annual General Shareholders' Meeting approves the allocation of AIXTRON's net profits (Bilanzgewinn), which AIXTRON determines on the basis of its
unconsolidated annual financial statements prepared in accordance with the accounting principles generally accepted in Germany. The Executive Board and the

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Supervisory
Board are authorized to allocate, in their discretion, up to half of AIXTRON's net profit in any fiscal year to other retained earnings (andere
Gewinnrücklagen). Shareholders participate in dividends in proportion to the number of shares held by each shareholder.

In
accordance with the German Stock Corporation Law, upon AIXTRON's liquidation, shareholders will receive, in proportion to their shareholdings, any liquidation proceeds remaining after
payment of all of AIXTRON's liabilities.

Voting Rights and General Shareholders' Meeting

A General Shareholders' Meeting of AIXTRON may be called by the Executive Board, the Supervisory Board or upon request of shareholders
whose aggregate holding is not less than 5% of the stated share capital. The annual General Shareholders' Meeting must take place within the first six months of the fiscal year. The Executive Board
calls this meeting upon the receipt of the Supervisory Board's report on the annual financial statements.

Under
German law and AIXTRON's Articles of Association, AIXTRON must publish notices of shareholders meetings in the German federal gazette
(Bundesanzeiger) at least one month before the last day on which the shareholders must deposit their shares for the meeting.

Under
AIXTRON's Articles of Association, those shareholders whose names are entered into the share register on the date of the General Shareholders' Meeting and who have registered for
participation in a timely manner shall be entitled to participate in such General Shareholders' Meeting and to exercise their voting rights. Such registration for participation must be received at the
Company under the address notified for this purpose in the call for the meeting in German or English in the form of text or, if so resolved by the Executive Board, electronically in a manner
determined in the call for the General Shareholders' Meeting, at least six days prior to the General Shareholders' Meeting, whereby the date of the General Shareholders' Meeting and the date of
receipt are not taken into account. Cancellations and new registration in the share register will not take place on the date of the General Shareholders' Meeting and during the last six days prior to
the General Shareholders' Meeting.

The
Executive Board is authorized to provide that shareholders can participate in the General Shareholders' Meeting without being present at its location and without a proxy and can
completely or partially exercise all or individual rights they have by means of electronic communication.

Each
ordinary share carries one vote at General Shareholders' Meeting. According to AIXTRON's Articles of Association, resolutions are generally passed with a simple majority of the
votes cast unless otherwise required by the Articles of Association or by law. Resolutions that require a majority of the share capital represented at the time of the adoption of the resolution are
passed with a simple majority of the share capital represented at the meeting of shareholders at which the resolution is considered, unless otherwise required by law. Resolutions about amending the
Articles of Association, to the extent legal provisions do not determine otherwise, require a majority of two thirds of the votes cast or, if at least one half of the share capital is represented, a
simple majority of the votes cast. Under the German Stock Corporation Law, a number of significant resolutions must be passed by a majority of the votes cast and at least 75% of the share capital
represented in connection with the vote taken on that resolution. The approval threshold required for some of these resolutions may be lowered by the Articles of Association.

The
following resolutions require the approval of a majority of at least 75% of the share capital represented at the meeting:



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Although
AIXTRON must notify shareholders of any ordinary or extraordinary shareholders' meeting as described above, neither the German Stock Corporation Law nor AIXTRON's Articles of
Association fixes a minimum quorum requirement. This means that holders of a minority of AIXTRON's shares could control the outcome of resolutions not requiring a specified majority of AIXTRON's
stated share capital.

Notice Requirements

In accordance with the German Stock Corporation Law, each enterprise owning AIXTRON ordinary shares must notify AIXTRON promptly if the
aggregate number of ordinary shares it holds exceeds or falls below 25% of AIXTRON's share capital or if it acquires or disposes of the majority of AIXTRON's voting rights. For any period in which a
notice is not given, the enterprise is prevented from exercising its rights as an AIXTRON shareholder, including voting rights and dividend rights.

The
German Securities Trading Act (Wertpapierhandelsgesetz) provides for extensive notification requirements. It requires each person
whose voting rights reach, exceed or, after exceeding, fall below the 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% voting rights thresholds in a company to notify the company and the Federal
Supervisory Agency (Bundesanstalt für Finanzdienstleistungsaufsicht) in writing within four trading days after they have reached,
exceeded or fallen below that threshold. For any period in which a notice is not given, the shareholder is prevented from exercising its rights as an AIXTRON shareholder, including voting rights and
dividend rights. In addition, anyone who holds, directly or indirectly, financial or other instruments that (i) grant an entitlement to acquire voting shares issued by a company whose home
member state is the Federal Republic of Germany or (ii) which do not grant an enforceable right to acquire such shares, but still make such acquisition (economically) possible must, without
undue delay, notify the issuer and the Federal Supervisory Agency if the thresholds mentioned above, with the exception of the 3% threshold, have been reached, exceeded or fallen below. In making the
threshold calculations, positions in voting rights must be aggregated with positions in such financial instruments.

Notices, Paying Agent and Depository

AIXTRON publishes official notices exclusively in the German federal gazette
(Bundesanzeiger).

In
addition, AIXTRON will file reports and other information with the SEC.

Deutsche
Bank AG is the German Paying Agent (Zahlstelle) for the AIXTRON ordinary shares.

There
are no limitations on rights to own AIXTRON ordinary shares.

Corporate Governance

AIXTRON's Declaration of Conformity with the recommendations of the Government Commission of the German Corporate Governance Code was
last updated in February 2014 and states that the Company has been in full compliance with the Corporate Governance Code with the exception of some minor deviations declared for precautionary reasons.
It is posted together with the "Declaration on Corporate Governance" in the "InvestorsCorporate Governance" section of AIXTRON's website at www.aixtron.com.

AIXTRON
has had a Code of Ethics procedure since 2006 for the Executive Board members and selected key managers in Finance. For more details to the Company's Code of Ethics refer to
Item 16B: Code of Ethics.

In
addition, AIXTRON has issued a Compliance Code of Conduct applicable to the Company's Executive and Supervisory Boards, as well as all employees in all Company offices throughout the
world and holds them accountable to conduct that is required to be conscientious and in conformity with the law. Amongst the topics addressed, this Code covers the following issues: responsibility and
respect towards society and the environment, compliance with overall legal conditions, legal and ethical conduct by each individual employee, loyalty to the Company, fair and respectful treatment of
fellow employees, rejection of any form of discrimination, dealing responsibly with corporate risks, acting in an environmentally aware manner, security in all operating areas, working in a
professional manner, reliability and fairness in all business relationships, compliance with guidelines on giving/taking unfair advantage, dealing with insider information and the treatment of Company
property. In addition, due to particular specifications set by

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NASDAQ,
AIXTRON SE has a separate NASDAQ-Code of Conduct. The NASDAQ-Code of Conduct is applicable to the Company's Executive Board, as well as all employees in all Company offices throughout the
world and provides more details on certain ethical requirements of the behavior of AIXTRON's employees described in the Compliance Code of Conduct. A copy of each of the Compliance Code of Conduct and
NASDAQ-Code of Conduct is available on the AIXTRON website www.aixtron.com under the section Investors / Corporate Governance / Code of Conduct.

In
2010, AIXTRON first issued a Compliance Manual which applies to all members of the Company's senior management. This manual is the basis for the principles of the Compliance Code of
Conduct and provides a detailed view on all important areas of compliance and requirements deriving therefrom, applicable to the Executive Board, the Supervisory Board and the employees. It is
regularly updated to reflect major legal changes. By signing each quarter, a representation letter, the senior managers thereby confirm that within their area of responsibility all compliance
requirements were
respected. Furthermore, they declare that in case of an update of the Compliance Manual, they will take note of the updated version, follow and communicate its contents within their area of
responsibility.

The
AIXTRON Vendor Code of Conduct formulates ethical, moral, and compliance standards for the purchase and use of materials with Conflict Minerals in the supply chain. The purpose of
the Vendor Code of Conduct is to communicate the Conflict Minerals Law, to introduce the due diligence process, to formulate the expectation to AIXTRON supply chain partners / vendors and to explain
consequences of non-compliance.

The
information available on AIXTRON's website is not incorporated by reference into this report.

Sarbanes-Oxley Act Requirements and NASDAQ Rules

To facilitate the Company's compliance with the Sarbanes-Oxley Act, the U.S. Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the rules of the NASDAQ Stock Market (the "NASDAQ Rules"), AIXTRON has established a Disclosure Committee that is responsible for reviewing and approving its public disclosures. AIXTRON also
has procedures for handling complaints related to accounting practices and a Code of Ethics.

In
conjunction with its annual report for the year ending December 31, 2013, the Company is required to include a report from its Management relating to its evaluation of the
Company's internal control over financial reporting, as required pursuant to Section 404 of the U.S. Sarbanes-Oxley Act, see Item 15 in this annual report on Form 20-F.

AIXTRON
generally complies with applicable German Corporate Governance practice rather than certain of the Corporate Governance requirements of NASDAQ. The requirements of NASDAQ that
AIXTRON is not following and its non-conforming practices in lieu thereof are as follows:



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Other
significant differences between AIXTRON's governance practices and those of U.S. domestic NASDAQ-listed companies are as follows:

Two-Tier Board

In accordance with the requirements of the German Stock Corporation Act, to which AIXTRON SE is subject via the SE statutes, AIXTRON
has a two-tier board structure consisting of an Executive Board and a Supervisory Board, which is not comparable to the one-tier or unitary board system in the U.S. The two-tier governance system
provides a strict separation of management and supervisory functions. Roles and responsibilities of each of the two boards are clearly defined by law.

Independence

Under this two-tier board system, except as described above, AIXTRON's methods for determining and ensuring the independence of its
Supervisory Board differ from those of NASDAQ Rule 5605, which generally contemplates a U.S.-style, one-tier system. In contrast to the NASDAQ Rules, which require the board to affirmatively
determine the independence of the individual directors with reference to specific tests of independence, German law does not require the Supervisory Board to make such affirmative findings on an
individual basis. At the same time, the Bylaws of AIXTRON's Supervisory Board contain several provisions to help ensure the independence of the Supervisory Board's advice and supervision. Furthermore,
the members of AIXTRON's Supervisory and Executive Boards are strictly independent from one another. A member of one board is legally prohibited from being concurrently active on the other.
Supervisory Board members have independent decision making authority and are legally prohibited from following the direction or instruction of any affiliated party. Moreover, Supervisory Board members

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may
not enter into advisory, service or certain other contracts with AIXTRON, unless approved by the Supervisory Board.

Compliance with the requirements of NASDAQ Rule 5600 Series applicable to foreign private issuers

Under Rule 5615(a)(3), as amended, AIXTRON is required to comply with Rule 5625 (relating to the notification of material
noncompliance), Rule 5640 (relating to certain voting rights and to have an Audit Committee that satisfies Rule 5605(c)(3) (regarding compliance with Rule 10A-3 of the Exchange
Act) and to ensure that such Audit Committee's members meet the independence requirement in 5605(c)(2)(A)(ii) (regarding independence required under Rule 10A-3 of the Exchange Act).

AIXTRON's
Supervisory Board has determined that as of December 31, 2013, the Company is in compliance with the aforementioned requirements applicable to foreign private issuers
pursuant to Rule 5600 Series. In particular, AIXTRON's Supervisory Board has determined that each member of the Audit Committee is "independent" as set forth in Rule 10A-3 of the
Exchange Act and as required by Rule 5605(c)(2)(A)(ii).

C.    Material Contracts

Apart from the following material contracts, all contracts AIXTRON has entered into during the course of the year 2013 were entered in
the ordinary course of business.

Employment contracts of current members of the Executive Board

The Company's employment contract with Martin Goetzeler, effective as of March 1, 2013 provides for a base salary of
€ 520,000 per year and a bonus in accordance with the employment contract (€ 500,000 for 2013, 4.0% of AIXTRON's annual Group net income
adjusted by additions to and withdrawals from revenue reserves ("modified annual AIXTRON Group net income") for the years after that). The total amount available to be paid as a bonus to all Executive
Board members as a group is limited to the lesser of € 6.5 million or 10% of the modified annual AIXTRON Group net income. For the purposes of a pension scheme, the
Company pays Mr. Goetzeler € 80,000 per year as the premium for a life insurance of his choice to be taken out or as an additional component of his gross salary. In
addition, the Company pays Mr. Goetzeler the employer's contribution to the compulsory health insurance or the same amount to an alternative insurance with waiver. Mr. Goetzeler's
present employment contract will expire on February 28, 2017.

The
Company's employment contract with Wolfgang Breme, effective as of April 1, 2005 and amended as of April 24, 2009 and December 5, 2012, provides for a base
salary of € 300,000 per year and a bonus in accordance with the employment contract (2.5% of AIXTRON's annual Group net income adjusted by additions to and withdrawals
from revenue reserves ("modified annual AIXTRON Group net income")). The total amount available to be paid as a bonus to all Executive Board members as a group is limited to the lesser of
€ 6.5 million or 10% of the modified annual AIXTRON Group net income. Wolfgang Breme receives half of his variable bonus in shares of the Company, which are
transferred to him after expiration of a three-year waiting period. For the purposes of a pension scheme, the Company pays Mr. Breme € 40,000 per year as the
premium for a life insurance of his choice to be taken out or as an additional component of his gross salary. In addition, the Company pays Mr. Breme the employer's contribution to the
compulsory health insurance or the same amount to an alternative insurance with waiver. Mr. Breme's present employment contract will expire on March 31, 2016.

The
Company's employment contract with Dr. Bernd Schulte, effective April 1, 2002 and amended as of April 24, 2009, provides for a base salary of
€ 325,000 per year and a bonus in accordance with the employment contract (2.5% of AIXTRON's annual Group net income adjusted by additions to and withdrawals from revenue
reserves ("modified annual AIXTRON Group net income")). The total amount available to be paid as a bonus to all Executive Board members as a group is limited to the lesser of
€ 6.5 million or 10% of the modified annual AIXTRON Group net income. For the purposes of a pension scheme, the Company pays Dr. Schulte
€ 40,000 per year, as the premium for a life insurance of his choice to be taken out or as an additional component of his gross salary. In addition, the Company pays
Dr. Schulte the employer's contribution to the compulsory health insurance or the same amount to an alternative insurance with waiver. Dr. Schulte's present employment contract will
expire on March 31, 2015.

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Intellectual Property Agreements

See also item 4.B. "Information on the CompanyBusiness OverviewIntellectual Property".

Certain
information, such as fees and royalties in the exclusive patent and know-how license agreement with the Centre National de la Recherche Scientifique ("CNRS") and the Institut
National Polytechnique de Grenoble ("INPG") executed on December 17, 2002 (the "CNRS Agreement") is confidential and has been redacted from the copies of the CNRS Agreement AIXTRON filed with
the SEC.

The
CNRS Agreement deals with the system for injection of precursors into a vacuum vapor deposition chamber (the "Product"). CNRS and INPG grant AIXTRON an exclusive license to develop,
manufacture, use, sell the Product and exploit the patents and know-how in the entire world with the right to grant certain sub-licenses. Except for the specified sub-license grants, the CNRS
Agreement is personal, not assignable and non-transferable. The CNRS Agreement remains in force during the life of the patents unless it is terminated by any of the parties to this agreement.

D.    Exchange Controls

At present, Germany does not restrict the movement of capital between Germany and other countries or individuals except certain
persons, entities and countries subject to embargoes in accordance with German law and applicable resolutions adopted by the United Nations and the European Union.

For
statistical purposes, with certain exceptions, every corporation or individual residing in Germany must report to the German Central Bank any payment received from or made to a
non-resident corporation or individual if the payment exceeds € 12,500 (or the equivalent in a foreign currency). Additionally, corporations and individuals residing in
Germany must report to the German Central Bank any claims of a resident against, or liabilities payable to, a non-resident corporation or individual exceeding an aggregate of
€ 5 million (or the equivalent in a foreign currency) at the end of any calendar month. Resident corporations and individuals are also required to report annually
to the German Central Bank any stakes of 10% or more they hold in the equity of non-resident corporations with total assets of more than € 3 million. Corporations
residing in Germany with assets in excess of € 3 million must report
annually to the German Central Bank any stake of 10% or more in the company held by an individual or a corporation located outside Germany.

E.    Taxation

German Taxation

The following discussion is a summary of certain material German tax consequences for beneficial owners of AIXTRON's ordinary shares or
ADSs:



The
discussion is based on tax laws of Germany as in effect on the date of this annual report, including the Convention between the United States of America and the Federal Republic of
Germany for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income and Capital and to Certain Other Taxes (the "Treaty"). Such laws are subject to
change. The discussion is also based in part upon the representations of the Depositary and assumes that each obligation in the Deposit Agreement and any related agreement will be performed in
accordance with its terms.

The
following discussion does not purport to be a comprehensive discussion of all German tax consequences that may be relevant for Non-German Holders. AIXTRON's discussion does not
address all aspects of German taxation that may be relevant to you in light of your particular circumstances. You should consult your tax advisor regarding the German federal, state and local tax
consequences of the purchase, ownership and disposition of AIXTRON's shares or ADSs and the procedures to follow to obtain a refund of German taxes withheld from dividends.

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Taxation of the Company in Germany

German Corporations are subject to a corporate tax rate of 15%. A 5.5% solidarity surcharge is imposed on the Corporation Tax,
resulting in an overall tax rate of 15.825%.

In
addition, German corporations are by virtue of their legal form subject to a municipal profit-related German Trade Tax. Trade Tax is calculated on the basis of the taxable Corporation
Tax income as shown in the annual statutory profit and loss accounts of the corporation which, however, is subject to certain particular Trade Tax add-backs and deductions. The effective Trade Tax
rate applicable depends on the municipality in which the corporation maintains a permanent establishment and ranges between approximately 7% and 17%.

German
Corporation Tax and Trade Tax combined will result in an overall tax burden for German corporations amounting to approximately 30% at an average.

The
deduction for a taxable loss carry-forward for the fiscal year is unlimited up to a threshold of € 1,000,000, thereafter taxable income can only be
offset to the extent of 60%. The temporary loss carry-forward is reduced by the amount used and remains unlimited in life. However, there are limitations on the use of loss carry-forwards upon a
transfer of more than 25% of a corporation's shares or voting rights to one purchaser, a related party or group of purchasers within a specified time period.

