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Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR |
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2014 |
OR |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period
from to
or? |
OR |
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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):
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Large accelerated filer ý |
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Accelerated filer o |
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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.
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U.S. GAAP o |
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International Financial Reporting
Standards as issued by the
International Accounting Standards Board ý |
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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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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 InformationSelected Financial
DataExchange 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:
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- discuss future expectations;
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- contain projections of future results of operations or financial condition; or
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- state other "forward-looking" information.
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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- the extent to which the technologies AIXTRON offers are demanded by the market place;
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- the actual number of customer orders AIXTRON receives;
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- the timing of final acceptance of products by customers;
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- the financial climate and accessibility of financing, general conditions in the thin film equipment market and in the
macro-economy;
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- the extent to which AIXTRON's business is impacted by global economic slowdown;
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- cancellations, rescheduling or delays in product shipments;
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- manufacturing capacity constraints;
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- lengthy sales and qualification cycles;
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- difficulties in the production process;
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- changes in semiconductor industry growth;
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- increased competition;
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- exchange rate fluctuations;
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- availability of government funding;
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- variability and availability of interest rates;
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- delays in developing and commercializing new products; and
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- general economic conditions being less favorable than expected.
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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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 5Operating
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.
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As of or For the Year Ended December 31,
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2014
IFRS |
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2013
IFRS |
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2012
IFRS |
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2011
IFRS |
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2010
IFRS |
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(thousand EUR, except share and per share data)
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Consolidated Income Statement Data: |
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Revenues |
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193,797 |
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182,863 |
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227,832 |
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610,960 |
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783,775 |
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Operating result |
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(58,309 |
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(95,741 |
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(132,267 |
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112,880 |
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275,510 |
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Profit/Loss attributable to the equity holders of AIXTRON SE (after taxes) |
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(62,511 |
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(101,016 |
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(145,436 |
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79,536 |
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192,496 |
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Basic earnings per share |
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(0.56 |
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(0.98 |
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(1.44 |
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0.79 |
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1.93 |
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Diluted earnings per share |
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(0.56 |
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(0.98 |
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(1.44 |
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0.78 |
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1.89 |
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Dividend payments(1) |
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0 |
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25,155 |
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60,708 |
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15,100 |
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Dividends declared per common share(1) (EUR) |
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0.00 |
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0.00 |
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0.25 |
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0.60 |
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0.15 |
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Dividends declared per common share(1) (USD(2)) |
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0.00 |
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0.00 |
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0.32 |
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0.84 |
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0.20 |
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Consolidated Statement of Financial Position Data: |
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Total assets |
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533,547 |
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563,193 |
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559,971 |
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777,259 |
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823,432 |
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Total liabilities |
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117,845 |
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97,790 |
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89,951 |
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148,919 |
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223,108 |
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Total shareholders' equity and net assets |
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415,702 |
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465,403 |
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470,020 |
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628,340 |
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600,324 |
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Fully paid capital |
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111,591 |
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111,535 |
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100,896 |
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100,711 |
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100,101 |
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Other Data: |
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Adjusted weighted average number of shares outstanding |
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basic |
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112,107,905 |
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103,016,618 |
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100,805,804 |
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100,530,006 |
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99,871,834 |
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diluted |
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112,107,905 |
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103,016,618 |
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100,805,804 |
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101,834,717 |
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101,746,466 |
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- (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 ProspectsOperating ResultsNet Income AIXTRON SEUse 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.
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Year ended December 31,
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Average
Rate |
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2014 |
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1.3215 |
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2013 |
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1.3281 |
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2012 |
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1.2859 |
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2011 |
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1.3931 |
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2010 |
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1.3261 |
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The
following table shows the noon buying rates for Euros in US-Dollars for the last six months.
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Month ended
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High |
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Low |
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February 2015 (through February 11, 2015) |
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1.1462 |
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1.1300 |
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January 2015 |
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1.2015 |
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1.1279 |
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December 2014 |
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1.2504 |
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1.2101 |
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November 2014 |
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1.2554 |
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1.2394 |
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October 2014 |
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1.2812 |
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1.2517 |
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September 2014 |
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1.3136 |
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1.2628 |
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August 2014 |
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1.3436 |
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1.3150 |
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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:
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- develop successfully new products and technologies;
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- develop new markets for its products and services;
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- introduce new products to the marketplace in a timely manner;
-
- qualify new products with its customers; and
-
- commence and adjust production to meet customer demands.
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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- changes in the semiconductor market environment;
-
- changes in regulations affecting the semiconductor industry;
-
- changes in the mix or cost of its products and services;
-
- the timing of the introduction or acceptance of new products and services offered by AIXTRON or its
competitors; and
-
- exchange rate fluctuations, in particular between the Euro, the US-Dollar and the Pound Sterling.
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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:
-
- unexpected changes in foreign law or regulatory requirements;
-
- exchange rate volatility;
-
- tariffs and other trade barriers;
-
- political and economic instability;
-
- military confrontation;
-
- difficulties in accounts receivable collection;
-
- extended payment terms;
-
- difficulties in managing distributors or representatives;
-
- difficulties in staffing its subsidiaries;
-
- difficulties in managing foreign subsidiary operations; and
-
- potentially adverse tax consequences.
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:
-
- difficulties in integrating the operations, technologies, products and personnel of acquired companies;
-
- lack of synergies or the inability to realize expected synergies and cost-savings;
-
- revenue and expense levels of acquired entities differing from those anticipated at the time of the acquisitions;
-
- difficulties in managing geographically dispersed operations;
-
- the potential loss of key employees, customers and strategic partners of acquired companies;
-
- claims by terminated employees, shareholders of acquired companies or other third parties related to the transaction;
-
- the issuance of dilutive securities, assumption or incurrence of additional debt obligations or expenses, or use of
substantial portions of AIXTRON's cash;
-
- diversion of AIXTRON's management's attention from daily operations of the business; and
-
- the impairment of acquired intangible assets as a result of technological advancements, or worse-than-expected performance
of acquired companies.
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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.
10
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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.
11
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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:
-
- you may not be able to participate in rights offerings or dividend alternatives;
-
- you may not receive copies of AIXTRON's reports as promptly as a holder of ordinary shares;
-
- you will be able to exercise voting rights only by instructing the depositary how to exercise the voting rights of the
shares that underlie your ADSs, and due to logistical, timing and other issues, you may not receive the opportunity to exercise a right to vote;
-
- the deposit agreement may be amended by the Company and the depositary, or may be terminated by AIXTRON or the depositary,
without your consent in a manner that could prejudice your rights; and
-
- the deposit agreement limits AIXTRON's obligations and liabilities and those of the depositary.
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
InformationTaxation."
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
12
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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
InformationMemorandum and Articles and Association" in this report.
Capital Expenditures
For information regarding capital expenditures, refer to Item 5.B. "Liquidity and Capital ResourcesInvestments" 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
InformationRisk Factors" in this report.
14
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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.
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|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
2012 |
|
Development
from
2013 to 2014 |
|
Employees 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 |
|
|
11 |
|
Manufacturing and Service |
|
|
323 |
|
|
41 |
|
|
338 |
|
|
44 |
|
|
427 |
|
|
44 |
|
|
(17 |
) |
|
(5 |
) |
Administration |
|
|
110 |
|
|
14 |
|
|
108 |
|
|
14 |
|
|
116 |
|
|
12 |
|
|
2 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
15
Table of Contents
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 2014 |
|
Employees 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 |
|
|
6 |
|
USA |
|
|
114 |
|
|
14 |
|
|
117 |
|
|
15 |
|
|
116 |
|
|
12 |
|
|
(3 |
) |
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
789 |
|
|
100 |
|
|
776 |
|
|
100 |
|
|
964 |
|
|
100 |
|
|
13 |
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Semiconductors |
Systems Technology |
|
MOCVD |
|
OVPD® |
|
CVD |
|
|
CVD |
|
PVPD |
|
ALD |
|
|
PECVD |
|
|
|
MOCVD |
Products |
|
Planetary Reactor® |
|
OVPD® R&D and Production Systems |
|
Lynx-iXP CVD |
|
|
Close Coupled Showerhead® |
|
PRODOS PVPD R&D and Production Systems |
|
QXP-8300 ALD |
|
|
Nano CVD Reactors BM Series |
|
|
|
CRIUS R MOCVD |
16
Table of Contents
|
|
|
|
|
|
|
Material
|
|
Compound
Semiconductors |
|
Organic Semiconductors |
|
Silicon Semiconductors |
Potential Applications/Devices |
|
LEDs |
|
OLEDs for displays |
|
CVD WSi Gate stacks for DRAM and 3D NAND |
|
|
Optoelectronics (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 Devices |
|
|
Laser devices for consumer electronics (CDs, DVDs) |
|
Organic transparent thin film solar cells |
|
High Mobility Channel for Logic Devices |
|
|
High-Frequency devices (such as Hetero Bipolar Transistors and High Electron Mobility Transistors) for wireless
datacom |
|
Electronic semiconductor structures, e.g. for flexible displays |
|
|
|
|
Silicon Carbide (SiC) based High Power Devices |
|
Functional polymer layers |
|
|
|
|
Gallium Nitride (GaN) based power devices |
|
Dielectric or passivating polymer layers |
|
|
|
|
Solar cells |
|
|
|
|
|
|
Carbon Nanostructures for electronic, display & heat sink applications |
|
|
|
|
|
|
Graphene 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
17
Table of Contents
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 ResultsDevelopment of ResultsOperating
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
18
Table of Contents
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 5Operating
and Financial Review and ProspectsOperating Results-2012-2014Development 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
ProspectsOperating ResultsDevelopment of Revenues" in this report.
19
Table of Contents
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
20
Table of Contents
fiscal
years, refer to Item 5.A. "Operating and Financial Review and ProspectsOperating ResultsDevelopment 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
Interest |
|
AIXTRON 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
21
Table of Contents
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 |
|
|
28.02.2016 |
|
Cambridge, UK (leased) |
|
Manufacturing, Engineering, R&D |
|
|
2,180 |
|
|
13.09.2019 |
|
Cambridge, UK (leased) |
|
Sales, Service, Engineering |
|
|
1,386 |
|
|
27.06.2020 |
|
Sunnyvale, CA, USA (leased) |
|
Manufacturing, Sales, Service, Engineering, R&D |
|
|
9,338 |
|
|
31.10.2017 |
|
Seoul, South Korea (leased) |
|
Sales, Service |
|
|
1,032 |
|
|
31.12.2015 |
|
Shanghai, China (leased) |
|
Sales, Service |
|
|
755 |
|
|
31.07.2016 |
|
Suzhou, China (leased) |
|
Sales, Service |
|
|
537 |
|
|
21.06.2016 |
|
Hsinchu, Taiwan (leased) |
|
Sales, Service |
|
|
1,417 |
|
|
31.12.2017 |
|
Tainan, Taiwan (leased) |
|
Service |
|
|
203 |
|
|
27.05.2016 |
|
Tokyo, 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
22
Table of Contents
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
23
Table of Contents
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
24
Table of Contents
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.
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
2012 |
|
2014-2013 |
|
Revenues 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 |
|
|
8 |
|
Other 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%).
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
2012 |
|
2014-2013 |
|
Revenues by Region
|
|
(million
EUR) |
|
(%) |
|
(million
EUR) |
|
(%) |
|
(million
EUR) |
|
(%) |
|
(million
EUR) |
|
(%) |
|
Asia |
|
|
160.2 |
|
|
83 |
|
|
141.8 |
|
|
78 |
|
|
177.5 |
|
|
78 |
|
|
18.4 |
|
|
13 |
|
Europe |
|
|
25.2 |
|
|
13 |
|
|
24.2 |
|
|
13 |
|
|
21.4 |
|
|
9 |
|
|
1.0 |
|
|
4 |
|
Americas |
|
|
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
Table of Contents
Development of Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
2012 |
|
2014-2013 |
|
Cost 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 |
|
|
13 |
|
Selling 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 |
|
|
6 |
|
Research and development costs |
|
|
66.7 |
|
|
34 |
|
|
57.2 |
|
|
31 |
|
|
72.9 |
|
|
32 |
|
|
9.5 |
|
|
17 |
|
Net 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 |
|
|
17 |
|
R&D expenses, % of sales |
|
|
34 |
|
|
31 |
|
|
32 |
|
|
|
|
R&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
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 |
|
2014-2013 |
|
Personnel 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
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 |
|
2014-2013 |
|
Interest & Taxes
|
|
(million
EUR) |
|
(million
EUR) |
|
(million
EUR) |
|
(million
EUR) |
|
(%) |
|
Net Finance Income/Expense |
|
|
1.2 |
|
|
0.5 |
|
|
2.3 |
|
|
0.7 |
|
|
140 |
|
Finance Income from financial assets |
|
|
1.2 |
|
|
0.8 |
|
|
2.3 |
|
|
0.4 |
|
|
50 |
|
Finance 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 SEUse 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 |
|
2014-2013 |
|
Equipment Orders
|
|
(million
EUR) |
|
(million
EUR) |
|
(million
EUR) |
|
(million
EUR) |
|
(%) |
|
Equipment order intake |
|
|
153.4 |
|
|
133.2 |
|
|
131.4 |
|
|
20.2 |
|
|
15 |
|
Equipment 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:
- 1.
- the
receipt of a firm written purchase order
- 2.
- the
receipt of the agreed deposit
- 3.
- accessibility
to the required shipping documentation
- 4.
- a
customer confirmed agreement on a system specific delivery date.
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 11Quantitative and Qualitative Disclosure about Market Risk" for further details. Please also see "Item 3DRisk 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
StatementsNote 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 |
|
2014-2013 |
|
Issued shares |
|
|
112,694,555 |
|
|
|
|
|
|
|
|
112,613,445 |
|
|
101,975,023 |
|
|
81,110 |
|
|
|
Authorized 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 |
|
|
45,883,905 |
|
Authorized 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 |
|
|
0 |
|
Authorized 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 |
|
|
0 |
|
|
|
Conditional Capital II 2012 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options Program 2012 |
|
|
4,208,726 |
|
|
16.05.2012 |
|
|
15.05.2017 |
|
|
4,208,726 |
|
|
4,208,726 |
|
|
0 |
|
Conditional 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
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 StatementsNote 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)
32
Table of Contents
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
CompanyBusiness OverviewResearch and Development", "Intellectual Property" and
Item 5.A. "Operating and Financial Review and ProspectsOperating ResultsDevelopment of ResultsOperating 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,
33
Table of Contents
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 InformationRisk 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 years |
|
Operating lease commitments |
|
|
8.83 |
|
|
3.96 |
|
|
3.71 |
|
|
0.94 |
|
|
0.22 |
|
Purchase commitments |
|
|
39.00 |
|
|
39.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual obligations |
|
|
47.82 |
|
|
42.96 |
|
|
3.71 |
|
|
0.94 |
|
|
0.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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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
-
- International Financial Reporting Standards (IFRS), and the interpretations as published by the International Accounting
Standards Board (IASB); and also
34
Table of Contents
-
- International Financial Reporting Standards (IFRS) as adopted for use in the European Union; and also
-
- Requirements of Section 315a of the German Commercial Code HGB.
