Use these links to rapidly review the documentTable of Contents CONSOLIDATED FINANCIAL STATEMENTS



Table of Contents





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, 2014ORo

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)

Dornkaulstr. 2
52134 Herzogenrath
Federal Republic of Germany
(Address of Principal Executive Offices)

Guido Pickert, +49 2407 9030-444, +49 2407 9030-445, AIXTRON SE, Dornkaulstr. 2, 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, 2014: 112,694,555 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 Web site, 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


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


17Intellectual Property


18Manufacturing


18Marketing Channels


19Customers and Principal Markets


19Seasonality


20Competitive Positioning


20Financial and other Performance Indicators


21Government Regulation


21C.

Organizational Structure


21D.

Property, Plant and Equipment


22Item 4A:

Unresolved Staff Comments


22Item 5:

Operating and Financial Review and Prospects


22Global Economy


22The Semiconductor Equipment Market


23Management Assessment of Company Situation


24A.

Operating Results


24Development of Revenues


24Development of Results


26Development of Orders


28B.

Liquidity and Capital Resources


29Corporate Financial Management


29Funding


29Investments


32Cash 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


36Item 6:

Directors, Senior Management and Employees


37A.

Directors and Senior Management


37Supervisory Board


37Executive Board


38B.

Compensation


38Executive Board Remuneration


38


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Table of Contents

Supervisory 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


47Item 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-2Consolidated Statement of Other Comprehensive Income or
Loss


F-3Consolidated Statement of Financial Position


F-4Consolidated Statement of Cash Flows


F-5Consolidated Statement of Changes in Equity


F-6Notes to the Consolidated Financial Statements


F-71. General principles


F-72. Significant accounting policies


F-73. Segment reporting


F-164. Research and development


F-185. Other operating income


F-186. Other operating expenses


F-197. Personnel expense


F-198. Net finance income


F-199. Income tax expense/benefit


F-2010. Current tax receivables and payable


F-2111. Property, plant and equipment


F-2112. Intangible assets


F-2313. Other non-current assets


F-2514. Deferred tax assets and liabilities


F-2515. Long-term receivables from current tax


F-2616. Inventories


F-2617. Trade receivables and other current assets


F-2718. Other financial assets


F-2819. Cash and cash equivalents


F-2820. Shareholders' Equity


F-2921. Earnings/Loss per share


F-3022. Employee benefits


F-3023. Share-based payment


F-3124. Provisions


F-3325. Trade payables and other current liabilities


F-3426. Financial instruments


F-3427. Operating leases


F-3828. Capital commitments


F-3829. Contingencies


F-3830. Identity of related parties


F-3931. Consolidated entities


F-3932. Events after the reporting period


F-4033. Auditors' fees


F-4034. Employees


F-4035. Statement of compliance with the German Corporate Governance Code


F-4036. Supervisory Board and Executive Board


F-4037. Critical accounting judgments and key sources of estimation and uncertainty


F-41


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Table of Contents

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,

2014
IFRS

2013
IFRS

2012
IFRS

2011
IFRS

2010
IFRS(thousand EUR, except share and per share data)Consolidated Income Statement Data:Revenues


193,797


182,863


227,832


610,960


783,775Operating result


(58,309
)

(95,741
)

(132,267
)

112,880


275,510Profit/Loss attributable to the equity holders of AIXTRON SE (after taxes)


(62,511
)

(101,016
)

(145,436
)

79,536


192,496Basic earnings per share


(0.56
)

(0.98
)

(1.44
)

0.79


1.93Diluted earnings per share


(0.56
)

(0.98
)

(1.44
)

0.78


1.89Dividend payments(1)


0


0


25,155


60,708


15,100Dividends declared per common share(1) (EUR)


0.00


0.00


0.25


0.60


0.15Dividends declared per common share(1) (USD(2))


0.00


0.00


0.32


0.84


0.20Consolidated Statement of Financial Position Data:Total assets


533,547


563,193


559,971


777,259


823,432Total liabilities


117,845


97,790


89,951


148,919


223,108Total shareholders' equity and net assets


415,702


465,403


470,020


628,340


600,324Fully paid capital


111,591


111,535


100,896


100,711


100,101Other Data:Adjusted weighted average number of shares outstandingbasic


112,107,905


103,016,618


100,805,804


100,530,006


99,871,834diluted


112,107,905


103,016,618


100,805,804


101,834,717


101,746,466


(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 ("ADS") 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
Rate2014


1.32152013


1.32812012


1.28592011


1.39312010


1.3261


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

Month ended

High

LowFebruary 2015 (through February 11, 2015)


1.1462


1.1300January 2015


1.2015


1.1279December 2014


1.2504


1.2101November 2014


1.2554


1.2394October 2014


1.2812


1.2517September 2014


1.3136


1.2628August 2014


1.3436


1.3150


On
February 11, 2015, the noon buying rate was USD 1.1300 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, or they cancel or reschedule their orders. 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 the global macroeconomic situation, may adversely impact AIXTRON's financial position and results
of operations.

Global economic development throughout the year 2014 remained subdued and regionally unbalanced. Among other things, the recovery in
the euro area was not as strong as previously expected and many emerging countries, including China, are facing a generally lowered growth potential. The sharply decreasing oil price at the end of the
year 2014 is putting additional pressure on many oil-producing countries including those in emerging markets. Moreover, there are increasing risks to the global economy from geopolitical tensions in
Europe and the Middle East. In particular, the economic sanctions against Russia are already affecting growth rates both in Europe and globally. On the other hand, the US economy is showing strong,
robust growth that has led the Federal Reserve to continue the cautious tightening of its monetary policy and phase out of its bond-buying program. 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 constantly 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 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

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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, even 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 and in response to changing market conditions or customer requirements, 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 ability to attract, retain and motivate its
employees could be adversely impacted, which could negatively

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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. Customer orders regularly include demanding technical or other commercial hurdles, which have to be overcome. If AIXTRON was unable to meet these specifications, was unable to overcome
technical or other commercial hurdles 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:



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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 three 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 87.00% of the Company's total revenues for the year ended December 31, 2014, versus
86.76% for the year ended December 31, 2013, and 90.63% of total revenues for the year ended December 31, 2012. Revenues from AIXTRON's Asian-based customers accounted for 82.68% for the
year ended December 31, 2014, versus 77.54% for
the year ended December 31, 2013, and 77.90% of total revenues for the year ended December 31, 2012. 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 regionally unbalanced economic development as well as geopolitical conflicts, 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.E 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 Dornkaulstrasse 2, 52134 Herzogenrath, Germany, and the Company's telephone number there is
+49-2407-9030-0. 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

Wolfgang Breme, Chief Financial Officer of the Company, resigned from his office by mutual agreement to pursue a new career opportunity
outside the Company. The Supervisory Board approved the termination of his service agreement with effect as of May 31, 2014. A new CFO will not be appointed. The Chairman of the Executive
Board, President and CEO Martin Goetzeler, has taken over the tasks previously performed by Mr. Breme.

The
service agreement of the current Chief Operating Officer, Dr. Bernd Schulte has been renewed until March 31, 2018, effective April 1, 2015.

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Dissolution of Nanoinstruments Ltd., Cambridge (United Kingdom)

Nanoinstruments Ltd., Cambridge (United Kingdom), one of the Company's subsidiaries, was dissolved in October 2014
due to the successful integration of its operations into the AIXTRON Group. This had no effect on the financial position of the Group.

Launch of a new MOCVD tool generation

In November 2014, AIXTRON presented its latest Metal-Organic Chemical Vapor Deposition ("MOCVD") tool at the China SSL
international trade fair. The new AIX R6 has been designed for the production of Light Emitting Diodes ("LED") based on Gallium Nitride ("GaN") and can be delivered in 12x6-, 31x4-, 121x2-inch
wafer configurations. Equipped with
numerous technical innovations the new tool will lower operational costs significantly while simplifying usability and process control. It is Managements expectation that this new tool generation will
enable the Company to return to a more stable price level and higher margin contributions. In September 2014, AIXTRON received a large multiple tool order from Chinese LED manufacturer San'an
Optoelectronics Co., Ltd. who has ordered 50 of these new AIX R6 tools. The order is being processed and will have an impact on order intake and revenues in 2015 and
beyond. Management believes that this groundbreaking order by a key market player shows the strong performance and value proposition of the new tool.

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, as well
as 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. The Company's engineers work diligently to continuously improve
AIXTRON's systems, both in terms of resource conservation and environmental-friendly design and function. With the implementation of an energy management system implemented on Company level according
to DIN EN ISO 50001:2011 AIXTRON will contribute to the efficient use of energy and the careful use of resources.

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.

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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 environment, 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 promotes these qualities also within its 5-Point-Program that
was introduced at the Annual General Meeting on May 23, 2013, by the President and CEO of AIXTRON, Mr. Martin Goetzeler, and is since continuously pursued throughout the Group. 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. The latter includes, among other things, stronger communication
activities, clear agreements on and proactive communication of objectives, strengthening employees' sense of identification with the Company as well as the strengthening of leadership. A pivotal
element of this program is the increase of the Company's cost and asset efficiency. With this in mind, the Company has entered into Phase 2 of the 5-Point-Program, focusing on cost reductions
as well as Supply Chain, Service and Production processes. Some examples include the Supply-Chain-Project, which, among other things, targets to reduce risks in the procurement and storage of material
by reducing delivery lead times to enable faster deliveries to customers. Additionally, Design-to-Cost-Programs have been initiated in order to reduce material cost on a continuous basis.

The
total expenses incurred in connection with the 2012/2013 restructuring efforts were € 10.3 million, of which
€ 5.2 million were incurred in 2013 and € 5.1 million were incurred in 2012, both consisting of employee termination benefits
paid within 12 months of the employees' leaving dates. The total expenses incurred in connection with the current restructuring effort were € 5.8 million,
consisting of employee termination benefits paid within 12 months of the employees' leaving dates.

AIXTRON
considers its labor relations to be satisfactory.

In
2014, the total number of employees increased by 2%, from 776 employees at the end of 2013 (2012: 964) to 789 at December 31, 2014. This was mainly
attributable to the increase of 11% in Research and Development (regionally located in Europe) related to increased project related tasks in the area of Organic Semiconductors. While Manufacturing and
Service positions saw the biggest reduction, it still comprises the largest group of permanent employees. In 2013, the total number of employees decreased significantly by 20%, from
964 employees at December 31, 2012 to 776 at December 31, 2013, due to the global staff reductions in the course of the Company's 5-Point-Program. In 2013, due to the above
mentioned 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.

2014

2013

2012

Development
from
2013 to 2014Employees by Function

Dec 31.

%

Dec 31.

%

Dec 31.

%

abs.

%Sales


65


8


66


8


88


9


(1
)

(1
)Research and Development


292


37


264


34


333


35


28


11Manufacturing and Service


323


41


338


44


427


44


(17
)

(5
)Administration


110


14


108


14


116


12


2


2​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


789


100


776


100


964


100


13


2​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


As
of December 31, 2014, the majority of AIXTRON's worldwide permanent employees were based in Europe, the region that saw an increase in headcount in fiscal year 2014 due to the
above mentioned headcount increase in R&D mainly in Europe. As of December 31, 2013, the majority of AIXTRON's

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worldwide
permanent employees were based in Europe. However, this region was also most affected by the global staff reductions in that year.

2014

2013

2012

2013 to 2014Employees by Region

Dec 31.

%

Dec 31.

%

Dec 31.

%

abs.

%Asia


154


20


168


22


188


20


(14
)

(8
)Europe


521


66


491


63


660


68


30


6USA


114


14


117


15


116


12


(3
)

(3
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


789


100


776


100


964


100


13


2​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
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Technology, Products and Services

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

The
deposition process technologies include 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"), 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").

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

ALDPECVD



MOCVDProducts

Planetary Reactor®

OVPD® R&D and Production Systems

Lynx-iXP CVDClose Coupled Showerhead®

PRODOS PVPD R&D and Production Systems

QXP-8300 ALDNano CVD Reactors BM Series



CRIUS R MOCVD


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Material

Compound
Semiconductors

Organic Semiconductors

Silicon SemiconductorsPotential Applications/Devices

LEDs

OLEDs for displays

CVD WSi Gate stacks for DRAM and 3D NANDOptoelectronics (photo diodes, lasers, modulators for telecom/datacom)

OLEDs for solid state lighting

Metal and High k Oxide films for capacitor/Gate Stacks in DRAMs, NAND and Logic DevicesLaser devices for consumer electronics (CDs, DVDs)

Organic transparent thin film solar cells

High Mobility Channel for Logic DevicesHigh-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 layersSolar cellsCarbon Nanostructures for electronic, display & heat sink applicationsGraphene structures for electronic applications


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 AIX R6 Close Coupled Showerhead® reactor technology, the QXP-8300 silicon semiconductor technology, and the PRODOS line of PVPD systems
in the organic semiconductor material space as well as the AIXTRON G5WW Vapor Phase Epitaxy system for Power Electronics.

Research and Development

In addition to the 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.

The
Company's R&D capability remains of important strategic significance, as it provides for a competitive, state-of-the-art technology portfolio and supports the future business
development. Therefore, AIXTRON is committed to investing specifically 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 Logic applications. Key aspects of the Company's R&D activities in fiscal
year 2014 comprised the launch of the new MOCVD Showerhead tool generation AIX R6, further progress made in

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the
OLED area and the start of a project to integrate compound based materials in future logic structures (Three-Five-On-Silicon TFOS). These expenditures are monitored very closely.

The
Company's R&D program comprised a team of on average 285 dedicated and highly skilled R&D employees in 2014 (2013: 297; 2012: 337). In 2014, R&D expenditures were up 17% to
€ 66.7 million (2013: € 57.2 million; 2012: € 72.9 million), reflecting AIXTRON's commitment
to innovation. This figure was influenced especially by pre-launch development costs related to the next generation of MOCVD tools and the progress made in the OLED area. In 2013, R&D expenditures
were reduced significantly by 22% to € 57.2 million, reflecting efficiency gains and a more focused R&D approach.

For
more information regarding R&D expenses from fiscal year 2012 through 2014, refer to Item 5.A "Operating ResultsDevelopment of ResultsOperating
Costs" in this report.