Withholding Tax on Dividends

Withholding Tax on Dividends in Germany constitutes 25%. A solidarity surcharge of 5.5% on the withholding tax results in a surcharge
amount to 1.375% (5.5% × 25%), and a total effective withholding tax rate from dividends of 26.375%. For many Non-German Holders, the withholding tax rate is reduced under applicable
income tax treaties. Under most income tax treaties to which Germany is a party, the rate of dividend withholding tax is reduced to 15%. To reduce the withholding to the applicable treaty rate of 15%,
a Non-German Holder must apply for a refund of withholding taxes paid. The application for refund must be filed with the German Federal Tax Office. The relevant forms can be obtained from the German
Federal Tax Office or from German embassies and consulates.

Special Tax Rules for tax resident in Germany

Since January 1, 2009 onwards 100% of dividends of shares held as private assets are subject to a 25% fixed tax rate plus 5.5%
solidarity surcharge thereon. If church tax is individually applicable for the shareholder this part of taxation will be subject of the withholding as well. This tax will be final unless the
individual tax rate of the shareholder is less than 25% and the shareholder opts for the tax assessment. Moreover, from 2009 on, capital gains from the sales of shares, acquired after
December 31, 2008, are taxable as well, regardless of the percentage of the shareholding and of how long the shareholding has been held. Capital gains from the sale of shares acquired before
January 1, 2009 are tax exempt if the shareholding has been held for more than one year and the taxpayer has held less than 1% of the registered share capital of the company during a five-year
period immediately preceding the disposition. The lump sum deduction of investment income related expenses amounts to € 801 for individuals and
€ 1,602 for married couples. Further investment income related expenses will not be tax deductible.

Regarding
shares held as business assets of the shareholder, 60% of the dividends will be subject to personal income tax (part income taxation). Accordingly, 60% of the income related
expenses are deductible.

Special Tax Rules for U.S. Shareholders

Under the current Treaty, the withholding tax rate generally is reduced to 15% of the gross amount of the dividends and a full refund
of the solidarity surcharge can be obtained by U.S. holder. Dividend payments to an eligible U.S. holder made by AIXTRON will be subject to a 15% general withholding tax rate under the Treaty.

Dividend
distributions made by the Company are subject to a 25% withholding tax plus a solidarity surcharge of 5.5% on the withholding tax resulting in an aggregate German withholding
tax of 26.375% of the declared dividend, and eligible U.S. holders (as defined below under "U.S. Taxation") are entitled to receive a payment from the German tax authorities equal to 11.375% of the
declared dividend.

Accordingly,
for a declared dividend of 100, an eligible U.S. holder initially will receive 73.625: 100 minus the 26.375% withholding tax. The eligible U.S. holder is then
entitled to a refund from

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the
German tax authorities of 11.375 and will, as a result, effectively receive a total of 85 (i.e., 85% of the declared dividend).

Withholding Refund Procedure for U.S. Shareholders

For shares and ADSs kept in custody with The Depository Trust Company in New York or one of its participating banks, the German tax
authorities have introduced a collective procedure for the refund of German dividend, capital withholding tax and the solidarity surcharge thereon on a trial basis. Under this procedure, The
Depository Trust Company may submit claims for refunds payable to eligible U.S. holders under the Treaty collectively to the German tax authorities on behalf of these eligible U.S. holders.

The
German Federal Tax Office will pay the refund amounts on a preliminary basis to The Depository Trust Company, which will redistribute these amounts to the eligible U.S. holders
according to the regulations governing the procedure. The German Federal Tax Office may review whether the refund was made in accordance with the law within four years after making the payment to The
Depository Trust Company. Details of this collective procedure are available from The Depository Trust Company. Individual claims for refunds may be made on a special German form which must be filed
with the German Federal Tax Office (Bundeszentralamt für Steuern, Dienstsitz Bonn, An der Küppe 1, 53225 Bonn, Germany). Copies of this form can be downloaded from the
homepage of the German Federal Tax Office:

http://www.bzst.bund.de
or http://www.germantaxes.info or can be obtained from the Embassy of the Federal Republic of Germany, 4645 Reservoir Road, N.W., Washington, D.C. 20007-1998. Claims must be
filed within a four-year period from the end of the calendar year in which the dividend was received.

As
part of the individual refund claim, an eligible U.S. holder must submit to the German tax authorities the original bank voucher (or a certified copy thereof) issued by the paying
agent documenting the tax withheld, and an official certification on IRS Form 6166 of its last United States federal income tax return. Form 6166 is a letter printed on U.S. Department
of Treasury stationery certifying that the individuals or entities listed are residents of the United States for purposes of the income tax laws of the United States. The Internal Revenue Service
(IRS) procedure for requesting a certificate of residency (Form 6166) from the Philadelphia Accounts Management Center is the submission of Form 8802, Application for United States
Residency Certification. This form may be obtained by filing a request with the Internal Revenue Service Center in Philadelphia, Pennsylvania, P.O. Box 71052, Philadelphia,
PA 19176-6052 U.S.A. Requests for certification must include the eligible U.S. holder's name, Social Security or Employer Identification Number, tax return form number, and tax period for which
the certification is requested. Requests for certifications can include a request to the Internal Revenue Service to send the certification directly to the German tax authorities. If no such request
is made, the Internal Revenue Service will send a certification on IRS Form 6166 to the eligible U.S. holder, who then must submit this document with his refund claim.

Taxation of Capital Gains for U.S. Shareholders

Capital Gains earned by a Non-German holder from the sale or other disposition of ordinary shares or ADS are subject to tax in Germany
at statutory tax rates if the Non-German holder has held, directly or indirectly, shares or ADSs representing 1% or more of the
registered share capital of the company at any time during a five-year period immediately preceding the disposition. Capital gains in general are not taxable if the above mentioned threshold is not
exceeded and certain further conditions are met.

The
Income Tax Treaty provides that taxation in Germany on capital gains of U.S. residents does not apply to gains on the sale or other disposition of ADSs or Ordinary shares.

Inheritance and Gift Tax

The current Estate Tax Treaty provides that an individual whose domicile is determined to be in the United States for purposes of such
Treaty will not be subject to German inheritance and gift tax (the equivalent of the United States federal estate and gift tax) on the individual's death or making of a gift unless the ADSs or
Ordinary Shares (1) are part of the business property of a permanent establishment located in Germany or (2) are part of the assets of a fixed base of an individual located in Germany
and used for the performance of independent personal services. An individual's domicile in the United States, however does not prevent imposition of German inheritance and gift tax with respect to an
heir, donee, or other beneficiary who either is or is deemed to be resident in Germany at the time the individual died or the gift was made.

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The
Estate Tax Treaty also provides a credit against U.S. federal estate and gift tax liability for the amount of inheritance and gift tax paid to Germany, subject to certain
limitations, in a case where the ADSs or Ordinary Shares are subject to German inheritance or gift tax and U.S. federal estate or gift tax.

Other Taxes

No German transfer, stamp or similar taxes apply to the purchase, sale or other disposition of shares or ADSs by Non-German Holder.
Currently, net worth tax is not levied in Germany.

U.S. Federal Taxation

The following is a summary of the principal U.S. federal income tax consequences that may be relevant with respect to the acquisition,
ownership and disposition of AIXTRON's shares or ADSs. This summary addresses only the U.S. federal income tax considerations of holders that hold shares or ADSs as capital assets. This summary does
not address tax considerations applicable to holders that may be subject to special tax rules, such as:



Moreover,
this summary does not address the U.S. federal estate and gift or alternative minimum tax consequences of the acquisition, ownership and disposition of AIXTRON's shares or
ADSs. This summary is based on (1) the federal tax laws of the United States as in effect and available on the date of this annual report, including the Internal Revenue Code of 1986, as
amended (the "Code"), judicial and administrative interpretations thereof, and currently effective and proposed U.S. Treasury Regulations, each as available on the date hereof, and (2) in part
on the representations and covenants of the Depositary and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms. All of
the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below.

For
purposes of this summary, a "U.S. Holder" is a beneficial owner of AIXTRON's shares or ADSs that, for U.S. federal income tax purposes, is: (1) a citizen or resident of the
U.S., (2) a partnership or corporation created or organized in or under the laws of the United States or any state thereof or the District of Columbia, (3) an estate, the income of which
is subject to U.S. federal income taxation regardless of its source or (4) a trust if such trust validly elects to be treated as a U.S. person for U.S. federal income tax purposes or if
(a) a court within the U.S. is able to exercise primary supervision over its administration and (b) one or more U.S. persons have the authority to control all of the substantial
decisions of the trust. A "Non-U.S. Holder" is a beneficial owner of AIXTRON's shares or ADSs that is not a U.S. Holder.

If
a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds AIXTRON's shares or ADSs, the tax treatment of such partnership and a partner
in such partnership generally will depend on the status of the partner and the activities of the partnership. Such a partnership or partner should consult its own tax advisor as to its consequences.

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Each
prospective purchaser should consult his/her own tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, owning or disposing of
AIXTRON's shares or ADSs.

Ownership of ADSs in general

For U.S. federal income tax purposes, a holder of ADSs generally will be treated as the owner of the shares represented by such ADSs.
The U.S. Treasury Department has expressed concern that depositaries for ADSs, or other intermediaries between the holders of shares of an issuer and the issuer, may be taking actions that are
inconsistent with the claiming of U.S. foreign tax credits by U.S. Holders of such receipts or shares. Accordingly, the analysis regarding the availability of a U.S. foreign tax credit for German
taxes and sourcing rules described below could be affected by future actions that may be taken by the U.S. Treasury Department.

Distributions

Subject to the discussion below under "Passive Foreign Investment Company Considerations", the gross amount of any
distribution the Company makes of cash or property (other than certain distributions, if any, of shares distributed pro rata to all AIXTRON shareholders, including holders of ADSs) with respect to
shares or ADSs, before reduction for any German taxes withheld therefrom, will be includible in income by a U.S. Holder as dividend income to the extent such distributions are paid out of the
Company's current or accumulated earnings and profits as determined under U.S. federal income tax principles. Subject to the discussion below under "Passive Foreign Investment Company
Considerations", individuals who are U.S. Holders may be taxed on any such dividends received at the lower tax rate applicable to long-term capital gains (i.e., gains from the sale of capital
assets held for more than one year). In order to qualify for the preferential rate of taxation, certain requirements must be met, including certain holding period requirements and the absence of
certain risk reduction transactions with respect to the shares or ADSs. Such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. Holders. Subject to
the discussion below under "Passive Foreign Investment Company Considerations", to the extent, if any, that the amount of any distribution AIXTRON makes exceeds its current and
accumulated earnings and profits as determined under U.S. federal income tax principles, it will be treated first as a tax-free return of the U.S. Holder's adjusted tax basis in the shares or ADSs and
thereafter as capital gain. AIXTRON does not maintain calculations of its earnings and profits under U.S. federal income tax principles.

Any
such dividend paid in Euros will be included in the gross income of a U.S. Holder in an amount equal to the US-Dollar value of the Euros on the date of receipt, which in the case of
ADSs, is the date they are received by the depositary. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution. A U.S.
Holder may elect to deduct in computing his/her taxable income or, subject to certain complex limitations on foreign tax credits generally, credit against its U.S. federal income tax liability German
withholding tax at the rate applicable to such U.S. Holder. As discussed under "German TaxationSpecial Tax Rules for U.S. Shareholders" above in this Item 10 under the Treaty,
dividends paid by AIXTRON to a U.S. Holder generally will be subject to a German withholding tax rate of 15%. Such reduced rate of withholding will apply only if such U.S. Holder is treated as a
resident of the U.S. for purposes of such Treaty and otherwise is entitled to the benefits of such treaty and the dividends are not effectively
connected with a permanent establishment or fixed base of such U.S. Holder that is situated in Germany.

Dividends
received by a U.S. Holder with respect to ordinary shares or ADSs will be treated as foreign source income, which may be relevant in calculating such holder's foreign tax
credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For purposes of calculating the U.S. foreign tax credit,
dividends paid by AIXTRON generally will constitute "passive category income", or in the case of certain U.S. Holders, "general category income". U.S. Holders should consult their tax advisors
regarding the availability of, and limitations on, any such foreign tax credit.

Subject
to the discussion under "Backup Withholding Tax and Information Reporting Requirements" below in this section, a Non-U.S. Holder of shares or ADSs generally will not be subject
to U.S. federal income or withholding tax on dividends received on shares or ADSs, unless such income is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the
United States.

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Sale or exchange of shares or ADSs

Subject to the discussion below under "Passive Foreign Investment Company Considerations", a U.S. Holder generally will
recognize gain or loss on the sale or exchange of shares or ADSs equal to the difference between the amount realized on such sale or exchange and the U.S. Holder's adjusted tax basis in the shares or
ADSs. Such gain or loss will be capital gain or loss. In the case of a non-corporate U.S. Holder, the maximum marginal U.S. federal income tax rate applicable to such gain will be lower than the
maximum marginal U.S. federal income tax rate applicable to ordinary income (other than certain dividends) if such U.S. Holder's holding period for such shares or ADSs exceeds one year. Gain or loss,
if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

A
U.S. Holder's initial tax basis in shares or ADSs will be the US-Dollar value of the Euro denominated purchase price determined on the date of purchase. If the shares or ADSs are
treated as traded on an "established securities market", a cash basis U.S. Holder, or, if it elects, an accrual basis U.S. Holder, will determine the dollar value of the cost of such shares or ADSs by
translating the amount paid at the spot rate of exchange on the settlement date of the purchase. If a U.S. Holder converts US-Dollars to Euros and immediately uses that currency to purchase shares or
ADSs, such conversion generally will not result in taxable gain or loss to such U.S. Holder. With respect to the sale or exchange of shares or ADSs, the amount realized generally will be the US-Dollar
value of the payment received determined on (1) the date of receipt of payment in the case of a cash basis U.S. Holder and (2) the date of disposition in the case of an accrual basis
U.S. Holder. If the shares or ADSs are treated as traded on an "established securities market", a cash basis taxpayer, or, if he/she elects, an accrual basis taxpayer, will determine the US-Dollar
value of the amount realized by translating the amount received at the spot rate of exchange on the settlement date of the sale.

Subject
to the discussion under "Backup Withholding Tax and Information Reporting Requirements" below in this section, a Non-U.S. Holder of shares or ADSs generally will not be subject
to U.S. federal income or withholding tax on any gain realized on the sale or exchange of such shares or ADSs unless (1) such gain is effectively connected with the conduct by such Non-U.S.
Holder of a trade or business in the U.S. or (2) in the case of any gain realized by an individual Non-U.S. Holder, such holder is present in the U.S. for 183 days or more in the taxable
year of such sale or exchange and certain other conditions are met.

Passive Foreign Investment Company Considerations

A Non-U.S. corporation will be classified as a "passive foreign investment company", or a PFIC, for U.S. federal income tax purposes in
any taxable year in which, after applying certain look-through rules, either: (i) at least 75% of its gross income is "passive income;" or (ii) at least 50% of the average value of its
gross assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties,
rents and gains from commodities and securities transactions.

Based
on certain estimates of the Company's gross income and gross assets and the nature of the Company's business, AIXTRON does not believe it was a PFIC for the taxable year ending
December 31, 2013. AIXTRON's status in future years will depend on its assets and activities in those years. AIXTRON has no reason to believe that its assets or activities will change in a
manner that would cause the Company to be classified as a PFIC, but there can be no assurance that AIXTRON will not be considered a PFIC for any taxable year. If AIXTRON were a PFIC, U.S. Holders
generally would have additional U.S. tax filing requirements and would be subject to imputed interest charges and other disadvantageous tax treatment with respect to any gain from the sale or exchange
of, and certain distributions with respect to, shares or ADSs.

If
AIXTRON were a PFIC, U.S. Holders could make a variety of elections that may alleviate certain tax consequences referred to above, and one of these elections may be made
retroactively. However, it is expected that the conditions necessary for making certain of such elections will not apply in the case of AIXTRON's shares and the ADSs. U.S. Holders should consult their
own tax advisor regarding the tax consequences that would arise if AIXTRON were to be treated as a PFIC.

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Backup withholding tax and information reporting requirements

U.S. backup withholding tax and information reporting requirements generally apply to certain payments to certain holders of stock.
Information reporting generally will apply to payments of dividends on, and to proceeds from the sale or redemption of, shares or ADSs
made within the United States, or by a U.S. payor or U.S. middleman to a holder of shares or ADSs, other than an "exempt recipient." A payor will be required to withhold backup withholding tax from
any payments of dividends on, or the proceeds from the, sale or redemption of, shares or ADSs within the United States to a holder, or by a U.S. payor or U.S. middleman, other than an "exempt
recipient", if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements.

In
the case of such payments made within the U.S. to a foreign simple trust, a foreign grantor trust or a foreign partnership, other than payments to a foreign simple trust, a foreign
grantor trust or a foreign partnership that qualifies as a "withholding foreign trust" or a "withholding foreign partnership" within the meaning of the applicable U.S. Treasury Regulations and
payments to a foreign simple trust, a foreign grantor trust or a foreign partnership that are effectively connected with the conduct of a trade or business in the U.S., the beneficiaries of the
foreign simple trust, the persons treated as the owners of the foreign grantor trust or the partners of the foreign partnership, as the case may be, will be required to provide the certification
discussed above in order to establish an exemption from backup withholding tax and information reporting requirements. Moreover, a payor may rely on a certification provided by a payee that is not a
U.S. person only if such payor does not have actual knowledge or a reason to know that any information or certification stated in such certificate is incorrect.

Foreign Asset Reporting

Certain U.S. Holders who are individuals are required to report information relating to an interest in shares or ADSs, subject to
certain exceptions (including an exception for shares or ADSs held in accounts maintained by U.S. financial institutions). U.S. Holders are urged to consult their tax advisors regarding their
information reporting obligations, if any, with respect to their ownership and disposition of shares or ADSs.

Medicare Tax

A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such
tax, is subject to a 3.8% tax on the lesser of (1) such U.S. Holder's "net investment income" (or undistributed "net investment income" in the case of estates and trusts) for the relevant
taxable year and (2) the excess of such U.S. Holder's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and
$250,000, depending on the individual's circumstances). A U.S. Holder's net investment income will generally include its gross dividend income and its net gains from the disposition of the ADSs,
unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If
you are a U.S. Holder that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of this tax to your income and gains in respect of your investment
in the ADSs.

The
above summary is not intended to constitute a complete analysis of all tax consequences that may be relevant to the acquisition, ownership and disposition of shares or ADSs, and does
not address state, local, foreign or other tax laws. Holders of shares or ADSs should consult their own tax advisors concerning the tax consequences of their particular situations.

F.     Dividends and Paying Agents

Not applicable.