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 StatementsNote 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 StatementsNote 16. Inventories".
As
disclosed in Item 18 "Financial StatementsNote 3. Segment Reporting" and Item 18 "Financial StatementsNote 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 StatementsNote 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
StatementsNote 24. Provisions"
35
Table of Contents
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 27Investment Entities
The
changes relate to consolidation of companies by investment entities.
Amendments
to IAS 36Recoverable 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 39Novation of Derivatives and Continuation of Hedge Accounting
The
standard relates to derivatives subject to novation. The Group has no such derivatives.
IFRIC 21Levies
This
interpretation relates to Government levies and has had no effect on the Group.
Amendments
to IAS 32Offsetting 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 StatementsNote 2. Significant accounting policies".
36
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
birth |
|
Kim Schindelhauer(1)(2)(3)(4)(5) |
|
Chairman of the Supervisory Board |
|
|
2002 |
|
|
AGM 2016 |
|
|
1953 |
|
Prof. Dr. Wolfgang Blättchen(1)(4) |
|
Deputy Chairman of the Supervisory Board, Chairman of the Audit Committee, Independent Financial Expert(6) |
|
|
1998 |
|
|
AGM 2016 |
|
|
1953 |
|
Dr. Andreas Biagosch(2) |
|
|
|
|
2013 |
|
|
AGM 2016 |
|
|
1955 |
|
Prof. Dr. Petra Denk(2)(3) |
|
Chair of the Technology Committee |
|
|
2011 |
|
|
AGM 2016 |
|
|
1972 |
|
Dr. Martin Komischke |
|
|
|
|
2013 |
|
|
AGM 2016 |
|
|
1957 |
|
Prof. 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
37
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 StatementsNote 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 Birth |
|
Martin Goetzeler |
|
Chairman, President and Chief Executive Officer |
|
|
March 1, 2013 |
|
|
February 28, 2017 |
|
|
May 11, 1962 |
|
Dr. 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
-
- Martin Goetzeler (Chairman of the Executive Board, President and Chief
Executive Officer): Mr. Goetzeler has been the President and Chief Executive Officer and a member of the Executive Board of AIXTRON since March 1, 2013. His present term will expire on
February 28, 2017. Before his appointment Mr. Goetzeler served on the executive board of Siemens' subsidiary Osram and also held various international leadership positions within the
Siemens group. He is an acknowledged expert in the LED and lighting industry.
-
- Dr. Bernd Schulte (Member of the Executive Board, Executive Vice
President and Chief Operating Officer): Dr. Schulte has been Executive Vice President, Chief Operating Officer and a member of the Executive Board of AIXTRON since April 1, 2002. In
June 2014, prior to the expiration of his present term on March 31, 2015, his service agreement has been renewed until March 31, 2018. Dr. Schulte joined AIXTRON in 1993,
and he served as Director, Sales and Marketing, from 2001 to 2002.
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.
38
Table of Contents
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
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 |
|
|
1,302,104 |
|
|
|
|
2013 |
|
|
517,730 |
|
|
250,000 |
|
|
250,000 |
|
|
1,017,730 |
|
|
0 |
|
|
0 |
|
|
1,017,730 |
|
|
|
|
2012 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
Paul Hyland(2) |
|
|
2014 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
|
|
2013 |
|
|
848,063 |
|
|
0 |
|
|
0 |
|
|
848,063 |
|
|
0 |
|
|
0 |
|
|
848,063 |
|
|
|
|
2012 |
|
|
437,334 |
|
|
0 |
|
|
0 |
|
|
437,334 |
|
|
0 |
|
|
0 |
|
|
437,334 |
|
Wolfgang Breme(3) |
|
|
2014 |
|
|
146,144 |
|
|
0 |
|
|
0 |
|
|
146,144 |
|
|
0 |
|
|
0 |
|
|
146,144 |
|
|
|
|
2013 |
|
|
341,514 |
|
|
0 |
|
|
0 |
|
|
341,514 |
|
|
0 |
|
|
0 |
|
|
341,514 |
|
|
|
|
2012 |
|
|
309,413 |
|
|
0 |
|
|
0 |
|
|
309,413 |
|
|
0 |
|
|
0 |
|
|
309,413 |
|
Dr. Bernd Schulte |
|
|
2014 |
|
|
377,527 |
|
|
0 |
|
|
0 |
|
|
377,527 |
|
|
50,000 |
|
|
189,000 |
|
|
566,527 |
|
|
|
|
2013 |
|
|
377,527 |
|
|
0 |
|
|
0 |
|
|
377,527 |
|
|
0 |
|
|
0 |
|
|
377,527 |
|
|
|
|
2012 |
|
|
377,527 |
|
|
0 |
|
|
0 |
|
|
377,527 |
|
|
0 |
|
|
0 |
|
|
377,527 |
|
Total |
|
|
2014 |
|
|
1,136,774 |
|
|
250,000 |
|
|
250,000 |
|
|
1,636,774 |
|
|
100,000 |
|
|
378,000 |
|
|
2,014,775 |
|
|
|
|
2013 |
|
|
2,084,833 |
|
|
250,000 |
|
|
250,000 |
|
|
2,584,833 |
|
|
0 |
|
|
0 |
|
|
2,584,834 |
|
|
|
|
2012 |
|
|
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 |
|
|
50,000 |
|
Dr. Bernd Schulte |
|
|
Oct 2014 |
|
|
50,000 |
|
|
0 |
|
|
189,000 |
|
|
13.14 |
|
|
Oct 2024 |
|
|
|
|
|
|
|
Nov 2010 |
|
|
52,000 |
|
|
26,000 |
|
|
461,240 |
|
|
26.60 |
|
|
Nov 2020 |
|
|
|
|
|
|
|
Nov 2009 |
|
|
52,000 |
|
|
39,000 |
|
|
448,240 |
|
|
24.60 |
|
|
Nov 2019 |
|
|
|
|
|
|
|
Nov 2008 |
|
|
52,000 |
|
|
52,000 |
|
|
92,040 |
|
|
4.17 |
|
|
Nov 2018 |
|
|
|
|
|
|
|
Dec 2007 |
|
|
52,000 |
|
|
52,000 |
|
|
225,680 |
|
|
10.09 |
|
|
Dec 2017 |
|
|
|
|
|
|
|
Nov 2006 |
|
|
55,000 |
|
|
55,000 |
|
|
84,150 |
|
|
3.83 |
|
|
Nov 2016 |
|
|
|
|
|
|
|
May 2002 |
|
|
27,500 |
|
|
0 |
|
|
152,625 |
|
|
7.48 |
|
|
May 2017 |
|
|
|
|
|
|
|
May 2001 |
|
|
5,000 |
|
|
0 |
|
|
106,500 |
|
|
26.93 |
|
|
May 2016 |
|
|
|
|
|
|
|
May 2000 |
|
|
2,640 |
|
|
660 |
|
|
55,981 |
|
|
67.39 |
|
|
May 2015 |
|
|
348,140 |
|
Total |
|
|
|
|
|
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).
40
Table of Contents
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.
41
Table of Contents
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
93,000 |
|
Prof. 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
49,000 |
|
Dr. 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
0 |
|
Prof. 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
51,000 |
|
Dr. Martin Komischke
(since May 23, 2013) |
|
|
2014
2013
2012 |
|
|
25,000
15,139
0 |
|
|
0
0
0 |
|
|
0
0
0 |
|
|
25,000
15,139
0 |
|
Prof. 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
31,000 |
|
Dr. 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
53,500 |
|
Karl-Hermann Kuklies(7)
(until January 30, 2013) |
|
|
2014
2013
2012 |
|
|
0
2,083
25,000 |
|
|
0
0
0 |
|
|
0
0
0 |
|
|
0
2,083
25,000 |
|
Total |
|
|
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.
42
Table of Contents
C. Board Practices
For general information of the Company's board practice, refer to Item 6.A. "Directors, Senior Management and
EmployeesDirectors and Senior Management" in this report. Also refer to Item 10.C. "Additional InformationMaterial 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:
-
- The Audit Committee consists of up to three members, elects one Audit Committee member to be the Audit Committee's
Chairman and one Audit Committee member whose area of expertise is reporting and audits (as required by Articles 107(4) and 100(5) of the German Stock Corporation Act/AktG), and
meets at least two times per half-year.
-
- The Audit Committee performs its duties in accordance with legal requirements, AIXTRON's Articles of Association, the
charter of AIXTRON's Supervisory Board, and the Audit Committee charter.
-
- The Audit Committee may inspect AIXTRON's records and routinely liaises with both the Company's Executive Board and the
auditors of the Company to identify and remedy possible weaknesses in AIXTRON's accounting and internal controls and to solve potential differences of opinion between the Company's Executive Board and
the Company's auditors.
43
Table of Contents
Set
forth in the table below are the current members of the Audit Committee:
|
|
|
Committee
|
|
Members |
Audit 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 a Technology 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 a Nomination 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 a Capital Market Committee on
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 InformationMemorandum and Articles of AssociationSarbanes-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 CompanyBusiness
OverviewEmployees" 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,
44
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 Securities |
|
Dr. Andreas Biagosch |
|
|
0 |
|
|
|
|
|
|
Prof. Dr. Wolfgang Blättchen |
|
|
0 |
|
|
|
|
|
|
Prof. Dr. Petra Denk |
|
|
129 |
|
* |
|
|
|
|
Martin Goetzeler |
|
|
0 |
|
|
|
|
50,000 |
|
Dr. Martin Komischke |
|
|
0 |
|
|
|
|
|
|
Prof. 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
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,
2013 |
|
AIXTRON ordinary shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock options |
|
|
3,291,896 |
|
|
81,110 |
|
|
437,095 |
|
|
1,150,400 |
|
|
2,659,701 |
|
underlying shares |
|
|
3,521,639 |
|
|
81,110 |
|
|
831,086 |
|
|
1,150,400 |
|
|
3,283,435 |
|
AIXTRON ADS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
stock options |
|
|
0 |
|
|
0 |
|
|
5,590 |
|
|
0 |
|
|
5,590 |
|
underlying shares |
|
|
0 |
|
|
0 |
|
|
5,590 |
|
|
0 |
|
|
5,590 |
|
See
Item 18 "Financial StatementsNote 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 EmployeesShare 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
StatementsNote 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
Table of Contents
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 StatementsNote 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
Table of Contents
Key
InformationExchange 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 |
|
Low |
|
Annual |
|
|
|
|
|
|
|
2010 |
|
|
28.87 |
|
|
18.99 |
|
2011 |
|
|
33.35 |
|
|
8.38 |
|
2012 |
|
|
14.45 |
|
|
8.71 |
|
2013 |
|
|
13.80 |
|
|
9.10 |
|
2014 |
|
|
12.84 |
|
|
8.90 |
|
Quarterly |
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
First quarter |
|
|
11.57 |
|
|
9.10 |
|
Second quarter |
|
|
13.80 |
|
|
9.66 |
|
Third quarter |
|
|
13.34 |
|
|
11.84 |
|
Fourth quarter |
|
|
12.02 |
|
|
9.68 |
|
2014 |
|
|
|
|
|
|
|
First quarter |
|
|
12.84 |
|
|
10.26 |
|
Second quarter |
|
|
12.17 |
|
|
10.08 |
|
Third quarter |
|
|
12.30 |
|
|
9.26 |
|
Fourth quarter |
|
|
11.97 |
|
|
8.90 |
|
Monthly |
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
July |
|
|
10.91 |
|
|
10.05 |
|
August |
|
|
10.08 |
|
|
9.26 |
|
September |
|
|
12.30 |
|
|
9.69 |
|
October |
|
|
11.97 |
|
|
9.45 |
|
November |
|
|
9.85 |
|
|
9.03 |
|
December |
|
|
9.43 |
|
|
8.90 |
|
2015 |
|
|
|
|
|
|
|
January |
|
|
9.38 |
|
|
6.81 |
|
February (through February 11, 2015) |
|
|
7.31 |
|
|
6.38 |
|
48
Table of Contents
|
|
|
|
|
|
|
|
|
|
Closing Price
per ADR |
|
|
|
(USD) |
|
|
|
High |
|
Low |
|
Annual |
|
|
|
|
|
|
|
2010 |
|
|
38.56 |
|
|
23.11 |
|
2011 |
|
|
44.88 |
|
|
11.26 |
|
2012 |
|
|
19.15 |
|
|
11.42 |
|
2013 |
|
|
17.91 |
|
|
11.57 |
|
2014 |
|
|
17.73 |
|
|
10.90 |
|
Quarterly |
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
First quarter |
|
|
14.95 |
|
|
11.57 |
|
Second quarter |
|
|
17.91 |
|
|
12.62 |
|
Third quarter |
|
|
17.64 |
|
|
15.58 |
|
Fourth quarter |
|
|
16.31 |
|
|
12.98 |
|
2014 |
|
|
|
|
|
|
|
First quarter |
|
|
17.73 |
|
|
14.08 |
|
Second quarter |
|
|
16.63 |
|
|
13.71 |
|
Third quarter |
|
|
15.67 |
|
|
12.39 |
|
Fourth quarter |
|
|
14.94 |
|
|
10.90 |
|
Monthly |
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
July |
|
|
14.83 |
|
|
13.49 |
|
August |
|
|
13.23 |
|
|
12.39 |
|
September |
|
|
15.67 |
|
|
12.44 |
|
October |
|
|
14.94 |
|
|
11.91 |
|
November |
|
|
12.20 |
|
|
11.21 |
|
December |
|
|
11.65 |
|
|
10.90 |
|
2015 |
|
|
|
|
|
|
|
January |
|
|
11.21 |
|
|
7.72 |
|
February (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
49
Table of Contents
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:
-
- capital increase;
-
- exclusion of preemptive rights in a capital increase;
-
- capital decreases (Kapitalherabsetzung);
-
- creation of authorized share capital or conditional share capital;
-
- amendment to the business purpose stated in AIXTRON's Articles of Association;
-
- dissolution (Auflösung);
-
- merger (Verschmelzung) or a consolidation with another stock corporation
(Eingliederung) or another corporate transformation (Maßnahmen nach dem Umwandlungsgesetz);
51
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-
- transfer of all or substantially all of AIXTRON's assets; or
-
- conclusion of any direct control, profit and loss pooling or similar intercompany agreements
(Abschluss von Unternehmensverträgen).