The
following provides specific examples of AIXTRON's R&D activities in 2014:

In
the first months of 2014, AIXTRON commissioned a new R&D cluster that demonstrates the core processes used to produce organic semiconductors. This enables the efficient demonstration
of the various processes for the deposition of organic thin-films for OLEDs and flexible electronics under industrial production conditions. The R&D cluster offers an integrated demonstration
environment of the various processes at device level which provides evidence of the specific advantages offered by AIXTRON's core technologies OVPD® and PVPD.

In
November 2014, AIXTRON introduced the newly developed AIX R6 Close Coupled Showerhead® reactor technology. This new tool allows customers to significantly
reduce their cost of ownership compared to incumbent AIXTRON tools.

Additionally,
AIXTRON was involved with a number of different publicly funded R&D projects, an example of which is the completion of the publicly funded NeuLand project. This project
aims to reduce power losses for example in feeding electricity into the grid or switch-mode power supplies for PC and TV sets, solar inverters or motor drives, using innovative, integrated
semiconductor devices based on Silicon Carbide (SiC) and Gallium Nitride on Silicon (GaN-on-Si). Moreover, AIXTRON has teamed up with research institution Fraunhofer IISB (Institute for Integrated
Systems and Device Technology) in Erlangen, Germany, to develop 150mm Silicon Carbide (SiC) epitaxy processes using the new AIXTRON 8×150 mm G5WW Vapor Phase Epitaxy system. A
variety of SiC devices are already commercially available and the implementation of the 150mm SiC technology is targeted to facilitate a widespread adoption of SiC in Power Electronics.

Intellectual Property

AIXTRON aims to secure its technology by patenting and protecting inventions, provided it is strategically expedient and possible for
the Company to do so. As of December 31, 2014, the Company had 196 patent families available (December 31, 2013: 198 patent families), of which 102 were patent
protected and patents were pending for the remaining 94. For 30 patent families, patent protection was applied for within fiscal year 2014. Patent protection for inventions is usually applied
for in those sales markets relevant for AIXTRON, specifically in Europe, China, Japan, South Korea, Taiwan and the United States. Patents are maintained and renewed annually and will expire
between 2015 and 2034. As of December 31, 2013, 198 patent families were in use, of which for 24 patents were applied for in the reporting period.

AIXTRON
also has exclusive and non-exclusive licenses to patents owned by others covering certain AIXTRON 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 complex material deposition. AIXTRON sells certain reactor technologies under the terms of those licenses, which apply to the principles of delivering precursor material into a vacuum vapor
deposition chamber.

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 suppliers and
contractors. 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

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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.

AIXTRON
has a DIN EN ISO 9001 certified process oriented management system. The certification was confirmed in November 2014 following a successful certification audit. In
2014, the energy management system of the Company was certified according to DIN EN ISO 50001:2011

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, among other things, 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.

AIXTRON
commits itself and its suppliers to ethical and moral standards for the purchase and usage of conflict minerals (gold, tantalum, tin and tungsten). AIXTRON is continuously
striving for transparency regarding the origin of these minerals to comply with the rules and regulations of the U.S. Dodd-Frank Act for Conflict Minerals (Section 1502). Therefore, a
process has been established assuring that, together with its suppliers the supply chain of the minerals can be disclosed. The result of the vendor related due-diligence is filed annually with the
Securities and Exchange Commission on AIXTRON's Form SD.

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. For a breakdown of revenues by geographic markets, refer to "Item 5Operating
and Financial Review and ProspectsOperating Results-2012-2014Development of Revenues" in this report.

Customers and Principal Markets

Among other things, AIXTRON's semiconductor device customers are engaged in the manufacturing of LEDs, wireless devices, Power
Electronics, optoelectronics, logic and data storage components. Some of these customers are vertically integrated device manufacturers who serve the entire 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.

In
2014, four AIXTRON customers each represented more than 10% of total revenues (12%, 11%, 10% and 10% of total Group revenues respectively) (2013: One AIXTRON customer with 14%; 2012:
One AIXTRON customer with 11%).

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.

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Seasonality

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

Competitive Positioning

AIXTRON's main competitor in MOCVD applications remains 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). As a consequence of the rising LED end-market expectations and 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 2014), it was estimated that the share of the worldwide MOCVD equipment market (estimated 2013
total market value: USD 325 million) held by AIXTRON in 2013 was around 41%. In the same report, the Company's strongest competitor in terms of sales, Veeco Instruments Inc., had
an estimated market share of approximately 55%. Viewed in the mid to long term, AIXTRON continues to target retaining a market leading position in the global MOCVD market. In a more recent report
(December 2014) Gartner Dataquest anticipated that the total value of the 2014 MOCVD equipment market would increase to approximately USD 376 million with Veeco and AIXTRON
remaining 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 considered not meaningful at this point
in time.

For
CVD, MOCVD and ALD technologies for Silicon 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, but completion of the merger is delayed due to
outstanding regulatory approvals. With the Company's currently available silicon semiconductor manufacturing technologies and thin film processes, AIXTRON is potentially well positioned to offer
advanced films for 25nm node and below for Memory and Logic Integrated Circuits (ICs). AIXTRON 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 industry new material deposition possibilities for the next generation
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 2014 to be valued at USD 788 million for 2014. For memory device production systems of the 25nm node and below, AIXTRON has generated revenues during 2014,
but as AIXTRON addresses a market niche, market share of the total market is 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

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fiscal
years, refer to Item 5.A. "Operating and Financial Review and ProspectsOperating ResultsDevelopment of Revenues" in this report.

Financial and other 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 financial and non-financial performance indicators with particular focus on: order intake,
revenues, margin contributions, operating result 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 financial and non-financial performance indicators to evaluate the progress of key
research and development projects. The Management regularly reviews compliance with project plans, pre-defined targets and quality gates, such as timelines, quality, cost and margin targets. Following
the release of new products for example, the Management monitors closely the development of 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 (such as industrial safety regulations, the
ordinance on hazardous substances, labor protection laws or the workplaces ordinance).

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.

C.    Organizational Structure

The table below shows a list of the AIXTRON subsidiaries as of December 31, 2014:

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
%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


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D.    Property, Plant and Equipment

The Company has its registered office in Herzogenrath, Germany, and had a total of 12 facilities worldwide owned or rented as of
December 31, 2014:

Locations (as of December 31, 2014)

Facility location

Use

Approx. size

Lease expiry(m2)Herzogenrath, Germany (owned)

Manufacturing, Service, Engineering


12,457


Herzogenrath, Germany (owned)

Headquarters, R&D, Manufacturing, Engineering


16,000


Aachen, Germany (leased)

R&D


200


28.02.2016Cambridge, UK (leased)

Manufacturing, Engineering, R&D


2,180


13.09.2019Cambridge, UK (leased)

Sales, Service, Engineering


1,386


27.06.2020Sunnyvale, CA, USA (leased)

Manufacturing, Sales, Service, Engineering, R&D


9,338


31.10.2017Seoul, South Korea (leased)

Sales, Service


1,032


31.12.2015Shanghai, China (leased)

Sales, Service


755


31.07.2016Suzhou, China (leased)

Sales, Service


537


21.06.2016Hsinchu, Taiwan (leased)

Sales, Service


1,417


31.12.2017Tainan, Taiwan (leased)

Service


203


27.05.2016Tokyo, Japan (leased)

Sales, Service


364


30.09.2016


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.

The
Company's engineers work diligently to continuously improve AIXTRON's systems, both in terms of resource conservation and environmental-friendly design and function. AIXTRON
underlines its strategic commitment to a responsible management and control of the Company, oriented to long-term value creation, with the recent implementation its certified energy management system
(certification under international standard DIN EN ISO 50001) 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. AIXTRON and its suppliers are committed to ethical and moral standards for the purchase and usage of conflict minerals
(gold, tantalum, tin and tungsten). AIXTRON annually files the result of the vendor related due-diligence on its Form SD with the Securities and Exchange Commission. 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 own
supply chain and cost of sales as well as on its customers' sales projections and therefore also on their investment behavior.

Global
economic development throughout the year 2014 remained subdued and regionally unbalanced. Among other things, the recovery in the Euro area was not as strong as previously
expected and many emerging countries, including China, are facing a generally lowered growth potential. The

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sharply
decreasing oil price at the end of the year 2014 is putting additional pressure on many oil-exporting countries including those in emerging markets. Moreover, there are increasing risks to the
global economy from geopolitical tensions in Europe and the Middle East. In particular, the economic sanctions against Russia are already affecting growth rates both in Europe and globally. On the
other hand, the US economy is showing strong, robust growth that has led the Federal Reserve to continue the cautious tightening of its monetary policy and phase out its bond-buying program. In total,
the International Monetary Fund (IMF), in the January update of its World Economic Outlook, saw global growth remaining at the previous year's level of 3.3%. However, this global economic environment
had no specific effects on AIXTRON's business development in fiscal year 2014.

In
the first half of fiscal year 2014, the US dollar exchange rate was moving in a range between 1.35 USD/EUR and 1.40 USD/EUR. In the third quarter of fiscal year 2014,
the US dollar gained significant strength against the background of negative spillovers from the geopolitical conflict in the Ukraine, the European growth perspectives and the expansionary monetary
policy of the European Central Bank aiming to cut across increasingly deflationary tendencies in the European Union. On the other hand, the US economy performed well, the Federal Reserve phased out
its bond buying program at the end of fiscal year 2014, and it is expected that it will start raising interest rates again in the first half of fiscal year 2015, all of which was positive for the US
dollar in the second half of fiscal year 2014. Thus, at the end of fiscal year 2014, the US dollar exchange rate improved significantly by 12% from USD/EUR 1.377 at the end of fiscal year 2013
to 1.217 USD/EUR. The average exchange rate used by AIXTRON to translate income and expenses denominated in US dollars in the fiscal year 2014 was 1.334 USD/EUR (Q1/2014:
1.37 USD/EUR; Q2/2014: 1.37 USD/EUR; Q3/2014: 1.34 USD/EUR; Q4/2014: 1.254 USD/EUR) which was virtually the same level as in the previous year (2013: 1.328 USD/EUR).
Thus, there were no significant exchange rate effects on AIXTRON's revenues and earnings development in fiscal year 2014.

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

The Semiconductor Equipment Market

In 2014, the electronics equipment industry in total grew by 2.3% (according to Gartner Dataquest, December 2014) which was
below the recorded world real GDP growth of 3.3% (according to the IMF World Economic Outlook January 2015 update).

In
comparison, the subset, semiconductor capital spending, showed an increase of about 13% in 2014. A further subset, specific spending on Wafer Fab equipment (WFE), which includes
spending on deposition tools supplied by AIXTRON, grew by 16% year on year (according to Gartner Dataquest, December 2014). The worldwide MOCVD equipment market as subset of the WFE market is
expected to increase by 16% to approximately USD 376 million in 2014, from an estimated total market value of USD 325 million in 2013 (Gartner Dataquest,
December 2014).

The
sale of MOCVD systems for the manufacturing of LEDs continued to be the largest revenue driver for AIXTRON in 2014, representing 68% (2013: 39%; 2012: 48%), of its total equipment
revenues.

The LED Market

The market for Gallium nitride based LED devices which can be produced with AIXTRON's compound semiconductor equipment, was expected to
have grown by 32% measured in units in 2014 according to a report from IHS (an independent semiconductor market research institute), published in November 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 2015. Concurrently, the market for Gallium nitride based, high brightness LED
devices was predicted to grow in 2015 by only 7% to USD 18.2 billion from USD 17 billion in 2014 (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 (November 2014), the market for LEDs for general lighting is expected to grow from 820 million shipped units in 2014 to
3.5 billion shipped units in 2020. The

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penetration
of LED-lamps relative to total lamps is expected to rise from 5% in 2014 to 27% in 2020, supported by the increasing availability of attractively priced, quality LED lighting products.

Management Assessment of Company Situation

Throughout fiscal year 2014, AIXTRON executed its strategy to consistently invest into future business fields including deposition
technologies for Power Electronics, OLED, Memory, Logic and Carbon Nanomaterials including Graphene. The Company has seen market interest and demand from customers in all of these fields.

Demand
for LED chips is increasing due to an increasing penetration of LED technology in the lighting market and strong demand of LEDs for displays, leading to high utilization rates of
LED producers. Market demand for LED production equipment has also grown.

AIXTRON
has launched the AIX R6, its new generation MOCVD showerhead tool. The tool specifically addresses lower cost of ownership requirements from customers who are facing very
competitive industry dynamics. At the end of September 2014, AIXTRON received a large tool order from Chinese manufacturer San'an Optoelectronics Co., Ltd. for
50 AIX R6 tools. The order is being processed and will have an impact on order intake and revenues in 2015 and beyond. In addition to this order, AIXTRON is currently positioning the new
tool with further customers in the market. Management expects that the performance of the new AIX R6 tool, including higher throughput and lower cost of ownership, will allow for a higher price
level. Efficiency and productivity enhancements in serial production will enable a consistent reduction of cost of sales, improving the lower gross margin levels during the production ramp up phase.
The new AIX R6 tool is currently being qualified for mass production at a number of different customers. Management expects that the timing of the qualification process could vary depending on
individual specification criteria and the experience levels customers have with AIXTRON's showerhead technology.

After
a slow first half of 2014, demand for AIXTRON's QXP-tools for DRAM memory production has recovered in the second half of the year, marking the beginning of an expected
positive trend.

Additionally,
good progress has been made in the area of OLED deposition technologies. The OLED R&D Cluster has been commissioned, successfully running customer demos to demonstrate
AIXTRON's deposition capabilities in this space. Currently, the Gen8 Demonstrator is being installed in order to prove the scalability of the organic deposition technology on very large
substrates. It is expected to be commissioned in the first half of 2015.

In
parallel, AIXTRON is executing its 5-Point-Program specifically addressing the further reduction of material costs as well as further improvements in Supply Chain, Service and
Production processes preparing the ground to return to sustainable profitability. To support this strategy, AIXTRON has announced a further 8% reduction of staff or approximately 60 jobs,
reflecting the shift of regional and technological requirements. At the same time, Management will execute on its productivity programs in all areas of the Company to further optimize the cost
structure whilst sustaining the targeted investments into the defined future business fields. Due to the progress made in AIXTRON's strategic initiatives and the steps forward the Company has made in
its operating programs and in the development of its products, Management remains confident that the Company is on track to return to the path to success.

The
Company has a strong balance sheet and a strong liquidity without any bank borrowings.

A.    Operating Results: 2012-2014

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 "Financial Information" 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.