G.    Statement by Experts

Not applicable.

62

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Table of Contents

H.    Documents on Display

AIXTRON is subject to the informational requirements of the U.S. Exchange Act. In accordance with these requirements, AIXTRON files
reports and other information with the SEC. These materials, including this report and the exhibits thereto, may be inspected and copied at the SEC's Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. Copies of the materials may be obtained from the SEC's Public Reference Room at prescribed rates. The public may obtain information on the operation of the SEC's Public
Reference Room by calling the SEC in the United States at 1-800-SEC-0330. AIXTRON's filings, including this report, are also available on the SEC's website at www.sec.gov.

I.     Subsidiary Information

Not applicable.

Item 11:    Quantitative and Qualitative Disclosure about Market Risk

The global nature of AIXTRON's businesses exposes the Company to market risks resulting from changes in foreign currency exchange rate
and interest rates. Accordingly, changes in foreign currency exchange rates and interest rates may adversely affect its operating results and financial condition. AIXTRON seeks to manage and control
these market risks primarily through monitoring of its operating and financial activities and the use of derivative financial instruments.

Foreign Currency Exchange Rate Risk

Transaction Risk and Currency Risk

The global nature of AIXTRON's businesses exposes its operations and reported financial results and cash flows to the risks arising
from fluctuations in the exchange rates of the dollar, the Euro and other world currencies. AIXTRON's businesses are exposed to transaction risk whenever the Company has revenues in a currency that is
different from the currency in which it incurs the costs of generating those revenues. When AIXTRON converts the revenues into the currency in which it incurs the costs, the value of the revenues may
have declined in the interim relative to the currency in which the Company incurred the costs. The main billing currency in the semiconductor equipment industry, and therefore also for AIXTRON
equipment, continues to be the US-Dollar, while AIXTRON incurs manufacturing costs primarily in Euros.

Effects of Currency Translation

Most of AIXTRON's subsidiaries are located outside the Euro zone. Since the Company's presentation currency is the Euro, AIXTRON
translates the income statements of these subsidiaries into Euros so that the Company can include their financial results in its Consolidated Financial Statements. Period-to-period changes in the
exchange rate for a particular country's currency can significantly affect the translation of both revenues and operating income denominated in that currency into Euros.

AIXTRON
has assets and liabilities outside the Euro zone. These assets and liabilities are denominated in local currencies and reside primarily at AIXTRON's subsidiaries in the United
States and the United Kingdom.

When
AIXTRON converts net asset values into Euros, currency fluctuations result in period-to-period changes in those net asset values. The Company's equity position reflects these
changes in net asset values. AIXTRON generally does not hedge against this type of risk.

Management of Foreign Currency Exchange Rate Risk

The Company's activities expose it to the financial risks of changes in foreign currency exchange rates. In order to manage foreign
exchange risks, the Company routinely monitors if and to what extent currency hedging instruments should be used. In 2013, no hedging instruments were used. The main exchange rates giving rise to the
risk are those between the US-Dollar, Pound Sterling, and Euro.

The
Company's use of derivative financial instruments is governed by the Company's policies, approved by the Supervisory Board, which provide principles on foreign exchange rate risk and
the use of derivative financial instruments. Exposures are reviewed on a regular basis. The Company does not enter into derivative financial instruments for purely speculative purposes.

63

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Table of Contents

Exposure
to exchange rate risk is managed by the Company through sensitivity analysis. The following table details the Company's historical sensitivity to a 10% increase/decrease in the
value of the Euro against the principal foreign currencies involved.

This
represents AIXTRON's assessment of the possible change in foreign exchange rates. The sensitivity analysis of the Company's exposure to foreign currency risk at the reporting date
has been determined based on the change taking place at the beginning of the applicable financial year and sustained throughout such fiscal year, the effects of changes in the opening and closing
balance sheet values have been ignored in this analysis. A negative number indicates a decrease in revenue and net income or net loss where the Euro strengthens against the US-Dollar or the Pound
Sterling.

Impact of 10% increase of EUR vs. USD exchange rate

2013

2012

2011(EUR thousands)Revenues


(10,866
)

(13,959
)

(48,844
)Net Result


(3,439
)

(8,767
)

(13,758
)




Impact of 10% increase of EUR vs. GBP exchange rate

2013

2012

2011(EUR thousands)Revenues








Net Result


1,504


3,910


8,075




Impact of 10% decrease of EUR vs. USD exchange rate

2013

2012

2011(EUR thousands)Revenues


10,866


13,959


48,844Net Result


3,439


8,767


13,758




Impact of 10% decrease of EUR vs. GBP exchange rate

2013

2012

2011(EUR thousands)Revenues








Net Result


(1,504
)

(3,910
)

(8,075
)


The
sensitivity of the Company's net income to exchange rate risk is reduced, in comparison with the effect on revenue, by the use of foreign currency exchange contracts and by the
"natural hedge" effect of costs incurred in those currencies.

It
is the Company's policy, if it enters into foreign exchange contracts only to do so to hedge its exposure to foreign exchange rate risk. The Company has not entered any such contracts
during 2013.

Interest Rate Risk

The Company's income is subject to effects from interest rate fluctuations relating to interest rate influenced cash and cash
equivalents, short term investments and bank loans. During 2013, the Company received € 0.8 million (2012: € 2.3 million; 2011:
€ 3.4 million) of interest income.

Since
AIXTRON has no bank borrowings, the Company does not enter into derivative financial instruments to manage exposure to interest rate risks.

Refer
to Item 18 "Financial StatementsNote 26. Financial instruments" for more information on the credit, interest rate, and currency risks arising in
AIXTRON's normal course of business.

Item 12:    Description of Securities other than Equity Securities

On February 7, 2011, the deposit agreement dated March 10, 2005 with JPMorgan Chase Bank, N.A. ("JPMorgan"), as
depositary for the AIXTRON ADS program, was effectively replaced by a deposit agreement with The Bank of New York Mellon ("Bank of New York Mellon"), dated February 7, 2011.

As
provided for in the American Depositary Receipt included as Exhibit A to the amended and restated deposit agreement among AIXTRON, Bank of New York Mellon, as depositary
(the "Depositary") and all owners and holders of American Depositary Shares dated as of February 7, 2011, holders of American Depositary Shares may be charged, directly or indirectly,
the following amounts in relation to the ownership of depositary receipts held in the Company's ADS Program, which amounts are payable to the Depositary.

64

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Table of Contents

The
following table shows the fees and charges that a holder of AIXTRON ADSs may have to pay, either directly or indirectly:

Depositary Actions

Associated FeeIssuance of ADSs, including as a result of a distribution of shares or rights or other property

Up to USD 5.00 for each 100 ADSs (or portion thereof)Cancellation of ADSs, including if the deposit agreement terminates

Up to USD 5.00 for each 100 ADSs (or portion thereof)Distribution of cash dividends

Up to USD 0.02 or less per ADS (or portion thereof)Distribution or sale of shares

Up to USD 5.00 for each 100 ADSs (or portion thereof)Depositary services

Up to USD 0.02 per ADS (or portion thereof) per annumExpenses incurred on behalf of Holders in connection with  Taxes and other governmental charges Registration fees as may from time to time be in effect for the registration of transfers of shares Cable, telex, facsimile
transmission Expenses of the
depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency) Any other charge payable by depositary or its agents

Expenses payable at the sole discretion of the depositary by billing Holders or by deducting charges from one or more cash
dividends or other cash distribution.


Direct Payments made by the Depositary to AIXTRON

The Depositary, has agreed under certain conditions to reimburse certain reasonable expenses related to the AIXTRON ADS program and
incurred by us in connection with such program.

In
2013, Bank of New York Mellon granted reimbursements in the amount of USD 90,000 to AIXTRON.

Indirect Payments made by the Depositary to AIXTRON

As part of its service to AIXTRON, Bank of New York Mellon has agreed to waive fees for the standard costs associated with the
administration of the AIXTRON ADS program, associated operating expenses and IR-related services, estimated to be approximately USD 200,000 annually.

65

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Table of Contents

PART II

Item 13:    Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14:    Material Modifications to the Rights of Security Holders and Use of Proceeds

Not applicable.



Item 15:    Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, Management of AIXTRON conducted an evaluation, under the supervision and with the
participation of AIXTRON's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of AIXTRON's disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Exchange Act).

Based
on such evaluation, AIXTRON's Chief Executive Officer Martin Goetzeler and Chief Financial Officer Wolfgang Breme have concluded that, as of December 31, 2013, AIXTRON's
disclosure controls and procedures are effective.

Management's Report on Internal Control over Financial Reporting

AIXTRON's Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term
is defined in Rule 13a-15(f) under the Exchange Act, for AIXTRON. Under the supervision and with the participation of AIXTRON's Chief Executive Officer and Chief Financial Officer, AIXTRON's
Management conducted an evaluation of the effectiveness of AIXTRON's internal control over financial reporting based upon the 1992 framework in "Internal ControlIntegrated Framework"
issued by the Committee of Sponsoring Organizations of the Treadway Commission as of the end of the period covered by this report.

Based
on that evaluation, Management has concluded that AIXTRON's internal control over financial reporting was effective as of December 31, 2013.

Deloitte &
Touche GmbH, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this annual report on
Form 20-F and, as part of the audit, has issued an attestation report, included herein, on the effectiveness of AIXTRON's internal control over financial reporting.

66

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Table of Contents

Attestation Report of the Registered Public Accounting Firm

To
The Supervisory Board
AIXTRON SE
Herzogenrath, Germany

We
have audited the internal control over financial reporting of AIXTRON SE and subsidiaries (the "Company") as of December 31, 2013, based on criteria established in Internal
ControlIntegrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management's report on internal control
over financial reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing
such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A
company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing
similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because
of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to
error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are
subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal
ControlIntegrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We
have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended
December 31, 2013 of the Company and our report dated February 25, 2014 expressed an unqualified opinion on those consolidated financial statements.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & ToucheGmbH
WirtschaftsprüfungsgesellschaftDuesseldorf, Germany, February 25, 2014

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Table of Contents

Changes in Internal Control over Financial Reporting

During the year ended December 31, 2013 there have been no changes in our internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Procedures in Internal Control over Financial Reporting

It should be noted that any system of controls, however well-designed and operated, can provide only reasonable, and not absolute,
assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

Item 16A:    Audit Committee Financial Expert

AIXTRON's Supervisory Board has determined that the Chairman of the Audit Committee Prof. Dr. Wolfgang
Blättchen is an "Audit Committee financial expert" and has determined that the "Audit Committee financial expert" is "independent" as set forth in Rule 10A-3 of the Exchange Act
and NASDAQ Rule 5605(a)(2). Prof. Dr. Wolfgang Blättchen is Chairman of the Audit Committee and acts as its independent financial expert since 2005.

Item 16B:    Code of Ethics

AIXTRON has adopted a Code of Ethics that applies to the members of the Company's Executive Board and senior financial officers
nominated by AIXTRON's Executive Board. All of these Executive Board members and senior financial officers have agreed to abide by this Code. The aim of the Code is to prevent misconduct and promote
upright and ethical conduct,
including ethical handling of conflicts of interest, the complete, fair, precise, timely and transparent disclosure of quarterly and annual reports, compliance with prevailing laws, rules and
regulations, the immediate internal reporting of breaches of the Code and responsibility for compliance with the Code. AIXTRON's Code of Ethics, which is filed as an exhibit to this annual report on
Form 20-F, is consistent with the requirements of the NASDAQ Stock Market. The Company has revised its Code of Ethics in 2013 and has published the updated version of the code on its website at
www.aixtron.com. A copy of the Code of Ethics is available on the AIXTRON website www.aixtron.com under the section Investors / Corporate Governance / Code of Ethics.

Item 16C:    Principal Accountant Fees and Services

Aggregate fees billed to AIXTRON for the years ended December 31, 2013 and 2012 by AIXTRON's independent principal accountant,
Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates are as follows:

Type of Fees

Dec 31,
2013

Dec 31,
2012Million EURAudit fees


0.72


0.73Audit-related fees


0.03


0.04Tax fees


0.30


0.23All other fees


0.03


0.00​
​
​
​
​
​
​
​Total


1.08


0.99​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


In
the above table, "audit fees" are the aggregate fees for professional services in connection with the audit of the Company's Consolidated Financial Statements, reviews of interim
financial statements, as well as audits of statutory financial statements of AIXTRON and its subsidiaries. Also included in "Audit fees" are amounts for attestation services in relation to regulatory
filings and other compliance requirements. "Audit-related fees" are fees for accounting advice on actual or contemplated transactions, due diligence engagements related to acquisitions, attestation
regarding compliance with certain agreements and other agreed-upon procedures. "Tax fees" are fees for tax advice on actual or contemplated transactions, tax compliance and expatriate employee tax
services. "All Other Fees" are miscellaneous items. For more information, refer to Item 18 "Financial StatementsNote 33. Auditors' fees".

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Table of Contents

Audit Committee Pre-Approval Policies

In accordance with German law, AIXTRON's independent auditors are appointed at the Annual General Meeting based on a recommendation of
the Company's Supervisory Board. The Audit Committee of the Supervisory Board prepares the Board's recommendation on the selection of the independent auditors. Subsequent to the auditors' appointment,
the Supervisory Board awards the contract and in its sole authority approves the terms and scope of the audit and all audit engagement fees, as well as monitors the auditors' independence. On
May 23, 2013, at the Annual General Meeting of Shareholders, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, Germany
("Deloitte & Touche") was appointed to serve as the Company's independent auditors for the year ending December 31, 2013.

In
order to assure the integrity of independent audits, AIXTRON's Audit Committee established a policy to approve all audit and permissible non-audit services provided by the Company's
independent auditors prior to the auditors' engagement. As part of this approval process, the Audit Committee adopted pre-approval policies and procedures pursuant to which the Audit Committee
annually pre-approves certain types of services to be performed by AIXTRON's independent auditors. Under the policies, the Company's independent auditors are not allowed to perform any non-audit
services which may impair the auditors' independence under the rules of the SEC. In fiscal year 2013 the Audit Committee pre-approved 100% of the performance by Deloitte & Touche of the above
specified audit and permitted non-audit services.

Item 16D:    Exemptions from the Listing Standard for Audit Committees

Not applicable.

Item 16E:    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not applicable.

Item 16F:    Change in Registrant's Certifying Accountant

Not applicable.



Item 16G:    Corporate Governance

AIXTRON is a stock corporation in the form of a European Company (Societas Europaea) under the laws of the Federal Republic of Germany
and AIXTRON's ADSs are listed on NASDAQ Global Select Market. AIXTRON generally complies with applicable German Corporate Governance practice rather than certain of the Corporate Governance
requirements of NASDAQ Rule 5600 Series. For more information regarding how AIXTRON's Corporate Governance practices are different from a domestic issuer, refer to Item 10.B "Additional
InformationMemorandum and Articles of Association" in this report.



Item 16H:    Mine Safety Disclosure

Not Applicable.

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Table of Contents

PART III



Item 17:    Financial Statements

Not applicable.



Item 18:    Financial Statements

See pages F-1 to F-49, incorporated herein by reference.

Item 19:    Exhibits

Exhibit
Number

Description of Exhibit1.1

Articles of Association (Satzung) as amended January 24, 2014.2.1

Amended and Restated Deposit Agreement dated as of February 7, 2011 among AIXTRON SE, The Bank of New York Mellon, as Depositary, and all Owners and Holders of American Depositary Shares (incorporated by
reference to Exhibit 1 to Form F-6, dated October 15, 2012, File No. 333-184427).4.1

Exclusive Patent and Know-How License Agreement among AIXTRON, Centre National de la Recherche Scientifique and the Institut National Polytechnique de Grenoble (incorporated by reference to Exhibit 10.3 to
Form F-4, dated February 8, 2005, File No. 333-122624).4.2

Contract between AIXTRON and Mr. Wolfgang Breme, effective April 1, 2013. (English translation; incorporated by reference to Exhibit 4.5 to Form 20-F, dated February 28, 2013, File
No. 000-51196)4.3

Contract between AIXTRON and Dr. Bernd Schulte, effective April 1, 2002. (English translation; incorporated by reference to Exhibit 4.7 to Form 20-F, dated June 22, 2006, File
No. 000-51196).4.4

Amendment to contract between AIXTRON and Dr. Bernd Schulte, dated October 20, 2004. (Incorporated by reference to Exhibit 4.8 to Form 20-F, dated June 22, 2006, File
No. 000-51196).8.1

List of Subsidiaries (incorporated by reference to the list of subsidiaries set forth in this report under the caption "Item 4. Information on the CompanyOrganizational Structure.")11.1

Code of Ethics, revised in 2013.12.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.12.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.13.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.15.1

Consent of Deloitte &Touche GmbH Wirtschaftsprüfungsgesellschaft.


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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and
authorized the undersigned to sign this annual report on its behalf.

Date:
February 25, 2014

AIXTRON SE/s/ MARTIN GOETZELERName:

Martin GoetzelerTitle:

Chairman, President and
Chief Executive Officer




/s/ WOLFGANG BREMEName:

Wolfgang BremeTitle:

Executive Vice President and
Chief Financial Officer


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Table of Contents

Report of Independent Registered Public Accounting Firm

To
The Supervisory Board
AIXTRON SE
Herzogenrath, Germany

We
have audited the accompanying consolidated statements of financial position of AIXTRON SE and subsidiaries (the "Company") as of December 31, 2013 and 2012, and the related
consolidated statements of income, consolidated statements of other comprehensive income, consolidated statements of cash flow, and consolidated statements of changes in equity for each of the three
years in the period ended December 31, 2013. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our opinion.

In
our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of AIXTRON SE and subsidiaries as of December 31, 2013 and
2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with International Financial Reporting Standards
as issued by the International Accounting Standards Board (IASB).