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 "InvestorsCorporate 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
52
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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:
-
- Rule 5250(d)(1)Distribution of Annual and Interim Reports. AIXTRON is exempt from the requirement
under NASDAQ Rule 5250(d)(1) that an annual report, containing audited financial statements of the company and its subsidiaries, be distributed to shareholders a reasonable period of time
following the filing of the annual report with the Commission. Consistent with the German Stock Corporation Act, AIXTRON does not distribute annual and interim reports automatically to shareholders.
Instead, AIXTRON's annual reports are available to the shareholders at the Company's website and are mailed to shareholders upon request. AIXTRON also files its annual reports with the SEC.
-
- Rule 5605Independent Directors. AIXTRON is exempt from the independent director requirement under
NASDAQ Rule 5605 that requires that, among other things, a majority of a company's board of directors must be comprised of independent directors (as defined in NASDAQ
Rule 5605(a)(2)) and sets forth certain voting and independence requirements with respect to the nomination of board members and the determination of compensation of officers. Consistent
with the German Corporation Act, members of AIXTRON's Executive Board are elected by its Supervisory Board. The Executive Board manages the Company under its own responsibility and is not bound by
orders of third parties, including the orders of the general meeting and the Supervisory Board. The Executive Board is obligated to comply with the statutory regulations, the
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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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Table of Contents
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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Table of Contents
Intellectual Property Agreements
See also item 4.B. "Information on the CompanyBusiness OverviewIntellectual 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:
- (1)
- who
are not German residents for German income tax purposes (i.e., persons whose residence, habitual abode, statutory seat or place of effective
management and control is not located in Germany), and
- (2)
- whose
shares or ADSs do not form part of the business property of a permanent establishment or fixed base in Germany. Throughout this section such owners
are referred to as "Non-German Holders."
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:
-
- financial institutions;
-
- insurance companies;
-
- real estate investment trusts;
-
- regulated investment companies;
-
- grantor trusts;
-
- dealers or traders in securities or currencies;
-
- tax-exempt entities;
-
- persons that received shares or ADSs as compensation for the performance of services;
-
- persons that will hold shares or ADSs as part of a "hedging" or "conversion" transaction or as a position in a "straddle"
for U.S. federal income tax purposes;
-
- certain former citizens or long-term residents of the United States;
-
- persons that have a "functional currency" other than the US-Dollar; or
-
- holders that own (or are deemed to own) 10% or more (by voting power or value) of AIXTRON's shares
or ADSs.
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
TaxationSpecial 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.
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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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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 |
|
|
0 |
|
Net 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 |
|
|
13,959 |
|
Net 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 |
|
|
0 |
|
Net 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 StatementsNote 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 Fee |
|
|
Issuance 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 annum |
|
|
Expenses 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.
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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
ControlIntegrated 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.
66
Table of Contents
Attestation Report of the Registered Public Accounting Firm
To
The Supervisory Board
AIXTRON SE
Herzogenrath, Germany
We
have audited the internal control over financial reporting of AIXTRON SE and subsidiaries (the "Company") as of December 31, 2014, based on criteria established in Internal
ControlIntegrated 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
ControlIntegrated 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 & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Duesseldorf, Germany, February 24, 2015
67
Table of Contents
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,
2013 |
|
|
|
Million EUR
|
|
Audit fees |
|
|
0.70 |
|
|
0.72 |
|
Audit-related fees |
|
|
0.03 |
|
|
0.03 |
|
Tax fees |
|
|
0.17 |
|
|
0.30 |
|
All 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 StatementsNote 33. Auditors' fees".
68
Table of Contents
Audit Committee Pre-Approval Policies
In accordance with German law, AIXTRON's independent auditors are appointed at the Annual General Meeting based on a recommendation of
the Company's Supervisory Board. The Audit Committee of the Supervisory Board prepares the Board's recommendation on the selection of the independent auditors. Subsequent to the auditors' appointment,
the Supervisory Board awards the contract and in its sole authority approves the terms and scope of the audit and all audit engagement fees, as well as monitors the auditors' independence. On
May 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
InformationMemorandum and Articles of Association" in this report.
Item 16H: Mine Safety Disclosure
Not Applicable.
69
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 Exhibit |
|
1.1 |
|
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 CompanyOrganizational 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. |
70
Table of Contents
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 GOETZELER
|
|
|
Name: |
|
Martin Goetzeler |
|
|
Title: |
|
Chairman, President and
Chief Executive Officer |
|
|
|
|
/s/ MARTIN GOETZELER
|
|
|
Name: |
|
Martin Goetzeler |
|
|
Title: |
|
Acting Chief Financial Officer |
71
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 ControlIntegrated 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 & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Duesseldorf, Germany, February 24, 2015
72
Table of Contents
CONSOLIDATED FINANCIAL STATEMENTS
F-1
Table of Contents
CONSOLIDATED INCOME STATEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes |
|
2014 |
|
2013 |
|
2012 |
|
|
|
|
|
in EUR thousands
|
|
Revenues |
|
|
3 |
|
|
193,797 |
|
|
182,863 |
|
|
227,832 |
|
Cost of sales |
|
|
|
|
|
152,282 |
|
|
190,251 |
|
|
227,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
41,515 |
|
|
(7,388 |
) |
|
430 |
|
Selling expenses |
|
|
|
|
|
15,971 |
|
|
28,956 |
|
|
34,830 |
|
General administration expenses |
|
|
|
|
|
19,341 |
|
|
18,223 |
|
|
19,551 |
|
Research and development costs |
|
|
4 |
|
|
66,739 |
|
|
57,153 |
|
|
72,862 |
|
Other operating income |
|
|
5 |
|
|
3,901 |
|
|
27,610 |
|
|
3,121 |
|
Other operating expenses |
|
|
6 |
|
|
1,674 |
|
|
11,631 |
|
|
8,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating result |
|
|
|
|
|
(58,309 |
) |
|
(95,741 |
) |
|
(132,267 |
) |
Finance Income |
|
|
|
|
|
1,168 |
|
|
839 |
|
|
2,353 |
|
Finance Expense |
|
|
|
|
|
0 |
|
|
313 |
|
|
29 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Finance Income |
|
|
8 |
|
|
1,168 |
|
|
526 |
|
|
2,324 |
|
Result 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 |
|
2012 |
|
|
|
|
|
in EUR thousands
|
|
Loss for the year |
|
|
|
|
|
(62,511 |
) |
|
(101,016 |
) |
|
(145,436 |
) |
Gains/losses from derivative financial instruments before taxes |
|
|
20 |
|
|
|
|
|
|
|
|
9,226 |
|
Deferred taxes on derivative financial instruments |
|
|
14 |
|
|
|
|
|
|
|
|
(2,788 |
) |
Currency translation adjustment |
|
|
20 |
|
|
11,815 |
|
|
(6,130 |
) |
|
1,512 |
|
Other 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 |
|
31/12/2013 |
|
|
|
|
|
in EUR thousands
|
|
Assets |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
11 |
|
|
77,299 |
|
|
79,866 |
|
Goodwill |
|
|
12 |
|
|
64,813 |
|
|
64,115 |
|
Other intangible assets |
|
|
12 |
|
|
2,458 |
|
|
3,058 |
|
Other non-current assets |
|
|
13 |
|
|
382 |
|
|
907 |
|
Deferred tax assets |
|
|
14 |
|
|
4,120 |
|
|
4,613 |
|
Tax receivables |
|
|
15 |
|
|
117 |
|
|
177 |
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets |
|
|
|
|
|
149,189 |
|
|
152,736 |
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
16 |
|
|
81,694 |
|
|
66,183 |
|
Trade receivables less allowance k€ 945 (2012: k€ 1,821) |
|
|
17 |
|
|
26,324 |
|
|
27,654 |
|
Current tax receivables |
|
|
10 |
|
|
543 |
|
|
5,388 |
|
Other current assets |
|
|
17 |
|
|
7,723 |
|
|
4,925 |
|
Other financial assets |
|
|
18 |
|
|
151,494 |
|
|
138,853 |
|
Cash and cash equivalents |
|
|
19 |
|
|
116,580 |
|
|
167,454 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
|
|
384,358 |
|
|
410,457 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
533,547 |
|
|
563,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
|
|
Fully paid capital Number of shares: 111,591,036 (2013: 111,534,520) |
|
|
|
|
|
111,591 |
|
|
111,535 |
|
Additional paid-in capital |
|
|
|
|
|
371,781 |
|
|
370,842 |
|
Accumulated losses |
|
|
|
|
|
(70,802 |
) |
|
(8,291 |
) |
Accumulated comprehensive income and expense recognised in equity |
|
|
|
|
|
3,132 |
|
|
(8,683 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity |
|
|
20 |
|
|
415,702 |
|
|
465,403 |
|
Other non-current payables |
|
|
|
|
|
62 |
|
|
92 |
|
Other non-current provisions |
|
|
24 |
|
|
1,206 |
|
|
1,977 |
|
Deferred tax liabilities |
|
|
14 |
|
|
34 |
|
|
300 |
|
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities |
|
|
|
|
|
1,302 |
|
|
2,369 |
|
Trade payables |
|
|
25 |
|
|
16,397 |
|
|
13,517 |
|
Advance payments from customers |
|
|
|
|
|
66,928 |
|
|
46,188 |
|
Other current provisions |
|
|
24 |
|
|
28,057 |
|
|
32,080 |
|
Other current liabilities |
|
|
25 |
|
|
3,192 |
|
|
2,948 |
|
Current tax payables |
|
|
10 |
|
|
1,969 |
|
|
688 |
|
Total 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 |
|
2012 |
|
|
|
|
|
in EUR thousands
|
|
Cash inflow/outflow from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
|
|
|
|
|
(62,511 |
) |
|
(101,016 |
) |
|
(145,436 |
) |
Reconciliation between loss and cash inflow/outflow from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense from share-based payments |
|
|
|
|
|
778 |
|
|
981 |
|
|
3,439 |
|
Depreciation, amortization and impairment expense |
|
|
|
|
|
17,000 |
|
|
27,812 |
|
|
16,641 |
|
Net result from disposal of property, plant and equipment |
|
|
|
|
|
29 |
|
|
11 |
|
|
149 |
|
Deferred income taxes |
|
|
|
|
|
618 |
|
|
643 |
|
|
22,855 |
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
|
|
|
|
(13,466 |
) |
|
57,938 |
|
|
59,571 |
|
Trade receivables |
|
|
|
|
|
2,738 |
|
|
8,500 |
|
|
41,435 |
|
Other assets |
|
|
|
|
|
3,263 |
|
|
4,209 |
|
|
14,943 |
|
Trade payables |
|
|
|
|
|
1,890 |
|
|
4,841 |
|
|
(10,871 |
) |
Provisions and other liabilities |
|
|
|
|
|
(3,223 |
) |
|
2,050 |
|
|
(28,743 |
) |
Deferred revenues |
|
|
|
|
|
0 |
|
|
(92 |
) |
|
0 |
|
Non-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 activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost 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 |
|
|
342 |
|
Bank 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 activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend 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 |
) |
|
792 |
|
Net 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 |
|
|
2,091 |
|
Income 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 SE |
|
|
|
|
|
in EUR thousands
|
|
Balance 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 |
|
|
3,438 |
|
Issue of shares |
|
|
|
|
|
185 |
|
|
698 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
883 |
|
Net loss for the year |
|
|
|
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
(145,436 |
) |
|
(145,436 |
) |
Other comprehensive income |
|
|
|
|
|
0 |
|
|
0 |
|
|
1,512 |
|
|
6,438 |
|
|
0 |
|
|
7,950 |
|
Total 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 |
|
|
970 |
|
Issue of shares |
|
|
|
|
|
10,639 |
|
|
90,920 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
101,559 |
|
Net 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 |
|
|
802 |
|
Purchase of treasury shares |
|
|
|
|
|
(25 |
) |
|
(224 |
) |
|
0 |
|
|
0 |
|
|
0 |
|
|
(249 |
) |
Issue of shares |
|
|
|
|
|
81 |
|
|
361 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
442 |
|
Net loss for the year |
|
|
|
|
|
0 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
(62,511 |
) |
|
(62,511 |
) |
Other comprehensive income |
|
|
|
|
|
0 |
|
|
0 |
|
|
11,815 |
|
|
0 |
|
|
0 |
|
|
11,815 |
|
Total 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
-
- International Financial Reporting Standards (IFRS), and the interpretations as published by the International Accounting Standards
Board (IASB); and also
-
- International Financial Reporting Standards (IFRS) as adopted for use in the European Union; and also
-
- the requirements of Section 315a of HGB (German Commercial Law).
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
- (i)
- Subsidiaries
Entities
over which AIXTRON SE has control are treated as subsidiaries (see note 31). Control exists when the Company is exposed, or has the rights, to variable returns from its
involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The financial statements of subsidiaries are included in the consolidated financial
statements from the date that control commences until the date that control ceases.
- (ii)
- Transactions eliminated on consolidation
All
intercompany income and expenses, transactions and balances have been eliminated in the 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
- (i)
- Acquisition or manufacturing cost
Items
of property, plant and equipment are stated at cost, plus ancillary charges such as installation and delivery costs, less accumulated depreciation (see below) and impairment losses
(see accounting policy (j)).
Costs
of internally generated assets include not only costs of material and personnel, but also a share of directly attributable overhead costs, such as employee benefits, delivery costs,
installation, and professional fees.
Where
parts of an item of property, plant and equipment have different useful lives, they are depreciated as separate items of property, plant and equipment.
- (ii)
- Subsequent costs
The
Company recognises in the carrying amount of an item of property, plant and equipment the cost of replacing components or enhancement of such an item when that cost is incurred if it is probable
that the future economic benefits embodied in the item will flow to the Company and the cost of the item can be measured reliably. All other costs such as repairs and maintenance are expensed
as incurred.
- (iii)
- Government grants
Government
grants related to the acquisition or manufacture of owned assets are deducted from original cost at the date of capitalisation.
- (iv)
- Depreciation
Depreciation
is charged on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Useful lives, depreciation method and residual values of
property,
F-8
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies (Continued)
plant
and equipment are reviewed at the year-end date or more frequently if circumstances arise which are indicative of a change. The estimated useful lives are as follows:
|
|
|
|
|
|
|
|
|
|
|
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
- (i)
- Goodwill
Business
combinations are accounted for by applying the purchase method. In respect of business combinations that have occurred since January 1, 2004, goodwill represents the difference between
the fair value of the consideration for the business combination and the fair value of the net identifiable assets acquired.