Development of Revenues

In fiscal year 2014, AIXTRON recorded total revenues of € 193.8 million, an increase of
€ 10.9 million, or 6%, compared to € 182.9 million in 2013 (2012: € 227.8 million) mainly
due to increased

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demand
from LED chip makers. At the end of September 2014, AIXTRON received a large multiple tool order from Chinese manufacturer San'an Optoelectronics Co., Ltd. for
50 new generation AIX R6 MOCVD Showerhead tools. The order is being processed and will have an impact on order intake and revenues in fiscal year 2015 and beyond. The 2014
equipment revenues increased by 8% to € 148.5 million (2013: € 138.0 million; 2012:
€ 176.9 million), with demand for MOCVD Equipment for LED manufacturing remaining the largest contributor to AIXTRON's equipment revenues, representing 68% (2013:
39%; 2012: 48%), the second largest being ALD Equipment, representing 11% (2013: 22%; 2012: 12%).

Total
MOCVD related revenues increased by 36% from € 94 million in 2013 to € 127.8 million in 2014 (2012:
€ 148.6 million). In 2014, 22% of the increase was related to volume reflecting higher market demand. The remaining 14% was caused by changes in realized average
selling price, product mix and exchange rate differences. In 2013, of the decrease, 21% was related to volume reflecting the lower market demand caused by over-capacity in
the LED markets our customers were addressing. The remaining 16% of the decline was caused by changes in realized average selling prices, which were also due to lower market demand and the competitive
situation. Total ALD related revenues in fiscal year 2014 amounted to € 16.5 million (2013: € 30.4 million; 2012:
€ 19.2 million). The 2014 decrease and the 2013 increase are entirely volume related.

Total
equipment sales generated 77% of total revenues in 2014 (2013: 75%; 2012: 78%).

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.

23%
of total revenues in 2014 were generated by sales of spare parts and service, which is 2 percentage points lower than in 2013 (2013: 25%; 2012: 22%) and mainly due to the
higher equipment revenue figure. In absolute terms, sales of spare parts and service were at € 45.3 million largely stable in 2014 compared to 2013 (2013:
€ 44.8 million; 2012: € 51.0 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.

2014

2013

2012

2014-2013Revenues by Equipment, Spares & Service

million
EUR

%

million
EUR

%

million
EUR

%

million
EUR

%Equipment revenues


148.5


77


138.0


75


176.9


78


10.5


8Other revenues (service, spare parts, etc.)


45.3


23


44.8


25


51.0


22


0.4


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


193.8


100


182.9


100


227.8


100


10.9


6​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


In
2014, the major part of total revenues, 83%, continued to be generated by sales to customers in Asia, which was 5 percentage points higher than in the previous year
(2013: 78%; 2012: 78%). 13% of revenues in 2014 were generated in Europe (2013: 13%; 2012: 9%) and the remaining 4% in the Americas (2013: 9%; 2012: 13%).

2014

2013

2012

2014-2013Revenues by Region

(million
EUR)

(%)

(million
EUR)

(%)

(million
EUR)

(%)

(million
EUR)

(%)Asia


160.2


83


141.8


78


177.5


78


18.4


13Europe


25.2


13


24.2


13


21.4


9


1.0


4Americas


8.4


4


16.9


9


29.0


13


(8.5
)

(50
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


193.8


100


182.9


100


227.8


100


10.9


6​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


25

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Table of Contents

Development of Results

2014

2013

2012

2014-2013Cost Structure

(million
EUR)

(%
Revenues)

(million
EUR)

(%
Revenues)

(million
EUR)

(%
Revenues)

(million
EUR)

(%)Cost of Sales


152.3


79


190.3


104


227.4


100


(38.0
)

(20
)Gross profit


41.5


21


(7.4
)

(4
)

0.4


0


48.9


n.m.Operating Costs


99.8


52


88.4


48


132.7


58


11.4


13Selling expenses


16.0


8


29.0


16


34.8


15


(13.0
)

(45
)General and administration expenses


19.3


10


18.2


10


19.6


9


1.1


6Research and development costs


66.7


34


57.2


31


72.9


32


9.5


17Net other operating (income) and expenses


(2.2
)

(1
)

(16.0
)

(9
)

5.5


2


13.8


86


Cost of Sales

In 2014, cost of sales decreased year on year by 20% or € 38.0 million from
€ 190.3 million to € 152.3 million (2012: € 227.4 million). 2014 cost of sales included
inventory write-downs and ramp-up costs for new products. 2013 cost of sales included 35.2 million of unusual items mainly consisting of inventory write-downs. 2013 unusual items in cost of
sales were significantly higher than the above mentioned effects in 2014. Consequently, 2014 cost of sales relative to revenues decreased to 79% (2013: 104%; 2012: 100%).

In
2013, cost of sales decreased year on year by 16% in absolute terms from € 227.4 million in 2012 to
€ 190.3 million. The decrease was particularly attributable to lower revenue-related costs.

Gross Profit, Gross Margin

Against the background of the aforementioned 2013 unusual items, the Company's gross profit in 2014 increased year-on-year to
€ 41.5 million (2013: € -7.4 million; 2012: € 0.4 million), resulting in a gross
margin of 21% after -4% in 2013 (2012: 0%). Due to the aforementioned 2013 unusual items as well as lower selling prices for MOCVD equipment, the Company's gross profit in 2013 decreased
to €-7.4 million, resulting in a -4% gross margin after 0 in 2012.

Operating Costs

Operating costs in 2014 were below the targeted € 100 million at
€ 99.8 million despite of significantly higher R&D spending and further restructuring costs.

This
development was influenced by the following factors:

Due
to a lower rate of volume related costs, selling expenses in 2014 decreased in absolute terms by 45% from € 29.0 million to
€ 16 million (2012: € 34.8 million). Selling expenses relative to revenues were down to 8% (2013: 16%; 2012: 15%).
In line with the revenue development, selling expenses in 2013 decreased in absolute terms
by 17% from € 34.8 million to € 29.0 million. In 2013 Selling expenses relative to revenues were stable at 16% compared to 2012
(2012: 15%).

Driven
by projects, general and administration expenses in fiscal year 2014 slightly increased by 6% in absolute terms and were stable in relative terms at
€ 19.3 million or 10% of revenues (2013: € 18.2 million or 10% of revenues; 2012:
€ 19.6 million or 9% of revenues). In 2013, general and administration expenses declined by 7% to € 18.2 million (2012:
€ 19.6 million) and were mainly influenced by reduced costs for external services as well as lower software license fees. General and administration expenses
relative to revenues were virtually stable at 10% in 2013 (2012: 9%), which was due to the included restructuring expenses that also contained severance payments.

Key R&D Information

2014

2013

2012

2014-2013%R&D expenses (in million EUR)


66.7


57.2


72.9


17R&D expenses, % of sales


34


31


32R&D employees (period average)


285


297


337


(13
)R&D employees, % of total headcount (period average)


36


35


34


Research
and development costs were up 17% from € 57.2 million in 2013 (2012: € 72.9 million) to
€ 66.7 million in 2014, reflecting the Company's commitment to innovation as well as pre-launch

26

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Table of Contents

development
costs related to the AIX R6 new generation MOCVD tool and progress made in the OLED area. Such expenditures are being made very specifically in the Company's targeted future markets
such as OLED, Power Electronics or Logic and are monitored very closely. In 2013, research and development expenses were carefully analyzed in the course of the 5-Point-Program and refocused on
specific growth areas. Thus, 2013 R&D expenditures were reduced significantly to € 57.2 million (2012: € 72.9 million),
reflecting efficiency gains and a more focused R&D approach.

2014

2013

2012

2014-2013Personnel Costs

(million
EUR)

(million
EUR)

(million
EUR)

(million
EUR)

(%)Cost of Sales


22.3


25.7


30.9


(3.4
)

(13
)Selling, General and Administrative expenses


16.1


17.8


19.3


(1.7
)

(10
)Research and Development costs


28.1


24.0


30.9


4.1


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


66.5


67.5


81.1


(1.0
)

(2
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Due
to the majority of the 2013 global staff reductions becoming effective not before the second half of the year 2013, the average number of Group employees declined again from
847 in 2013 to 785 in 2014 (2012: 983), resulting in 2% lower personnel costs of € 66.5 million compared to
€ 67.5 million in 2013 (2012: € 81.1 million). 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, also resulting in 17% lower personnel costs of € 67.5 million, including severance
payments, compared to € 81.1 million in 2012. Based on the relatively stable revenue base, personnel expenses relative to revenues were down by 3 percentage
points from 37% in 2013 to 34% in 2014 (2012: 36%). In line with the announcement in December 2014 to further reduce staff by cutting approximately 60 jobs, personnel costs across all
functions in fiscal year 2014 include restructuring charges amounting to € 5.8 million (2013: 5.2 million; 2012: 5.1 million). At the end of the period on
December 31, 2014, in absolute terms, the number of employees increased from 776 as of December 31, 2013 to 789 as of December 31, 2014 (December 31,
2012: 964).

Net
other operating income and expenses for fiscal year 2014 resulted in an income of € 2.2 million (2013:
€ 16.0 million income including insurance proceeds; 2012: € 5.5 million expense). In 2013, net other operating income and
expenses gave an operating income of € 16.0 million (2012: € 5.5 million expense) since the write-down of a building expected to
be put on the market for sale amounting to € 9.9 million was more than offset by the insurance proceeds of € 22.5 million
resulting from a fire in a third-party warehouse in the United Kingdom.

In
2014, the Company recorded a net currency expense of € -0.3 million (2013: € 0.5 million net
income; 2012: € 6.9 million net expense) resulting from currency and translation differences. The 2013 net currency income resulted from currency and translation
differences, too. The € 1.8 million of R&D grants received in 2014 (2013: € 2.5 million; 2012:
€ 2.7 million), were recorded as "other operating income".

Total
operating costs in 2014 came in at € 99.8 million and were up compared to the prior year from
€ 88.4 million (2012: € 132.7 million), primarily due to the above mentioned effects recorded in 2013 which did not reoccur in
2014. Operating costs relative to revenues were 52% in 2014, 4 percentage points more than the 48% in 2013 (2012: 58%).

Operating Result

The absolute operating result improved in a year-on-year comparison by € 37.4 million and came in
at € -58.3 million in 2014 (2013: € -95.7 million; 2012:
€ -132.3 million) resulting in an EBIT margin of -30% (2013: -52%; 2012: -58%). Despite higher R&D
expenses in fiscal year 2014, this positive development is attributable to the above mentioned higher unusual items included in the 2013 figures. The 2013 improvement of the operating result was
mainly due to realized operating cost savings and the previously mentioned insurance proceeds.

27

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Table of Contents

Result Before Taxes

Result before taxes improved year-on-year by € 38.1 million from
€ -95.2 million in 2013 (2012: € -129.9 million) to
€ -57.1 million in 2014, with a net finance income of € 1.2 million (2013:
€ 0.5 million income; 2012: € 2.3 million income).

2014

2013

2012

2014-2013Interest & Taxes

(million
EUR)

(million
EUR)

(million
EUR)

(million
EUR)

(%)Net Finance Income/Expense


1.2


0.5


2.3


0.7


140Finance Income from financial assets


1.2


0.8


2.3


0.4


50Finance Expenses from financial liabilities


0.0


(0.3
)

0.0


0.3


n.m.Taxes on Income


(5.4
)

(5.8
)

(15.5
)

0.4


(7
)


In
2014, AIXTRON recorded a country specific tax expense of € 5.4 million (2013: tax expense of € 5.8 million;
2012: tax expense of € 15.5 million). The 2013 tax expense also resulted from country specific taxes. Unrecognized deferred tax assets related to tax losses at
December 31, 2014 totaled € 129.5 million (2013: € 88.7 million; 2012:
€ 90.9 million).

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

The 2014 after-tax result attributable to the equity holders of AIXTRON SE was
€ -62.5 million or -32% of revenues, and € -101.0 million (-55% of revenues) in
2013 (2012: € -145.4 million or -64% of revenues).

Net Income 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 € -53.6 million for 2014 (2013: loss of
€ -1.1 million; 2012: loss of € -51.6 million).

As
they did with the 2013 loss, AIXTRON's Executive and Supervisory Boards will propose to the annual general meeting that the 2014 loss should be carried forward and consequently no
dividend payment should be made for 2014 (2013: no dividend; 2012: no dividend).

Development of Orders

2014

2013

2012

2014-2013Equipment Orders

(million
EUR)

(million
EUR)

(million
EUR)

(million
EUR)

(%)Equipment order intake


153.4


133.2


131.4


20.2


15Equipment order backlog (end of period)


65.2


59.6


79.4


5.6


9


As
a matter of internal policy, the 2014 US dollar denominated order intake and backlog were recorded at the 2014 budget exchange rate of 1.35 USD/EUR (2013: 1.30 USD/EUR;
2012: 1.40 USD/EUR).

Equipment Order Intake

Mainly driven by higher demand from LED chip makers, equipment order intake in 2014 was up 15% year-on-year by
€ 20.2 million and came in at a total of € 153.4 million (2013: € 133.2 million; 2012:
€ 131.4 million). The order intake in fiscal year 2014 was not influenced by the aforementioned 50-tool order, which is in line with AIXTRON's strict order intake
policy. Due to the agreed and ongoing qualification process, order intake will be booked only when in line with customer confirmed shipment dates and upon availability of shipping documents. Recording
of the 50-tool order will commence in Q1/2015. In 2013, order intake was particularly affected by the continuously subdued demand for new production equipment from AIXTRON customers and lower selling
prices for MOCVD equipment sold out of excess inventories.

28

---





Table of Contents

Equipment Order Backlog

The total equipment order backlog of € 65.2 million at December 31, 2014 was 9% higher than
the € 59.6 million at the same point in time in 2013 (December 31, 2012: € 79.4 million) and 12% higher than the 2014
opening backlog of € 58.1 million, revalued as of January 1, 2014, at the US-Dollar exchange rate of 1.35 USD/EUR valid at that time. 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.

The
2014 year-end order backlog was revalued at the 2015 budget rate of 1.25 USD/EUR as per January 1, 2015, leading to an opening equipment order backlog of
€ 69.03 million for 2015, the majority of which is due for delivery in fiscal year 2015.

As
a matter of strict internal policy, AIXTRON follows clear internal requirements before recording and reporting received orders as order intake and order backlog. These requirements
comprise 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 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. 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 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 2014, no currency hedging instruments were used.