We
have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of
December 31, 2013, based on the criteria established in Internal ControlIntegrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission
and our report dated February 25, 2014 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & ToucheGmbH
WirtschaftsprüfungsgesellschaftDuesseldorf, Germany, February 25, 2014

72

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Table of Contents

CONSOLIDATED INCOME STATEMENT

Notes

2013

2012

2011in EUR thousandsRevenues


3


182,863


227,832


610,960Cost of sales





190,251


227,402


379,529​
​
​
​
​
​
​
​
​
​
​
​
​
​Gross profit





(7,388
)

430


231,431Selling expenses





28,956


34,830


32,138General administration expenses





18,223


19,551


33,978Research and development costs


4


57,153


72,862


50,410Other operating income


5


27,610


3,121


2,394Other operating expenses


6


11,631


8,575


4,419​
​
​
​
​
​
​
​
​
​
​
​
​
​Operating result





(95,741
)

(132,267
)

112,880Finance Income





839


2,353


3,393Finance Expense





313


29


1,306​
​
​
​
​
​
​
​
​
​
​
​
​
​Net Finance Income


8


526


2,324


2,087Result before taxes





(95,215
)

(129,943
)

114,967Taxes on income/loss


9


5,801


15,493


35,431​
​
​
​
​
​
​
​
​
​
​
​
​
​Profit or loss for the year





(101,016
)

(145,436
)

79,536​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​Thereof attributable to the owners of Aixtron SE





(101,016
)

(145,436
)

79,536Basic earnings or loss per share (EUR)


21


(0.98
)

(1.44
)

0.79Diluted earnings or loss per share (EUR)


21


(0.98
)

(1.44
)

0.78


See
accompanying notes to consolidated financial statements.

F-1

---





Table of Contents

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

Note

2013

2012

2011in EUR thousandsProfit or loss for the year





(101,016
)

(145,436
)

79,536Losses/gains from derivative financial instruments before taxes


20





9,226


(9,032
)Deferred taxes on derivative financial instruments


14





(2,788
)

2,934Currency translation adjustment





(6,130
)

1,512


6,930Other comprehensive income (loss)





(6,130
)

7,950


832​
​
​
​
​
​
​
​
​
​
​
​
​
​Total comprehensive income or loss for the year





(107,146
)

(137,486
)

80,368​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​Thereof attributable to the owners of Aixtron SE





(107,146
)

(137,486
)

80,368


See
accompanying notes to consolidated financial statements.

F-2

---





Table of Contents

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note

31/12/2013

31/12/2012in EUR thousandsAssetsProperty, plant and equipment


11


79,866


97,552Goodwill


12


64,115


64,346Other intangible assets


12


3,058


4,218Other non-current assets


13


907


677Deferred tax assets


14


4,613


5,388Tax receivables


15


177


236​
​
​
​
​
​
​
​
​
​
​Total non-current assets





152,736


172,417​
​
​
​
​
​
​
​
​
​
​Inventories


16


66,183


125,986Trade receivables less allowance k€ 1,821 (2012: k€ 1,819)


17


27,654


37,291Current tax receivables


10


5,388


7,127Other current assets


17


4,925


7,660Other financial assets


18


138,853


109,756Cash and cash equivalents


19


167,454


99,734​
​
​
​
​
​
​
​
​
​
​Total current assets





410,457


387,554​
​
​
​
​
​
​
​
​
​
​Total assets





563,193


559,971​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Liabilities and shareholders' equityFully paid capital Number of shares: 111,534,520 (2012: 100,896,098)





111,535


100,896Additional paid-in capital





370,842


278,952Retained earnings





(8,291
)

92,725Cumulated comprehensive income and expense recognised in equity





(8,683
)

(2,553
)​
​
​
​
​
​
​
​
​
​
​Total shareholders' equity


20


465,403


470,020Other non-current payables





92


117Other non-current provisions


24


1,977


1,206Deferred tax liabilities


14


300


123​
​
​
​
​
​
​
​
​
​
​Total non-current liabilities





2,369


1,446Trade payables


25


13,517


9,683Advance payments from customers





46,188


45,969Other current provisions


24


32,080


28,204Other current liabilities


25


2,948


3,783Current tax payables


10


688


770Deferred revenues





0


96​
​
​
​
​
​
​
​
​
​
​Total current liabilities





95,421


88,505​
​
​
​
​
​
​
​
​
​
​Total liabilities





97,790


89,951​
​
​
​
​
​
​
​
​
​
​Total liabilities and shareholders' equity





563,193


559,971​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


See
accompanying notes to consolidated financial statements.

F-3

---





Table of Contents

CONSOLIDATED STATEMENT OF CASH FLOW

Note

2013

2012

2011in EUR thousandsCash inflow / outflow from operating activitiesProfit or loss for the year





(101,016
)

(145,436
)

79,536Reconciliation between profit or loss and cash inflow/outflow from operating activitiesExpense from share-based payments





981


3,439


5,177Depreciation, amortization and impairment expense





27,812


16,641


12,258Net result from disposal of property, plant and equipment





11


149


49Deferred income taxes





643


22,855


(8,739
)Change inInventories





57,938


59,571


(16,390
)Trade receivables





8,500


41,435


9,524Other assets





4,209


14,943


(13,653
)Trade payables





4,841


(10,871
)

(19,274
)Provisions and other liabilities





2,050


(28,743
)

(2,132
)Deferred revenues





(92
)

0


57Non-current liabilities





1,977


(89
)

(813
)Advance payments from customers





364


(19,131
)

(51,945
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow /outflow from operating activities





8,218


(45,237
)

(6,345
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from investing activitiesCost related to acquisitions





0


(234
)

0Capital expenditures in property, plant and equipment





(9,603
)

(15,768
)

(27,184
)Capital expenditures in intangible assets





(465
)

(715
)

(2,978
)Proceeds from disposal of fixed assets





789


342


77Bank deposits with a maturity of more than 90 days


18


(30,383
)

11,934


80,537​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from investing activities





(39,662
)

(4,441
)

50,452​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from financing activitiesDividend paid to shareholders





0


(25,155
)

(60,708
)Proceeds from issue of equity shares





101,553


883


3,179​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from financing activities





101,553


(24,272
)

(57,529
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Effect of changes in exchange rates on cash and cash equivalents





(2,389
)

792


4,196Net change in cash and cash equivalents





67,720


(73,158
)

(9,226
)Cash and cash equivalents at the beginning of the period





99,734


172,892


182,118​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash and cash equivalents at the end of the period


19


167,454


99,734


172,892​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​Interest paid





(3
)

(28
)

(140
)Interest received





1,172


2,091


2,675Income taxes paid





(1,860
)

(7,440
)

(54,651
)Income taxes received





65


7,199


211


See
accompanying notes to consolidated financial statements.

F-4

---





Table of Contents

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Note

Subscribed
capital
under IFRS

Additional
paid-in-
capital

Currency
translation

Derivative
financial
instruments

Retained
Earnings/
Accumulated
deficit

Shareholders'
equity
attributable to
the owners of
AIXTRON SEin EUR thousandsBalance at January 1, 2011





100,101


267,070


(10,995
)

(340
)

244,488


600,324​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Dividends to shareholders (€ 0.60 per share)

















(60,708
)

(60,708
)Share based payments








5,177











5,177Issue of shares





610


2,569











3,179Net income for the year

















79,536


79,536Other comprehensive income











6,930


(6,098
)




832Total comprehensive income for the year





0


0


6,930


(6,098
)

79,536


80,368​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance December 31, 2011 and January 1, 2012





100,711


274,816


(4,065
)

(6,438
)

263,316


628,340​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Dividends to shareholders (€ 0.25 per share)

















(25,155
)

(25,155
)Share based payments








3,438











3,438Issue of shares





185


698











883Net loss for the year

















(145,436
)

(145,436
)Other comprehensive income











1,512


6,438





7,950Total comprehensive income (loss) for the year





0


0


1,512


6,438


(145,436
)

(137,486
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance December 31, 2012 and January 1, 2013





100,896


278,952


(2,553
)

0


92,725


470,020​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Share based payments








970











970Issue of shares





10,639


90,920











101,559Net Loss for the year

















(101,016
)

(101,016
)Other comprehensive income (Loss)











(6,130
)







(6,130
)Total comprehensive income (Loss) for the year





0


0


(6,130
)

0


(101,016
)

(107,146
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance December 31, 2013





111,535


370,842


(8,683
)

0


(8,291
)

465,403​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


See
accompanying notes to consolidated financial statements.

F-5

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS



1.     General Principles

AIXTRON SE is incorporated as a European Company (Societas Europaea) under the laws of the Federal Republic of Germany. The Company is domiciled at Kaiserstraße 98, 52134
Herzogenrath, Germany. AIXTRON SE is registered in the commercial register of the District Court ("Amtsgericht") of Aachen under HRB 16590.

The
consolidated financial statements of AIXTRON SE and its subsidiaries ("AIXTRON" or "Company") have been prepared in accordance with, and fully comply with



AIXTRON
is a leading provider of deposition equipment to the semiconductor industry. The Company's technology solutions are used by a diverse range of customers worldwide to build
advanced components for electronic and opto-electronic applications based on compound, silicon, or organic semiconductor materials. Such components are used in fibre optic communication systems,
wireless and
mobile telephony applications, optical and electronic storage devices, computing, signalling and lighting, displays, as well as a range of other leading-edge technologies.

These
consolidated financial statements have been prepared by the Executive Board and have been submitted to the Supervisory Board at its meeting held on February 24, 2014 for
approval and publication.

2.     Significant Accounting Policies

(a)   Companies included in consolidation

Companies
included in consolidation are the parent company, AIXTRON SE, and 8 companies, in which AIXTRON SE has a 100% direct shareholding or control. The balance sheet date of all
consolidated companies is December 31. A list of all consolidated companies is shown in note 31.

(b)   Basis of accounting

The consolidated financial statements are presented in Euro (EUR). The amounts are rounded to the nearest thousand Euro (kEUR). Some items in the consolidated
statement of financial position and consolidated income statement have been combined under one heading to improve the clarity of presentation. Such items are disclosed and commented on individually in
the notes.

The
financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments.

The
preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of
contingent assets and liabilities at the balance sheet date and the reported amounts of income and expenses during the reported period. Actual results may differ from these estimates.

The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if this
revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgments which have a significant effect on the
Company's financial statements are described in Note 37.

The
accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

The
accounting policies have been applied consistently by each consolidated company.

F-6

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(c)   Bases of consolidation



(d)   Foreign currency

The consolidated financial statements have been prepared in Euro (EUR). In the translation of financial statements of subsidiaries outside the Euro-Zone the local
currencies are also the functional currencies of those companies. Assets and liabilities of those companies are translated to EUR at the exchange rate ruling at the balance sheet date. Revenues and
expenses are translated to EUR at average exchange rates for the year or at average exchange rates for the period between their inclusion in the consolidated financial statements and the balance sheet
date. Net equity is translated at historical rates. The differences arising on translation are disclosed in the Consolidated Statement of Changes in Equity.

Exchange
gains and losses resulting from fluctuations in exchange rates in the case of foreign currency transactions are recognised in the income statement in "Other operating income" or
"Other operating expenses".

(e)   Property, plant and equipment









F-7

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)





Buildings

25 years

Machinery and equipment

3-14 years

Other plant, factory and office equipment

2-14 years


(f)    Intangible assets





Expenditure
on internally generated goodwill, trademarks and patents is expensed as incurred.







Software

2-5 years

Patents and similar rights

5-18 years

Customer base and product and technology know how

6-7 years


F-8

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(g)   Financial Instruments











F-9

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)









(h)   Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less
the estimated cost of completion and selling expenses. Cost is determined using weighted average cost.

The
cost includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work in progress and finished goods, cost
includes direct material and production cost, as well as an appropriate share of overheads based on normal operating capacity.

Allowance
for slow moving, excess and obsolete, and otherwise unsaleable inventory is recorded based primarily on either the Company's estimated forecast of product demand and production
requirement or historical usage. When the estimated future demand is less than the inventory, the Company writes down such inventories.

(i)    Operating Result

Operating result is stated before finance income, finance expense and tax.

F-10

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(j)    Impairment of property, plant and equipment and intangible assets

Goodwill purchased as part of a business acquisition is tested annually for impairment, irrespective of whether there is any indication of impairment. For
impairment test purposes, the goodwill is allocated to cash-generating units. Impairment losses are recognised to the extent that the carrying amount exceeds the higher of fair value less cost to sell
or value in use of the cash-generating unit.

Property,
plant and equipment as well as other intangible assets are tested for impairment, where there is any indication that the asset may be impaired. The company assesses at the end
of each period whether there is an indication that an asset may be impaired. Impairment losses on such assets are recognised, to the extent that the carrying amount exceeds either the fair value that
would be obtainable from a sale in an arm's length transaction, or the value in use.

In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments and the risks
associated with the asset.

Impairment
losses are reversed if there has been a change in the estimates used to determine the recoverable amount. Reversals are made only to the extent that the carrying amount of the
asset does not exceed the carrying amount that would have been determined if no impairment loss had been recognised.

An
impairment loss in respect of goodwill is not reversed.

(k)   Earnings per share

Basic earnings per share are computed by dividing net income (loss) by the weighted average number of issued common shares (see note 21) for the year.
Diluted earnings per share reflect the potential dilution that could occur if options issued under the Company's stock option plans were exercised and convertible bonds were converted, unless such
conversion had an anti-dilutive effect.

(l)    Employee benefits







(m)  Provisions

A provision is recognised when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of
economic benefits will be required to settle this obligation. If the effect is material, provisions are determined by discounting the expected future cash

F-11

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

flows
at a pre-tax interest rate that reflects current market assessments of the time value of money and, where appropriate, the risks associated with the liability.





(n)   Revenue

Revenue is generated from the sale and installation of equipment, spare parts and maintenance services. The sale of equipment involves a customer acceptance test
at AIXTRON?s production facility. After successful completion of this test, the equipment is dismantled and packaged for shipment. Upon arrival at the customer site the equipment is
reassembled and installed, which is a service generally performed by AIXTRON engineers. AIXTRON gives no general rights of return, discounts, credits or other sales incentives within its terms of
sale. However, occasionally some customers of AIXTRON have specifically negotiated terms and conditions of business.

Revenues
from the sale of products that have been demonstrated to meet product specification requirements are recognised upon shipment to the customer, if a full customer acceptance test
has been successfully completed at the AIXTRON production facility and the significant risks and rewards of ownership has passed to the customer.

Revenue
relating to the installation of the equipment at the customer's site is recognised when the installation is completed and the final customer acceptance has been confirmed.

The
portion of the contract revenue deferred until completion of the installation services is determined based on either the fair value of the installation services or, if the company
determines that there may be a risk that the economic benefits of installation services may not flow to the Company, the portion of the contract amount that is due and payable upon completion of the
installation.

Fair
value of the installation services is determined based on the price that would be received in an orderly transaction in the principal market for such equipment at the measurement
date under current market conditions.

Revenue
related to products where meeting the product specification requirements has not yet been demonstrated, or where specific rights of return have been negotiated, is recognised
only upon final customer acceptance.

Revenue
on the sale of spare parts is recognised when title and risk passes to the customer, generally upon shipment. Revenue from maintenance services is recognised as the services are
provided.

F-12

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(o)   Expenses







(p)   Other operating income

Government grants

Government grants awarded for project funding are recorded in "Other operating income" if the Research and Development costs are
incurred and provided that the conditions for the funding have been met.

(q)   Tax

The tax expense represents the sum of the current and deferred tax.

Deferred
tax assets and liabilities are recorded for all temporary differences between tax and commercial balance sheets and for losses brought forward for tax purposes as well as for
tax credits of the companies included in consolidation. The deferred taxes are calculated, based on tax rates applicable at the balance sheet date or known to be applicable in the future. Effects of
changes in tax rates on the deferred tax assets and liabilities are recognised upon substantively enacted amendments to the law.

A
deferred tax asset is recognised only to the extent that it is probable that future taxable profits can be set off against tax credits and tax losses carried forward. Deferred tax
assets are reduced to the extent that it is no longer probable that the related tax benefit can be realised. The recoverability of deferred tax assets is reviewed at least annually.

(r)   Segment reporting

An operating segment is a distinguishable component of the Company that is engaged in business activities and whose operating results are reviewed regularly by
the Chief Operating Decision Maker, which the Company considers to be its Executive Board. The Executive Board regularly reviews financial information on a consolidated group basis. Aixtron has only
one reportable segment.

Accounting
standards applied in segment reporting are in accordance with the general accounting policies as explained in this section.

(s)   Cash flow statement

The cash flow statement is prepared in accordance with IAS 7. Cash flows from operating activities are prepared using the indirect method. Cash inflows and
cash outflows from taxes and interest are included in cash flows from operating activities.

F-13

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(t)    Recently issued accounting standards

In the current year, the following new and revised standards have been adopted. Their adoption has not had any significant impact on the amounts reported in these
financial statements.

IFRS 10Consolidated Financial Statements

This standard replaces the parts of IAS 27 that deal with consolidated financial statements and changes the
definition of control.IFRS 12Disclosures of interests in Other Entities

The standard generally increases the required disclosures for subsidiaries, joint arrangements, associates and
unconsolidated entities.Amendments to IAS 1Presentation of Financial Statements

This standard amends the presentation requirements when an entity applies accounting policies retrospectively, or
makes a retrospective restatement or reclassification of items in its financial statements.Amendments to IFRS 7 Disclosures

The amendments to IFRS 7 require entities to disclose information about rights of offset and related
arrangements.At the date of authorisation of these financial statements, the following Standards and Interpretations which have not
been applied in these financial statements were in issue but not yet effectiveIFRS 9

Financial InstrumentsIAS 36 (amendments)

Recoverable amount disclosures for Non-Financial AssetsIAS 39 (amendments)

Novation of Derivatives and Continuation of Hedge AccountingIFRIC Interpretation 21

LeviesThe company does not expect that the adoption of these standards will have a material impact on the financial statements
of the Group in future periods.




3.     Segment Reporting and Revenues

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Executive Board, as chief
operating decision maker, in order to allocate resources to the segments and to assess their performance.

The
Executive Board regularly reviews financial information on a consolidated group basis since the various activities of the group are largely integrated from an operational
perspective. In accordance with IFRS, AIXTRON has only one reportable segment.

The
company's reportable segment is based around the category of goods and services provided to the semiconductor industry.

Revenues
are recognised as disclosed in Note 2 (n).

The
company values the revenue deferred for installation services, using a market based approach, based on observed transactions for all such contracts involving multiple elements where
revenue has been recognised during the financial year. This is level 2 within the fair value hierarchy described in IFRS 13. The fair value of the installation services is taken as the
most frequently observed (modal value) percentage of the contract price payable upon completion of the installation service.

For
contracts where revenue is recognised in two elements, the same method is also used to determine the fair value of products delivered, which is taken to be the most frequently
observed (modal value)

F-14

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     Segment Reporting and Revenues (Continued)

percentage
of the contract value payable upon delivery of the equipment to the customer. This is also level 2 in the fair value hierarchy.