Goodwill
is stated at cost less any accumulated impairment loss. Goodwill is allocated to cash-generating units and is tested annually for impairment (see accounting policy (j)).
- (ii)
- Research and development
Expenditure
on research activities, undertaken with the prospect of gaining new technical knowledge and understanding using scientific methods, is recognised as an expense as incurred.
Expenditure
on development comprises costs incurred with the purpose of using scientific knowledge technically and commercially. As not all criteria of IAS 38 are met AIXTRON did not capitalise
such costs.
- (iii)
- Other intangible assets
Other
intangible assets that are acquired by the Company are stated at cost less accumulated amortisation (see below) and impairment losses (see accounting policy (j)).
Intangible
assets acquired through business combinations are stated at their fair value at the date of purchase.
Expenditure
on internally generated goodwill, trademarks and patents is expensed as incurred.
- (iv)
- Subsequent expenditure
Subsequent
expenditure on capitalised intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is
expensed as incurred.
- (v)
- Amortisation
Amortisation
is charged on a straight-line basis over the estimated useful lives of intangible assets, except for goodwill. Goodwill has a useful life which is indefinite and is tested annually in
respect of its recoverable amount. Other intangible assets are amortised from the date they are available for use. Useful lives and residual values of intangible assets are reviewed at the year-end
date or more frequently if circumstances arise which are indicative of a change. The estimated useful lives are as follows:
|
|
|
|
|
|
|
|
|
|
|
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
- (i)
- Financial Assets
Financial
assets are classified into the following specific categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held to maturity investments', and 'loans and receivables'.
The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Investments
are recognised at the contract date, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss,
which are initially measured at fair value.
- (ii)
- Financial assets at FVTPL
Financial
assets are classified as at FVTPL where the asset is either
-
- held for trading or
-
- it is designated as at FVTPL.
Financial
assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The 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.
- (iii)
- Held to maturity investments
Investments
with fixed or determinable payments and fixed maturity dates that the Company intends to and has the ability to hold to maturity are classified as held to maturity investments. Held to
maturity investments are recorded at amortised cost using the effective interest rate method less any impairment, with revenue recognised on an effective yield basis.
- (iv)
- Trade receivables
Trade
receivables and other receivables that have fixed or determinable payments that are not quoted on an active market are classified as loans and receivables. Loans and receivables are measured at
amortised cost using the effective interest rate method, less any impairment.
- (v)
- Impairment of financial assets
Financial
assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.
The
carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the
use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
If,
in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have
been had the impairment not been recognised.
- (vi)
- Cash and cash equivalents
Cash
and cash equivalents comprise cash on hand and deposits with banks with a maturity of less than three months at inception.
F-10
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Significant Accounting Policies (Continued)
- (vii)
- Equity instruments
Equity
instruments, including share capital, issued by the company are recorded at the proceeds received, net of direct issue costs.
- (viii)
- Financial liabilities
Financial
liabilities are classified as either financial liabilities "at FVTPL" or "other financial liabilities".
- (ix)
- Financial liabilities at FVTPL
Financial
liabilities are classified as at FVTPL where the liability is either
-
- held for trading or
-
- it is designated as at FVTPL.
Financial
liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The 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.
- (x)
- Other financial liabilities
Other
financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the
effective interest rate method, with interest expense recognised on an effective yield basis.
- (xi)
- Derivative financial instruments and hedge accounting
The
Company's activities expose it to the financial risks of changes in foreign exchange currency rates (see note 26). The Company uses foreign exchange forward contracts to hedge these
exposures. The Company does not use derivative financial instruments for speculative purposes. The use of financial derivatives is governed by policies approved by the Executive Board, which provide
written principles on the use of financial derivatives.
Changes
in the fair value of derivative financial instruments that are designated as effective hedges of future cash flows are recognised directly in equity and the ineffective portion is recognised
immediately in the income statement.
Changes
in fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in the income statement as they arise.
Hedge
accounting is discontinued when the derivative financial instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain
or loss on the derivative financial instrument recognised in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net
cumulative gain or loss recognised in equity is transferred to net profit or loss for the period.
(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
- (i)
- Defined contribution plans
Obligations
for contributions to defined contribution pension plans are recognised as an expense in the income statement as incurred.
- (ii)
- Defined benefit plans
The
obligation from defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in return for their service in prior periods; that benefit is discounted
to determine its present value. The calculation is performed by a qualified actuary using the projected unit credit method.
- (iii)
- Share-based payment transactions
The
stock option programs allows members of the Executive Board, management and employees of the Company to acquire shares/ADS (see note 23) of the Company. These stock option programs
are accounted for by AIXTRON according to IFRS 2. The fair value of options granted after November 7, 2002 is recognised as personnel expense with a corresponding increase in additional
paid-in capital. The fair value is calculated at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted
is measured using a mathematical model, taking into account the terms and conditions upon which the options were granted. In the calculation of the personnel expense options forfeited are taken
into account.
(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.
The
Company normally offers one, occasionally two, year warranties on all of its products. Warranty expenses generally include cost of labor, material and related overhead necessary to repair a
product free of charge during the warranty period, and are recorded as a selling expense. The specific terms
and conditions of those warranties may vary depending on the equipment sold, the terms of the contract and the locations from which they are sold. The Company establishes the costs that may be
incurred under its warranty obligations and records a liability in the amount of such costs at the time revenue is recognised. Factors that affect the Company's warranty liability include the
historical and anticipated rates of warranty claims and cost per claim.
The
Company accrues material and labor cost for systems shipped based upon historical experience. The Company periodically assesses the adequacy of its recorded warranty provisions and adjusts the
amounts as necessary.
- (ii)
- Onerous contracts
A
provision for onerous contracts is recognised when the expected economic benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under
the contract. The amount recognised as a provision is determined as the excess of the unavoidable costs of meeting the obligations under the contract over the economic benefits expected to be
received. Before making that provision any impairment loss that has occurred on assets dedicated to that contract are recognised. The provision is discounted to present value if the adjustment
is material.
(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
Cost
of sales includes such direct costs as materials, labor and related production overheads.
- (ii)
- Research and development
Research
and development costs are expensed as incurred. Project funding received from governments (e.g. state funding) and the European Union is recorded in other operating income, if the
Research and Development costs are incurred and provided that the conditions for the funding have been met.
- (iii)
- Operating lease payments
Payments
made under operating leases are recognised as expense on a straight-line basis over the term of the lease.
(p) Other operating income
Government grants
Government
grants awarded for project funding are recorded in "Other operating income" if the Research and Development costs are incurred and provided that the conditions for the funding have
been met.
(q) Tax
The tax expense represents the sum of the current and deferred tax.
Deferred
tax assets and liabilities are recorded for all temporary differences between tax and commercial balance sheets and for losses brought forward for tax purposes as well as for
tax credits of the companies included in consolidation. The deferred taxes are calculated, based on tax rates applicable at the balance sheet date or known to be applicable in the future. Effects of
changes in tax
rates on the deferred tax assets and liabilities are recognised upon substantively enacted amendments to the law.
A
deferred tax asset is recognised only to the extent that it is probable that future taxable profits can be set off against tax credits and tax losses carried forward. Deferred tax
assets are reduced to the extent that it is no longer probable that the related tax benefit can be realised. The recoverability of deferred tax assets is reviewed at least annually.
(r) Segment reporting
An operating segment is a 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 28Investment Entities |
|
The changes relate to consolidation of companies by investment entities. |
Amendments to IAS 36Recoverable 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 21Levies |
|
This interpretation relates to Government levies and has had no effect on the Group. |
Amendments to IAS 32Offsetting 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 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 41 (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. |
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 |
|
2012 |
|
|
|
|
|
in EUR thousands
|
|
Equipment revenues |
|
|
|
|
148,543 |
|
|
138,044 |
|
|
176,865 |
|
Spares 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 |
|
|
113,083 |
|
Obsolescence and valuation allowance expense for inventories |
|
16 |
|
|
3,016 |
|
|
17,885 |
|
|
40,947 |
|
Personnel expense |
|
7 |
|
|
66,409 |
|
|
67,548 |
|
|
81,076 |
|
Depreciation |
|
11 |
|
|
15,591 |
|
|
16,314 |
|
|
11,165 |
|
Impairment |
|
6 / 11 |
|
|
0 |
|
|
9,888 |
|
|
2,756 |
|
Amortization |
|
12 |
|
|
1,409 |
|
|
1,609 |
|
|
2,720 |
|
Other expenses |
|
|
|
|
33,366 |
|
|
74,864 |
|
|
104,496 |
|
Foreign exchange losses |
|
5 |
|
|
1,276 |
|
|
206 |
|
|
6,977 |
|
Other operating income |
|
5 |
|
|
(3,901 |
) |
|
(27,610 |
) |
|
(3,121 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit/loss |
|
|
|
|
(58,309 |
) |
|
(95,741 |
) |
|
(132,267 |
) |
Finance income |
|
8 |
|
|
1,168 |
|
|
839 |
|
|
2,353 |
|
Finance 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 |
|
31/12/2013 |
|
|
|
in EUR thousands
|
|
Semi-conductor equipment segment assets segment assets |
|
|
260,693 |
|
|
246,708 |
|
Unallocated assets |
|
|
272,854 |
|
|
316,485 |
|
|
|
|
|
|
|
|
|
Total Group assets |
|
|
533,547 |
|
|
563,193 |
|
|
|
|
|
|
|
|
|
|
|
31/12/2014 |
|
31/12/2013 |
|
|
|
in EUR thousands
|
|
Semi-conductor equipment segment liabilities segment liabilities |
|
|
115,842 |
|
|
96,802 |
|
Unallocated 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Asia |
|
|
160,240 |
|
|
141,785 |
|
|
177,490 |
|
Europe |
|
|
25,189 |
|
|
24,213 |
|
|
21,352 |
|
Americas |
|
|
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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Germany |
|
|
6,621 |
|
|
7,210 |
|
|
10,105 |
|
USA |
|
|
8,162 |
|
|
14,805 |
|
|
28,868 |
|
Korea |
|
|
18,641 |
|
|
30,578 |
|
|
29,759 |
|
China |
|
|
106,568 |
|
|
56,788 |
|
|
71,611 |
|
Taiwan |
|
|
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 |
|
31/12/2013 |
|
|
|
in EUR thousands
|
|
Asia |
|
|
2,591 |
|
|
5,181 |
|
Europe excluding Germany |
|
|
12,619 |
|
|
13,052 |
|
Germany |
|
|
127,536 |
|
|
127,977 |
|
Americas |
|
|
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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Research and development funding |
|
|
1,795 |
|
|
2,526 |
|
|
2,661 |
|
Income from resolved contract obligations |
|
|
0 |
|
|
225 |
|
|
0 |
|
Income from the reversal of provisions and the write-off of debts |
|
|
4 |
|
|
33 |
|
|
78 |
|
Gain from the disposal of fixed assets |
|
|
0 |
|
|
43 |
|
|
0 |
|
Insurance recoveries |
|
|
52 |
|
|
22,638 |
|
|
11 |
|
Foreign exchange gains |
|
|
979 |
|
|
746 |
|
|
136 |
|
Other |
|
|
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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Foreign exchange gains |
|
|
979 |
|
|
746 |
|
|
136 |
|
Foreign 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Foreign exchange losses |
|
|
1,276 |
|
|
206 |
|
|
6,977 |
|
Impairment of building |
|
|
|
|
|
9,888 |
|
|
|
|
Losses from the disposal of fixed assets |
|
|
29 |
|
|
54 |
|
|
149 |
|
Additions to allowances for receivables or write-off of receivables |
|
|
327 |
|
|
142 |
|
|
1,449 |
|
Other |
|
|
42 |
|
|
1,341 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,674 |
|
|
11,631 |
|
|
8,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Personnel expense
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
2012 |
|
|
|
in EUR thousands
|
|
Payroll |
|
|
57,403 |
|
|
58,783 |
|
|
67,179 |
|
Social insurance contributions |
|
|
6,560 |
|
|
6,444 |
|
|
8,732 |
|
Decrease/Increase in defined benefit plan obligations |
|
|
|
|
|
|
|
|
|
|
Expense for defined contribution plans |
|
|
1,667 |
|
|
1,340 |
|
|
1,712 |
|
Share 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Cost of sales |
|
|
729 |
|
|
2,096 |
|
|
1,964 |
|
Selling expenses |
|
|
424 |
|
|
525 |
|
|
497 |
|
General administration expenses |
|
|
577 |
|
|
1,680 |
|
|
274 |
|
Research and development costs |
|
|
4,086 |
|
|
930 |
|
|
2,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,816 |
|
|
5,231 |
|
|
5,054 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Net finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
2012 |
|
|
|
in EUR thousands
|
|
Interest income from financial assets |
|
|
|
|
|
|
|
|
|
|
On financial assets measured at amortised cost |
|
|
1,168 |
|
|
839 |
|
|
2,274 |
|
Other financial assets |
|
|
0 |
|
|
0 |
|
|
