Market correction and currency affects 3Q Aixtron result

Date Announced: 01 Nov 2011

Aachen, Germany, October 27, 2011 – AIXTRON SE, a worldwide leading provider of deposition equipment to the semiconductor industry, today announced the consolidated financial results for the third quarter and first nine months of 2011.

Financial Highlights

In the third quarter of 2011, the previously high investment activities by Asian LED manufacturers, driven by substantial government funding, have become restrained by an unscheduled but significant slow-down in demand. This partially resulted from insufficiently developed end-market demand, but is also evidence of some financing pressures on the Asian LED manufacturers, including increasing credit tightness in this region.

As a consequence, AIXTRON equipment order intake in Q3/2011 decreased sequentially by 77% to EUR 51.5m (Q2/2011: EUR 222.2m). Equipment order intake of the 9 month 2011 period came in at EUR 484.1m and was 11% lower in a year on year comparison (9M/2010: EUR 544.3m).

Quarterly revenues decreased by 49% sequentially from EUR 175.6m in Q2/2011 to EUR 89.8m in Q3/2011. In a year-on-year comparison, the 9M/2011 revenues of EUR 470.8m were down by 16% (9M/2010: EUR 559.1m). This sudden decrease in revenues is principally down to a small number of significant customer-delayed deliveries, which are also reflected in the order backlog adjustment, announced on September 15th.

The Company’s gross margin decreased sequentially by 1 percentage point, from 44% (EUR 76.9m) in Q2/2011 to 43% (EUR 38.7m) in Q3/2011. In 9M/2011, the gross margin recorded was EUR 219.7m in absolute terms or 47% of sales, 25% or 6pp down from the same period of the previous year (9M/2010: EUR 294.5m, 53% of sales). The year on year decrease by comparison was mainly due to adverse effects the currency had on revenues resulting in higher cost of sales relative to revenues.

The Q3/2011 EBIT came in slightly above break-even, at EUR 0.6m with a 1% EBIT margin (Q2/2011: EUR 54.3m or 31% margin). In 9M/2011 EBIT was EUR 129.8m with a 28% EBIT margin (9M/2010: EUR 189.6m or 34% margin). This EBIT decline is largely due to lower revenues at the previously planned cost base and due to the adverse effects of quarter-end mark-to-market of pending hedging instruments and customer deposits in the third quarter of 2011. Without these non-operational currency related effects, recorded as other operating expenses, the Q3/2011 EBIT would have been EUR 13.0m or 14% of sales.

Management Review

Despite the current market correction, the AIXTRON Management remains convinced that the development of a sustainable LED lighting industry will follow this temporary period of uncertainty.

Paul Hyland, President & Chief Executive Officer at AIXTRON: “There can be no doubt in anybody’s mind that the LED lighting investment cycle will come and will be the biggest end market opportunity this industry has ever seen. It is not a question of “If” it is only a question of “When”.

"As you would expect; In the difficult market conditions we face today, we are exercising our operational business flexibility and have already initiated immediate cost reduction measures to ensure that the margin effect of reduced shipping volumes is minimized.

"However, the shorter-term market challenges we face will not distract us from the longer-term market opportunities, into which we are continuing to extensively invest in, through our R&D programs. We have a comprehensive pipeline of product developments in progress which directly address the needs of our customers to produce the highest quality products at the lowest possible manufacturing cost and I am in no doubt, that the products in development, will reinforce our traditionally very strong positioning in all of the markets we serve.”

Outlook

AIXTRON Management confirms the guidance for the full fiscal year 2011 given on September 15, and is expecting revenues of EUR 600 million to EUR 650 million and an EBIT margin of circa 25-30%.

Financial Tables

The 9M/2011 results presentation as well as the consolidated financial statements (statement of financial position, income statement, cash flow statement, statement of changes in equity) relating to this press release are available at http://www.aixtron.com, section “Investors, Reports/Presentations”, as part of AIXTRON’s Nine-Months Financial Report 2011.

Investor Conference Call

AIXTRON will host a financial analyst and investor conference call on Thursday, October 27, 2011, 3:00 p.m. CEST (6:00 a.m. PDT, 9:00 a.m. EDT) to review the first half-year 2011 results. From 2:45 p.m. CEST (5:45 a.m. PDT, 8:45 a.m. EDT) you may dial in to the call at +49 (69) 247501–899 or +1 (212) 444–0297. A conference call audio replay or a transcript of the conference call will be available at http://www.aixtron.com, section “Investors, Reports/Presentations”, following the conference call.

Contact
Guido Pickert Investor Relations and Corporate Communications: T: +49-241-8909-444 F: +49-241-8909-445 invest(at)aixtron.com

E-mail:invest@aixtron.com

Web Site:www.aixtron.com

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