Segment revenues and results

Note

2013

2012

2011in EUR thousandsEquipment revenues




138,044


176,865


556,275Spares and service




44,819


50,967


54,685​
​
​
​
​
​
​
​
​
​
​
​
​Revenue from external customers




182,863


227,832


610,960​
​
​
​
​
​
​
​
​
​
​
​
​Inventories recognized as an expense

16


117,900


113,083


255,357Obsolescence and valuation allowance expense for inventories

16


17,885


40,947


41,602Personnel expense

7


67,548


81,076


76,494Depreciation

11


16,314


11,165


8,960Impairment

6 / 11


9,888


2,756


0Amortization

12


1,609


2,720


3,540Other expenses




74,864


104,496


112,072Foreign exchange losses

5


206


6,977


2,449Other operating income

5


(27,610
)

(3,121
)

(2,394
)​
​
​
​
​
​
​
​
​
​
​
​
​Segment profit/loss




(95,741
)

(132,267
)

112,880Finance income

8


839


2,353


3,393Finance expense

8


(313
)

(29
)

(1,306
)​
​
​
​
​
​
​
​
​
​
​
​
​Profit/loss before tax




(95,215
)

(129,943
)

114,967


The
accounting policies of the reportable segment are identical to the Group's accounting policies as described in note 2. Segment profit represents the profit earned by the
segment without the allocation of investment revenue, finance costs and income tax expense. This is the measure reported to the Executive Board for the purpose of resource allocation and assessment of
performance.

Segment assets and liabilities

31/12/2013

31/12/2012in EUR thousandsSemi-conductor equipment segment assets


246,708


337,730Unallocated assets


316,485


222,241​
​
​
​
​
​
​
​Total Group assets


563,193


559,971




31/12/2013

31/12/2012in EUR thousandsSemi-conductor equipment segment liabilities


96,802


89,057Unallocated liabilities


988


894​
​
​
​
​
​
​
​Total Group liabilities


97,790


89,951


For
the purpose of monitoring segment performance and allocating resources all assets other than tax assets, cash and other financial assets are treated as allocated to the reportable
segment. All liabilities are allocated to the reportable segment apart from tax liabilities and post-employment benefit liabilities.

Additions
to Property, Plant and Equipment, to Goodwill and to Intangible assets, and the depreciation and amortization expenses are given in notes 11 and 12. Other non-current
assets increased by k€ 230 during 2013 (decreased by k€ 43 in 2012).

Information
concerning other material items of income and expense for personnel expenses and R&D expenses can be found in notes 7 and 4.

F-15

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     Segment Reporting and Revenues (Continued)

Geographical Information

The Group's revenue from continuing operations from external customers and information about its non-current assets by geographical
location are detailed below. Revenues
from external customers are attributed to individual countries based on the country in which it is expected that the products will be used.

2013

2012

2011in EUR thousandsAsia


141,785


177,490


547,782Europe


24,213


21,352


26,322Americas


16,865


28,990


36,856​
​
​
​
​
​
​
​
​
​
​Total


182,863


227,832


610,960


Sales
from external customers attributed to Germany, Aixtron's country of domicile, and to other countries which are of material significance are as follows:

2013

2012

2011in EUR thousandsGermany


7,210


10,105


10,929USA


14,805


28,868


35,871Korea


30,578


29,759


57,744China


56,788


71,611


314,900Taiwan


43,177


47,147


157,446


Revenues
from all foreign countries outside of Germany were k€ 175,653, k€ 217,727 and k€ 600,031 for the years ended
December 31, 2013, 2012 and 2011 respectively.

Sales
to one customer in 2013 amounted to 14.4% of Group revenue, in 2012 sales to one customer amounted to 11% of Group revenues. In 2011 there were no customers who accounted for more
than 10% of Group revenues.

Non-current assetsDec 31, 2013

Dec 31, 2012in EUR thousandsAsia


5,181


5,352Europe excluding Germany


13,052


14,459Germany


127,977


144,745USA


1,736


2,237​
​
​
​
​
​
​
​Total Group non current assets


147,946


166,793


Non-current
assets exclude deferred tax assets, financial instruments, post-employment benefit assets and rights arising under insurance contracts.

4.     Research and development

Research
and development costs, before deducting project funding received, were k€ 57,153, k€ 72,862 and k€ 50,410
for the years ended December 31, 2013, 2012 and 2011 respectively.

After
deducting project funding received and not repayable, net expenses for research and development were k€ 54,627, k€ 70,201 and
k€ 49,003 for the years ended December 31, 2013, 2012 and 2011 respectively.

F-16

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



5.     Other operating income

2013

2012

2011in EUR thousandsResearch and development funding


2,526


2,661


1,407Income from resolved contract obligations


225Income from the reversal of provisions and the write-off of debts


33


78


92Gain from the disposal of fixed assets


43





17Compensation payments


22,638


11


2Foreign exchange gains


746


136


367Other


1,399


235


509​
​
​
​
​
​
​
​
​
​
​27,610


3,121


2,394​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


In
June 2013 inventory belonging to Aixtron with an original cost of k€ 22,284 was destroyed by a fire in a third party warehouse in the United Kingdom. The
inventory valuation had been written down by a provision of k€ 17,127 to a net amount of k€ 5,157. Insurance proceeds related to the incident amounting
to k€ 22,479 are included within Compensation payments in Other operating income. The destroyed inventory, net of the provision, is expensed in cost of sales.

The
total amount of exchange gains and losses (see also note 6) recognised in profit or loss was a gain of k€ 540, (2012 loss
k€ -6,841; 2011 loss k€ -2,082).

2013

2012

2011Foreign exchange gains


746


136


367Foreign exchange losses (see note 6)


(206
)

(6,977
)

(2,449
)​
​
​
​
​
​
​
​
​
​
​Net foreign exchange gains (losses)


540


(6,841
)

(2,082
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Gains (losses) arising on financial instruments at FVTPL


0


(6,774
)

(1,320
)Other foreign exchange gains (losses)


540


(67
)

(762
)​
​
​
​
​
​
​
​
​
​
​Net foreign exchange gains (losses)


540


(6,841
)

(2,082
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


6.     Other operating expenses

2013

2012

2011in EUR thousandsForeign exchange losses


206


6,977


2,449Impairment of building


9,888Losses from the disposal of fixed assets


54


149


66Additions to allowances for receivables or write-off of receivables


142


1,449


101Customs penalty








1,334Other


1,341





469​
​
​
​
​
​
​
​
​
​
​11,631


8,575


4,419​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


7.     Personnel expense

2013

2012

2011in EUR thousandsPayroll


58,783


67,179


63,315Social insurance contributions


6,444


8,732


6,777Decrease/Increase in defined benefit plan obligations








(17
)Expense for defined contribution plans


1,340


1,712


1,355Share based payments


981


3,453


5,064​
​
​
​
​
​
​
​
​
​
​67,548


81,076


76,494​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


F-17

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.     Net finance income

2013

2012

2011in EUR thousandsInterest income from financial assetsOn financial assets measured at amortised cost


839


2,274


3,309Other financial assets


0


79


84​
​
​
​
​
​
​
​
​
​
​839


2,353


3,393​
​
​
​
​
​
​
​
​
​
​Interest expense from financial liabilitiesOn financial liabilities not at fair value through profit or loss


(313
)

(29
)

(546
)On financial liabilities at fair value through profit or loss








(760
)​
​
​
​
​
​
​
​
​
​
​(313
)

(29
)

(1,306
)​
​
​
​
​
​
​
​
​
​
​Net finance income


526


2,324


2,087​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Interest
income relates to interest on cash and cash equivalents and held to maturity investments.

9.     Income tax expense/benefit

The following table shows income tax expenses and income recognised in the consolidated income statement:

2013

2012

2011in EUR thousandsCurrent tax expense (+)/current tax income (-)for current year


5,697


(4,508
)

40,686adjustment for prior years


(539
)

(204
)

552​
​
​
​
​
​
​
​
​
​
​Total current tax expense/income


5,158


(4,712
)

41,238​
​
​
​
​
​
​
​
​
​
​Deferred tax expense (+)/deferred tax income (-)from temporary differences


55


22,868


(5,802
)Income/expense from changes in local tax rate


4


(56
)

(5
)from reversals and write-downs


584


(2,607
)​
​
​
​
​
​
​
​
​
​
​Total deferred tax expense/income


643


20,205


(5,807
)​
​
​
​
​
​
​
​
​
​
​Taxes on income/loss


5,801


15,493


35,431​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Income/loss
before income taxes and income tax expense relate to the following regions:

2013

2012

2011in EUR thousandsIncome/loss before income taxesGermany


(104,284
)

(101,617
)

56,554Outside Germany


9,069


(28,326
)

58,413​
​
​
​
​
​
​
​
​
​
​Total


(95,215
)

(129,943
)

114,967​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Income tax expenseGermany


353


21,143


18,867Outside Germany


5,448


(5,650
)

16,564​
​
​
​
​
​
​
​
​
​
​Total


5,801


15,493


35,431​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


The
Company's effective tax rate is different from the German statutory tax rate of 30.54% (2012: 30.54%; 2011: 30.21%) which is based on the German corporate income tax rate (including
solidarity surcharge and trade tax).

F-18

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.     Income tax expense/benefit (Continued)

The
following table shows the reconciliation from the expected to the reported tax expense:

2013

2012

2011in EUR thousandsNet result before taxes


(95,215
)

(129,943
)

114,967​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Income tax expense/benefit (German tax rate)


(29,079
)

(39,685
)

34,732​
​
​
​
​
​
​
​
​
​
​Effect from differences to foreign tax rates


(1,768
)

1,250


(1,574
)Non-deductible expenses


338


1,343


2,236Non-consideration of tax claims from loss carryforwards


36,089


55,062Reversal of Allowance/write-off against deferred tax assets


662


(2,607
)

587Effect from changes in local tax rate


4


(56
)

(5
)Effect of the use of loss carryforwards


(1,752
)

(1,482
)

(1,369
)Effect of permanent differences


(25
)

152


(71
)Other


1,332


1,516


895​
​
​
​
​
​
​
​
​
​
​Taxes on income/loss


5,801


15,493


35,431​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Effective tax rate


(6.1
)%

(11.9
)%

30.8
%​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​




10.   Current tax receivable and payable

As of December 31, 2013 the current tax receivable and payable, arising because the amount of tax paid in the current or in prior periods was either too high or too low, are
k€ 5,388 (2012:
k€ 7,127) and k€ 688 (2012: k€ 770) respectively.

F-19

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



11.   Property, plant and equipment

Land and
buildings

Technical
equipment
and
machinery

Other plant,
factory and
office
equipment

Assets
under
construction

Totalin EUR thousandsCostBalance at January 1, 2012


41,263


51,258


17,429


44,955


154,905Acquisitions


2,252


7,479


1,156


4,881


15,768Disposals


119


6,182


44


2,639


8,984Transfers


21,403


18,584


1,838


(41,825
)

0Effect of movements in exchange rates


40


(202
)

(20
)

3


(179
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2012


64,839


70,937


20,359


5,375


161,510​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2013


64,839


70,937


20,359


5,375


161,510Acquisitions


282


5,273


443


3,608


9,606Disposals


1,476


639


859


745


3,719Transfers





3,896


25


(3,921
)

0Effect of movements in exchange rates


(106
)

(752
)

(213
)

(26
)

(1,097
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2013


63,539


78,715


19,755


4,291


166,300​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Depreciation and impairment lossesBalance at January 1, 2012


11,694


37,163


9,872


0


58,729Depreciation charge for the year


2,239


6,436


2,489





11,164Impairment





253





2,503


2,756Disposals


117


5,848


24


2,503


8,492Transfers


(50
)

48


2





0Effect of movements in exchange rates


20


(207
)

(12
)




(199
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2012


13,786


37,845


12,327


0


63,958​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2013


13,786


37,845


12,327


0


63,958Depreciation charge for the year


2,383


11,602


2,329





16,314Impairment


6,264


3,450


174





9,888Disposals


1,471


639


810





2,920Transfers














0Effect of movements in exchange rates


(59
)

(611
)

(136
)




(806
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2013


20,903


51,647


13,884


0


86,434​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Carrying amountsAt January 1, 2012


29,569


14,095


7,557


44,955


96,176​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At December 31, 2012


51,053


33,092


8,032


5,375


97,552​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At January 1, 2013


51,053


33,092


8,032


5,375


97,552​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At December 31, 2013


42,636


27,068


5,871


4,291


79,866​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Depreciation

Depreciation expense amounted to k€ 16,314 for 2013 and was k€ 11,164 and k€ 8,959 for
2012 and 2011 respectively.

During
each financial year, asset useful lives are reviewed in accordance with IAS 16. The effect of the changes in assets useful lives has been to increase the depreciation
expense in 2013 by k€ 2,160 (2012 k€ nil, 2011 k€ nil) compared with the depreciation which would have occurred had the asset useful lives remained
unchanged.

F-20

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.   Property, plant and equipment (Continued)

Impairments

In 2013 impairment charges of k€ 9,888 were made in respect of a building and specific equipment contained in that
building in Herzogenrath, Germany. The impairment losses are recorded in Other operating expenses in the Income Statement, within Aixtron's one operating segment, and are also shown in the table
above.

The
company decided to relocate its main activities from its Kaiserstrasse facility in Herzogenrath to a purpose built building nearby. Consequently, the recoverable amount of the
Kaiserstrasse facility was re-assessed as its fair value less costs of disposal, which is k€ 5,500.

The
valuation was carried out by a professionally qualified valuer (CIS Immobiliengutachter HypZert fuer finanzwirtschaftliche Zwecke) and is level 2 in the hierarchy of
valuations in IFRS 13. The valuation was based on observable inputs from comparable property transactions. The valuation given of the building was k€ 5,670 and an allowance for
the costs of disposal of k€ 170 has been made against this.

The
building is expected to be put on the market for sale in the near future.

In
2012 impairment charges of k€ 2,756 were made in respect of specific test equipment for discontinued products. They are reported within the line item research and
development costs in the Income Statement. During 2011 no impairment charges were necessary.

Assets under construction

Assets under construction relates mainly to the research and development centre in Germany in 2012 and to self-built systems for
development laboratories in 2013.

F-21

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



12.   Intangible assets

Goodwill

Other
intangible
assets

Totalin EUR thousandsCostBalance at January 1, 2012


81,461


37,548


119,009Acquisitions





715


715Disposals








0Effect of movements in exchange rates


368


(295
)

73​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2012


81,829


37,968


119,797​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2013


81,829


37,968


119,797Acquisitions





464


464Disposals





718


718Effect of movements in exchange rates


(325
)

(881
)

(1,206
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2013


81,504


36,833


118,337​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Amortisation and impairment lossesBalance at January 1, 2012


17,383


31,343


48,726Amortisation charge for the year





2,720


2,720Disposals








0Effect of movements in exchange rates


100


(313
)

(213
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2012


17,483


33,750


51,233​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2013


17,483


33,750


51,233Amortisation charge for the year





1,609


1,609Disposals





718


718Effect of movements in exchange rates


(94
)

(866
)

(960
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2013


17,389


33,775


51,164​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Carrying amountsAt January 1, 2012


64,078


6,205


70,283​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​At December 31, 2012


64,346


4,218


68,564​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​At January 1, 2013


64,346


4,218


68,564​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​At December 31, 2013


64,115


3,058


67,173​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Amortisation and impairment expenses for other intangible assets

Amortisation and impairment expenses for other intangible assets are recognised in the income statement as follows:

2013

2012

2011Amortisation

Impairment

Amortisation

Impairment

Amortisation

Impairmentin EUR thousandsCost of sales


0


0


202


0


1,000


0Selling expenses


1


0


5


0


255


0General administration expenses


1,461


0


1,915


0


1,670


0Research and development costs


147


0


598


0


615


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​1,609


0


2,720


0


3,540


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


In
2013, 2012 and 2011, no impairment losses were incurred and no reversals of impairment losses were made.

F-22

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   Intangible assets (Continued)

The
amortisation expected to be charged on other intangible assets in the future years is as follows:

in EUR thousands2014


1,3002015


6822016


4922017


1562018


113After 2018


315


The
actual amortisation can differ from the expected amortization.

Impairment of goodwill

At the end of 2013 the Group assessed the recoverable amount of goodwill and determined that no impairment loss had to be recognized
(2012: k€ 0; 2011 k€ 0).

The
carrying value of goodwill was k€ 64,115 (2012 k€ 64,346; 2011 k€ 64,078).

As
at the end of 2013 the cash generating unit, to which the goodwill has been allocated, is the Aixtron Group operational segment.

The
recoverable amount of the cash-generating unit is determined through a fair value less cost to sell calculation. Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between market participants at the measurement date. As Aixtron has only one cash generating unit (CGU), market capitalisation of Aixtron,
adjusted for a control premium, has
been used to determine the fair value less cost to sell of the cash generating unit. This is level 2 in the hierarchy of fair value measures set out in IFRS 13.

As
at December 31, 2013 the market capitalisation of Aixtron was € 1,172.8 million, based on a share price of € 10.515 and
issued shares (excluding Treasury Shares) of 111,534,520.

In
an orderly selling process costs are incurred. Aixtron has used 1.5% to account for the costs to sell.

A
control premium of 20% has been applied to adjust the market capitalization to the fair value. Market capitalisation was also adjusted for net debt and tax assets prior to comparing it
to the carrying amount of the CGU. The analysis shows that the fair value less costs to sell of the CGU Aixtron exceeds its carrying amount and that Goodwill is not impaired.

Impairment
Test
2013

Impairment
Test
2012

Sensitivity
Analysis
2013Euro millionsMarket capitalisation as of December 31, 2013 (December 28, 2012)


1,172.8


896.0


472.5Costs to sell in percentage


1.50
%

1.50
%

1.50
%Costs to sell


(17.6
)

(13.4
)

(7.1
)​
​
​
​
​
​
​
​
​
​
​Market capitalisation less cost to sell


1,155.2


882.6


465.4​
​
​
​
​
​
​
​
​
​
​Control premium in percentage


20.00
%

20.00
%

0.00
%Control premium


231.0


179.2


0.0​
​
​
​
​
​
​
​
​
​
​Market capitalisation and control premium less cost to sell


1,386.2


1,061.8


465.4Net debt


(306.3
)

(209.5
)

(306.3
)Tax assets


(9.2
)

(11.9
)

(9.2
)​
​
​
​
​
​
​
​
​
​
​Fair value less costs to sell of CGU


1,070.7


840.4


149.9Carrying amount of the CGU


149.9


248.7


149.9​
​
​
​
​
​
​
​
​
​
​Surplus of fair value less cost to sell over carrying amount


920.8


591.7


0.0​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Surplus of fair value less cost to sell over carrying amount as a percentage


614
%

238
%

0
%


F-23

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   Intangible assets (Continued)

The
fair value less costs to sell, which is the recoverable amount, exceeds the carrying amount of the CGU by 614% (2012 238%).