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,168 |
|
|
839 |
|
|
2,353 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense from financial liabilities |
|
|
|
|
|
|
|
|
|
|
On 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Current 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Income/loss before income taxes |
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
(61,568 |
) |
|
(104,284 |
) |
|
(101,617 |
) |
Outside Germany |
|
|
4,427 |
|
|
9,069 |
|
|
(28,326 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
(57,141 |
) |
|
(95,215 |
) |
|
(129,943 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
1,249 |
|
|
353 |
|
|
21,143 |
|
Outside 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Net 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 |
) |
|
1,250 |
|
Non-deductible expenses |
|
|
1,848 |
|
|
338 |
|
|
1,343 |
|
Non-consideration of tax claims from loss carryforwards |
|
|
27,277 |
|
|
36,089 |
|
|
55,062 |
|
Reversal 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 |
) |
|
152 |
|
Other |
|
|
(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 |
|
Total |
|
|
|
in EUR thousands
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2013 |
|
|
64,839 |
|
|
70,937 |
|
|
20,359 |
|
|
5,375 |
|
|
161,510 |
|
Acquisitions |
|
|
282 |
|
|
5,273 |
|
|
443 |
|
|
3,608 |
|
|
9,606 |
|
Disposals |
|
|
1,476 |
|
|
639 |
|
|
859 |
|
|
745 |
|
|
3,719 |
|
Transfers |
|
|
|
|
|
3,896 |
|
|
25 |
|
|
(3,921 |
) |
|
0 |
|
Effect 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 |
|
|
166,300 |
|
Acquisitions |
|
|
428 |
|
|
2,894 |
|
|
644 |
|
|
8,681 |
|
|
12,647 |
|
Disposals |
|
|
29 |
|
|
504 |
|
|
2,172 |
|
|
47 |
|
|
2,752 |
|
Transfers |
|
|
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 impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2013 |
|
|
13,786 |
|
|
37,845 |
|
|
12,327 |
|
|
0 |
|
|
63,958 |
|
Depreciation charge for the year |
|
|
2,383 |
|
|
11,602 |
|
|
2,329 |
|
|
|
|
|
16,314 |
|
Impairment |
|
|
6,264 |
|
|
3,450 |
|
|
174 |
|
|
|
|
|
9,888 |
|
Disposals |
|
|
1,471 |
|
|
639 |
|
|
810 |
|
|
|
|
|
2,920 |
|
Effect 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 |
|
|
86,434 |
|
Depreciation charge for the year |
|
|
1,940 |
|
|
11,762 |
|
|
1,889 |
|
|
|
|
|
15,591 |
|
Disposals |
|
|
16 |
|
|
400 |
|
|
2,146 |
|
|
|
|
|
2,562 |
|
Effect 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 amounts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At January 1, 2013 |
|
|
51,053 |
|
|
33,092 |
|
|
8,032 |
|
|
5,375 |
|
|
97,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2013 |
|
|
42,636 |
|
|
27,068 |
|
|
5,871 |
|
|
4,291 |
|
|
79,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
Total |
|
|
|
in EUR thousands
|
|
Cost |
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2013 |
|
|
81,829 |
|
|
37,968 |
|
|
119,797 |
|
Acquisitions |
|
|
0 |
|
|
464 |
|
|
464 |
|
Disposals |
|
|
0 |
|
|
718 |
|
|
718 |
|
Transfers |
|
|
0 |
|
|
0 |
|
|
0 |
|
Effect 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 |
|
|
118,337 |
|
Acquisitions |
|
|
0 |
|
|
759 |
|
|
759 |
|
Disposals |
|
|
0 |
|
|
1,990 |
|
|
1,990 |
|
Transfers |
|
|
0 |
|
|
25 |
|
|
25 |
|
Effect of movements in exchange rates |
|
|
982 |
|
|
2,620 |
|
|
3,602 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014 |
|
|
82,486 |
|
|
38,247 |
|
|
120,733 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation and impairment losses |
|
|
|
|
|
|
|
|
|
|
Balance at January 1, 2013 |
|
|
17,483 |
|
|
33,750 |
|
|
51,233 |
|
Amortisation charge for the year |
|
|
0 |
|
|
1,609 |
|
|
1,609 |
|
Disposals |
|
|
0 |
|
|
718 |
|
|
718 |
|
Effect 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 |
|
|
51,164 |
|
Amortisation charge for the year |
|
|
0 |
|
|
1,409 |
|
|
1,409 |
|
Disposals |
|
|
0 |
|
|
1,990 |
|
|
1,990 |
|
Effect of movements in exchange rates |
|
|
284 |
|
|
2,595 |
|
|
2,879 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2014 |
|
|
17,673 |
|
|
35,789 |
|
|
53,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying amounts |
|
|
|
|
|
|
|
|
|
|
At 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 |
|
2012 |
|
in EUR thousands
|
|
Amortisation |
|
Amortisation |
|
Amortisation |
|
Cost of sales |
|
|
0 |
|
|
0 |
|
|
202 |
|
Selling expenses |
|
|
1 |
|
|
1 |
|
|
5 |
|
General administration expenses |
|
|
1,261 |
|
|
1,461 |
|
|
1,915 |
|
Research 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 thousands |
|
2015 |
|
|
933 |
|
2016 |
|
|
586 |
|
2017 |
|
|
315 |
|
2018 |
|
|
168 |
|
2019 |
|
|
100 |
|
After 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
2014 |
|
|
|
Euro millions
|
|
Market capitalisation as of December 31 |
|
|
1,045.6 |
|
|
1,172.8 |
|
|
422.0 |
|
Costs 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 |
|
|
415.7 |
|
Net 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 |
|
|
144.8 |
|
Carrying 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 |
|
Net |
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
in EUR thousands
|
|
Property, plant and equipment |
|
|
624 |
|
|
124 |
|
|
0 |
|
|
0 |
|
|
624 |
|
|
124 |
|
Trade receivables |
|
|
(29 |
) |
|
693 |
|
|
0 |
|
|
0 |
|
|
(29 |
) |
|
693 |
|
Inventories |
|
|
939 |
|
|
959 |
|
|
0 |
|
|
0 |
|
|
939 |
|
|
959 |
|
Employee benefits |
|
|
318 |
|
|
209 |
|
|
0 |
|
|
0 |
|
|
318 |
|
|
209 |
|
Currency translation |
|
|
(37 |
) |
|
29 |
|
|
0 |
|
|
0 |
|
|
(37 |
) |
|
29 |
|
Provisions and other liabilities |
|
|
80 |
|
|
53 |
|
|
0 |
|
|
0 |
|
|
80 |
|
|
53 |
|
Intangible assets |
|
|
|
|
|
(711 |
) |
|
0 |
|
|
0 |
|
|
0 |
|
|
(711 |
) |
Other |
|
|
(56 |
) |
|
(71 |
) |
|
(34 |
) |
|
(300 |
) |
|
(90 |
) |
|
(371 |
) |
Tax losses |
|
|
2,281 |
|
|
3,328 |
|
|
0 |
|
|
0 |
|
|
2,281 |
|
|
3,328 |
|
Derivative 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, 2014 |
|
|
|
in EUR thousands
|
|
Property, plant and equipment |
|
|
124 |
|
|
500 |
|
|
0 |
|
|
624 |
|
Trade receivables |
|
|
693 |
|
|
(722 |
) |
|
0 |
|
|
(29 |
) |
Inventories |
|
|
959 |
|
|
(20 |
) |
|
0 |
|
|
939 |
|
Employee benefits |
|
|
209 |
|
|
109 |
|
|
0 |
|
|
318 |
|
Currency translation |
|
|
29 |
|
|
(397 |
) |
|
331 |
|
|
(37 |
) |
Provisions and other liabilities |
|
|
53 |
|
|
27 |
|
|
0 |
|
|
80 |
|
Intangible assets |
|
|
(711 |
) |
|
711 |
|
|
0 |
|
|
0 |
|
Other |
|
|
(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, 2013 |
|
|
|
in EUR thousands
|
|
Property, plant and equipment |
|
|
53 |
|
|
71 |
|
|
0 |
|
|
124 |
|
Trade receivables |
|
|
0 |
|
|
693 |
|
|
0 |
|
|
693 |
|
Inventories |
|
|
1,690 |
|
|
(731 |
) |
|
0 |
|
|
959 |
|
Employee benefits |
|
|
191 |
|
|
18 |
|
|
0 |
|
|
209 |
|
Currency translation |
|
|
12 |
|
|
326 |
|
|
(309 |
) |
|
29 |
|
Provisions and other liabilities |
|
|
(638 |
) |
|
691 |
|
|
0 |
|
|
53 |
|
Intangible 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 |
|
2013 |
|
|
|
in EUR thousands
|
|
Raw materials and supplies |
|
|
32,019 |
|
|
23,307 |
|
Work in process |
|
|
42,269 |
|
|
38,606 |
|
Finished goods and services completed |
|
|
0 |
|
|
0 |
|
Inventories 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 |
|
2013 |
|
|
|
|
|
in EUR thousands
|
|
Inventories recognised as an expense during the period |
|
|
3 |
|
|
134,940 |
|
|
117,900 |
|
Reversals of write-downs recognised during the year |
|
|
3 |
|
|
|
|
|
(17,127 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
134,940 |
|
|
100,773 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Write-down of inventories during the year |
|
|
3 |
|
|
3,016 |
|
|
35,012 |
|
Inventories measured at net realisable value |
|
|
|
|
|
5,665 |
|
|
17,959 |
|
Carrying 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 |
|
2013 |
|
|
|
in EUR thousands
|
|
Trade receivables |
|
|
27,269 |
|
|
29,475 |
|
Allowances for doubtful accounts |
|
|
(945 |
) |
|
(1,821 |
) |
|
|
|
|
|
|
|
|
Trade receivablesnet |
|
|
26,324 |
|
|
27,654 |
|
|
|
|
|
|
|
|
|
Prepaid expenses |
|
|
1,152 |
|
|
735 |
|
Reimbursement of research and development costs |
|
|
1,485 |
|
|
1,196 |
|
Advance payments to suppliers |
|
|
2,010 |
|
|
61 |
|
VAT recoverable |
|
|
1,865 |
|
|
2,187 |
|
Other 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 |
|
2013 |
|
|
|
in EUR thousands
|
|
Allowance at January 1 |
|
|
1,821 |
|
|
1,819 |
|
Translation adjustments |
|
|
21 |
|
|
(10 |
) |
Impairment losses recognised |
|
|
2 |
|
|
89 |
|
Used |
|
|
(866 |
) |
|
(25 |
) |
Impairment losses reversed |
|
|
(33 |
) |
|
(52 |
) |
|
|
|
|
|
|
|
|
Allowance at December 31 |
|
|
945 |
|
|
1,821 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ageing of past due but not impaired receivables
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
|
|
in EUR thousands
|
|
1-90 days past due |
|
|
1,891 |
|
|
1,437 |
|
More 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 |
|
2013 |
|
|
|
in EUR thousands
|
|
Maturity up to 180 days |
|
|
111,494 |
|
|
38,853 |
|
Maturity 181 days to 365 days |
|
|
40,000 |
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
|
151,494 |
|
|
138,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19. Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
2014 |
|
2013 |
|
|
|
in EUR thousands
|
|
Cash-in-hand |
|
|
3 |
|
|
5 |
|
Short term deposits |
|
|
0 |
|
|
0 |
|
Bank 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 |
|
2013 |
|
January 1 |
|
|
112,613,445 |
|
|
101,975,023 |
|
Shares 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 |
|
Total |
|
|
|
in EUR thousands
|
|
Balance at December 31, 2011 |
|
|
(4,065 |
) |
|
(6,438 |
) |
|
(10,503 |
) |
|
|
|
|
|
|
|
|
|
|
|
Change in currency translation |
|
|
1,512 |
|
|
|
|
|
1,512 |
|
Change in unrealised gains/losses before taxes |
|
|
|
|
|
9,226 |
|
|
9,226 |
|
Deferred 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 |
|
2012 |
|
Earnings/loss per share |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
100,805,804 |
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
100,805,804 |
|
Dilutive effect of share options |
|
|
0 |
|
|
0 |
|
|
0 |
|
Weighted 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 |
|
2012 |
|
Share 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 |
|
2013 |
|
|
|
Number 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 |
|
|
21.68 |
|
Granted during the year |
|
|
1,150,400 |
|
|
13.19 |
|
|
0 |
|
|
0.00 |
|
Exercised during the year |
|
|
81,110 |
|
|
5.53 |
|
|
415,289 |
|
|
5.31 |
|
Forfeited 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 |
|
2013 |
|
|
|
Number of
shares |
|
Average
exercise price |
|
Number of
shares |
|
Average
exercise price |
|
|
|
|
|
(USD)
|
|
|
|
(USD)
|
|
Balance at January 1 |
|
|
5,590 |
|
|
6.55 |
|
|
6,610 |
|
|
7.44 |
|
Exercised during the year |
|
|
|
|
|
|
|
|
|
|
|
|
|
Expired 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 |
|
|
0.5 |
|
2001 |
|
26.93 |
|
|
265,000 |
|
|
0 |
|
|
1.5 |
|
2002 |
|
7.48 |
|
|
408,500 |
|
|
0 |
|
|
2.5 |
|
2006 |
|
3.83 |
|
|
116,950 |
|
|
116,950 |
|
|
1.5 |
|
2007 |
|
10.09 |
|
|
169,875 |
|
|
169,875 |
|
|
3.0 |
|
2008 |
|
4.17 |
|
|
101,390 |
|
|
101,390 |
|
|
4.0 |
|
2009 |
|
24.60 |
|
|
478,100 |
|
|
478,100 |
|
|
5.0 |
|
2010 |
|
26.60 |
|
|
500,100 |
|
|
375,075 |
|
|
6.0 |
|
2011 |
|
12.55 |
|
|
8,000 |
|
|
4,000 |
|
|
7.0 |
|
2012 |
|
15.75 |
|
|
25,000 |
|
|
12,500 |
|
|
8.0 |
|
2014 |
|
14.01 |
|
|
57,000 |
|
|
0 |
|
|
10.0 |
|
2014 |
|
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 2012 |
|
Fair 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 years |
|
Expected 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-
current |
|
|
|
in EUR thousands
|
|
Personnel expenses |
|
|
8,244 |
|
|
(120 |
) |
|
5,808 |
|
|
925 |
|
|
4,314 |
|
|
5,705 |
|
|
5,705 |
|
|
0 |
|
Warranties |
|
|
6,252 |
|
|
29 |
|
|
1,107 |
|
|
2 |
|
|
7,417 |
|
|
12,589 |
|
|
10,846 |
|
|
1,743 |
|
Onerous contracts |
|
|
4,669 |
|
|
(6 |
) |
|
2,021 |
|
|
0 |
|
|
2,760 |
|
|
5,402 |
|
|
5,402 |
|
|
0 |
|
Commissions |
|
|
2,170 |
|
|
(1 |
) |
|
1,623 |
|
|
106 |
|
|
813 |
|
|
1,253 |
|
|
1,253 |
|
|
0 |
|
Other |
|
|
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-
current |
|
|
|
in EUR thousands
|
|
Personnel expenses |
|
|
5,705 |
|
|
202 |
|
|
4,661 |
|
|
715 |
|
|
9,135 |
|
|
9,666 |
|
|
9,666 |
|
|
0 |
|
Warranties |
|
|
12,589 |
|
|
172 |
|
|
5,477 |
|
|
3,921 |
|
|
4,320 |
|
|
7,683 |
|
|
6,695 |
|
|
988 |
|
Onerous contracts |
|
|
5,402 |
|
|
27 |
|
|
3,444 |
|
|
13 |
|
|
1,380 |
|
|
3,352 |
|
|
3,352 |
|
|
0 |
|
Commissions |
|
|
1,253 |
|
|
8 |
|
|
1,380 |
|
|
20 |
|
|
821 |
|
|
682 |
|
|
682 |
|
|
0 |
|
Other |
|
|
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 |
|
2013 |
|
|
|
in EUR thousands
|
|
Trade payables |
|
|
16,397 |
|
|
13,517 |
|
|
|
|
|
|
|
|
|
Liabilities from grants |
|
|
2,015 |
|
|
1,507 |
|
Payroll taxes and social security contributions |
|
|
769 |
|
|
1,111 |
|
VAT and similar taxes |
|
|
52 |
|
|
94 |
|
Other 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 |
|
Assets |
|
|
|
2014 |
|
2013 |
|
2014 |
|
2013 |
|
|
|
in EUR thousands
|
|
US Dollars |
|
|
(62,064 |
) |
|
(44,424 |
) |
|
123,852 |
|
|
83,781 |
|
GB 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
Effect |
|
Increase in value of Euro by 10% kEUR
|
|
2014 |
|
2013 |
|
Profit or loss |
|
|
(3,529 |
) |
|
530 |
|
Other comprehensive income |
|
|
(2,429 |
) |
|
(2,924 |
) |
|
|
|
|
|
|
|
|
|
|
USD
Currency
Effect |
|
Decrease in value of Euro by 10% kEUR
|
|
2014 |
|
2013 |
|
Profit 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 value |
|
|
|
in EUR thousands
|
|
Cash and cash equivalents |
|
|
116,580 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
116,580 |
|
Other financial assets |
|
|
0 |
|
|
0 |
|
|
151,494 |
|
|
0 |
|
|
151,494 |
|
Other non-current assets |
|
|
0 |
|
|
382 |
|
|
0 |
|
|
0 |
|
|
382 |
|
Trade 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 |
|
|
|
|
|
291,830 |
|
At 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 value |
|
|
|
in EUR thousands
|
|
Trade payables |
|
|
0 |
|
|
0 |
|
|
16,397 |
|
|
0 |
|
|
16,397 |
|
Advance 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 |
|
|
|
|
|
83,325 |
|
At 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 value |
|
|
|
in EUR thousands
|
|
Cash and cash equivalents |
|
|
167,454 |
|
|
0 |
|
|
0 |
|
|
0 |
|
|
167,454 |
|
Other financial assets |
|
|
0 |
|
|
0 |
|
|
138,853 |
|
|
0 |
|
|
138,853 |
|
Other non-current assets |
|
|
0 |
|
|
907 |
|
|
0 |
|
|
0 |
|
|
907 |
|
Trade 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 |
|
|
|
|
|
334,480 |
|
At fair value |
|
|
|
|
|
|
|
|
|
|
|
388 |
|
|
388 |
|
F-37
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 value |
|
|
|
in EUR thousands
|
|
Trade payables |
|
|
0 |
|
|
0 |
|
|
13,517 |
|
|
0 |
|
|
13,517 |
|
Advance 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 |
|
|
|
|
|
59,705 |
|
At 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
thousands
|
|
Not later than one year |
|
|
3,957 |
|
Later than one year and not later than five years |
|
|
4,646 |
|
Later 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
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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Short-term employee benefits |
|
|
1,387 |
|
|
1,555 |
|
|
1,124 |
|
Termination benefits |
|
|
0 |
|
|
780 |
|
|
0 |
|
Share 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 |
|
2012 |
|
|
|
in EUR thousands
|
|
Fixed 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 EmployeesCompensation" in this report.