Funding

The Company's stated share capital as of December 31, 2014 amounted to € 112,694,555
(December 31, 2013: € 112,613,445; December 31, 2012: € 101,975,023) divided into 112,694,555 registered shares with a
proportional interest in the share capital of € 1.00 per no-par value registered share. All

29

---



Table of Contents

registered
shares are fully paid in. AIXTRON has an ADS program. The Company's ADSs each represent one ordinary share traded on the NASDAQ Global Select Market.

On
October 23, 2013, the Company made use of the authorizations to issue equity instruments and 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. As a consequence of this partial utilization of the
Authorized Capital 2011, the Company proposed to the Annual General Meeting on May 14, 2014, a resolution to cancel the Authorized Capital 2011 and to create a new Authorized Capital 2014 where
the Executive Board shall be authorized, with the approval of the Supervisory Board, to increase the share capital on one occasion or in partial amounts on several occasions in the period to
May 13, 2019 by up to a total of € 45,883,905.00 against cash and/or non-cash contributions by issuing new registered no-par value shares corresponding to
approximately 40% of the Company's share capital. The shareholders approved the proposal with a majority of 75.3%.

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 2014, 81,110 stock options (2013: 415,289; 2012: 185,496 options) were exercised, resulting in delivery of in total 81,110 ordinary shares. In fiscal
year 2014, 1,150,400 new stock options were granted under the 2014 tranches of the 2012 stock option plan (2013: no new stock options were granted; 2012: 31,000 options from the 2012
tranche of the 2007 stock option plan). 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, 2014, 2013 and 2012.

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 was 78% as of December 31, 2014, compared to 83% as of December 31, 2013 (December 31, 2012: 84%). This development was principally attributable to
the 2014 net loss. In 2013, the equity ratio was broadly stable at 83% versus 84% in the preceding year, mainly due to the positive effect of the capital increase virtually compensating the 2013
net loss.

In
2014, the return on equity (ROE) based on the negative 2014 Group's net result in proportion to the average total shareholders' equity at the start and end of the year was
-15% (2013: -22%; 2012: -26%).

30

---



Table of Contents

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

Funding Sources
(EUR or number of shares)

2014
31-Dec

Approved
since

Expiry
Date

2013
31-Dec

2012
31-Dec

2014-2013Issued shares


112,694,555








112,613,445


101,975,023


81,110Authorized Capital 2014Capital increase for cash or contribution in kind with or without existing shareholders' preemptive rights


45,883,905


14.05.2014


13.05.2019


0


0


45,883,905Authorized Capital 2012Capital increase for cash with existing shareholders' preemptive rights


10,422,817


16.05.2012


15.05.2017


10,422,817


10,422,817


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


cancelled


19.05.2011


18.05.2016


30,248,813


40,471,946


(30,248,813
)Conditional Capital I 2012Authorization to potentially issue bonds with warrants and/or convertible bonds in future


40,715,810


16.05.2012


15.05.2017


40,715,810


40,715,810


0Conditional Capital II 2012Stock Options Program 2012


4,208,726


16.05.2012


15.05.2017


4,208,726


4,208,726


0Conditional Capital II 2007Stock Options Program 2007


2,890,613


22.05.2007


31.12.2018


2,927,226


3,136,628


(36,613
)Conditional Capital 4Stock Options Program 2002


471,713


22.05.2002


31.12.2016


516,210


722,097


(44,497
)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 13, 2019, with the approval of the Supervisory
Board, to purchase its own shares representing an amount of up to € 11,262,429 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 or (3) by way of a public invitation to submit offers for sale.

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.

31

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Table of Contents

Investments

The AIXTRON Group's total capital expenditures in fiscal year 2014 amounted to € 13.4 million
(2013: € 10.1 million; 2012: € 16.5 million). In 2014, € 12.6 million (2013:
€ 9.6 million; 2012: € 15.8 million) were related to property, plant and equipment (including testing and laboratory equipment
such as the OLED R&D Cluster). The remaining € 0.8 million in 2014 (2013: € 0.5 million; 2012:
€ 0.7 million) were related to intangible assets including software licenses. In 2013, € 9.6 million of the total of
€ 10.1 million were related to investments in property, plant and equipment. The remaining € 0.5 million in 2013 were related to
intangible assets including software licenses.

The
majority of capital expenditures (87%) for the year 2014 (2013: 82%; 2012: 63%) were invested in Germany and such expenditures for 2015 are generally expected to be invested also
primarily in Germany.

In
2015, investments will again be made mainly for laboratory and test equipment. 2015 capital expenditures amounting to € 9.6 million are currently
planned to be made in Germany and paid in cash.

The
increase of € 9.9 million in bank deposits with a maturity of at least three months in 2014 was recorded as cash outflow from investing
activities. In 2013 bank deposits with a maturity of at least three months increased by € 30.4 million which was recorded as cash outflow from investing activities
(2012: decrease of € 11.9 million was recorded as cash inflow from investing activities).

All
2014, 2013 and 2012 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

In fiscal year 2014, a cash outflow from operating activities of € 33.8 million (2013: cash inflow
of € 8.2 million; 2012: cash outflow of € 45.2 million) was recorded. The decrease in operating cash flow in 2014 was mainly
caused by the net loss incurred for the full fiscal year and the scheduled increase of inventories for the MOCVD tools only partially being offset by received advance payments from customers (2014:
net loss of € -62.5 million; 2013: net loss of € -101.0 million; 2012: net loss of
€ -145.4 million). In 2013, the increase in operating cash flow was mainly attributable to 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.

A
cash outflow from investment activities of € -23.2 million was recorded in 2014 (2013: cash outflow of
€ 39.7 million; 2012: cash outflow of € 4.4 million). This outflow was mainly due to previously mentioned capital expenditures
and money market deposits that were added in the amount of € 9.9 million (2013: liquidated € 30.4 million; 2012: liquidated
€ 11.9 million), which were previously classified as "other financial assets". In 2013 a cash outflow of € 39.7 million was
recorded from investment activities. Money market deposits were liquidated in the amount of € 30.4 million in 2013, which were previously classified as "other
financial assets".

In
2014, the cash inflow from financing activities of € 193 thousand (2012: cash outflow of € 24.3 million) was
recorded from the issue of new shares (2012: € 883 thousand), no dividends were paid to AIXTRON shareholders (2012:
€ 25.2 million). The 2013 cash inflow of € 101.6 million comprised mainly of the gross proceeds from the capital increase, also
no dividends were paid to AIXTRON shareholders.

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"), decreased by 12% or
€ 38.2 million to € 268.1 million
(€ 116.6 million + € 151.5 million financial assets) as of December 31, 2014 (December 31, 2013:
€ 306.3 million, equaling € 167.5 million + € 138.9 million;
December 31, 2012: € 209.5 million, equaling
€ 99.7 million + € 109.8 million). Specific items that lowered the 2014 year-end liquidity came
predominantly from the 2014 net loss (€ -62.5 million), the capital expenditures and the inventory build-up. These cash outflows were only partially
offset by increased received advance payments from customers.

In
2013, Cash and cash equivalents including cash deposits with a maturity of at least three months, most of which were held in Euros, increased by 46% or
€ 96.8 million to € 306.3 million. Specific items that lowered the 2013 year-end liquidity came, among other factors,
from the 2013 net loss (€ -101.0 million)

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as
well as capital expenditures. The capital increase with gross proceeds of € 101.3 million and the sale of goods from inventory had a positive impact.

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

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, 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 persisting subdued 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, 2014 should provide additional sources of liquidity if required.

As
of December 31, 2014, € 151.5 million (2013: € 138.9 million; 2012:
€ 109.8 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 next generation 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 for LEDs but also to enable greater penetration into markets such as for
Power Electronics, Organic Semiconductors, next generation Memory and Logic applications.

A
key milestone in the field of MOCVD technology was the release of AIXTRON's new generation equipment AIX R6 in November 2014. AIXTRON is working actively with a number of
customers to qualify the tool for mass production and to support customers in their growth plans based on this technology.

Another
important field 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 expects higher equipment demand as the penetration of above mentioned devices is gaining momentum.

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 exclusively licensed 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 yield. Demonstration and qualification efforts are closely linked to the expansion plans of potential customers in
this field.

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

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Carbon
Nanowires and Graphene. The potential applications for advanced Carbon Nanostructures include, among other things, display technologies, semiconductor technologies or composite materials.
The significant number of AIXTRON R&D tools installed and the close collaboration with customers allow the Company to align its roadmaps with the market requirements of this emerging technology.

AIXTRON's
Silicon team has developed the high throughput QXP-8300 ALD deposition tool aimed specifically at providing efficient and innovative solutions for memory applications.
AIXTRON's QXP tool is production qualified at a major Korean memory 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, based on R&D projects and customer feedback, AIXTRON sees tangible opportunities to further support 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, 2014:

(million EUR)

Total

Less than
1 year

1-3 years

3-5 years

More than
5 yearsOperating lease commitments


8.83


3.96


3.71


0.94


0.22Purchase commitments


39.00


39.00​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total contractual obligations


47.82


42.96


3.71


0.94


0.22​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Commitments
for capital expenditures were € 2.0 million as of December 31, 2014 (December 31, 2013:
€ 831 thousand; December 31, 2012: € 437 thousand).

No
obligations for funding of pension plans existed as of December 31, 2014, December 31, 2013 and December 31, 2012.

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, Note 3. Segment Reporting and Note 37. Critical accounting
judgments and key sources of estimation and uncertainty".

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 2014, 2013 and 2012 the Company incurred expenses of € 3,016 thousand, € 35,102 thousand and
€ 40,947 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 adjustments 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 Item 18 "Financial
StatementsNote 24. Provisions"

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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.

Amendments
to IFRS 10, IFRS 12 and IAS 27Investment Entities

The
changes relate to consolidation of companies by investment entities.

Amendments
to IAS 36Recoverable amount Disclosures for Non-Financial Assets

The
amendments improve disclosures related to the recoverable amount of an asset measured at fair value less costs of disposal.

Amendments
to IAS 39Novation of Derivatives and Continuation of Hedge Accounting

The
standard relates to derivatives subject to novation. The Group has no such derivatives.

IFRIC 21Levies

This
interpretation relates to Government levies and has had no effect on the Group.

Amendments
to IAS 32Offsetting financial assets and financial liabilities

The
amendment clarifies the requirement for offsetting financial assets and liabilities.

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

IFRS 15

Revenue
from Contracts with Customers

IFRS 11
(amendments)

Accounting
for Interests in Joint Operations

IAS 16
and IAS 38 (amendments)

Agriculture:
Bearer Plants

IAS 19
(amendments)

Defined
Benefit Plans: Employee Contributions

IAS 27
(amendments)

Equity
method in Separate Financial Statements

IFRS 10
and IAS 28 (amendments)

Sale
or Contribution of Assets between an Investor and its Associate or Joint Venture

Annual
Improvement to IFRSs: 2010-2012; 2011-2013; 2012-2014

Amendments
to various IFRSs

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".

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Table of Contents

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.

As
of December 31, 2014 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


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)

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 Capital Market Committee(5)Former
AIXTRON Executive Board Member(6)Since
2005


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Table of Contents

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 Dornkaulstr. 2, 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.

As
of December 31, 2014, AIXTRON's Executive Board ("Management") consisted of the following two individuals:

Name

Position

First
Appointment

End of Term

Date of BirthMartin Goetzeler

Chairman, President and Chief Executive Officer


March 1, 2013


February 28, 2017


May 11, 1962Dr. Bernd Schulte

Executive Vice President and Chief Operating Officer


April 1, 2002


March 31, 2018


August 22, 1962


Wolfgang
Breme, former Executive Vice President and Chief Financial Officer, has resigned from office as of May 31, 2014



The
Executive Board's business address is Dornkaulstr. 2, 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.

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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 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. 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. 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. 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 2014, the total fixed and variable remuneration of the Executive Board (including benefits in kind and pension allowance) totaled € 2,014,775
(2013: € 2,584,834; 2012: € 1,124,274). In fiscal

39

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Table of Contents

year
2014, the Executive Board was granted 100,000 options (2013: 0; 2012: 0). The division between the individual members of the Executive Board for the years 2012 to 2014 is presented in the
table below.

Executive Board Member

Year

Fixed*

Variable
(cash)

Variable
(share-based)

Total fixed
and variable
remuneration

Options
granted

Option
value on
allocation

Total EB
Remuneration(EUR)

(EUR)

(EUR)

(EUR)

(number)

(EUR)

(EUR)Martin Goetzeler(1)


2014


613,104


250,000


250,000


1,113,104


50,000


189,000


1,302,1042013


517,730


250,000


250,000


1,017,730


0


0


1,017,7302012


0


0


0


0


0


0


0Paul Hyland(2)


2014


0


0


0


0


0


0


02013


848,063


0


0


848,063


0


0


848,0632012


437,334


0


0


437,334


0


0


437,334Wolfgang Breme(3)


2014


146,144


0


0


146,144


0


0


146,1442013


341,514


0


0


341,514


0


0


341,5142012


309,413


0


0


309,413


0


0


309,413Dr. Bernd Schulte


2014


377,527


0


0


377,527


50,000


189,000


566,5272013


377,527


0


0


377,527


0


0


377,5272012


377,527


0


0


377,527


0


0


377,527Total


2014


1,136,774


250,000


250,000


1,636,774


100,000


378,000


2,014,7752013


2,084,833


250,000


250,000


2,584,833


0


0


2,584,8342012


1,124,274


0


0


1,124,274


0


0


1,124,274


*incl.
benefits in kind and allowance for pension provisions(1)EB
member since March 1st, 2013(2)left
the company with effect as of February 28, 2013; remuneration of EB contract € 780.000(3)left
the company with effect as of May 31, 2014


As
of December 31, 2014, the AIXTRON Executive Board held a total of 396,160 Company stock options (December 31, 2013: 500,408 and December 31, 2012:
914,758 options respectively) to subscribe to a total of 398,140 ordinary shares of the Company (December 31, 2013: 505,116 and December 31, 2012: 923,516 shares
respectively). 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
Date

Outstanding

Exercisable

Option
value on
allocation

Exercise
price

Maturity

Total
Outstanding
Shares(shares)

(shares)

(EUR)

(EUR)Martin Goetzeler


Oct 2014


50,000


0


189,000


13.14


Oct 2024


50,000Dr. Bernd Schulte


Oct 2014


50,000


0


189,000


13.14


Oct 2024Nov 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 2017Nov 2006


55,000


55,000


84,150


3.83


Nov 2016May 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 2015


348,140Total





398,140


224,660











398,140


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.