A
sensitivity analysis of the impairment test, in which the control premium is reduced to zero, shows that the carrying amount of the CGU would equal the recoverable amount should the
market capitalisation of AIXTRON fall by 60% (2012 47%) to € 472.5 million (2012 € 477.3 million).

13.   Other non-current assets

Other non-current assets totalling k€ 907 (2012: k€ 677) include mainly rent deposits for buildings.

14.   Deferred tax assets and liabilities

Recognised deferred tax assets and liabilities

Deferred tax assets are recognised at the level of individual consolidated companies in which a loss was realised in the current or
preceding financial year, only to the extent that realisation in future periods is probable. The nature of the evidence used in assessing the probability of realisation includes forecasts, budgets and
the recent profitability of the relevant entity. The carrying amount of deferred tax assets for entities which have made a loss in either the current or preceding year was kEUR nil (2012:
k€ 151).

Deferred
taxes for tax losses in the amount of k€ 88,664 (2012: k€ 90,897) and on deductible temporary differences in the amount of
k€ 27,021 (2012: k€ 20,984) were not recognised. Tax losses in the amount of k€ 71,811 can be used indefinitely (2012:
k€ 53,302), k€ 10,309 expire by 2018 (2012: k€ 7,302, by 2017) and k€ 6,544 expire after 2018 (2012:
k€ 30,293 after 2017).

The
following table shows the development of temporary differences during the financial year:

Deferred
tax assets and liabilities are attributable to the following items

Assets

Liabilities

Net2013

2012

2013

2012

2013

2012in EUR thousandsProperty, plant and equipment


124


53








124


53Trade receivables


693


0








693


0Inventories


959


1,690








959


1,690Employee benefits


209


191








209


191Currency translation


29


12








29


12Provisions and other liabilities


53


(638
)







53


(638
)Intangible assets


(711
)










(711
)

0Other


(71
)

(16
)

(300
)

(123
)

(371
)

(139
)Tax losses


3,328


4,096








3,328


4,096Derivative financial instruments














0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Deferred tax assets (+) liabilities (-)


4,613


5,388


(300
)

(123
)

4,313


5,265​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


F-24

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.   Deferred tax assets and liabilities (Continued)



Balance at
January 1,
2013

Recognised
in income
statement

Directly
recognised
in Other
Comprehensive
Income

Balance at
December 31,
2013in EUR thousandsProperty, plant and equipment


53


71


0


124Trade receivables


0


693


0


693Inventories


1,690


(731
)

0


959Employee benefits


191


18


0


209Currency translation


12


326


(309
)

29Provisions and other liabilities


(638
)

691


0


53Customer advances


0


0


0


0Intangible assets


0


(711
)

0


(711
)Other


(139
)

(232
)

0


(371
)Tax losses


4,096


(768
)

0


3,328Derivative financial instruments


0


0


0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​5,265


(643
)

(309
)

4,313​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​




Balance at
January 1,
2012

Recognised
in income
statement

Directly
recognised
in Other
Comprehensive
Income

Balance at
December 31,
2012in EUR thousandsProperty, plant and equipment


10


43


0


53Trade receivables


7,160


(7,160
)

0


0Inventories


13,629


(11,932
)

(7
)

1,690Employee benefits


59


138


(6
)

191Currency translation


0


(118
)

130


12Provisions and other liabilities


(2,955
)

2,325


(8
)

(638
)Customer Advances


1,578


(1,578
)

0


0Intangible assets


5,576


(5,576
)

0


0Other


(105
)

(26
)

(8
)

(139
)Tax losses


1,688


2,458


(50
)

4,096Derivative financial instruments


1,567


1,221


(2,788
)

0​
​
​
​
​
​
​
​
​
​
​
​
​
​28,207


(20,205
)

(2,737
)

5,265​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​


F-25

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



15.   Long term receivable from current tax

Long term receivables from current tax consist of a receivable from corporate tax which will be refunded over a period of five years. The amount included in long term receivables is for
the amount receivable after more than one year from the balance sheet date.

16.   Inventories

Note

2013

2012in EUR thousandsRaw materials and supplies





23,307


49,272Work in process





38,606


64,984Finished goods and services completed





0


1,790Inventories at customers' locations





4,270


9,940​
​
​
​
​
​
​
​
​
​
​66,183


125,986​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​




2013

2012in EUR thousandsInventories recognised as an expense during the period


3


117,900


113,083Reversals of write-downs recognised during the year


3


(17,127
)

0​
​
​
​
​
​
​
​
​
​
​100,773


113,083​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Write-down of inventories during the year


3


35,012


40,947Inventories measured at net realisable value





17,959


8,135Carrying amount of inventories pledged as security for liabilities





0


0


On
June 28th, 2013 a fire at a warehouse in the United Kingdom destroyed inventory with an original cost of k€ 22,284. At that date, the inventory
valuation had been written down by a provision of k€ 17,127 to k€ 5,157. The provision was reversed because the inventory was expensed at that
time.

Inventories
recognised as an expense during the period includes the inventory destroyed in the fire in 2013 (2012 nil).

17.   Trade receivables and other current assets

2013

2012in EUR thousandsTrade receivables


29,475


39,110Allowances for doubtful accounts


(1,821
)

(1,819
)​
​
​
​
​
​
​
​Trade receivablesnet


27,654


37,291​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​Prepaid expenses


735


955Reimbursement of research and development costs


1,196


1,553Advance payments to suppliers


61


897VAT recoverable


2,187


2,572Other assets


746


1,683​
​
​
​
​
​
​
​Total other current assets


4,925


7,660​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​32,579


44,951​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


F-26

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17.   Trade receivables and other current assets (Continued)

Additions
to allowances against trade receivables are included in other operating expenses, releases of allowances are included in other operating income. Allowances against receivables
developed as follows:

2013

2012in EUR
thousandsAllowance at January 1


1,819


389Translation adjustments


(10
)

(7
)Impairment losses recognised


89


1,593Used


(25
)

(29
)Impairment losses reversed


(52
)

(127
)​
​
​
​
​
​
​
​Allowance at December 31


1,821


1,819​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


Ageing
of past due but not impaired receivables

2013

2012in EUR
thousands1-90 days past due


1,437


1,971More than 90 days past due


2,023


1,246


Due
to the worldwide spread of risks, there is a diversification of the credit risk for trade receivables. Generally, the Company demands no securities for financial assets. In
accordance with usual business practice for capital equipment however, the Company mitigates its exposure to credit risk by requiring payment by irrevocable letters of credit and substantial payments
in advance from most customers as conditions of contracts for sale of major items of equipment.

At
the balance sheet date one customer accounted for 16% of the company's net trade receivables, no other customer accounted for more than 10% of trade receivables. In 2012 one customer
accounted for 26% of the company's net trade receivables, no other single customer accounted for more than 10% of trade receivables. In determining concentrations of credit risk the company defines
counterparties as having similar characteristics if they are connected entities.

Included
in the Company's trade receivable balance are debtors with a carrying amount of k€ 3,460 (2012: k€ 3,217) which are
past due at the reporting date for which the Company has not provided. As there has not been a significant change in credit quality, and although the company has no collateral, the amounts are still
considered recoverable.

In
determining the financial assets which may be individually impaired the Company has taken into account the likelihood of recoverability based on the past due nature of certain
receivables, and our assessment of the ability of all counter-parties to perform their obligations.

18.   Other financial assets

Other
financial assets of k€ 138,853 (2012: k€ 109,756) are fixed deposits with banks with a maturity of more than three months
at inception of the contracts.

An
analysis of the maturities at December 31, 2013 and 2012 is as follows:

2013

2012In EUR thousandsMaturity up to 180 days


38,853


94,756Maturity 181 days to 365 days


100,000


15,000​
​
​
​
​
​
​
​138,853


109,756​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


F-27

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



19.   Cash and cash equivalents

2013

2012in EUR thousandsCash-in-hand


5


9Bank balances


167,449


99,725​
​
​
​
​
​
​
​Cash and Cash equivalents


167,454


99,734​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


Cash
and cash equivalents comprise short-term bank deposits with an original maturity of 3 months or less. The carrying amount and fair value are the same.

Bank
balances included k€ 0 given as security (2012: k€ 0) at December 31, 2013.

20.   Shareholders' Equity

FULLY PAID CAPITAL

2013

2012January 1


101,975,023


101,789,527Shares issued during the year


10,638,422


185,496​
​
​
​
​
​
​
​Issued and fully paid capital at December 31, including Treasury Shares


112,613,445


101,975,023​
​
​
​
​
​
​
​Treasury shares


(1,078,925
)

(1,078,925
)​
​
​
​
​
​
​
​Issued and fully paid share capital at December 31 under IFRS


111,534,520


100,896,098​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


The
share capital of the company consists of no-par value shares and was fully paid-up during 2013 and 2012. Each share represents a portion of the share capital in the amount of
€ 1.00.

Authorised share capital

Authorised share capital, including issued capital, amounted to € 203,422,077 (2012: 203,579,052).

Additional paid-in capital

Additional paid-in capital mainly includes the premium on increases of subscribed capital as well as cumulative expense for share-based
payments.

In
2013 the company issued 10,638,422 shares. Of these, 10,223,133 were issued to qualified investors under an accelerated book-building process in October 2013, the remainder were
issued as a result of the exercise of stock options during the year. Shares issued in 2012 were all issued as a result of stock options being exercised.

The
Company regards its shareholders' equity as capital for the purpose of managing capital. Changes in Shareholders' equity are shown in the Consolidated Statement of Changes in Equity.
The Company considers its capital resources to be adequate.

F-28

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20.   Shareholders' Equity (Continued)

Income and expenses recognised in other comprehensive income

Currency
translation

Derivative
financial
instruments

Totalin EUR thousandsBalance at December 31, 2010


(10,995
)

(340
)

(11,335
)​
​
​
​
​
​
​
​
​
​
​Change in currency translation


6,930





6,930taxes





(9,032
)

(9,032
)Deferred taxes





2,934


2,934​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2011


(4,065
)

(6,438
)

(10,503
)​
​
​
​
​
​
​
​
​
​
​Change in currency translation


1,512





1,512Change in unrealised gains/losses before taxes





9,226


9,226Deferred taxes





(2,788
)

(2,788
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2012


(2,553
)

0


(2,553
)​
​
​
​
​
​
​
​
​
​
​Change in currency translation


(6,130
)




(6,130
)​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2013


(8,683
)

0


(8,683
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


The
foreign currency translation adjustment comprises all foreign exchange differences arising from the translation of the financial statements of foreign subsidiaries whose functional
currency is not the Euro.

The
item "derivative financial instruments" comprises the gain or loss on foreign currency hedge contracts deferred in other comprehensive income.

21.   Earnings/Loss per share

Basic earnings/loss per share

The calculation of the basic earnings/loss per share is based on the weighted-average number of common shares outstanding during the
reporting period.

Diluted earnings/loss per share

The calculation of the diluted earnings/loss per share is based on the weighted-average number of outstanding common shares and of
common shares with a possible dilutive effect resulting from share options being exercised under the share option plan.

2013

2012

2011Earnings/loss per shareNet profit/loss attributable to the shareholders of AIXTRON SE in k€


(101,016
)

(145,436
)

79,536Weighted average number of common shares and ADS for the purpose of Earnings/Loss Per Share


103,016,618


100,805,804


100,530,006​
​
​
​
​
​
​
​
​
​
​Basic earnings/loss per share (EUR)


(0.98
)

(1.44
)

0.79​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Earnings/loss per share (diluted)Net profit/loss attributable to the shareholders of AIXTRON SE in k€


(101,016
)

(145,436
)

79,536Weighted average number of common shares and ADS for the purpose of Earnings/Loss Per Share


103,016,618


100,805,804


100,530,006Dilutive effect of share options


0


0


1,304,711Weighted average number of common shares and ADS for the purpose of Earnings/Loss Per Share (diluted)


103,016,618


100,805,804


101,834,717​
​
​
​
​
​
​
​
​
​
​Diluted earnings/loss per share (EUR)


(0.98
)

(1.44
)

0.78​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


F-29

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

21.   Earnings/Loss per share (Continued)

The following securities issued were not included in the computation of the diluted earnings per share, as their effect would be anti-dilutive:

Number of shares

2013

2012

2011Share options


3,289,025


3,366,396


2,305,590




22.   Employee benefits

Defined contribution plan

The Company grants retirement benefits to qualified employees through various defined contribution pension plans. The expenses incurred
for defined contribution plans mainly arise from two pension plans in subsidiaries. The contributions made do not exceed 10% of qualified employees' base salaries. In 2013 the expense recognised for
defined contribution plans amounted to k€ 1,340 (2012: k€ 1,712, 2011: k€ 1,338).

In
addition to the Company's retirement benefit plans, the company is required to make contributions to state retirement benefit schemes in most of the countries in which it operates.
The company is required to contribute a specified percentage of payroll costs to the retirement schemes in order to fund the benefits. The only obligation of the group is to make the required
contributions.

Defined benefit plan

The Company's net obligation in respect of defined benefit pension plans reflects commitments to two former members of the Executive
Board of AIXTRON SE. These are final salary plans.

In
the three years ending 2013 no payments were made under these plans. The value of the obligations from pension plans is determined annually at December 31. During 2010 these
obligations were contracted out to an insurance company. Following the transfer of the pension obligation to the insurance company, the guaranteed increase in pensions is 1% only. The company does not
expect to have any further obligation under these schemes.

Movements in the present value of defined benefit obligations

2013

2012

2011in EUR thousandsPresent value of defined benefit obligations at January 1


1,466


1,024


1,048Interest expense


48


54


51Actuarial gains and losses


(29
)

388


(58
)Settlement








(17
)​
​
​
​
​
​
​
​
​
​
​Present value of defined benefit obligations at December 31


1,485


1,466


1,024​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


The amount included in the consolidated statement of financial position arising from defined benefit obligations is

2013

2012

2011

2010

2009in EUR thousandsPresent value of defined benefit obligations


1,485


1,466


1,024


1,048


1,064Fair value of scheme assetsfunded


(1,485
)

(1,466
)

(1,024
)

(1,031
)

0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Defined benefit liabilityunfunded


0


0


0


17


1064​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


F-30

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

22.   Employee benefits (Continued)

Expense recognised in the consolidated income statement

2013

2012

2011in EUR thousandsInterest expense


0


0


0Actuarial gains and losses


0


0


(17
)​
​
​
​
​
​
​
​
​
​
​0


0


(17
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Development of plan assets

2013

2012

2011in EUR thousandsat January 1


1,466


1,024


1,031Contributions by the sponsoring companies


0


0


0Return from plan assets


48


54


51Actuarial gains and losses


(29
)

388


(58
)​
​
​
​
​
​
​
​
​
​
​1,485


1,466


1,024​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


In
the 2013 income statement, the income of k€ nil (2012 k€ nil; income 2011 k€ 17) is
recognised in general administration expense.

The
following table shows the principal actuarial assumptions.

2013

2012Biometrical calculation assumptions


Heubeck
tables 2005G


Heubeck
tables 2005GInterest rate at December 31


3.40
%

3.30
%Expected salary increase


0.00
%

0.00
%Expected pension increase


1.00
%

1.00
%Expected rate of return on plan assets


3.40
%

3.30
%




23.   Share-based payment

The Company has different fixed option plans which reserve shares of common stock and AIXTRON American Depository Shares (ADS) for issuance to members of the Executive Board, management
and employees of the Company. Each AIXTRON ADS represents the beneficial ownership in one AIXTRON common share. The following is a description of these plans:

AIXTRON stock option plan 1999

In May 1999, options were authorized to purchase 3,000,000 shares of common stock (after giving effect to capital increases, stock
splits, and the EURO conversion). The stock options can be exercised when 15 years have elapsed since their issue. Under the terms of the 1999 plan, options were granted at prices equal to the
average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date. Under this plan 890,976 options for the purchase of 1,514,710 common shares were outstanding
as of December 31, 2013.

AIXTRON stock option plan 2002

In May 2002, options were authorized to purchase 3,511,495 shares of common stock. The options are exercisable in equal instalments of
25% per year after the second anniversary of the date of grant, subject to certain conditions. Options expire ten years from date of grant. Under the terms of the 2002 plan, options are granted at
prices equal to the average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date, plus 20%. No grants were issued with a strike price less

F-31

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

than
fair market value. A total of 161,447 options to purchase the same number of common stock were outstanding under this plan as of December 31, 2013.

AIXTRON stock option plan 2007

In May 2007, options were authorized to purchase 3,919,374 shares of common stock. 50% of the granted options may be executed after a
waiting period of not less than two years, further 25% after three years and the remaining 25% after at least four years. The options expire 10 years after they have been granted. Under the
terms of the 2007 plan, options were granted at prices equal to the average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date, plus 20%. A total of
1,607,278 options to purchase the same number of common stock were outstanding under this plan as of December 31, 2013.

AIXTRON stock option plan 2012

In May 2012, options were authorized to purchase shares of common stock. The granted options may be exercised after a waiting period of
not less than four years. The options expire 10 years after they have been granted. Under the terms of the 2012 plan, options are granted at prices equal to the average closing price over the
last 20 trading days on the Frankfurt Stock Exchange before the grant date, plus 30%. As of December 31, 2013 no options had been granted under this plan.

Genus stock option plan 2000

With the acquisition of Genus, Inc. the company adopted the Genus Incentive Stock Option Plan 2000. Under this plan at the date
of acquisition options were authorized to purchase the equivalent of 2,013,487 AIXTRON ADS. Options granted before October 3, 2003 vest over a three-year-period and expire five years from the
date of grant. Options granted after October 3, 2003 vest over a four-year-period and expire ten years from the date of grant.

A
total of 5,590 options to purchase AIXTRON ADS were outstanding under this plan as of December 31, 2013. Upon exercise of options new shares are issued from the trust (see
note 20).