31. Consolidated entities
AIXTRON S.E. controls the following subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of
capital in % |
|
|
|
Country |
|
2014 |
|
2013 |
|
AIXTRON Inc |
|
USA |
|
|
100 |
|
|
100 |
|
AIXTRON Ltd. |
|
England & Wales |
|
|
100 |
|
|
100 |
|
AIXTRON Korea Co. Ltd. |
|
South Korea |
|
|
100 |
|
|
100 |
|
AIXTRON Taiwan Co. Ltd. |
|
Taiwan |
|
|
100 |
|
|
100 |
|
AIXTRON AB |
|
Sweden |
|
|
100 |
|
|
100 |
|
AIXTRON KK |
|
Japan |
|
|
100 |
|
|
100 |
|
AIXTRON China Ltd |
|
P. R. China |
|
|
100 |
|
|
100 |
|
Nanoinstruments Ltd ** |
|
England & Wales |
|
|
n.a. |
|
|
100 |
|
Genus 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
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 |
|
2013 |
|
|
|
in EUR
thousands
|
|
for audit |
|
|
699 |
|
|
719 |
|
for other confirmation services |
|
|
34 |
|
|
35 |
|
for tax advisory services |
|
|
173 |
|
|
299 |
|
for 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 |
|
2013 |
|
Sales |
|
|
65 |
|
|
70 |
|
Research and Development |
|
|
285 |
|
|
297 |
|
Manufacturing and Service |
|
|
331 |
|
|
373 |
|
Administration |
|
|
86 |
|
|
88 |
|
Employees (§ 314 HGB) |
|
|
767 |
|
|
828 |
|
Executive board members |
|
|
2 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
769 |
|
|
831 |
|
Apprentices |
|
|
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
-
- Dipl.-Kfm. Kim Schindelhauer
-
- Aachen/businessman/Chairman of the Supervisory Board since 2002
F-40
Table of Contents
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
36. Supervisory Board and Executive Board (Continued)
-
- Prof. Dr. Wolfgang Blättchen
-
- Leonberg/Managing Director of Blättchen Advisory Group GmbH/member of the Supervisory Board since 1998/Deputy
Chairman of the Supervisory Board since February 27, 2013
-
- Membership of Supervisory Boards and controlling bodies:
-
- Pfisterer Holding AG, WinterbachChairman of the Supervisory Board
-
- APCOA Parking AG, Leinfelden-Echterdingenmember of the Supervisory Board (until December 15, 2014)
-
- FAS AG, Stuttgartmember of the Supervisory Board
-
- Prof. Dr. Rüdiger von Rosen
Frankfurt/Main/businessman/member
of the Supervisory Board since 2002
-
- Membership of Supervisory Boards and controlling bodies:
-
- PriceWaterhouseCoopers AG, Frankfurt/Mainmember of the Supervisory Board(until February 2014)
-
- ICF Bank AG, Frankfurt/MainDeputy Chairman of the Supervisory Board
-
- Paladin Asset Management Investment AG, HannoverChairman of the Supervisory Board
-
- AKO Capital AG, Thalwil/Switzerlandmember of the Board (since April 2014)
-
- Prof. Dr. Petra Denk
Unterschleißheim/Professor
of Energy Economics/member of the Supervisory Board since 2011
-
- Dr. Andreas Biagosch
Munich/Managing
Director Impacting I GmbH & Co KG/member of the Supervisory Board since May 2013
-
- Membership of Supervisory Boards and controlling bodies
-
- Wacker Chemie AG, Munichmember of the Supervisory Board (since February 4, 2015)
-
- Lürssen Maritime Beteiligungen, Bremen, Advisory Board member
-
- Ashok Leyland Limited, Chennai/Indiennon-executive director
-
- Dr. Ing. Martin Komischke
Morgarten/Switzerland/Group
Chief Executive Officer, Hoerbiger Holding AG, Zug/Switzerland/member of the Supervisory Board since May 2013
-
- Membership of Supervisory Boards and controlling bodies
-
- Adcuram Group AG, Munichmember of the Supervisory Board
The
composition of the Company's Executive Board is:
-
- Martin Goetzeler, Aachen, businessman, Chairman, President and Chief Executive Officer since March 1, 2013
-
- Dr. Bernd Schulte, Aachen, physicist, Executive Vice President and Chief Operating Officer since 2002
-
- Dipl.-Kfm.Wolfgang Breme, Aachen, business graduate, Executive Vice President and Chief Financial Officer until
May 31, 2014
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
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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Exhibit 1.1
Articles of Association
ARTICLES OF ASSOCIATION
of
AIXTRON SE
It
is hereby certified that the following Articles of Association of
AIXTRON SE, Herzogenrath
are consistent with the Articles of Association submitted to the commercial register
in the version dated January 23, 2015.
Aachen,
February, 2015
Müsgen, Civil law notary, Aachen
1
Translation for Convenience Purposes
Articles of Association
of
AIXTRON SE
2
I. GENERAL PROVISIONS
§ 1
Company Name, Domicile, Duration
- 1.
- The
Company is registered under the name:
- 2.
- The
domicile of the Company is Herzogenrath.
- 3.
- The
duration of the Company is unlimited.
§ 2
Purpose
- 1.
- 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.
- 2.
- 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 in clause 1 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.
§ 3
Notices and Information
- 1.
- The
Company's notices will be published in the Bundesanzeiger (Federal Gazette), unless otherwise required by law.
- 2.
- Information
intended for the holders of listed securities of the Company may also be transmitted electronically.
II. SHARE CAPITAL AND SHARES
§ 4
Share Capital
- 1.
- The
Company's share capital is EUR 112, 694,555.00 (in words: one hundred and twelve million six hundred ninety four thousand five hundred
fifty five euros). It is composed of 112,694,555 no-par value registered shares. The share capital in the amount of EUR 100,667,177.00 (in words: one hundred million six hundred
sixty seven thousand one hundred seventy seven euros) has been contributed through the conversion of the corporate form of AIXTRON Aktiengesellschaft into AIXTRON SE
- 2.1
- 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 EUR 45,883,905.00 against cash and/or non-cash contributions by issuing new registered no-par value
shares (Authorized Capital 2014). Shareholders must be granted pre-emptive rights. The shares may also be underwritten by one or several credit institutions with the obligation to offer the shares to
the shareholders of the Company for subscription. The Executive Board shall, however, be authorized, with the approval of the Supervisory Board, to exclude the pre-emptive rights of shareholders in
full or in part:
-
- to eliminate fractions resulting from the subscription ratio;
-
- if required for protection against dilution, to grant holders and/or creditors of option or conversion rights arising from
bonds with warrants or convertible bonds that were or will be issued by the Company and/or its subsidiaries the right to subscribe for new shares to the extent that they would
3
The
Executive Board shall also be authorized, with the approval of the Supervisory Board, to determine the further content of the share rights and the conditions for issuing shares.
This
authorization shall applywithout taking into account shares issued without pre-emptive rights in order to eliminate fractions and/or to protect the holders of option or conversion
rights or conversion obligations arising from bonds with warrants or convertible bonds against dilutiononly subject to the provision that following exercise of such authorization the sum
of the shares issued without pre-emptive rights under Authorized Capital 2014 does not exceed 20 percent of the share capital existing at the time this authorization becomes effective
orif this amount is lowerexisting at the time of its exercise. In calculating this limit of 20 percent of the share capital, those shares shall be included which are
issued during the term of this authorization with exclusion of pre-emptive rights under any other authorized capital and/or contingent capital as a result of the exercise of options and/or conversion
rights or conversion obligations to holders of bonds with warrants or convertible bonds, provided that an exclusion of pre-emptive rights to eliminate fractions and/or in favor of the holders of bonds
with warrants or convertible bonds to protect them against dilution will not be taken into account.
- 2.2
- 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 15, 2017 by up to a total of EUR 10,422,817.00 against cash contributions by issuing new registered no-par value shares (Authorized Capital 2012).
Shareholders must be granted pre-emptive rights. The shares may also be underwritten by one or several credit institutions with the obligation to offer the shares to the shareholders of the Company
for subscription. The Executive Board shall, however, be authorized, with the approval of the Supervisory Board, to exclude the pre-emptive rights of shareholders in order to eliminate fractions
resulting from the subscription ratio. The Executive Board shall also be authorized, with the approval of the Supervisory Board, to determine the further content of the share rights and the conditions
for issuing shares.
- 2.3
- The
Company's share capital is conditionally increased by up to EUR 1,926,005.00 by issuing up to 1,926,005 new no-par value registered
shares. This conditional capital increase serves the purpose of granting options to members of the Executive Board and employees of the Company and to members of the management and employees of
affiliated companies under the stock option plans resolved by the General Meeting on May 26, 1999 under agenda item 5. The conditional capital increase will only be implemented to the
extent that the holders of such share options exercise their rights. The new shares carry dividend rights as of the start of the fiscal year in which they are issued as a result of the options being
exercised in each case. The Executive Board is authorized to determine the further details of the implementation of the conditional capital increase with the approval of the Supervisory Board. Where
options are to be granted to members of AIXTRON Aktiengesellschaft's Executive
4
Board,
the further details of the conditional capital increase will be determined by the Supervisory Board.
- 2.4
- The
share capital is conditionally increased by up to EUR 40,715,810.00 by issuing up to 40,715,810 new registered no-par value shares
carrying dividend rights from the beginning of the fiscal year in which they are issued. This contingent capital increase serves the purpose of granting shares to the holders or creditors of bonds
with warrants and/or convertible bonds which will be issued against cash contributions by the Company or any company in which the Company owns a majority interest, either directly or indirectly, based
on the authorization granted by the General Meeting on May 16, 2012 (agenda item 7). The contingent capital increase will only be implemented to the extent that option and/or conversion
rights arising from the bonds will be exercised and/or conversion obligations arising from the bonds will be fulfilled and to the extent that no cash compensation is granted or own shares are used to
satisfy such rights or obligations. The Executive Board shall be authorized, with the approval of the Supervisory Board, to determine the further details of implementing the contingent capital
increase (Contingent Capital I 2012).
- 2.5
- The
Company's share capital is conditionally increased by up to EUR 471,713.00 by issuing up to 471,713 new no-par value registered shares.
This conditional capital increase serves the purpose of granting options to members of the Executive Board of the Company and members of the management of affiliated companies as well as to employees
of the Company and of affiliated companies under the stock option plans in accordance with the General Meeting's resolution of May 22, 2002 (Stock Option Plan 2002). The conditional capital
increase will only be implemented to the extent that the holders of options make use of their rights, and the Company does not grant own shares to satisfy these rights. The new shares carry dividend
rights as of the start of the fiscal year in which they are issued as a result of the options being exercised. The Executive Board is authorized to determine the further details of the implementation
of the conditional capital increase with the approval of the Supervisory Board. Where options are to be granted to members of AIXTRON Aktiengesellschaft's Executive Board, the further details of the
conditional capital increase will be determined by the Supervisory Board.
- 2.6
- The
Company's share capital is conditionally increased by up to EUR 2,890,613.00 by issuing up to 2,890,613 new no-par value registered shares
(Contingent Capital II 2007). The Contingent Capital II 2007 serves the purpose of securing subscription rights arising from share options which will be issued by the Company under the Stock Option
Plan 2007 until and including May 21, 2012 based on the authorization granted by the General Meeting on May 22, 2007. The contingent capital increase will only be implemented to the
extent that the holders of such share options will exercise their option rights and the Company does not grant own shares or cash compensation in fulfillment of the share options. The new shares will
carry dividend rights from the beginning of the fiscal year in which they are issued.