In
fiscal year 2014, former and current Executive Board members exercised 48,000 options (2013: 211,500; 2012: 39,000), and options to acquire 158,976 AIXTRON shares
expired (2013: 207,000; 2012: 0).

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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 (€ 120,000 per year in 2014, € 160,000 per year in 2013 and
€ 120,000 per year in 2012) 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
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 2014, the compensation of the Supervisory Board totaled € 292,500 (2013: € 290,042; 2012:
€ 302,500). The Supervisory Board compensation for the years 2012 to 2014 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)


2014
2013
2012


75,000
75,000
75,000


0
0
0


16,000
20,000
18,000


91,000
95,000
93,000Prof. Dr. Wolfgang Blättchen(1)(4)
(Deputy Chairman of the Supervisory Board since Feb. 27, 2013)
(Chairman of the Audit Committee)
(Independent Financial Expert)


2014
2013
2012


37,500
35,556
25,000


0
0
0


24,000
24,000
24,000


61,500
59,556
49,000Dr. Andreas Biagosch(2)
(since May 23. 2013)


2014
2013
2012


25,000
15,139
0


0
0
0


8,000
2,000
0


33,000
17,139
0Prof. Dr. Petra Denk(2)(3)
(since May 19, 2011)
(Chairman of the Technology Committee)


2014
2013
2012


25,000
25,000
25,000


0
0


24,000
28,000
26,000


49,000
53,000
51,000Dr. Martin Komischke
(since May 23, 2013)


2014
2013
2012


25,000
15,139
0


0
0
0


0
0
0


25,000
15,139
0Prof. Dr. Rüdiger von Rosen(1)(3)
(Chairman of the Nomination Committee)


2014
2013
2012


25,000
25,000
25,000


0
0
0


8,000
20,000
6,000


33,000
45,000
31,000Dr. Holger Jürgensen(5)(6)(7)
(until January 30. 2013)


2014
2013
2012


0
3,125
37,500


0
0
0


0
0
16,000


0
3,125
53,500Karl-Hermann Kuklies(7)
(until January 30, 2013)


2014
2013
2012


0
2,083
25,000


0
0
0


0
0
0


0
2,083
25,000Total


2014
2013
2012


212,500
196,042
212,500


0
0
0


80,000
94,000
90,000


292,500
290,042
302,500


(1)Member
of the Audit Committee(2)Member
of the Technology Committee(3)Member
of the Nomination Committee(4)Member
of the Capital Markets Committee(5)Former
AIXTRON Executive Board Member(6)Honorary
Chairman of the Supervisory Board(7)Resigned
from Office 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 2014.

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:



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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)
Dipl.-Kfm. Kim Schindelhauer
Prof. Dr. Rüdiger von Rosen


Further Committees

AIXTRON does not have a Compensation Committee that assists the Supervisory Board in establishing the structure of the remuneration
system. However, 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 to ensure that Management is not taking unreasonable risks. The remuneration level of the Executive Board members of AIXTRON SE is
aligned not only with the commercial and financial situation and future prospects of the Company and the level and structure of Executive Board remuneration at comparable companies but also with 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. 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 (Chair), 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 (Chair), Prof. Dr. Petra Denk and Kim Schindelhauer.

In
the course of evaluating a number of strategic projects, the Supervisory Board has established aCapital Market Committeeon
April 12, 2014. The Capital Market Committee is currently composed of Kim Schindelhauer and Prof. Dr. Wolfgang Blättchen.

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 11,

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Table of Contents

2015,
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


0Prof. Dr. Wolfgang Blättchen


0Prof. Dr. Petra Denk


129

*Martin Goetzeler


0




50,000Dr. Martin Komischke


0Prof. Dr. Rüdiger von Rosen


1,300

*Kim Schindelhauer(4)


600,000

*Dr. Bernd Schulte


0




346,160​
​
​
​
​
​
​
​
​
​All Supervisory and Executive Board members as a group


601,429

0.53%


396,160


*Less
than 1%.(1)Unless
indicated otherwise, the address is: c/o AIXTRON SE, Dornkaulstr. 2, 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 112,694,555 shares of common stock outstanding as of December 31, 2014 (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 2014, Executive Board member Dr. Bernd Schulte reported he had sold a total of 35,000 shares of AIXTRON after exercising stock
options from AIXTRON's stock option plan 2002, tranche 2004.

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 2014, 81,110 stock options (2013: 415,289; 2012: 185,496 options) were exercised, resulting in delivery of in total 81,110 ordinary shares.
1,150,400 new stock options were granted in fiscal year 2014 from tranches 2014 and 2014_I under the 2012 stock option plan (2013: no options were granted; 2012 tranche:
31,000 grants under the stock option plan 2007). Half of the granted options under the stock option plan 2007 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. 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

45

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Table of Contents

exercise
threshold with the TecDAX as a comparison parameter. The maximum term of the stock options is 10 years. The options expire 10 years after they have been granted.

Dec 31,
2014

Exercise

Expired/
Forfeited

Allocation

Dec 31,
2013AIXTRON ordinary sharesstock options


3,291,896


81,110


437,095


1,150,400


2,659,701underlying shares


3,521,639


81,110


831,086


1,150,400


3,283,435AIXTRON ADSstock options


0


0


5,590


0


5,590underlying shares


0


0


5,590


0


5,590


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, 2014, the Bank of New York Mellon, N. Y. held
4,737,423 ordinary shares as of December 31, 2014, represented by 4,737,423 ADSs, or 4.2% of AIXTRON's shares outstanding.

As
of February 11, 2015, the following investors had shareholdings in AIXTRON SE exceeding the 3% reporting threshold (shares held as of the reporting date, based on publications
pursuant to Section 26 (1) of the German Securities Trading Act/WpHG or other public filings):

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, 9,311,785 shares or 8.26% 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 4.62% of AIXTRON's shares outstanding

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

UBS
Group AG, Zurich, Switzerland, 3,454,009 shares or 3.06% of AIXTRON's shares outstanding

ING
Fund Management B.V., The Hague, Netherlands, 3,493,665 shares or 3.10% of AIXTRON's shares outstanding

Actual
shareholdings may differ from these figures. 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 11, 2015.

As
of December 31, 2014, AIXTRON had 140 registered ADS holders, and an estimated 4,215 beneficial holders of ADSs. As of February 11, 2015, AIXTRON had
44,709 shareholders registered in its share register of ordinary shares, and U.S. record holders held approximately 4,527,423 or 4.0% 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 2014, there were no outstanding personal loans or guarantees to members of the Executive Board or the Supervisory Board.

46

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C.    Interests of Experts and Counsel

Not applicable.

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 € 168.6 million or 87.00% of the AIXTRON's total revenues
for the year ended December 31, 2014 (2013: € 158.7 million or 86.76%; 2012: € 206.5 million or 90.63%). Revenues from
AIXTRON's Asian-based customers accounted for € 160.2 million or 82.68% of the Company's total revenues for the year ended December 31, 2014 (2013:
€ 141.8 million or 77.54%; 2012: € 177.5 million or 77.90%).

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 € -53.6 million for 2014 (2013: € -1.1 million; 2012:
€ -51.6 million loss).

AIXTRON's
Executive and Supervisory Boards will propose to the shareholders' meeting that the 2014 loss should be carried forward and consequently no dividend payment should be made for
2014. For the fiscal years 2013 and 2012 the Company did not distribute any dividends.

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 German closing prices (all stock exchanges,
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 discussion under "Item 3.

47

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Table of Contents

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

LowAnnual2010


28.87


18.992011


33.35


8.382012


14.45


8.712013


13.80


9.102014


12.84


8.90Quarterly2013First quarter


11.57


9.10Second quarter


13.80


9.66Third quarter


13.34


11.84Fourth quarter


12.02


9.682014First quarter


12.84


10.26Second quarter


12.17


10.08Third quarter


12.30


9.26Fourth quarter


11.97


8.90Monthly2014July


10.91


10.05August


10.08


9.26September


12.30


9.69October


11.97


9.45November


9.85


9.03December


9.43


8.902015January


9.38


6.81February (through February 11, 2015)


7.31


6.38


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Table of Contents



Closing Price
per ADR(USD)High

LowAnnual2010


38.56


23.112011


44.88


11.262012


19.15


11.422013


17.91


11.572014


17.73


10.90Quarterly2013First quarter


14.95


11.57Second quarter


17.91


12.62Third quarter


17.64


15.58Fourth quarter


16.31


12.982014First quarter


17.73


14.08Second quarter


16.63


13.71Third quarter


15.67


12.39Fourth quarter


14.94


10.90Monthly2014July


14.83


13.49August


13.23


12.39September


15.67


12.44October


14.94


11.91November


12.20


11.21December


11.65


10.902015January


11.21


7.72February (through February 11, 2015)


8.22


7.24


On
February 11, 2015, the closing price in Germany per ordinary share was € 7.31.

On
February 11, 2015, the closing price per ADS on NASDAQ Global Select Market was USD 8.22.

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 May 14, 2014 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 € 112,694,555 as per January 31, 2015. It is composed
of 112,694,555 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 2015 and states that the Company has been in full compliance with the Corporate Governance Code with the exception of some minor deviations which were declared. 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

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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 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 expectations on AIXTRON's supply chain partners / vendors and to
explain consequences of non-compliance. Further information on the use and origination of conflict minerals in the AIXTRON Group are published in in its Form SD, which has been filed with the
SEC on May 30, 2014 and is also available on the AIXTRON website under www.AIXTRON.COM/INVESTORS/U.S.-LISTINGS.

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, 2014, 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.

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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
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, 2014, 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 2014 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 and 2014 respectively, 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 and
will be paid half in cash and half in shares. 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 Dr. Bernd Schulte, effective April 1, 2002 and amended as of April 24, 2009, provides for a base salary of
€ 325,000 per year. Dr. Schulte's contract was renewed in 2014 and effective April 1, 2015, Dr. Schulte will receive a base salary of
€ 390,000 per year. His employment contract provides for 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 and will be paid half in cash and half in shares. 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.

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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 the

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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, 2014. 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 2014, 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.

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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

2014

2013

2012(EUR thousands)Revenues


(11,951
)

(10,866
)

(13,959
)Net Result


(7,509
)

(3,439
)

(8,767
)




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

2014

2013

2012(EUR thousands)Revenues


0


0


0Net Result


2,953


1,504


3,910




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

2014

2013

2012(EUR thousands)Revenues


11,951


10,866


13,959Net Result


7,509


3,439


8,767




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

2014

2013

2012(EUR thousands)Revenues


0


0


0Net Result


(2,953
)

(1,504
)

(3,910
)


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 2014.

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 2014, the Company received € 1.2 million (2013: € 0.8 million; 2012:
€ 2.3 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

The depositary for the AIXTRON ADS program is The Bank of New York Mellon ("Bank of New York Mellon"). The amended and
restated deposit agreement with Bank of New York Mellon is 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 ADS 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.

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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
2014, Bank of New York Mellon granted reimbursements in the amount of USD 40,000 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 Acting 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 and Acting Chief Financial Officer Martin Goetzeler has concluded that, as of December 31, 2014, 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 Acting Chief Financial Officer Martin
Goetzeler, AIXTRON's Management conducted an evaluation of the effectiveness of AIXTRON's internal control over financial reporting based upon the 2013 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 such evaluation, Management has concluded that AIXTRON's internal control over financial reporting was effective as of December 31, 2014.

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.

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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, 2014, based on criteria established in Internal
ControlIntegrated Framework (2013) 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 supervisory board, 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, 2014, based on the criteria established in Internal
ControlIntegrated Framework (2013) 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, 2014 of the Company and our report dated February 24, 2015 expressed an unqualified opinion on those consolidated financial statements.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & ToucheGmbH
WirtschaftsprüfungsgesellschaftDuesseldorf, Germany, February 24, 2015

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Changes in Internal Control over Financial Reporting

During the year ended December 31, 2014 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 2014 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, 2014 and 2013 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,
2014

Dec 31,
2013Million EURAudit fees


0.70


0.72Audit-related fees


0.03


0.03Tax fees


0.17


0.30All other fees


0.05


0.03​
​
​
​
​
​
​
​Total


0.96


1.09​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


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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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 14, 2014, 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, 2014.

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 2014 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-58, incorporated herein by reference.

Item 19:    Exhibits

Exhibit
Number

Description of Exhibit1.1

Articles of Association (Satzung) as amended January 23, 2015.2.1

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 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
[                        ], 2014, effective April 1, 2015.4.3

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 2014.12.1

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

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

Certification of Chief Executive Officer and Acting 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 24, 2015

AIXTRON SE/s/ MARTIN GOETZELERName:

Martin GoetzelerTitle:

Chairman, President and
Chief Executive Officer/s/ MARTIN GOETZELERName:

Martin GoetzelerTitle:

Acting 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, 2014 and 2013, 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, 2014. 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, 2014 and
2013, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2014, 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, 2014, based on the criteria established in Internal ControlIntegrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 24, 2015 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & ToucheGmbH
WirtschaftsprüfungsgesellschaftDuesseldorf, Germany, February 24, 2015

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CONSOLIDATED FINANCIAL STATEMENTS



Contents

Page1.

General Principles

F-72.

Significant Accounting Policies

F-73.

Segment Reporting

F-164.

Research and development

F-185.

Other operating income

F-186.

Other operating expenses

F-197.

Personnel expense

F-198.

Net finance income

F-199.

Income tax expense/benefit

F-2010.

Current tax receivable and payable

F-2111.

Property, plant and equipment

F-2112.

Intangible assets

F-2313.

Other non-current assets

F-2514.

Deferred tax assets and liabilities

F-2515.

Long term receivable from current tax

F-2616.

Inventories

F-2617.

Trade receivables and other current assets

F-2718.

Other financial assets

F-2819.

Cash and cash equivalents

F-2820.

Shareholders' Equity

F-2921.

Earnings per share

F-3022.

Employee benefits

F-3023.

Share-based payment

F-3124.

Provisions

F-3325.

Trade payables and other current liabilities

F-3426.

Financial Instruments

F-3427.

Operating leases

F-3828.

Capital commitments

F-3829.