Summary of Stock Option Transactions

AIXTRON share options

2013

2012Number of
shares

Average
exercise price

Number of
shares

Average
exercise price(EUR)



(EUR)Balance at January 1


4,274,126


21.68


4,519,641


21.06Granted during the year


0


0.00


31,000


15.75Exercised during the year


415,289


5.31


185,496


4.79Forfeited during the year


575,402


23.29


91,019


23.29​
​
​
​
​
​
​
​
​
​
​
​
​
​Outstanding at December 31


3,283,435


23.47


4,274,126


21.68​
​
​
​
​
​
​
​
​
​
​
​
​
​Exercisable at December 31


2,014,503


26.22


937,426


23.24​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​


F-32

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

Genus share options

2013

2012Number of
shares

Average
exercise price

Number of
shares

Average
exercise price(USD)



(USD)Balance at January 1


6,610


7.44


6,610


7.44Exercised during the yearExpired during the year


1,020


12.35​
​
​
​
​
​
​
​
​
​
​
​
​
​Outstanding at December 31


5,590


6.55


6,610


7.44​
​
​
​
​
​
​
​
​
​
​
​
​
​Exercisable at December 31


5,590


6.55


6,610


7.44​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​


AIXTRON Stock Options as of December 31, 2013

Exercise price per share (EUR)

Underlying shares
represented by
outstanding options

Shares
represented by
exercisable options

Average
option life
(in years)18.70


406,824


406,824


0.567.39


334,416


334,416


1.526.93


310,800


0


2.57.48


462,670


0


3.56.17


39,322


39,322


0.53.83


122,125


122,125


2.510.09


226,325


226,325


4.04.17


133,553


133,553


5.024.60


590,950


443,213


6.026.60


617,450


308,725


7.012.55


14,000


0


8.015.75


25,000


0


9.0​
​
​
​
​
​
​
​
​
​
​3,283,435


2,014,503​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Genus Stock Options as of December 31, 2013

Average exercise price (USD)

Outstanding

Exercisable

Average
option life
(in Years)3.55


1,000


1,000


0.97.20


4,590


4,590


0.3​
​
​
​
​
​
​
​
​
​
​5,590


5,590​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Assumptions used to calculate fair values and share-based payment expenses

The fair value of services received in return for stock options granted is measured by reference to the fair value of the stock options
granted. The fair value of the stock
options is determined on the basis of a binomial lattice model. In accordance with IFRS 2 the measurement includes only options which were granted after November 7, 2002.

In
2013, the personnel expenses from share-based payments, all of which were equity settled share based payments, were k€ 981 (2012:
k€ 3,453; 2011: k€ 5,064).

As
of December 31, 2013 an amount of k€ 622 relating to stock options granted prior to that date had not yet been recognised as a personnel expense.
This amount will be charged over the periods to 2016. The expected allocation of the expense is as follows: 2014: k€ 541, 2015: k€ 79 and 2016
k€ 2.

F-33

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

AIXTRON share options granted

in 2013

in 2012

in 2011Fair value on grant date

N/A


4.66 €


3.22 €​
​
​
​
​
​
​
​
​
​Price per share

N/A


12.74 €


9.95 €Exercise price

N/A


15.75 €


12.55 €Expected volatility

N/A


55.96
%

59.03
%Option life

N/A


10,0 years


10,0 yearsExpected dividend payments

N/A


0.33 €


0.38 €Risk-free interest rate

N/A


1.47
%

2.02
%




24.   Provisions

Development and breakdown of provisions

01.01.2013

Exchange
rate
differences

Usage

Reversal

Addition

31.12.2013

Current

Non-
currentin EUR thousandsPersonnel expenses


8,244


(120
)

5,808


925


4,314


5,705


5,705


0Warranties


6,252


29


1,107


2


7,417


12,589


10,846


1,743Onerous contracts


4,669


(6
)

2,021





2,760


5,402


5,402


0Commissions


2,170


(1
)

1,623


106


813


1,253


1,253


0Other


8,075


(69
)

5,113


191


6,406


9,108


8,874


234​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


29,410


(167
)

15,672


1,224


21,710


34,057


32,080


1,977​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​




01.01.2012

Exchange
rate
differences

Usage

Reversal

Addition

31.12.2012

Current

Non-
currentin EUR thousandsPersonnel expenses


14,407


(56
)

11,466


2,015


7,374


8,244


8,244


0Warranties


3,579


(23
)

3,135


96


5,927


6,252


5,262


990Onerous contracts


416





19


399


4,671


4,669


4,669


0Commissions


6,538


(3
)

5,543





1,178


2,170


2,170


0Other


11,618


(92
)

9,047


148


5,744


8,075


7,859


216​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


36,558


(174
)

29,210


2,658


24,894


29,410


28,204


1,206​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Personnel expenses

These include mainly provisions for holiday pay, payroll and bonuses, which are financial liabilities.

Provisions for onerous contracts

These include provisions associated with contracts where the unavoidable costs of meeting the contract obligations exceed the economic
benefits expected to be received. These mainly relate to supply contracts for materials which are excess to the forecast future requirements.

Commissions

Commissions are payable to sales agents and are recorded as financial liabilities.

Warranties

Warranty provisions are the estimated unavoidable costs of providing parts and service to customers during the normal warranty periods.

F-34

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

24.   Provisions (Continued)

Other provisions

Other provisions consist mainly of the estimated cost of services received.

For
provisions existing at both December 31, 2013 and December 31, 2012, the economic outflows resulting from the obligations that are provided for are expected to be
settled within one year of the respective balance sheet date for current provisions and within two years of the respective balance sheet date, but more than one year, for non-current provisions.

25.   Trade payables and other current liabilities

The liabilities consist of the following:

2013

2012in EUR thousandsTrade payables


13,517


9,683​
​
​
​
​
​
​
​Liabilities from grants


1,507


1,740Payroll taxes and social security contributions


1,111


981VAT and similar taxes


94


739Other liabilities


236


323​
​
​
​
​
​
​
​2,948


3,783​
​
​
​
​
​
​
​16,465


13,466​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


The
carrying amount of trade payables and other current liabilities approximates their fair value. Trade payables, grant liabilities, taxes and other liabilities fall due for payment
within 90 days of receipt of the relevant goods or services.

26.   Financial Instruments

Details of the significant accounting policies and methods, the basis of measurement that are used in preparing the financial statements and the other accounting policies that are
relevant to an understanding of the financial statement are disclosed in note 2 to the financial statements.

Financial risk management objectives

The group seeks to minimise the effects of any risk that may occur from any financial transaction. Key aspects are the exposures to
liquidity risk, credit risk, interest rate risk and currency risk arising in the normal course of the Company's business.

The
AIXTRON Group's central management co-ordinates access to domestic and international financial institutions and monitors and manages the financial risks relating to the operations of
the Group through internal risk reports which analyse exposure to risk by likelihood and magnitude. These risks cover all aspects of the business, including financial risks; and the risk management
system is in accordance with the corporate governance recommendations specified in the German Corporate Governance Code.

Where
the Company uses derivative financial instruments it does so to hedge exposure to fluctuations in foreign exchange rates.

Liquidity risks

Liquidity risk is the risk that the Group is unable to meet its existing or future obligations due to insufficient availability of cash
or cash equivalents. Managing liquidity risk is one of the central tasks of AIXTRON SE. In order to be able to ensure the Group's solvency and flexibility at all times cash and cash equivalents are
projected on the basis of regular financial and liquidity planning.

As
at December 31, 2013 the group had no borrowings (2012 nil). Financial liabilities, all due within one year, of k€ 16,465 (2012
k€ 13,466) consisting of trade payables and other liabilities and are shown in Note 25, together with an analysis of their maturity.

F-35

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

As
at December 31, 2013 the group had k€ 167,454 cash and cash equivalents (2012 k€ 99,734) and a further
k€ 138,853 of fixed deposits with banks (2012 k€ 109,756).

Credit risks

Financial assets generally exposed to a credit risk are trade receivables (see note 17) and cash and cash equivalents.

The
Group's cash and cash equivalents are kept with banks that have a good credit standing. Central management of the Group assesses the counter-party risk of each financial institution
dealt with and sets limits to the Group's exposure to those institutions. These credit limits are reviewed from time to time so as to minimise the default risk as far as possible and to ensure that
concentrations of risk are managed.

The
maximum exposure of the Group to credit risk is the total amount of receivables, financial assets and cash balances as described in notes 17, 18 and 19.

For
receivables measured at fair value, the maximum amount of the exposure to credit risk is the amount of receivables measured at fair value as disclosed in note 26. There are no
credit derivatives or similar instruments which mitigate the maximum exposure to credit risk and there has been no change during the period or cumulatively in the fair value of such receivables that
is attributable to changes in the credit risk.

Market risks

The Company's activities expose it to the financial risks of changes in foreign currency exchange rates and interest rate risks.
Interest rate risks are not material as the company only receives a minor amount of interest income. The Company does not use derivative financial instruments to manage its exposure to interest rate
risk. Cash deposits are made with the company's bankers at the market rates prevailing at inception of the deposit for the period and currency concerned. There has been no change to the Company's
exposure to market risk or the manner in which it manages and measures the risk.

Foreign currency risk

The Company enters into a variety of derivative financial instruments to manage its exposure to foreign currency risk, including
forward exchange contracts to hedge the exchange rate risk arising on the export of equipment. The main exchange rates giving rise to the risk are those between the US Dollar, Pound Sterling and Euro.

The
carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

Liabilities

Assets2013

2012

2013

2012in EUR thousandsUS Dollars


(44,424
)

(43,342
)

83,781


72,064GB Pounds


(1,612
)

(2,168
)

15,227


17,124


Exposures
are reviewed on a regular basis and are managed by the Company through sensitivity analysis.

Foreign currency sensitivity analysis

The Company is mainly exposed to US Dollar exchange rate risks through its worldwide activities.

F-36

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

The
following table details the company's sensitivity to a 10% change in the value of the Euro against the Dollar. A positive number indicates an increase in profit and other equity, a
negative number indicates a reduction in profit and other equity.

USD
Currency
EffectIncrease in value of Euro by 10% k€

2013

2012Profit or loss


530


1,266Other comprehensive income










USD
Currency
EffectDecrease in value of Euro by 10% k€

2013

2012Profit or loss


(530
)

(1,266
)Other comprehensive income








The
sensitivity analysis represents the foreign exchange risk at the year-end date only. It is calculated by revaluing the Group's financial assets and liabilities, existing at
31 December, denominated in US-Dollars by 10%. It does not represent the effect of a 10% change in exchange rates sustained over the whole of the financial year, only the effect of a different
rate occurring on the last day of the year.

Forward foreign exchange contracts

The company had no forward foreign exchange contracts with banks at December 31, 2013 or December 31, 2012.

Foreign currency cash flow hedges

As of 31st December 2013, the aggregate amount of unrealised gains on forward foreign exchange contracts deferred in the hedging
reserve relating to the exposure on anticipated future transactions is k€ nil (2012: k€ nil).

There
were no unrealised losses or gains (unrealised losses 31 December 2011: k€ 6,438) included in income and expenses recognised in equity as of
December 31, 2012. The losses actually realised in 2013 were k€ nil (2012: losses k€ 8,531).

Foreign currency option contracts

The company had no option contracts as at December 31, 2013 or December 31, 2012.

Fair values

Cash and cash equivalents, Loans and receivables and Held to maturity investments are stated at amortised cost. At FVTPL are classed as
at fair value through profit or loss and are designated as such upon initial recognition. At FVTPL includes accrued receivables arising as the difference between the fair value of revenue
(note 3) and the invoiced amounts. The fair value is level 2 in the fair value hierarchy.

The
fair values and the carrying amounts of the financial instruments shown in the balance sheet are shown in the following table. Financial assets are classified into categories.

F-37

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

FINANCIAL ASSETS 2013

Cash and
cash
equivalents
at amortised
cost

Loans and
receivables
at amortised
cost

Held
to-maturity
investments
at amortised
cost

At FVTPL
at fair value

Total
Carrying
amount and
fair valuein EUR thousandsCash and cash equivalents


167,454


0


0


0


167,454Other financial assets


0


0


138,853


0


138,853Other non-current assets


0


907


0


0


907Trade receivables


0


27,266


0


388


27,654​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


167,454


28,173


138,853


388


334,868​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At amortized cost


167,454


28,173


138,853





334,480At fair value











388


388


FINANCIAL LIABILITIES 2013

Cash and
cash
equivalents
at amortised
cost

Loans and
receivables
at amortised
cost

Other
payables at
amortised
cost

At FVTPL
at fair value

Total
Carrying
amount and
fair valuein EUR thousandsTrade payables


0


0


13,517


0


13,517Advance payments from customers (not in scope of IFRS 7)


0


0


46,188


0


46,188​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


0


0


59,705


0


59,705​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At amortized cost


0


0


59,705





59,705At fair value











0


0


FINANCIAL ASSETS 2012

Cash and
cash
equivalents
at amortised
cost

Loans and
receivables
at amortised
cost

Held
to-maturity
investments
at amortised
cost

At FVTPL
at fair value

Total
Carrying
amount and
fair valuein EUR thousandsCash and cash equivalents


99,734


0


0


0


99,734Other financial assets


0


0


109,756


0


109,756Other non-current assets


0


677


0


0


677Trade receivables


0


29,683


0


7,608


37,291​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


99,734


30,360


109,756


7,608


247,458​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At amortized cost


99,734


30,360


109,756





239,850At fair value











7,608


7,608


F-38

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

FINANCIAL LIABILITIES 2012

Cash and cash equivalents at amortised cost

Loans and receivables at amortised cost

Other payables at amortised cost

At FVTPL at fair value

Total Carrying amount and fair valuein EUR thousandsTrade payables


0


0


9,683


0


9,683Advance payments from customers (not in scope of IFRS 7)


0


0


45,969


0


45,969​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


0


0


55,652


0


55,652​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At amortized cost


0


0


55,652





55,652At fair value











0


0


Trade receivables/payables

For trade receivables/payables due within less than one year, measured at amortised cost, the fair value is taken to be the carrying
amount. All other receivables/payables, measured at amortised cost, are discounted to determine the fair value.

27.   Operating leases

LEASES AS LESSEE

Non-cancellable operating lease rentals are payable as follows:

in EUR
thousandsNot later than one year


3,342Later than one year and not later than five years


4,667Later than five years


258​
​
​
​
​8,267​
​
​
​
​​
​
​
​
​


The
Company leases certain office and plant facilities, office furniture and motor vehicles under various operating leases. Under most of the lease commitments for office and plant
facilities the Company has options to renew the leasing contracts. The leases typically run for a period between one and fifteen years. None of the leases include contingent rentals.

The
expenses for leasing contracts were k€ 3,957, k€ 4,393 and k€ 4,490 for 2013, 2012 and 2011 respectively.

28.   Capital commitments

As of December 31, 2013, the Company had entered into purchase commitments with suppliers in the amount of k€ 30,270 (2012:
k€ 33,860) for purchases within the next 12 months. Commitments for capital expenditures for fixed assets are k€ 831 (2012:
k€ 437) as of December 31, 2013.

29.   Contingencies

The Company is involved in various legal proceedings or can be exposed to a threat of legal proceedings in the normal course of business. The Executive Board regularly analyses these
matters, considering any possibilities of avoiding legal proceedings or of covering potential damages under insurance contracts and has recognised, where required, appropriate provisions. It is not
expected that such matters will have a material effect on the Company's net assets, results of operations and financial position.

F-39

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30.   Identity of related parties

Related parties of the Company are members of the Executive Board and members of the Supervisory Board.

Executive Board Remuneration

The Supervisory Board as a whole is responsible for establishing the structure of the remuneration system and for the total
remuneration for individual members of the Executive Board. It regularly discusses and reviews remuneration for appropriateness.

The
remuneration level of the Executive Board members of AIXTRON SE is aligned with the commercial and financial situation and future prospects of the Company and the level and structure
of Executive Board remuneration at comparable companies as well as the compensation structure in place in other areas of the Company. In addition, the responsibilities, experience and contribution of
each individual Executive Board member, and the desire to retain them, are taken into account when calculating the remuneration.

Executive
Board remuneration currently consists of three components: fixed remuneration (including benefits in kind and payments into a private pension insurance), a variable bonus, and
may include stock-based remuneration.

The
Executive Board employment contracts stipulate an annual income for the fixed remuneration component. The fixed remuneration component is non-performance-related and is paid out on a
monthly basis (13 times a year) as a salary. Additional payments in kind are made, chiefly consisting of company car usage and payments for private pension insurance.

For
contracts entered into before 2013, the variable bonus scheme for the collective Executive Board (profit-sharing) is based on consolidated net income for the year and is paid from an
"accrued internal bonus", defined as up to 10% of the modified consolidated net income for the year, but not to exceed € 6.5 million in total. The modified consolidated
net income for the year is obtained from the Company's Consolidated Financial Statements (IFRS) certified by the auditor, less a consolidated loss carry forward figure and those amounts that are to be
allocated to retained earnings in the Annual Financial Statements of AIXTRON by law or in accordance with the Articles of Association. The consolidated loss carry forward is obtained from consolidated
net losses from previous years, less consolidated net income from subsequent fiscal years.

In
addition, as a variable component acting as a long-term incentive with an element of risk, the members of the Executive Board may receive a share-based payment in the form of options
that are granted under AIXTRON's stock option plans. The stock option plans, including the exercise thresholds, are adopted at each General Meeting. The number of options granted to the Executive
Board is stipulated by the Supervisory Board. Further details on the outstanding stock options of the Executive Board as well as comments on the respective stock option plans are set out further in
this report.

The
appropriateness of the above mentioned remuneration components, and the likelihood that they do not encourage Management to take unreasonable risks, are regularly reviewed by the
Supervisory Board.

If
the tenure of any Executive Board member ends prematurely as result of a revocation of the appointment, such member of the Executive Board will receive a severance pay in an amount
equal to the fixed and variable compensation expected to be owed by the Company for the remaining term of the employment contract, however, not exceeding an amount equal to twice the annual
compensation (severance cap). Any payments beyond this severance pay shall be excluded.

If
the tenure of any Executive Board member ends prematurely and the employment contract is terminated by mutual agreement, the total amount of any payments agreed to be paid by the
Company to the Executive Board member as part of such an agreement may not exceed the amount of the severance pay which the Executive Board member would receive in the event of a revocation of the
appointment with due regard to the severance cap.

F-40

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30.   Identity of related parties (Continued)

If
any Executive Board Member terminates the employment relationship after a change of control, such member of the Executive Board will receive a severance pay in an amount equal to the
fixed and variable compensation expected to be owed by the Company for the remaining term of the employment contract, however, not exceeding the severance cap, i.e. an amount equal to twice the
annual compensation. Any payments beyond this severance pay shall be excluded. A change of control situation exists if a third party or a group of third parties who contractually combine their shares
in
order to act subsequently as a third party, directly or indirectly holds more than 50% of the Company's registered share capital.

The
Executive Board members have no individual Company pension benefits, which would result in pension provisions being required to be made by AIXTRON, and receive no loans from the
Company.