- 2.7
- The
Company's share capital is conditionally increased by up to EUR 4,208,726.00 by issuing up to 4,208,726 new no-par value registered shares
(Contingent Capital II 2012). The Contingent Capital II 2012 serves the purpose of securing subscription rights arising from share options which will be issued by the Company under the Stock Option
Plan 2012 until and including May 15, 2017 based on the authorization granted by the General Meeting on May 16, 2012. The contingent capital increase will only be implemented to the
extent that the holders of such share options will exercise their option rights and the Company does not grant own shares or cash compensation in fulfillment of the share options. The new shares will
carry dividend rights from the beginning of the fiscal year in which they are issued.
- 2.8
- The
Supervisory Board is authorized to reformulate the Articles of Association in accordance with the amount of the capital increase from authorized and
contingent capital in each case.
§ 5
Dividend Rights
In
the case of a capital increase, the dividend rights of the new shares can be determined differently from section 60 of the Aktiengesetz
(German Stock Corporation Act).
5
§ 6
Classes of Shares
- 1.
- The
shares are registered shares.
- 2.
- If,
as part of an increase in capital, the resolution makes no provision as to whether shares are to be bearer shares or registered shares, they will be
registered shares.
- 3.
- The
Executive Board, with the approval of the Supervisory Board, determines the type of share certificates as well as the coupons and renewal coupons. The
same applies to interim certificates, bonds, interest coupons and warrants.
- 4.
- The
Company may issue share certificates representing multiples of shares (global shares). The right of shareholders to the certification of their shares
is excluded.
- 5.
- Renewal
coupons and coupons shall be attached to the shares.
III. CONSTITUTION OF THE COMPANY
§ 7
Corporate Bodies
The
Company's corporate bodies are:
the
Executive Board,
the Supervisory Board,
the General Meeting.
A. Executive Board
§ 8
Executive Board
- 1.
- The
Company's Executive Board is comprised of two or more persons. The Supervisory Board determines the number of Executive Board members. The appointment of
deputy Executive Board members is permitted. The members of the Executive Board are appointed for a maximum period of six years. Reappointments are permissible.
- 2.
- The
Supervisory Board can delegate the conclusion, amendment, and termination of employment contracts to a Supervisory Board committee.
- 3.
- The
Supervisory Board can appoint a member of the Executive Board as the Chairman or the Spokesman of the Executive Board and additional members of the
Executive Board as Deputy Chairmen or Deputy Spokesmen.
§ 9
Legal Representation
- 1.
- The
Company is legally represented by two members of the Executive Board or by one member of the Executive Board acting jointly with a Prokurist (authorized
signatory). The Supervisory Board can grant individual Executive Board members power of sole representation.
- 2.
- The
Supervisory Board can also exempt individual Executive Board members from the restrictions imposed by section 181, second alternative, of the Bürgerliches Gesetzbuch (BGBGerman Civil
Code) (multiple representation).
§10
Management
- 1.
- The
Executive Board conducts the business of the Company in accordance with the law and the Articles of Association. It will pass by-laws for itself by a
unanimous resolution of its members and with the approval of the Supervisory Board.
6
- 2.
- The
Executive Board requires the prior consent of the Supervisory Board in order to conduct the following transactions or take the following
measures:
-
- establishing, acquiring, disposing of, especially in the form of sale, surrendering or dissolving plants, subsidiaries and
companies in which shareholdings are held and participations in other enterprises if, in the specific case, an amount of EUR 500,000 is exceeded;
-
- commencing, materially restricting or giving up fields of activity of the Company;
-
- acquiring and selling real property and rights equivalent to real property, dispositions over such properties and rights
and corresponding transactions resulting in obligations to make such dispositions;
-
- conclusion, amendment and termination of important license contracts or cooperation contracts which involve an economic
risk of more than EUR 1,000,000 for AIXTRON SE or its group companies;
-
- appointment of holders of registered signing authority, general agents and representatives for the entire business
operations.
The
Supervisory Board can make other matters dependent on its consent.
The
Supervisory Board can issue the consent for specific matters in advance or in the context of approving the business planning.
B. Supervisory Board
§ 11
Composition, Election, Term of Office
- 1.
- The
Supervisory Board consists of 6 (six) members. The General Meeting can specify any other number of Supervisory Board members divisible by three.
- 2.
- The
appointment of the Supervisory Board occurs for the period of time until the end of the General Meeting resolving on the approval of actions for the
fourth fiscal year after the commencement of the term of office, whereby the fiscal year in which the appointment occurs is not taken into account; however, the longest term is six years. The General
Meeting may resolve a shorter term of office. Repeated appointment is permissible.
- 3.
- Substitute
members can be elected for Supervisory Board members who have been elected by the General Meeting. The term of office of a substitute member
taking the place of a retired member ends at the end of the General Meeting in which a supplementary election for the remaining term of the retired member takes place, but no later than the end of the
retiring member's term of office.
§ 12
Resignation from Office
Any
member of the Supervisory Board can resign from office by addressing a statement to the Chairman of the Supervisory Board or the Executive Board, giving one month's notice.
§ 13
Chairman of the Supervisory Board
The
Supervisory Board elects a Chairman and a Deputy from among its members. If in the course of an electoral period, the Chairman or the Deputy Chairman retire from their posts, the Supervisory Board
must immediately hold an election for the remainder of the term of the retiree.
7
§ 14
Meetings
The
meetings of the Supervisory Board are convened in writing by the Chairman, orif he is prevented from doing soby his Deputy, giving 14 days' notice. When
calculating the period of notice required, the day on which the invitation was sent and the day of the meeting are not included. The invitation must indicate the individual items on the agenda. In
urgent cases, the period of notice for convening a meeting can be reduced to 3 (three) business days and the invitation can be issued verbally, by fax, telephone, or email.
§ 15
Resolutions
- 1.
- The
agenda must be announced at the time the meeting is convened. Resolutions on agenda items not duly announced in the invitation are only permitted if no
Supervisory Board member presents objects. In such cases, absent Supervisory Board members must be given the opportunity to object to the resolution within an appropriate period to be determined by
the Chairman, orif he is prevented from doing soby his Deputy, or to submit their vote in writing. The resolution shall only take effect if the absent Supervisory Board
members do not object to it within this period or if they vote in favor of it.
- 2.
- Resolutions
of the Supervisory Board are passed at meetings. In exceptional, justified cases, members of the Supervisory Board may also participate in
meetings of the Supervisory Board and its committees by telephone conferencing or video conferencing with the approval of the Chairman, orif he is prevented from giving such
approvalby his Deputy. Supervisory Board members who do not participate in the meeting in accordance with clause 2, sentence 2 above, may take part in resolutions of the
Supervisory Board and its committees by submitting a written vote (also by fax) to the Chairman of the meeting. Outside the meetings, resolutions of the Supervisory Board are only permitted by way of
votes cast in writing, by fax, telephone, or e-mail or by way of a combination of these aforementioned means of communication, if no member of the Supervisory Board objects to this procedure.
- 3.
- The
Supervisory Board is quorate if two thirds of its members in accordance with § 11 clause 1 of the Articles of Association take
part in the resolution. If the Supervisory Board only consists of three members, all three members are required to take part in the resolution.
- 4.
- The
resolutions of the Supervisory Board require a majority of the votes cast. Abstentions are not counted as votes. The Chairman of the meeting has the
casting vote in the event of a tie. The Chairman of the meeting will determine the type of voting procedure to be followed. These provisions apply accordingly to votes cast in writing, or by
telephone, fax, or e-mail.
- 5.
- Minutes
must be taken of Supervisory Board meetings and must be signed by the Chairman of the meeting. The minutes taken on resolutions passed in writing, or
by telephone, fax, or e-mail must be signed by the Chairman of the Supervisory Board, orif he is prevented from doing soby his Deputy.
§ 16
Committees
- 1.
- The
Supervisory Board is authorized and, if prescribed by law, required to form committees of its members and to draw up by-laws establishing their
responsibilities and powers. The Supervisory Board can also, if permitted by law, assign decision-making powers to the committees.
- 2.
- Declarations
of intent by the Supervisory Board and its committees are submitted by the Chairman on behalf of the Supervisory Board, orif he is
prevented from doing soby his Deputy.
§ 17
Tasks/Remuneration for the Supervisory Board
- 1.
- The
Supervisory Board supervises the management activities of the Executive Board.
- 2.
- The
Supervisory Board shall draw up by-laws for itself.
8
- 3.
- In
addition to the reimbursement of expenses (including any value added tax payable on their Supervisory Board remuneration or expenses), the members of the
Supervisory Board will receive an annual compensation in an amount of EUR 25,000, with the Chairman receiving triple this amount and the Deputy Chairman one and a half times this amount. As
well as fixed compensation, the members of the Supervisory Board will also receive total variable compensation of 1% of the Company's net retained profit, less an amount corresponding to 4% of the
paid-in contributions to the share capital. The Chairman of the Supervisory Board receives 6/17, the Deputy Chairman 3/17, and a member of the Supervisory Board 2/17 of the variable
compensation. The amount of the variable compensation shall not exceed four times the fixed compensation per member of the Supervisory Board. Such variable compensation shall be payable following the
end of the General Meeting that resolves on the appropriation of the net retained profit. If members of the Supervisory Board have been members on the Supervisory Board for only part of the fiscal
year, they will receive a prorated remuneration for such period.
- 4.
- The
members of the Supervisory Board will receive an attendance fee in an amount of EUR 2,000 for attending the meetings of committees each; the
chairman of a committee will receive triple this amount. The total amount of attendance fees payable to the members of the Supervisory Board shall be limited to one and a half times of the fixed
compensation of this person pursuant to § 17 clause 3.
- 5.
- The
Company also pays the insurance premiums for the members of Supervisory Board for liability and legal insurance to cover liability risks arising from
their activities for the Supervisory Board, as well as the insurance tax payable on these.
C. General Meeting
§ 18
General Meeting
The
Company's General Meetings take place either at the Company's domicile or a German city with over 100,000 residents.
§ 19
Convening the General Meeting
The
General Meeting is called by the Executive Board or by the Supervisory Board. The General Meeting must be called at least 30 days prior to the date of the meeting. The minimum notice period
under sentence 2 is extended by the days of the registration period (§ 20 clause 2 sentence 1).
§ 20
Participation in the General Meeting
- 1.
- Those
shareholders whose names are entered into the share register on the date of the General Meeting and who have registered for participation in a timely
manner shall be entitled to participate in such General Meeting and to exercise their voting rights.
- 2.
- 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 Meeting, at least six days prior to the General Meeting,
whereby the date of the General Meeting and the date of receipt are not taken into account (registration period). Cancellations and new registrations in the share register will not take place on the
date of the General Meeting and during the last six days prior to the General Meeting.
- 3.
- The
details regarding registration will be announced together with the call for the General Meeting.
- 4.
- The
Executive Board is authorized to provide that shareholders can participate in the General 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 (online participation). The Executive Board is also authorized to make
determinations about the scope and the process for participating and exercising rights under sentence 1. The determinations will be announced together with the call for the General Meeting.
9
§ 21
Chairing the General Meeting
- 1.
- The
General Meeting is chaired by the Chairman of the Supervisory Board, or by his Deputy if the Chairman is unable to do so. If neither the Chairman nor his
Deputy chairs the meeting, it will be chaired by the most senior member of the Supervisory Board (in terms of service) present.
- 2.
- The
chairman of the General Meeting can change the sequence of topics to be discussed as against that announced in the agenda. In addition, he shall decide
on the type and form of voting.
- 3.
- The
chairman of the General Meeting may restrict the right of shareholders to speak and to ask questions to an appropriate amount of time. In particular the
person presiding over the General Meeting may determine an appropriate time frame for the course of the entire General Meeting, for individual items on the agenda and for questions and contributions
by the shareholders.
- 4.
- The
chairman of the General Meeting is authorized to permit in parts or completely the transmission in pictures and sound of the General Meeting in a manner
to be determined in more detail by the chair of the meeting. The transmission can also occur in a form to which the public has unrestricted access.
§ 22
Resolutions
- 1.
- Resolutions
of the General Meeting are passed by a simple majority of the votes cast, unless the Articles of Association or mandatory provisions of law
require otherwise. Insofar as the provisions in the law require that resolutions be passed by a majority of the share capital represented at the time of resolution, a simple majority of the
represented capital is sufficient, as far as this is legally permissible. 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.
- 2.
- If
a simple majority is not achieved in the first round of voting for elections by the General Meeting, an additional round of voting will be held between
the two people who have received the highest number of votes in the first round.
§ 23
Voting Rights
- 1.
- Each
no-par value share grants one vote at General Meetings. Any preferred shares without voting rights only have voting rights in the cases provided for by
law, in this case, each no-par value share also grants one vote.
- 2.
- The
voting right can be exercised by proxy. The grant of proxy, its revocation and proof of proxy for the Company requires the form of text. An easing of the
form can also be determined in the call for a meeting. The Company will provide at least one method of electronic communication for transmitting proof. The further details will be announced together
with the call for the General Meeting. § 135 Aktiengesetz (German Stock Corporation Act) remains unaffected.
- 3.
- The
Executive Board is authorized to provide that shareholders can cast their votes in writing or by means of electronic communications (absentee ballot)
even without participating in the meeting. The authorization includes the right to make determinations about the procedure. The determinations will be announced together with the call for the General
Meeting.
IV. ANNUAL FINANCIAL STATEMENTS, PROVISIONS, APPROPRIATION OF RETAINED EARNINGS
§ 24
Fiscal Year
The
fiscal year is the calendar year.
10
§ 25
Annual Financial Statements, Ordinary General Meeting, Appropriation of Retained Earnings
- 1.
- The
Executive Board shall prepare the annual financial statements as well as the management report for the previous fiscal year and present them to the
Supervisory Board within the first 3 (three) months of each fiscal year. If the annual financial statements have to be audited by an auditor, these documents shall be submitted along with the
auditor's report immediately after the receipt of the auditor's report by the Supervisory Board.
- 2.
- At
the same time, the Executive Board shall submit to the Supervisory Board its proposal for the appropriation of the net retained profit that will be
presented to the General Meeting.
- 3.
- The
Supervisory Board is required to examine the annual financial statements, the management report, and the proposal for the appropriation of the net
retained profit within one month of receiving the auditor's report. The Executive Board will receive the Supervisory Board's report.
- 4.
- After
receiving the Supervisory Board's report of the result of its examination, the Executive Board shall immediately convene the Ordinary General Meeting,
which is required to take place within the first 6 (six) months of every fiscal year.