Contingencies

F-3830.

Identity of related parties

F-3931.

Consolidated entities

F-3932.

Events after the reporting period

F-4033.

Auditors' fees

F-4034.

Employees

F-4035.

Statement of compliance with the German Corporate Governance Code

F-4036.

Supervisory Board and Executive Board

F-4037.

Critical accounting judgments and key sources of estimation and uncertainty

F-41


F-1

---





Table of Contents

CONSOLIDATED INCOME STATEMENT

Notes

2014

2013

2012in EUR thousandsRevenues


3


193,797


182,863


227,832Cost of sales





152,282


190,251


227,402​
​
​
​
​
​
​
​
​
​
​
​
​
​Gross profit





41,515


(7,388
)

430Selling expenses





15,971


28,956


34,830General administration expenses





19,341


18,223


19,551Research and development costs


4


66,739


57,153


72,862Other operating income


5


3,901


27,610


3,121Other operating expenses


6


1,674


11,631


8,575​
​
​
​
​
​
​
​
​
​
​
​
​
​Operating result





(58,309
)

(95,741
)

(132,267
)Finance Income





1,168


839


2,353Finance Expense





0


313


29​
​
​
​
​
​
​
​
​
​
​
​
​
​Net Finance Income


8


1,168


526


2,324Result before taxes





(57,141
)

(95,215
)

(129,943
)Taxes on income/loss


9


5,370


5,801


15,493​
​
​
​
​
​
​
​
​
​
​
​
​
​Loss for the year





(62,511
)

(101,016
)

(145,436
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Thereof attributable to the owners of Aixtron SE





(62,511
)

(101,016
)

(145,436
)Basic earnings or loss per share (EUR)


21


(0.56
)

(0.98
)

(1.44
)Diluted earnings or loss per share (EUR)


21


(0.56
)

(0.98
)

(1.44
)


See
accompanying notes to consolidated financial statements.

F-2

---



Table of Contents

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

Note

2014

2013

2012in EUR thousandsLoss for the year





(62,511
)

(101,016
)

(145,436
)Gains/losses from derivative financial instruments before taxes


20








9,226Deferred taxes on derivative financial instruments


14








(2,788
)Currency translation adjustment


20


11,815


(6,130
)

1,512Other comprehensive income/loss





11,815


(6,130
)

7,950​
​
​
​
​
​
​
​
​
​
​
​
​
​Total comprehensive loss for the year





(50,696
)

(107,146
)

(137,486
)​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​Thereof attributable to the owners of Aixtron SE





(50,696
)

(107,146
)

(137,486
)


See
accompanying notes to consolidated financial statements.

F-3

---





Table of Contents

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Note

31/12/2014

31/12/2013in EUR thousandsAssetsProperty, plant and equipment


11


77,299


79,866Goodwill


12


64,813


64,115Other intangible assets


12


2,458


3,058Other non-current assets


13


382


907Deferred tax assets


14


4,120


4,613Tax receivables


15


117


177​
​
​
​
​
​
​
​
​
​
​Total non-current assets





149,189


152,736​
​
​
​
​
​
​
​
​
​
​Inventories


16


81,694


66,183Trade receivables less allowance k€ 945 (2012: k€ 1,821)


17


26,324


27,654Current tax receivables


10


543


5,388Other current assets


17


7,723


4,925Other financial assets


18


151,494


138,853Cash and cash equivalents


19


116,580


167,454​
​
​
​
​
​
​
​
​
​
​Total current assets





384,358


410,457​
​
​
​
​
​
​
​
​
​
​Total assets





533,547


563,193​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Liabilities and shareholders' equityFully paid capital Number of shares: 111,591,036 (2013: 111,534,520)





111,591


111,535Additional paid-in capital





371,781


370,842Accumulated losses





(70,802
)

(8,291
)Accumulated comprehensive income and expense recognised in equity





3,132


(8,683
)​
​
​
​
​
​
​
​
​
​
​Total shareholders' equity


20


415,702


465,403Other non-current payables





62


92Other non-current provisions


24


1,206


1,977Deferred tax liabilities


14


34


300​
​
​
​
​
​
​
​
​
​
​Total non-current liabilities





1,302


2,369Trade payables


25


16,397


13,517Advance payments from customers





66,928


46,188Other current provisions


24


28,057


32,080Other current liabilities


25


3,192


2,948Current tax payables


10


1,969


688Total current liabilities





116,543


95,421​
​
​
​
​
​
​
​
​
​
​Total liabilities





117,845


97,790​
​
​
​
​
​
​
​
​
​
​Total liabilities and shareholders' equity





533,547


563,193​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


See
accompanying notes to consolidated financial statements.

F-4

---



Table of Contents

CONSOLIDATED STATEMENT OF CASH FLOW

Note

2014

2013

2012in EUR thousandsCash inflow/outflow from operating activitiesLoss for the year





(62,511
)

(101,016
)

(145,436
)Reconciliation between loss and cash inflow/outflow from operating activitiesExpense from share-based payments





778


981


3,439Depreciation, amortization and impairment expense





17,000


27,812


16,641Net result from disposal of property, plant and equipment





29


11


149Deferred income taxes





618


643


22,855Change inInventories





(13,466
)

57,938


59,571Trade receivables





2,738


8,500


41,435Other assets





3,263


4,209


14,943Trade payables





1,890


4,841


(10,871
)Provisions and other liabilities





(3,223
)

2,050


(28,743
)Deferred revenues





0


(92
)

0Non-current liabilities





(801
)

1,977


(89
)Advance payments from customers





19,905


364


(19,131
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from operating activities





(33,780
)

8,218


(45,237
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from investing activitiesCost related to acquisitions





0


0


(234
)Capital expenditures in property, plant and equipment





(12,622
)

(9,603
)

(15,768
)Capital expenditures in intangible assets





(785
)

(465
)

(715
)Proceeds from disposal of fixed assets





146


789


342Bank deposits with a maturity of more than 90 days


18


(9,933
)

(30,383
)

11,934​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from investing activities





(23,194
)

(39,662
)

(4,441
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from financing activitiesDividend paid to shareholders





0


0


(25,155
)Proceeds from issue and acquisition of equity shares





193


101,553


883​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash inflow/outflow from financing activities





193


101,553


(24,272
)​
​
​
​
​
​
​
​
​
​
​
​
​
​Effect of changes in exchange rates on cash and cash equivalents





5,907


(2,389
)

792Net change in cash and cash equivalents





(50,874
)

67,720


(73,158
)Cash and cash equivalents at the beginning of the period





167,454


99,734


172,892​
​
​
​
​
​
​
​
​
​
​
​
​
​Cash and cash equivalents at the end of the period


19


116,580


167,454


99,734​
​
​
​
​
​
​
​
​
​
​
​
​
​Interest paid





(34
)

(3
)

(28
)Interest received





242


1,172


2,091Income taxes paid





(5,878
)

(1,860
)

(7,440
)Income taxes received





10,518


65


7,199


See
accompanying notes to consolidated financial statements.

F-5

---





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, 2012





100,711


274,816


(4,065
)

(6,438
)

263,316


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





0


0


0


0


(25,155
)

(25,155
)Share based payments





0


3,438


0


0


0


3,438Issue of shares





185


698


0


0


0


883Net loss for the year





0


0


0


0


(145,436
)

(145,436
)Other comprehensive income





0


0


1,512


6,438


0


7,950Total comprehensive 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





0


970


0


0


0


970Issue of shares





10,639


90,920


0


0


0


101,559Net loss for the year





0


0


0


0


(101,016
)

(101,016
)Other comprehensive income





0


0


(6,130
)

0


0


(6,130
)Total comprehensive loss for the year





0


0


(6,130
)

0


(101,016
)

(107,146
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance December 31, 2013 and January 1, 2014





111,535


370,842


(8,683
)

0


(8,291
)

465,403​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Share based payments





0


802


0


0


0


802Purchase of treasury shares





(25
)

(224
)

0


0


0


(249
)Issue of shares





81


361


0


0


0


442Net loss for the year





0


0


0


0


(62,511
)

(62,511
)Other comprehensive income





0


0


11,815


0


0


11,815Total comprehensive loss for the year





0


0


11,815


0


(62,511
)

(50,696
)​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance December 31, 2014





111,591


371,781


3,132


0


(70,802
)

415,702​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


See
accompanying notes to consolidated financial statements.

F-6

---





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 Dornkaulstraße 2,
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 23, 2015 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-7

---



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 as of 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-8

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)





Buildings

25-33 years

Machinery and equipment

3-14 years

Other plant, factory and office equipment

2-14 years


The
useful lives of leased assets do not exceed the expected lease periods.

(f)    Intangible assets







Software

2-5 years

Patents and similar rights

5-18 years

Customer base and product and technology know how

6-7 years


F-9

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(g)   Financial Instruments











F-10

---



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.

F-11

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(i)    Operating Result

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

(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

F-12

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

obligation.
If the effect is material, provisions are determined by discounting the expected future cash 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 and is recognised when the Company satisfies a performance
obligation by transferring goods or services to the customer and it is probable that the ecomonic benefits associated with the transaction will flow to the entity.

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 related to equipment 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.

F-13

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

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.

The
consideration from contracts which include combinations of different performance obligations such as equipment, spares and services is allocated to each performance obligation in an
amount that depicts the amount of consideration to which the company expects to be entitled in exchange for transferring the goods or services to the customer. The company uses a combination of
methods such as an estimated cost plus margin approach, and allocating discounts proportionately to each performance obligation when determining the consideration for each performance obligation.

(o)   Expenses





(p)   Other operating income

Government grants



(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 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, to make decisions about resources to be allocated to the segment and assess its performance and for which discrete
financial information is available. 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.

F-14

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(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.

(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.

Amendments to IFRS 10, IFRS 12 and IAS 28Investment Entities

The changes relate to consolidation of companies by investment entities.Amendments to IAS 36Recoverable amount Disclosures for Non Financial Assets

The amendments improve disclosures related to the recoverable amount of an asset measured at fair value less costs of disposal.Amendments to IAS 39 Novation of Derivatives and Continuation of Hedge Accounting

The standard relates to derivatives subject to novation. The Group has no such derivatives.IFRIC 21Levies

This interpretation relates to Government levies and has had no effect on the Group.Amendments to IAS 32Offsetting financial assets and financial liabilities

The amendment clarifies the requirement for offsetting financial assets and liabilities.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 InstrumentsIFRS 15

Revenue from Contracts with CustomersIFRS 11 (amendments)

Accounting for Interests in Joint OperationsIAS 16 and IAS 41 (amendments)

Agriculture: Bearer PlantsIAS 19 (amendments)

Defined Benefit Plans: Employee ContributionsIAS 27 (amendments)

Equity method in Separate Financial StatementsIFRS 10 and IAS 28 (amendments)

Sale or Contribution of Assets between an Investor and its Associate or Joint VentureAnnual Improvement to IFRSs: 2010-2012; 2011-2013; 2012-2014

Amendments to various IFRSsThe 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.


F-15

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



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 to allocate resources and assess performance only 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 two 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) 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

2014

2013

2012in EUR thousandsEquipment revenues




148,543


138,044


176,865Spares and service




45,254


44,819


50,967​
​
​
​
​
​
​
​
​
​
​
​
​Revenue from external customers




193,797


182,863


227,832​
​
​
​
​
​
​
​
​
​
​
​
​Inventories recognized as an expense

16


134,940


117,900


113,083Obsolescence and valuation allowance expense for inventories

16


3,016


17,885


40,947Personnel expense

7


66,409


67,548


81,076Depreciation

11


15,591


16,314


11,165Impairment

6 / 11


0


9,888


2,756Amortization

12


1,409


1,609


2,720Other expenses




33,366


74,864


104,496Foreign exchange losses

5


1,276


206


6,977Other operating income

5


(3,901
)

(27,610
)

(3,121
)​
​
​
​
​
​
​
​
​
​
​
​
​Segment profit/loss




(58,309
)

(95,741
)

(132,267
)Finance income

8


1,168


839


2,353Finance expense

8


0


(313
)

(29
)​
​
​
​
​
​
​
​
​
​
​
​
​Profit/loss before tax




(57,141
)

(95,215
)

(129,943
)


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.

F-16

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     Segment Reporting and Revenues (Continued)

Segment assets and liabilities

31/12/2014

31/12/2013in EUR thousandsSemi-conductor equipment segment assets segment assets


260,693


246,708Unallocated assets


272,854


316,485​
​
​
​
​
​
​
​Total Group assets


533,547


563,193




31/12/2014

31/12/2013in EUR thousandsSemi-conductor equipment segment liabilities segment liabilities


115,842


96,802Unallocated liabilities


2,003


988​
​
​
​
​
​
​
​Total Group liabilities


117,845


97,790


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 decreased by k€ 525 during 2014 (increased by k€ 230 in 2013).

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

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.

2014

2013

2012in EUR thousandsAsia


160,240


141,785


177,490Europe


25,189


24,213


21,352Americas


8,368


16,865


28,990​
​
​
​
​
​
​
​
​
​
​Total


193,797


182,863


227,832


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

2014

2013

2012in EUR thousandsGermany


6,621


7,210


10,105USA


8,162


14,805


28,868Korea


18,641


30,578


29,759China


106,568


56,788


71,611Taiwan


20,580


43,177


47,147


Revenues
from all foreign countries outside of Germany were k€ 187,176, k€ 175,653 and k€ 217,727 for the years ended
December 31, 2014, 2013 and 2012 respectively.

Sales
to four customers in 2014 exceeded 10% of Group revenue, representing 12.2%, 10.9%, 10.4% and 10.1% respectively. In 2013 sales to one customer amounted to 14.4% of Group revenues.
In 2012 sales to one customer accounted for 11% of Group revenues.

F-17

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     Segment Reporting and Revenues (Continued)

31/12/2014

31/12/2013in EUR thousandsAsia


2,591


5,181Europe excluding Germany


12,619


13,052Germany


127,536


127,977Americas


2,205


1,736​
​
​
​
​
​
​
​Total Group non current assets


144,951


147,946


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€ 66,739, k€ 57,153 and k€ 72,862
for the years ended December 31, 2014, 2013 and 2012 respectively.

After
deducting project funding received and not repayable, net expenses for research and development were k€ 64,944, k€ 54,627 and
k€ 70,201 for the years ended December 31, 2014, 2013 and 2012 respectively.

