AIXTRON's order intake in Q2/2014 improved by 25 percent year-on-year to EUR 38.2 million (Q2/2013: EUR 30.5 million). Sequentially, orders were up for the fifth consecutive quarter reflecting an improving market sentiment in the first half of 2014 (Q1/2014: EUR 37.7 million).

The Company has successfully entered Phase Two of its 5-Point-Program, targeting to return to sustainable profitability. The focus is on lowering material costs, discretionary spending and the optimization of processes. At the same time, AIXTRON is currently preparing for the market launch of its next generation MOCVD production tool in the course of the second half of this year due to positive customer feedback.

Key Financials

Financial Highlights

Global demand for LEDs continues to increase, driven by the growing adoption of LEDs in the general lighting market. Utilization rates of most leading LED chip manufacturers also remain high. However, the increasingly positive market sentiment has not yet translated into substantially increased order levels for AIXTRONs LED manufacturing capacity. Nevertheless, AIXTRON generated increased revenues sequentially and year-on-year

The Company's gross profit at EUR 12.6 million was 17 percent higher than in the previous quarter, mainly due to higher volumes and a more favorable product mix (Q1/2014: EUR 10.8 million). It was up slightly year-on-year compared to EUR 12.3 million in Q2/2013.

Operating expenses at EUR 23.2 million were slightly up both sequentially and year-on-year (Q2/2013: EUR 22.0 million; Q1/2014: EUR 21.7 million) primarily due to increased R&D costs.

Consequently, EBIT for Q2/2014 was broadly unchanged sequentially and came in at EUR -10.6 million (Q2/2013: EUR -9.8 million; Q1/2014: EUR -10.9 million). The net result for Q2/2014 amounted to EUR -11.6 million (Q2/2013: -11.8 million; Q1/2014: EUR -11.8 million).

AIXTRON's Q2/2014 equipment order intake, at EUR 38.2 million, showed a year-on-year increase of 25% from the EUR 30.5 million in Q2/2013. Sequentially, the equipment order intake was also up (Q1/2014: EUR 37.7 million), representing the fifth consecutive quarter of rising orders. The total equipment order backlog of EUR 66.4 million as at June 30, 2014 was 14 percent higher than the 2014 opening backlog of EUR 58.1 million.

Mainly due to the next generation MOCVD tool being in the qualification phase at key customers, Research and Development costs in Q2/2014 increased year-on-year by 22 percent to EUR 15.5 million and 13 percent sequentially (Q2/2013: EUR 12.7 million; Q1/2014: EUR 13.7 million). At 34 percent of revenues, R&D spending remained at a relatively high level that underlines the important strategic significance of AIXTRON's internal R&D capabilities. Further progress was made in SG&A expenses. They were further reduced sequentially by 13 percent to EUR 7.9 million in Q2/2014 (Q1/2014: EUR 9.1 million).

Mainly due to the operating losses and a scheduled increase of inventories for new MOCVD tools and spares, free cash flow was down to EUR -17.5 million in Q2/2014 (Q2/2013: EUR -3.7 million; Q1/2014: -13.8 million). Cash and cash equivalents (including bank deposits with a maturity of more than three months) as of June 30, 2014 amounted to EUR 275.6 million (December 31, 2013: EUR 306.3 million).

Management Review

Martin Goetzeler, President & Chief Executive Officer of AIXTRON SE, comments on the market environment and the development in the second quarter: "As evidenced by our 5th consecutive quarter of higher equipment orders, the demand for LEDs is growing partially due to a wide range of new LED lighting products being sold into the warehouses and stores, especially into regions such as China. A successful sell-out to consumers would represent the next stage of the transition away from traditional to LED lighting. Evidenced by positive feedback from our customers, we have made good progress in the qualification process and are preparing for the market launch of our new MOCVD tool generation later this year.

Furthermore, we continue to push the development of our other technology areas. These include MOCVD for power electronic and logic applications, ALD for memory, OVPD for OLED applications and PECVD for carbon nanomaterials including graphene. Here we continue to see substantial market potential for AIXTRON.

In parallel, we have successfully entered phase two of our 5-Point-Program specifically addressing the reduction of material costs and discretionary spending as well as further process improvements preparing the ground to return to sustainable profitability. In combination with our continued dedication to R&D, we remain confident that we are on track to bring AIXTRON back on the path to success”.