In
accordance with Section 120(4) of the German Stock Corporation Act, the remuneration system was approved by the General Meeting on May 18, 2010.

For
other contracts, the new compensation scheme envisages that variable bonuseswhich will be continued to be provided from an "accrued internal bonus" as defined
abovewill be paid half through a monetary element and half in shares. That part of the variable bonus payable in shares will be converted into whole numbers of shares of the Company and
will be deferred until the third bank working day following the ordinary General Meeting in the third fiscal year after having been granted to the Board members. The number of the shares to be granted
for the part of the variable bonus payable in shares will be determined in accordance with the closing price of the share of the Company on the third bank working day following the ordinary General
Meeting which is presented with the annual financial statements of the Company and the consolidated financial statements for the fiscal year for which the bonus is granted. The shares will be granted
from treasury shares.

As
a result of this new compensation scheme, the Board members will not only participate in positive, but also in negative developments of the share price which may occur during the
extended waiting period of several years, and the orientation towards a sustainable growth of the Company is strengthened; therefore, the Supervisory Board has decided to incorporate corresponding
provisions on compensation into future management contracts (upon conclusion or renewal).

On
February 18, 2013 Mr. Martin Goetzeler was appointed as new Executive Board member of AIXTRON SE; he took up his office on March 1, 2013. The revised remuneration
system was approved by the General Meeting on May 23, 2013.

Supervisory Board Remuneration

Supervisory Board remuneration is governed by § 17 of AIXTRON's Articles of Association.

Accordingly,
the annual fixed compensation for individual members of the Supervisory Board is € 25,000. The Chairman's compensation is three times this amount and
the Deputy Chairman's one and a half times the amount received by a regular member of the Supervisory Board.

The
members of the Supervisory Board also receive, in aggregate, a variable compensation of 1% of the Company's balance sheet profit, less an amount corresponding to 4% of the paid-in
contributions to the share capital. The Chairman of the Supervisory Board receives 6/17 of the variable compensation, the Deputy Chairman 3/17, and each other member of
the Supervisory Board 2/17. The variable compensation is limited to the fourfold of the fixed compensation per Supervisory Board member. In addition, committee members receive an
attendance fee of € 2.000 for attending a committee meeting, with the Chairman of the committee receiving triple this amount. The total annual attendance fee per Supervisory
Board member is limited to one and a half times that individual's fixed compensation.

The
Supervisory Board members receive no loans from the Company.

F-41

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30.   Identity of related parties (Continued)

Other

The Company has a D&O insurance contract in place, covering the activities of members of the Executive Board and members of the
Supervisory Board. Pursuant to the amended § 93, Section 2 AktG following the Act on the Appropriateness of Executive Board remuneration (VorstAG), as well as to the amended
recommendation in chapter 3.8. German Corporate Governance Code, the deductible for members of the Executive Board and members of the Supervisory Board is equal to a minimum of 10% of the
respective loss incurred. The deductible cannot exceed a factor of 1.5 of the respective annual fixed remuneration.

Individual Structure of Remuneration

Executive Board Remuneration

In fiscal year 2013, the cash remuneration of the Executive Board (including benefits in kind and allowances for pensions) totalled
€ 2,584,833 (2012: € 1,124,274; 2011: € 7,623,754). During the past fiscal year, the Executive Board was allocated 0 options (2012:
0; 2011: 0). The breakdown among the individual members of the Executive Board in Euros for the years 2011 to 2013 is presented in the table below.

Martin Goetzeler President/CEO since 1. March 2013Granted remuneration

Amounts received by
the individual2011

2012

2013

2013 (Min)

2013 (Max)

2011

2012

2013Fixed remuneration


0


0


506,667


506,667


506,667


0


0


506,667Termination benefitsOther








11,063


11,063


11,063


0


0


11,063Sub-total


0


0


517,730


517,730


517,730


0


0


517,730One-year variable remuneration








500,000


500,000


2,888,889


0


0


0Multi-year variable remuneration

















0


0


0Share option program 2007 (Tranche 2008)Share option program 2002 (Tranche 2006)Share option program 2002 (Tranche 2004)Share option program 2002 (Tranche 2003)Sub-total


0


0


500,000


500,000


2,888,889


0


0


0Pension expense


0


0


0








0


0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total remuneration


0


0


1,017,730


1,017,730


3,406,619


0


0


517,730​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​




Dr. Bernd Schulte Vice President and Chief Operating officerGranted remuneration

Amounts received by
the individual2011

2012

2013

2013 (Min)

2013 (Max)

2011

2012

2013Fixed remuneration


365,000


365,000


365,000


365,000


365,000


365,000


365,000


365,000Termination benefitsOther


12,527


12,527


12,527


12,527


12,527


12,527


12,527


12,527Sub-total


377,527


377,527


377,527


377,527


377,527


377,527


377,527


377,527One-year variable remuneration


1,805,556


0


0


0


1,805,556


1,805,556


1,805,556Multi-year variable remuneration























0Share option program 2007 (Tranche 2008)Share option program 2002 (Tranche 2006)Share option program 2002 (Tranche 2004)Share option program 2002 (Tranche 2003)Sub-total


1,805,556


0


0


0


1,805,556


1,805,556


1,805,556


0Pension expense


0


0


0


0


0


0


0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total remuneration


2,183,083


377,527


377,527


377,527


2,183,082


2,183,083


2,183,083


377,527​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


F-42

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30.   Identity of related parties (Continued)



Wolfgang Breme Vice President and Chief Financial OfficerGranted remuneration

Amounts received by
the individual2011

2012

2013

2013 (Min)

2013 (Max)

2011

2012

2013Fixed remuneration


300,000


300,000


330,769


330,769


330,769


300,000


300,000


330,769Termination benefitsOther


9,413


9,413


10,745


10,745


10,745


9,413


9,413


10,745Sub-total


309,413


309,413


341,514


341,514


341,514


309,413


309,413


341,514One-year variable remuneration


1,805,556


0


0


0


1,805,556


1,805,556


1,805,556


0Multi-year variable remuneration

















0


209,586


512,600Share option program 2007 (Tranche 2008)




















209,586Share option program 2002 (Tranche 2006)























512,600Share option program 2002 (Tranche 2004)Share option program 2002 (Tranche 2003)Sub-total


1,805,556


0


0


0


1,805,556


1,805,556


2,015,142


512,600Pension expense


0


0


0


0


0


0


0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total remuneration


2,114,969


309,413


341,514


341,514


2,147,070


2,114,969


2,324,555


854,114​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​




Paul Hyland President and Chief Executive Officer until 28. February 2013Granted remuneration

Amounts received by
the individual2011

2012

2013

2013 (Min)

2013 (Max)

2011

2012

2013Fixed remuneration


424,422


424,941


65,728


65,728


65,728


424,422


424,941


65,728Termination benefits








780,000


780,000


780,000








780,000Other


12,392


12,392


2,335


2,335


2,335


12,392


12,392


2,335Sub-total


436,814


437,334


848,063


848,063


848,063


436,814


437,333


848,063One-year variable remuneration


2,888,889








0


481,481
*

2,888,889


2,888,889


0Multi-year variable remuneration

















0


0


836,778Share option program 2007 (Tranche 2008)























210,405Share option program 2002 (Tranche 2006)























322,135Share option program 2002 (Tranche 2004)























123,095Share option program 2002 (Tranche 2003)























181,143Sub-total


2,888,889


0


0


0


481,481


2,888,889


2,888,889


836,778Pension expense


0


0


0


0


0


0


0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total remuneration


3,325,703


437,334


848,063


848,063


1,329,544


3,325,703


3,326,222


1,684,840​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


*pro
rata for 2 months until 28.2.2013


As
of December 31, 2013, the AIXTRON Executive Board held a total of 500,408 options for the purchase of 505,116 shares of the Company (December 31, 2012: 923,516 shares;
December 31, 2011: 962,516 shares). The number of shares underlying the options is set out below. The actual profits from exercising the stock options may differ significantly from the figures
shown in the table.

F-43

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30.   Identity of related parties (Continued)

Under
IFRS 2, the "Option value at grant date" is also used as the basis for recognizing options issued after November 7, 2002 under expenses on the Income Statement. For
stock options issued prior to November 7, 2002, the fair value was determined using the Black-Scholes model.

Executive Board Member

Allocation
Date

Allocation

Exercisable

Option
Value on
Allocation

Exercise
Price

Maturity(shares)
(shares)

(shares)

(EUR)

(EUR)Wolfgang Breme

Nov 2010


52,000


26,000


461,240


26.60

Nov 2020Nov 2009


52,000


39,000


448,240


24.60

Nov 2019Nov 2008


13,000


13,000


92,040


4.17

Nov 2018Dec 2007


52,000


52,000


225,680


10.09

Dec 2017Dr. Bernd Schulte

Nov 2010


52,000


26,000


461,240


26.60

Nov 2020Nov 2009


52,000


39,000


448,240


24.60

Nov 2019Nov 2008


52,000


52,000


92,040


4.17

Nov 2018Dec 2007


52,000


52,000


225,680


10.09

Dec 2017May 2006


55,000


55,000


84,150


3.83

Nov 2016May 2004


35,000


35,000


107,800


6.17

Nov 2014May 2002


27,500


0


152,625


7.48

May 2017May 2001


5,000


0


106,500


26.93

May 2016May 2009


2,640


660


55,981


67.39

May 2015May 1999


2,976


2,976


35,640


18.70

May 2014​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total




505,116


392,636


The
stock option expenses for each individual member of the Executive Board are as follows:

2013

2012

2011in EUR thousandsPaul Hyland


(532
)

249


347Wolfgang Breme


118


244


347Dr. Bernd Schulte


118


249


347


In
2013 207,000 options lapsed on cessation of employment of Paul Hyland. The expenses for the unvested lapsed options have been reversed in accordance with IFRS 2.

In
fiscal year 2013, Executive Board members exercised 211,500 options (2012: 39,000; 2011: 0); 207,000 options expired (2012: 0; 2011: 0).

Date of
exercise

Weighted
average
share price
at date of
exercise

Number of
shares2013Paul Hyland


21.11.13


9.8440


39,000Paul Hyland


18.11.13


9.8132


117,500Wolfgang Breme


31.05.13


13.7101


55,0002012Wolfgang Breme


30.11.12


9.5362


39,0002011N/A


The
current Executive Board members have no individual company pension benefits which would result in pension provisions being required to be made by the company. Instead, the Executive
Board annual pension allowance (a total of € 40,000 for Paul Hyland (€ 6,667 pro rata in 2013), Wolfgang Breme and Dr. Bernd Schulte in each of the
years; 2013, 2012 and 2011 and € 80,000 for Martin Goetzeler in 2013) is paid by AIXTRON and included in the fixed remuneration, and is transferred by the Executive Board
members into independent insurance contracts with a benevolent fund or similar plan.

F-44

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

30.   Identity of related parties (Continued)

Supervisory Board Remuneration

In fiscal year 2013, the remuneration of the Supervisory Board totaled € 290,042 (2012:
€ 302,500; 2011: € 1,024,933). For the years 2011 to 2013, Supervisory Board remuneration may be broken down as follows:

SB Compensation

Supervisory Board Member

Year

Fixed

Variable

Attendance
Fee

Total(EUR)

(EUR)

(EUR)

(EUR)Kim Schindelhauer(1)(2)(3)(4)(5)


2013


75,000


0


20,000


95,000(Chairman of the Supervisory Board)


2012


75,000


0


18,000


93,000(Chairman of the 2013 Capital Markets Committee)


2011


75,000


257,333


16,000


348,333Prof. Dr. Wolfgang Blättchen(1)(4)


2013


35,556


0


24,000


59,556(Deputy Chairman of the Supervisory Board)


2012


25,000


0


24,000


49,000(Chairman of the Audit Committee)
(Independent Financial Expert)


2011


25,000


85,778


24,000


134,778Dr. Andreas Biagosch(2)


2013


15,139


0


2,000


17,139(since May 23. 2013)


2012


0


0


0


02011


0


0


0


0Prof. Dr. Petra Denk(2)(3)


2013


25,000





28,000


53,000(since May 19, 2011)


2012


25,000


0


26,000


51,000(Chair of the Technology Committee)


2011


15,548


53,347


23,322


92,217Dr. Martin Komischke


2013


15,139


0


0


15,139(since May 23, 2013)


2012


0


0


0


02011


0


0


0


0Prof. Dr. Rüdiger von Rosen(1)(3)(4)


2013


25,000


0


20,000


45,000(Chairman of the Nomination Committee)


2012


25,000


0


6,000


31,0002011


25,000


85,778


0


110,778Dr. Holger Jürgensen(6)


2013


3,125


0


0


3,125(until January 30. 2013)


2012


37,500


0


16,000


53,5002011


37,500


128,667


16,000


182,167Karl-Hermann Kuklies


2013


2,083


0


0


2,083(until January 30, 2013)


2012


25,000


0


0


25,0002011


25,000


85,778


0


110,778Joachim Simmroß(1)


2013


0


0


0


0(until May 19, 2011)


2012


0


0


0


02011


9,452


32,431


4,000


45,883Total


2013


196,042


0


94,000


290,0422012


212,500


0


90,000


302,5002011


212,500


729,111


83,322


1,024,933


(1)Member
of the Audit Committee(2)Member
of the Technology Committee(3)Member
of the Nomination Committee(4)Member
of the 2013 Capital Markets Committee(5)Former
AIXTRON Executive Board Member(6)Honorary
Chairman of the Supervisory Board


In
the years 2011 to 2013, there were no payments made to any Supervisory Board member for advisory services.

F-45

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



31.   Consolidated entities

AIXTRON S.E. controls the following subsidiaries:

Share of
capital in %Country

2013

2012AIXTRON Inc

USA


100


100AIXTRON Ltd.

England & Wales


100


100AIXTRON Korea Co. Ltd.

South Korea


100


100AIXTRON Taiwan Co. Ltd.

Taiwan


100


100AIXTRON AB

Sweden


100


100AIXTRON KK

Japan


100


100AIXTRON China Ltd

P. R. China


100


100Nanoinstruments Ltd

England & Wales


100


100Genus trust *

USA


n.a.


n.a.


*The
shares held in the Genus trust are attributed, as beneficial owner, to AIXTRON, as control exists through the trust relationship with Aixtron SE




32.   Events after the reporting period

There are no events which have occurred after the balance sheet date, of which the directors have knowledge, which would result in a different assessment of the Company's net assets,
results of operation and financial position.

33.   Auditors' fees

Fees expensed in the income statement for the services of the group auditor Deloitte & Touche are as follows:

2013

2012in EUR
thousandsfor audit


719


728for other confirmation services


35


36for tax advisory services


299


226for other services


30


0​
​
​
​
​
​
​
​1,083


990​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


Included
in the total amount of fees are fees for the group auditor Deloitte & Touche GmbH, Wirtschaftsprüfungsgesellschaft, Duesseldorf, in the amount of
k€ 444 for audit (2012: k€ 443), k€ 32 for other confirmation services (2012: k€ 36), k€ 34 for tax services (2012:
k€ 89) and k€ nil for other services (2012: k€ nil).

F-46

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

34.   Employees

Compared to last year, the average number of employees during the current year was as follows:

Employees by Function

average
number for the year

2013

2012Sales


70


90Research and Development


297


337Manufacturing and Service


373


440Administration


88


98Employees (§ 314 HGB)


828


965Executive board members


3


3​
​
​
​
​
​
​
​831


968Apprentices


16


15​
​
​
​
​
​
​
​847


983​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​




35.   Statement of compliance with the German Corporate Governance Code

In 2013, Executive and Supervisory Boards have made the declaration of compliance in accordance with Section 161 of AktG and this is permanently available on the Company's web
site at http://www.aixtron.com/en/investors/corporate-governance/principles.

36.   Supervisory Board and Executive Board

Composition of the Supervisory Board as of December 31, 2013



F-47

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

36.   Supervisory Board and Executive Board (Continued)



The
composition of the Company's Executive Board is:





37.   Critical accounting judgments and key sources of estimation and uncertainty

The preparation of AIXTRON's Consolidated Financial Statements requires the Company to make certain estimates, judgments and assumptions that the Company believes are reasonable based
upon the information available. These estimates and assumptions affect the reported amounts and related disclosures and are made in order to fairly present the Company's financial position and results
of operations. The following accounting policies are significantly impacted by these estimates and judgments that AIXTRON believes are the most critical to aid in fully understanding and evaluating
its reported financial results:

Revenue Recognition

Revenue is generally recognised in two stages for the supply of equipment to customers, partly on delivery and partly on final
installation and acceptance (see note 2 (n)). The Company believes, based on past experience, that this method of recognising revenue fairly states the revenues of the Company. The judgements
made by management include an assessment of the point at which substantially all of the risks and rewards of ownership have passed to the customer.

Valuation of Inventories

Inventories are stated at the lower of cost and net realisable value. This requires the Company to make judgments concerning
obsolescence of materials. This evaluation requires estimates, including both forecasted product demand and pricing environment, both of which may be susceptible to significant change. The carrying
amount of inventories is disclosed in note 16.

As
disclosed in notes 3 and 16, during the years 2013, 2012 and 2011 the Company incurred expenses of k€ 35,012, k€ 40,947 and k€
41,602 respectively arising mainly from changes to past assumptions concerning net realisable value of inventories and excess and obsolete inventories. In future periods, write-downs of inventory may
be necessary due to
(1) reduced demand in the markets in which the Company operates, (2) technological obsolescence due to rapid developments of new products and technological improvements, or
(3) changes in economic or other events and conditions that impact the market price for

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

37.   Critical accounting judgments and key sources of estimation and uncertainty (Continued)

the
Company's products. These factors could result in adjustment to the valuation of inventory in future periods, and significantly impact the Company's future operating results.

Income Taxes

At each balance sheet date, the Company assesses whether the realisation of future tax benefits is sufficiently probable to recognise
deferred tax assets. This assessment requires the exercise of judgement on the part of management with respect to future taxable income. The recorded amount of total deferred tax assets could be
reduced if estimates of projected future taxable income are lowered, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of the Company's ability to
utilize future tax benefits. The carrying amount of deferred tax assets is disclosed in note 14.

Provisions

Provisions are liabilities of uncertain timing or amount. At each balance sheet date, the Company assesses the valuation of the
liabilities which have been recorded as provisions and adjusts them if necessary. Because of the uncertain nature of the timing or amounts of provisions, judgement has to be exercised by the Company
with respect to their valuation. Actual liabilities may differ from the estimated amounts. Details of provisions are shown in Note 24.

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