5.     Other operating income

2014

2013

2012in EUR thousandsResearch and development funding


1,795


2,526


2,661Income from resolved contract obligations


0


225


0Income from the reversal of provisions and the write-off of debts


4


33


78Gain from the disposal of fixed assets


0


43


0Insurance recoveries


52


22,638


11Foreign exchange gains


979


746


136Other


1,071


1,399


235​
​
​
​
​
​
​
​
​
​
​3,901


27,610


3,121​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


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 Insurance recoveries 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 loss of k€ 297, (2013 gain
k€ 540; 2012 loss k€ 6,841).

2014

2013

2012in EUR thousandsForeign exchange gains


979


746


136Foreign exchange losses (see note 6)


(1,276
)

(206
)

(6,977
)​
​
​
​
​
​
​
​
​
​
​Net foreign exchange gains (losses)


(297
)

540


(6,841
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Gains (losses) arising on financial instruments at FVTPL


0


0


(6,774
)Other foreign exchange gains (losses)


(297
)

540


(67
)​
​
​
​
​
​
​
​
​
​
​Net foreign exchange gains (losses)


(297
)

540


(6,841
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


F-18

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



6.     Other operating expenses

2014

2013

2012in EUR thousandsForeign exchange losses


1,276


206


6,977Impairment of building





9,888Losses from the disposal of fixed assets


29


54


149Additions to allowances for receivables or write-off of receivables


327


142


1,449Other


42


1,341​
​
​
​
​
​
​
​
​
​
​1,674


11,631


8,575​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​




7.     Personnel expense

2014

2013

2012in EUR thousandsPayroll


57,403


58,783


67,179Social insurance contributions


6,560


6,444


8,732Decrease/Increase in defined benefit plan obligationsExpense for defined contribution plans


1,667


1,340


1,712Share based payments


779


981


3,453​
​
​
​
​
​
​
​
​
​
​66,409


67,548


81,076​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Personnel
expenses include restructuring costs related to reductions in personnel in a number of the Group's activities. During 2015 we expect to implement these plans with the effect on
future earnings and cash flow following their completion. Costs are included in expenses as set out in the table below.

2014

2013

2012in EUR thousandsCost of sales


729


2,096


1,964Selling expenses


424


525


497General administration expenses


577


1,680


274Research and development costs


4,086


930


2,319​
​
​
​
​
​
​
​
​
​
​5,816


5,231


5,054​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​




8.     Net finance income

2014

2013

2012in EUR thousandsInterest income from financial assetsOn financial assets measured at amortised cost


1,168


839


2,274Other financial assets


0


0


79​
​
​
​
​
​
​
​
​
​
​1,168


839


2,353​
​
​
​
​
​
​
​
​
​
​Interest expense from financial liabilitiesOn financial liabilities not at fair value through profit or loss


0


(313
)

(29
)On financial liabilities at fair value through profit or loss


0


0


0​
​
​
​
​
​
​
​
​
​
​0


(313
)

(29
)​
​
​
​
​
​
​
​
​
​
​Net finance income


1,168


526


2,324​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


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

F-19

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.     Income tax expense/benefit

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

2014

2013

2012in EUR thousandsCurrent tax expense (+)/current tax income ()for current year


4,093


5,697


(4,508
)for prior years


719


(539
)

(204
)​
​
​
​
​
​
​
​
​
​
​Total current tax expense/income


4,812


5,158


(4,712
)​
​
​
​
​
​
​
​
​
​
​Deferred tax expense (+)/deferred tax income ()from temporary differences


989


55


22,868Income/expense from changes in local tax rate





4


(56
)from reversals and write-downs


(431
)

584


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


558


643


20,205​
​
​
​
​
​
​
​
​
​
​Taxes on income/loss


5,370


5,801


15,493​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


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

2014

2013

2012in EUR thousandsIncome/loss before income taxesGermany


(61,568
)

(104,284
)

(101,617
)Outside Germany


4,427


9,069


(28,326
)​
​
​
​
​
​
​
​
​
​
​Total


(57,141
)

(95,215
)

(129,943
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Income tax expenseGermany


1,249


353


21,143Outside Germany


4,121


5,448


(5,650
)​
​
​
​
​
​
​
​
​
​
​Total


5,370


5,801


15,493​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


The
Company's effective tax rate is different from the German statutory tax rate of 30.55% (2013: 30.54%; 2012: 30.54%) which is based on the German corporate income tax rate, including
solidarity surcharge, and trade tax.

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

2014

2013

2012in EUR thousandsNet result before taxes


(57,141
)

(95,215
)

(129,943
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Income tax expense/benefit (German tax rate)


(17,451
)

(29,079
)

(39,685
)​
​
​
​
​
​
​
​
​
​
​Effect from differences to foreign tax rates


(2,291
)

(1,768
)

1,250Non-deductible expenses


1,848


338


1,343Non-consideration of tax claims from loss carryforwards


27,277


36,089


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


(431
)

662


(2,607
)Effect from changes in local tax rate


0


4


(56
)Effect of the use of loss carryforwards


(1,390
)

(1,752
)

(1,482
)Effect of permanent differences


(24
)

(25
)

152Other


(2,168
)

1,332


1,516​
​
​
​
​
​
​
​
​
​
​Taxes on income/loss


5,370


5,801


15,493​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Effective tax rate


(9.4
)%

(6.1
)%

(11.9
)%​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


F-20

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



10.   Current tax receivable and payable

As of December 31, 2014 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€ 543 (2013: k€ 5,388) and k€ 1,969 (2013: k€ 688) respectively.

11.   Property, plant and equipment

Land and
buildings

Technical
equipment
and
machinery

Other plant,
factory and
office

Assets
under
construction

Totalin EUR thousandsCostBalance 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​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2014


63,539


78,715


19,755


4,291


166,300Acquisitions


428


2,894


644


8,681


12,647Disposals


29


504


2,172


47


2,752Transfers


119


3,200


130


(3,474
)

(25
)Effect of movements in exchange rates


311


2,452


271


153


3,187​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2014


64,368


86,757


18,628


9,604


179,357​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Depreciation and impairmentBalance 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





2,920Effect of movements in exchange rates


(59
)

(611
)

(136
)




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


20,903


51,647


13,884


0


86,434​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2014


20,903


51,647


13,884


0


86,434Depreciation charge for the year


1,940


11,762


1,889





15,591Disposals


16


400


2,146





2,562Effect of movements in exchange rates


204


2,151


240





2,595​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2014


23,031


65,160


13,867


0


102,058​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Carrying amountsAt 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​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At January 1, 2014


42,636


27,068


5,871


4,291


79,866​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At December 31, 2014


41,337


21,597


4,761


9,604


77,299​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Depreciation

Depreciation expense amounted to k€ 15,591 for 2014 and was k€ 16,314 and
k€ 11,164 for 2013 and 2012 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 2014 by k€ 561 (2013 k€ 2,160, 2012 k€ nil) compared with the depreciation which would have occurred had
the asset useful lives remained unchanged. The changes relate to e basis over the estimated useful lives.

F-21

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.   Property, plant and equipment (Continued)

Impairments

In 2014 there were no impairments of Fixed Assets.

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.

In
fiscal year 2013, 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.

Assets under construction

Assets under construction relates mainly to self-built systems for development laboratories in 2014 and 2013.

F-22

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



12.   Intangible assets

Goodwill

Other
intangible
assets

Totalin EUR thousandsCostBalance at January 1, 2013


81,829


37,968


119,797Acquisitions


0


464


464Disposals


0


718


718Transfers


0


0


0Effect of movements in exchange rates


(325
)

(881
)

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


81,504


36,833


118,337​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2014


81,504


36,833


118,337Acquisitions


0


759


759Disposals


0


1,990


1,990Transfers


0


25


25Effect of movements in exchange rates


982


2,620


3,602​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2014


82,486


38,247


120,733​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Amortisation and impairment lossesBalance at January 1, 2013


17,483


33,750


51,233Amortisation charge for the year


0


1,609


1,609Disposals


0


718


718Effect of movements in exchange rates


(94
)

(866
)

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


17,389


33,775


51,164​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Balance at January 1, 2014


17,389


33,775


51,164Amortisation charge for the year


0


1,409


1,409Disposals


0


1,990


1,990Effect of movements in exchange rates


284


2,595


2,879​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2014


17,673


35,789


53,462​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Carrying amountsAt January 1, 2013


64,346


4,218


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


64,115


3,058


67,173​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​At January 1, 2014


64,115


3,058


67,173​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​At December 31, 2014


64,813


2,458


67,271​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Amortisation and impairment expenses for other intangible assets

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

2014

2013

2012in EUR thousands

Amortisation

Amortisation

AmortisationCost of sales


0


0


202Selling expenses


1


1


5General administration expenses


1,261


1,461


1,915Research and development costs


147


147


598​
​
​
​
​
​
​
​
​
​
​1,409


1,609


2,720​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


In
2014, 2013 and 2012, no impairment losses were incurred and no reversals of impairment losses were made.

F-23

---



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 thousands2015


9332016


5862017


3152018


1682019


100After 2019


121


The
actual amortisation can differ from the expected amortization.

Impairment of goodwill

At the end of 2014 the Group assessed the recoverable amount of goodwill and determined that no impairment loss had to be recognized
(2013: k€ 0; 2012: k€ 0).

The
carrying value of goodwill was k€ 64,813 (2013: k€ 64,115; 2012: k€ 64,346).

As
at the end of 2014 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, 2014 the market capitalisation of Aixtron was Euro 1,045.6 million, based on a share price of Euro 9.37 and issued shares (excluding
Treasury Shares) of 111,591,036. 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
2014

Impairment
Test
2013

Sensitivity
Analysis
2014Euro millionsMarket capitalisation as of December 31


1,045.6


1,172.8


422.0Costs to sell in percentage


1.50
%

1.50
%

1.50
%Costs to sell


(15.7
)

(17.6
)

(6.3
)​
​
​
​
​
​
​
​
​
​
​Market capitalisation less cost to sell


1,029.9


1,155.2


415.7​
​
​
​
​
​
​
​
​
​
​Control premium in percentage


20.00
%

20.00
%

0.00
%Control premium


206.0


231.0


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


1,235.9


1,386.2


415.7Net debt


(268.1
)

(306.3
)

(268.1
)Tax assets


(2.8
)

(9.2
)

(2.8
)​
​
​
​
​
​
​
​
​
​
​Fair value less costs to sell of CGU


965.0


1,070.7


144.8Carrying amount of the CGU


144.8


149.9


144.8​
​
​
​
​
​
​
​
​
​
​Surplus of fair value less cost to sell over carrying amount


820.2


920.8


0.0​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Surplus of fair value less cost to sell over carrying amount as a percentage


566
%

614
%

0
%


F-24

---



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 566% (2013 614%).

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% (2013 60%) to Euro 422.0 million (2013 Euro 472.5 million).

13.   Other non-current assets

Other
non-current assets totalling k€ 382 (2013: k€ 907) 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
k€ 2,281 (2013: k€ nil).

Deferred
taxes for tax losses in the amount of k€ 129,544 (2013: k€ 88,664) and on deductible temporary differences in the amount of
k€ 12,164 (2013: k€ 27,021) were not recognised. Tax losses in the amount of k€ 110,550 can be used indefinitely (2013:
k€ 71,811), k€ nil expire by 2019 (2013: k€ 10,309, by 2018) and k€ 18,994 expire after 2019 (2013:
k€ 6,544 after 2018).

The
following table shows the development of temporary differences during the financial year:

Assets

Liabilities

Net2014

2013

2014

2013

2014

2013in EUR thousandsProperty, plant and equipment


624


124


0


0


624


124Trade receivables


(29
)

693


0


0


(29
)

693Inventories


939


959


0


0


939


959Employee benefits


318


209


0


0


318


209Currency translation


(37
)

29


0


0


(37
)

29Provisions and other liabilities


80


53


0


0


80


53Intangible assets





(711
)

0


0


0


(711
)Other


(56
)

(71
)

(34
)

(300
)

(90
)

(371
)Tax losses


2,281


3,328


0


0


2,281


3,328Derivative financial instruments


0


0


0


0


0


0​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Deferred tax assets (+) liabilities ()


4,120


4,613


(34
)

(300
)

4,086


4,313​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


F-25

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.   Deferred tax assets and liabilities (Continued)



Balance at
January 1, 2014

Recognised
in income
statement

Directly
recognised
in Other
Comprehensive
Income

Balance at
December 31, 2014in EUR thousandsProperty, plant and equipment


124


500


0


624Trade receivables


693


(722
)

0


(29
)Inventories


959


(20
)

0


939Employee benefits


209


109


0


318Currency translation


29


(397
)

331


(37
)Provisions and other liabilities


53


27


0


80Intangible assets


(711
)

711


0


0Other


(371
)

281


0


(90
)Tax losses


3,328


(1,047
)

0


2,281​
​
​
​
​
​
​
​
​
​
​
​
​
​4,313


(558
)

331


4,086​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​




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


53Intangible assets


0


(711
)

0


(711
)Other


(139
)

(232
)

0


(371
)Tax losses


4,096


(768
)

0


3,328​
​
​
​
​
​
​
​
​
​
​
​
​
​5,265


(643
)

(309
)

4,313​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​




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 up to 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

2014

2013in EUR thousandsRaw materials and supplies


32,019


23,307Work in process


42,269


38,606Finished goods and services completed


0


0Inventories at customers' locations


7,406


4,270​
​
​
​
​
​
​
​81,694


66,183​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


F-26

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16.   Inventories (Continued)



Note

2014

2013in EUR thousandsInventories recognised as an expense during the period


3


134,940


117,900Reversals of write-downs recognised during the year


3





(17,127
)​
​
​
​
​
​
​
​
​
​
​134,940


100,773​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Write-down of inventories during the year


3


3,016


35,012Inventories measured at net realisable value





5,665


17,959Carrying 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 (2014 nil)

17.   Trade receivables and other current assets

2014

2013in EUR thousandsTrade receivables


27,269


29,475Allowances for doubtful accounts


(945
)

(1,821
)​
​
​
​
​
​
​
​Trade receivablesnet


26,324


27,654​
​
​
​
​
​
​
​Prepaid expenses


1,152


735Reimbursement of research and development costs


1,485


1,196Advance payments to suppliers


2,010


61VAT recoverable


1,865


2,187Other assets


1,211


746​
​
​
​
​
​
​
​Total other current assets


7,723


4,925​
​
​
​
​
​
​
​34,047


32,579​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


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:

2014

2013in EUR thousandsAllowance at January 1


1,821


1,819Translation adjustments


21


(10
)Impairment losses recognised


2


89Used


(866
)

(25
)Impairment losses reversed


(33
)

(52
)​
​
​
​
​
​
​
​Allowance at December 31


945


1,821​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


Ageing of past due but not impaired receivables

2014

2013in EUR thousands1-90 days past due


1,891


1,437More than 90 days past due


2,084


2,023


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

F-27

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17.   Trade receivables and other current assets (Continued)

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 four customers each accounted for more than 10% of the company's net trade receivables, representing respectively 30.4%, 16.2%,11.5% and 10.5% of trade
receivables. In 2013 one customer accounted for 16% 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€ 3,975 (2013: k€ 3,460) 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€ 151,494 (2013: k€ 138,853) 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, 2014 and 2013 is as follows:

2014

2013in EUR thousandsMaturity up to 180 days


111,494


38,853Maturity 181 days to 365 days


40,000


100,000​
​
​
​
​
​
​
​151,494


138,853​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​




19.   Cash and cash equivalents

2014

2013in EUR thousandsCash-in-hand


3


5Short term deposits


0


0Bank balances


116,577


167,449​
​
​
​
​
​
​
​Cash and Cash equivalents


116,580


167,454​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


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 (2013: k€ 0) at December 31, 2014.

F-28

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20.   Shareholders' Equity

FULLY PAID CAPITAL

2014

2013January 1


112,613,445


101,975,023Shares issued during the year


81,110


10,638,422​
​
​
​
​
​
​
​Issued and fully paid capital at December 31, including Treasury Shares


112,694,555


112,613,445​
​
​
​
​
​
​
​Treasury shares


(1,103,519
)

(1,078,925
)​
​
​
​
​
​
​
​Issued and fully paid share capital at December 31 under IFRS


111,591,036


111,534,520​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


The
share capital of the company consists of no-par value shares and was fully paid-up during 2014 and 2013. 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 € 219,214,144 (2013: 203,422,077).

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
2014 all shares issued were the result of stock options being exercised.

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.

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.

Income and expenses recognised in other comprehensive income

Currency
translation

Derivative
financial
instruments

Totalin EUR thousandsBalance 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
)​
​
​
​
​
​
​
​
​
​
​Change in currency translation


11,815





11,815​
​
​
​
​
​
​
​
​
​
​Balance at December 31, 2014


3,132


0


3,132​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


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.

F-29

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

2014

2013

2012Earnings/loss per shareNet loss attributable to the shareholders of AIXTRON SE in kEUR


(62,511
)

(101,016
)

(145,436
)Weighted average number of common shares and ADS for the purpose of Earnings/Loss Per Share


112,107,905


103,016,618


100,805,804​
​
​
​
​
​
​
​
​
​
​Basic earnings/loss per share (EUR)


(0.56
)

(0.98
)

(1.44
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​Earnings/loss per share (diluted)Net loss attributable to the shareholders of AIXTRON SE in kEUR


(62,511
)

(101,016
)

(145,436
)Weighted average number of common shares and ADS for the purpose of Earnings/Loss Per Share


112,107,905


103,016,618


100,805,804Dilutive effect of share options


0


0


0Weighted average number of common shares and ADS for the purpose of Earnings/Loss Per Share (diluted)


112,107,905


103,016,618


100,805,804​
​
​
​
​
​
​
​
​
​
​Diluted earnings/loss per share (EUR)


(0.56
)

(0.98
)

(1.44
)​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


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

2014

2013

2012Share options


3,521,639


3,289,025


3,366,396




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 2014 the expense recognised for
defined contribution plans amounted to k€ 1,667 (2013: k€ 1,340, 2012: k€ 1,712).

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 obligation in respect of defined benefit pension commitments to two former members of the Executive Board of AIXTRON SE were contracted out to an insurance company during
2010. The company does not expect to have any further obligation under these schemes.

F-30

---





Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)



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 750,081 options for the purchase of 979,824 common shares were outstanding as of December 31, 2014.

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 than fair market value. A total of 116,950 options to purchase the same number of common stock were outstanding under this plan as of December 31, 2014.

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 1,282,465 options to purchase the same number of common stock were outstanding under this plan as of December 31, 2014.

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%. A total of 1,142,400 options to purchase the same number of common stock were outstanding
under this plan as of December 31, 2014.

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.

No
options to purchase AIXTRON ADS remain outstanding under this plan as of December 31, 2014. Upon exercise of options new shares are issued from the trust
(see note 20).

F-31

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

Summary of Stock Option Transactions

AIXTRON share options

2014

2013Number of
shares

Average
exercise price

Number of
shares

Average
exercise price(EUR)



(EUR)Balance at January 1


3,283,435


23.47


4,274,126


21.68Granted during the year


1,150,400


13.19


0


0.00Exercised during the year


81,110


5.53


415,289


5.31Forfeited during the year


831,086


21.35


575,402


23.29​
​
​
​
​
​
​
​
​
​
​
​
​
​Outstanding at December 31


3,521,639


21.02


3,283,435


23.47​
​
​
​
​
​
​
​
​
​
​
​
​
​Exercisable at December 31


1,564,214


28.91


2,014,503


26.22​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​


Genus share options

2014

2013Number of
shares

Average
exercise price

Number of
shares

Average
exercise price(USD)



(USD)Balance at January 1


5,590


6.55


6,610


7.44Exercised during the yearExpired during the year


5,590


6.55


1,020


12.35​
​
​
​
​
​
​
​
​
​
​
​
​
​Outstanding at December 31


0


0.00


5,590


6.55​
​
​
​
​
​
​
​
​
​
​
​
​
​Exercisable at December 31


0


0.00


5,590


6.55​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​


AIXTRON Stock Options as of December 31, 2014

Year

Exercise price per share (EUR)

Underlying shares
represented by
outstanding options

Shares
represented by
exercisable options

Average
option life
(in years)2000

67.39


306,324


306,324


0.52001

26.93


265,000


0


1.52002

7.48


408,500


0


2.52006

3.83


116,950


116,950


1.52007

10.09


169,875


169,875


3.02008

4.17


101,390


101,390


4.02009

24.60


478,100


478,100


5.02010

26.60


500,100


375,075


6.02011

12.55


8,000


4,000


7.02012

15.75


25,000


12,500


8.02014

14.01


57,000


0


10.02014

13.14


1,085,400


0


10.0​
​
​
​
​
​
​
​
​
​
​
​
​3,521,639


1,564,214​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​


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 mathematical model. In accordance with IFRS 2 the measurement includes only options which were granted after November 7, 2002.

F-32

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

In
2014, the personnel expenses from share-based payments, all of which were equity settled share based payments, were k€ 779 (2013:
k€ 981; 2012: k€ 3,453).

As
of December 31, 2014 an amount of k€ 4,104 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 2018. The expected allocation of the expense is as follows: 2015: k€ 1,153, 2016: k€ 1,093, 2017:
k€ 1,088 and 2018 k€ 770.

AIXTRON share options granted

in 2014
(October)

in 2014
(June)

in 2012Fair value on grant date


3.79 €


4.26 €


4.66 €​
​
​
​
​
​
​
​
​
​
​Price per share


10.11 €


10.77 €


12.74 €Exercise price


13.14 €


14.01 €


15.75 €Expected volatility


50.53
%

50.92
%

55.96
%Option life


10.0 years


10.0 years


10.0 yearsExpected dividend payments


0.13 €


0.13 €


0.33 €Risk-free interest rate


1.03
%

1.46
%

1.47
%




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


0


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​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


01.01.2014

Exchange
rate
differences

Usage

Reversal

Addition

31.12.2014

Current

Non-
currentin EUR thousandsPersonnel expenses


5,705


202


4,661


715


9,135


9,666


9,666


0Warranties


12,589


172


5,477


3,921


4,320


7,683


6,695


988Onerous contracts


5,402


27


3,444


13


1,380


3,352


3,352


0Commissions


1,253


8


1,380


20


821


682


682


0Other


9,108


169


9,355


1,275


9,233


7,880


7,662


218​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


34,057


578


24,317


5,944


24,889


29,263


28,057


1,206​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​


Personnel expenses

These include mainly provisions for holiday pay, payroll and severance costs, which are financial liabilities.

F-33

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

24.   Provisions (Continued)

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.

Other provisions

Other provisions consist mainly of the estimated cost of services received.

For
provisions existing at both December 31, 2014 and December 31, 2013, 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:

2014

2013in EUR thousandsTrade payables


16,397


13,517​
​
​
​
​
​
​
​Liabilities from grants


2,015


1,507Payroll taxes and social security contributions


769


1,111VAT and similar taxes


52


94Other liabilities


356


236​
​
​
​
​
​
​
​Other current liabilities


3,192


2,948​
​
​
​
​
​
​
​19,589


16,465​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


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 coordinates 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

F-34

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

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, 2014 the group had no borrowings (2013 nil). Financial liabilities, all due within one year, of k€ 19,589 (2013
k€ 16,465) consisting of trade payables and other liabilities and are shown in Note 25, together with an analysis of their maturity.

As
at December 31, 2014 the group had k€ 116,580 cash and cash equivalents (2013 k€ 167,454) and a further
k€ 151,494 of fixed deposits with banks (2013 k€ 138,853).

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 may enter 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 Company did not use derivative financial instruments during either 2014 or 2013. The main exchange
rates giving rise to the risk are those between the US Dollar, Pound Sterling and Euro.

F-35

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

The
carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

Liabilities

Assets2014

2013

2014

2013in EUR thousandsUS Dollars


(62,064
)

(44,424
)

123,852


83,781GB Pounds


(3,158
)

(1,612
)

13,218


15,227


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.

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% kEUR

2014

2013Profit or loss


(3,529
)

530Other comprehensive income


(2,429
)

(2,924
)




USD
Currency
EffectDecrease in value of Euro by 10% kEUR

2014

2013Profit or loss


3,529


(530
)Other comprehensive income


2,429


2,924


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, 2014 or December 31, 2013.

Foreign currency cash flow hedges

As of 31st December 2014, 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 (2013: k€ nil).

There
were no unrealised losses or gains included in income and expenses recognised in equity as of December 31, 2013 (2012 k€ nil). The losses actually
realised in 2014 were k€ nil (2013: losses k€ nil).

Foreign currency option contracts

The company had no option contracts as at December 31, 2014 or December 31, 2013.

F-36

---



Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

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.

FINANCIAL ASSETS 2014

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


116,580


0


0


0


116,580Other financial assets


0


0


151,494


0


151,494Other non-current assets


0


382


0


0


382Trade receivables


0


23,374


0


2,950


26,324​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


116,580


23,756


151,494


2,950


294,780​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At amortized cost


116,580


23,756


151,494





291,830At fair value











2,950


2,950


FINANCIAL LIABILITIES 2014

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


16,397


0


16,397Advance payments from customers (not in scope of IFRS 7)


0


0


66,928


0


66,928​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​Total


0


0


83,325


0


83,325​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​
​At amortized cost


0


0


83,325





83,325At fair value











0


0


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


F-37

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

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


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


3,957Later than one year and not later than five years


4,646Later than five years


222​
​
​
​
​8,825​
​
​
​
​​
​
​
​
​​
​
​
​
​


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€ 4,150, k€ 3,957 and k€ 4,393 for 2014, 2013 and 2012 respectively.

28.   Capital commitments

As of December 31, 2014, the Company had entered into purchase commitments with suppliers in the amount of k€ 38,998 (2013:
k€ 30,270) for purchases within the
next 12 months. Commitments for capital expenditures for fixed assets are k€ 1,977 (2013: k€ 831) as of December 31, 2014.

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-38

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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 and Supervisory Board Remuneration

The disclosures for key management personnel compensation required according to IAS 24 contains the remuneration of the
Executive Board and the Supervisory Board.

Remuneration
of the members of the Executive Board:

2014

2013

2012in EUR thousandsShort-term employee benefits


1,387


1,555


1,124Termination benefits


0


780


0Share based payments


628


250


0​
​
​
​
​
​
​
​
​
​
​2,015


2,585


1,124​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


Share
based payments refer to the fair value of share options at grant date and also includes that portion of bonus agreements which is settled in shares.

Remuneration
of the members of the Supervisory Board:

2014

2013

2012in EUR thousandsFixed remuneration (incl. attendance fee)


293


290


303​
​
​
​
​
​
​
​
​
​
​293


290


303​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​
​
​
​


For
further information regarding the Company's directors' remuneration refer to Item 6.B. "Directors, Senior Management and EmployeesCompensation" in this report.

31.   Consolidated entities

AIXTRON S.E. controls the following subsidiaries:

Share of
capital in %Country

2014

2013AIXTRON 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


n.a.


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**Nanoinstruments Ltd
was dissolved on October 14, 2014. Until that date it was included in the consolidated financial statements. Because the
company had been dormant for a number of years with no material assets its dissolution had no effect on the financial statements.


All
companies in the Group are engaged in the supply of equipment to the semiconductor industry. Design and manufacture of equipment takes place at the entities in Germany, UK and USA.
Service and distribution takes place at all locations.

F-39

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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:

2014

2013in EUR
thousandsfor audit


699


719for other confirmation services


34


35for tax advisory services


173


299for other services


53


30​
​
​
​
​
​
​
​959


1,083​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​


Included
in the total amount of fees are fees for the group auditor Deloitte & Touche GmbH, Wirtschaftsprüfungsgesellschaft, Duesseldorf, in the amount of
k€ 416 for audit (2013: k€ 444), k€ 34 for other confirmation services (2013: k€ 32),
k€ 76 for tax services (2013: k€ 34) and k€ 53 for other services (2013: k€ nil).

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

2014

2013Sales


65


70Research and Development


285


297Manufacturing and Service


331


373Administration


86


88Employees (§ 314 HGB)


767


828Executive board members


2


3​
​
​
​
​
​
​
​769


831Apprentices


16


16​
​
​
​
​
​
​
​785


847​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​​
​
​
​
​
​
​
​




35.   Statement of compliance with the German Corporate Governance Code

In 2014, 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, 2014



F-40

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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

F-41

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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)

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 2014, 2013 and 2012 the Company incurred expenses of k€ 3,016, k€ 35,012 and
k€ 40,947 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 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.

F-42

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