- 5.
- The
Ordinary General Meeting resolves on the approval of the activities of the Executive Board and the Supervisory Board as well as on the appropriation of
the net retained profit. In addition, the General Meeting resolves on the choice of the auditor and, in the cases provided for by the law, on the adoption of the annual financial statements.
V. AUTHORITY OF THE SUPERVISORY BOARD TO AMEND THE ARTICLES OF ASSOCIATION, FORMATION EXPENSES, PLACE OF JURISDICTION, SPECIAL BENEFITS
§ 26
Amendments to the Articles of Association
The
Supervisory Board is authorized to resolve amendments and additions to the Articles of Association that only concern the formal wording.
§ 27
Costs
- 1.
- The
Company will bear the formation costs and taxes up to a maximum amount of DM 100,000.00.
- 2.
- The
Company assumes the expense for establishing itself with regard to the conversion of corporate form of AIXTRON AG into AIXTRON SE, especially the costs
of the preparatory measures, the costs for examining and preparing the certificate on value by the court appointed expert in accordance with § 37 para. 6 SE Regulation, the
costs for notarizing the Conversion Plan, the costs for entries in the register, the costs of external advisors, the costs for required publications, the costs for conducting the process for
regulating the involvement of employees and the costs for converting stock exchange listings for the shares in AIXTRON AG to shares in AIXTRON SE in an estimated amount of up to
EUR 1,000,000.00.
§ 28
Place of Jurisdiction
The
Company's domicile is the place of jurisdiction.
§ 29
Special Benefits
The
following is pointed out in the context of the conversion of corporate form of AIXTRON AG into AIXTRON SE due to reasons of precaution:
Notwithstanding
the responsibility of the Supervisory Board of AIXTRON SE to make decisions under stock corporation law, it must be assumed that the present members of the Executive Board of AIXTRON
AG will be appointed as members of the Executive Board of AIXTRON SE. The members of the Executive Board of AIXTRON AG are Paul K. Hyland, Dr. Bernd Schulte and Wolfgang Breme.
Furthermore,
the then current members of the Supervisory Board of AIXTRON AG at the time the conversion of AIXTRON AG into AIXTRON SE takes effect are supposed to be appointed as members of the
Supervisory Board of AIXTRON SE (see § 11 clause 3).
11
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Exhibit 4.4
Convenience Translation from the German Original
Contract
between
AIXTRON SE
Kaiserstrasse 98
52134 Herzogenrath
in the following called the "Company"
represented by the chairman of its Supervisory Board
Mr. Kim Schindelhauer, Dipl.-Kfm.
and
Dr. Bernd Schulte
in the following called the "Board Member"
§ 1
Preliminary remark
The
Board Member currently serves as Executive Board member of AIXTRON SE on the basis of the board member service contract dated March 1/7, 2002 and the existing amendments thereof and
supplements thereto. The Supervisory Board decided to extend the board member service contract expiring on March 31, 2015 for an additional term of three years, i.e. until
March 31, 2018. In order to provide for uniform regulations for the employment of Dr. Schulte as Executive Board member of AIXTRON SE, the contractual terms and conditions are set out
uniformly in this revised and restated board member service contract effective as of April 1, 2015.
§ 2
Tasks and duties
- 1.
- Irrespective
of the Board Member's responsibility for the business management as a whole, the responsible management of the business division assigned to him
in the schedule of responsibilities is incumbent upon the Board Member.
- 2.
- The
Board Member conducts the business of the Company in accordance with the law, the articles of association of the Company, the resolutions of the general
meeting and of the Supervisory Board, the rules of procedure of the Executive Board, the schedule of responsibilities as well as this service contract with the due diligence of a prudent business
manager. This responsibility also relates to the enterprises directly or indirectly associated with the Company in accordance with §§ 15 ff. AktG [the German
Stock Corporation Act].
- 3.
- The
Board Member represents the Company under the terms of the articles of association. He is exempt from the restrictions of § 181 BGB
[the German Civil Code] within the limits laid down by § 112 AktG [the German Stock Corporation Act].
- 4.
- The
Company reserves the right to extend, to limit or otherwise to amend the scope of responsibilities of the Board Member.
- 5.
- Irrespective
of the direct allocation of areas of responsibility, all board members are jointly responsible for the financial success of the Company.
- 6.
- The
Board Member represents the Company jointly with one other board member or holder of a full power of attorney.
- 7.
- At
the Company's request, the Board Member will accept mandates and similar offices in any companies in which the Company holds an interest, either directly
or indirectly. The Board Member shall resign from any mandates and offices which are held by him the interest of the Company when he ceases to serve as Board Member or, if so requested by the Company,
at any earlier date. The remuneration received by the Board Member hereunder shall be in full compensation of all activities involved in any such mandates or offices.
§ 3
Secondary activities, working hours
- 1.
- The
Board Member has to execute the tasks incumbent upon him with the due care of a prudent and diligent board member. He has to place his full working
capacity at the disposal of the Company, to promote its interests in every respect as well as to strive intently towards a successful co-operation with the other board members and the other employees.
- 2.
- The
Board Member shall make available to the Company his full working capacity, his experience and knowledge. He is not bound by fixed working hours. He is,
however, obliged to be available to provide his service at any timewhen and so far as the good of the Company requires it.
- 3.
- In
so far as the Board Member holds at the same time any other mandates or offices, including that of a managing director, in other companies, all or the
majority of the shares of which belong to the Company, this activity is considered approved upon the conclusion of the appropriate employment contract or upon his appointment as managing director or
holder of any other mandates or offices. In cases where there is a conflict, the Board Member is obliged to weigh up the conflicting demands and allot his working capacity and working hours
accordingly.
2
- 4.
- Secondary
activities such as membership of an advisory or supervisory board are permissible at companies or organizations that do not stand in any current or
potential competitive relationship with the Company; however, the prior written consent of the Chairman of the Supervisory Board is required.
§ 4
Benefits
- 1.
- As
remuneration for his activity, the Board Member receives a monthly salary of EUR 30,000.00 gross, which is paid 13 times per year. The annual salary
accordingly amounts to EUR 390,000.00 gross. The monthly salary is to be paid at the end of each calendar month. The 13th salary is disbursed together with the payment of the salary for the
month of November.
- 2.
- In
addition, the Board Member receives from a "total bonus pot" a profit-sharing bonus in the amount of 2.5% of the modified consolidated profit for the year
(in accordance with IFRS consolidated accounts). The total bonus pot amounts to 10% of the modified consolidated profit for the year and amounts in sum to a maximum of EUR 6.5 million. The
modified consolidated profit for the year results from the consolidated profit for the year according to the consolidated accounts (IFRS) of the Company audited by the external auditors, less any
consolidated loss brought forward and any amounts that are to be transferred in the annual accounts of AIXTRON SE to the retained earnings in accordance with the law or the articles of association.
The consolidated loss brought forward results from the annual consolidated losses from previous years, less annual consolidated profits from subsequent financial years.
50%
of the profit-sharing bonus is paid in cash (cash portion) and the remaining 50% in shares (share portion).
The
cash portion will be paid within one month after the Supervisory Board has adopted the consolidated accounts for the relevant financial year.
The
amount of the profit-sharing bonus that is attributable to the share portion will be calculated as a vested option for a whole number of shares in the Company; any remaining amount of the
profit-sharing bonus shall be forfeited. The number of the shares to be granted under the share portion will be determined in accordance with the closing price of the share on the third bank business
day following the annual general meeting to which the annual accounts and the consolidated accounts for the relevant financial year for which the bonus is granted are submitted. The relevant share
portion will be transferred to the Board Member on the third bank business day following the annual general meeting in the third financial year after the share portion was granted (transfer date). The
entitlement to the share portion shall continue to exist after the Board Member has departed from the Company for any reason (for example, termination or expiration of the contract, death). The share
portion will be granted from own shares of the Company; if, in the absence of a corresponding authorization of the Supervisory Board by the general meeting, the Company does not hold any own shares or
an insufficient number of own shares which may be granted to the Board Member on the transfer date, the Board Member will receive the value of the share portion [at the opening price on
the third bank business day following the annual general meeting in the third financial year after the share portion was granted] in cash, either in full or on a pro rata basis.
If
the employment relationship is terminated by the Company without observing any notice period for good cause that lies with the person of the Board Member and for which he has to bear
responsibility, the Board Member will not be entitled to any bonus payment for the year in which the termination notice is issued, either in full or on a pro rata basis.
- 3.
- For
the purposes of a pension scheme, the Company pays the Board Member up to EUR 40,000.00 p.a. according to his choice as the premium for life insurance to
be taken out or as an additional component of his salary (gross).
The
Company pays the regular premiums for accident insurance for the benefit of the Board Member; the sums insured are EUR 500,000.00 in the event of accidental death, EUR 1,000,000.00 in the event of
accidental death as a result of the use of public transport and EUR 1,000,000.00 in the event of disability according to a progressive disability scale.
- 4.
- In
addition to that, the Company pays the employer's contributions to the compulsory health insurance or the same amount to alternative insurance with
waiver.
3
- 5.
- If
the employment relationship of the Board Member ends before a full financial year is completed, all of the above remuneration benefits shall be calculated
pro rata temporis.
- 6.
- All
overtime, supplementary work, work on Sundays and public holidays as well as activities for subsidiary and associated companies that may arise are also
satisfied by the remuneration provided for above.
- 7.
- The
Company has taken out D&O insurance for all members of the Executive Board and the Supervisory Board, which provides for a deductible of at least 10% of
each loss that occurs, but not exceeding one and a half times the amount of the fixed annual remuneration paid to the Board Member. If the Board Member should depart from the Company, he shall be
entitled to receive a copy of the relevant policies upon request.
§ 5
Other benefits
- 1.
- For
business travel, the Board Member is entitled to reimbursement of his travel expenses upon presentation of the appropriate receipts.
- 2.
- An
appropriate company carMercedes E class or equivalentshall be made available to the Board Member. He is entitled to use the
passenger car placed at his disposal also for private purposes. The Board Member shall bear the income tax on the monetary value of the benefit represented by this private use. The Company bears the
running and maintenance costs.
§ 6
Continued payment of the benefits
- 1.
- Should
the Board Member be prevented from exercising his duties on the board on account of illness or for any other reason for which he bears no
responsibility, then his monthly salary as defined in § 4 para. 1 shall continue to be paid to him in full for the duration of three months and at a rate of 50% for a further nine
months. Any sickness benefits paid by a health insurance will be deducted from such amount.
- 2.
- The
following shall apply concerning the profit-sharing bonus:
In
the event that the Board Member suffers an illness or other incapacity for which he is not responsible for a duration of more than six months, the profit-sharing bonus shall only be paid for the
first six months after the commencement of the incapacity. Following the resumption of his activities, the Board Member is entitled to the profit-sharing bonus for the current financial year pro rata
temporis based on the full months remaining in that year.
- 3.
- In
the event of the death of the Board Member, his legal heirs as joint and several creditors shall receive the salary of the Board Member as defined in
§ 4 para. 1 for the month in which the death occurs as well as for the subsequent three months.
§ 7
Annual leave
- 1.
- The
Board Member is entitled to annual leave of 30 (thirty) days.
- 2.
- The
annual leave is to be arranged in co-ordination with the other board members in such a way that the proper management and representation of the Company
is always ensured.
§ 8
Prohibition on competition
- 1.
- For
the duration of this contract the Board Member is prohibited from engaging in any activity, either as an employee or based on self-employment, or from
providing advice or support in any form whatsoever, whether directly or indirectly or occasionally or on a commercial basis, on behalf of or to any of the companies appearing in the list attached
hereto. The list is defined once a year at the meeting of the Supervisory Board deciding on the budget of the following year. The provisions of § 88 AktG [German
Stock Corporation Act] shall apply accordingly.
- 2.
- In
addition to that, the Board Member is prohibited for the duration of this service contract from holding an interest in other companies that are in direct
or indirect competition with the Company or with which the Company maintains business relations, whether that be directly or indirectly. The only cases where this is not prohibited is when the company
in question is a listed company and the commitment amounts to less than 2% of its share capital.
4
- 3.
- Exceptions
from these restrictions require the prior written approval of the Chairman of the Supervisory Board. Activities for subsidiary and associated
companies of the Company are generally exempted from the provisions of this section.
- 4.
- The
prohibition on competition shall continue to apply for the duration of 24 (twenty-four) months after the end of this contract. The post-contractual
prohibition on competition shall not apply if the contract with the Board Member ends as a result of the Board Member reaching the age of 65 as provided for in § 11 para. 2.
- 5.
- As
compensation for the post-contractual prohibition on competition, the Board Member will receive 50% of the monthly salary last paid to him as defined in
§ 4 paras. 1 and 2; such compensation shall be payable for the duration of the post-contractual prohibition on competition.
- 6.
- The
Company may, during the term of this contract, waive the post-contractual prohibition on competition at any time with immediate effect. The Company will
in such case no longer be required to pay the compensation defined above as soon as six months have elapsed after receipt of the notification of the waiver by the Board Member.
- 7.
- The
Board Member will have to accept a deduction from the compensation of any other income realized by him if and to the extent such income exceeds, together
with the compensation, 100% of the fixed remuneration last received by him. The Board Member has to notify at the end of each calendar quarter any other income realized by him; if requested, the Board
Member shall furnish proof of such income.
- 8.
- For
each negligent or willful violation of the contractual or post-contractual prohibition on competition set forth herein, the Board Member shall pay a
penalty in an amount that is equal to the monthly gross salary most recently received by him hereunder. If the violation consists of holding a capital interest in a competitor or entering into a
recurring obligation (e.g. an employment, service, commercial agent or consultancy agreement), the penalty shall be forfeited for each month which has commenced and in which the capital
interest is held or the recurring obligation continues (continuing violation). Several violations shall trigger separate penalties, which may become payable in the same month. If, however, individual
violations should be committed as part of a continuing violation, such individual violations are covered by the penalty payable for the continuing violation. In the event of a forfeiture of several
penalties, the sum of the penalties shall be limited to six times the monthly gross salary most recently received by the Board Member. The right to claim damages beyond the forfeited penalty is
reserved, as well as the right to assert any other statutory rights and remedies arising from a violation (e.g. injunctive relief, loss of compensation for the prohibition on competition by the
Board Member for the duration of the violation, etc.).
§ 9
Confidentiality
- 1.
- The
Board Member undertakes to maintain confidentiality concerning all confidential business matters and procedures, including, but not limited to, business
and trade secrets, which he gains knowledge of within the framework of his activity, also following his departure from the Company.
- 2.
- Upon
his departure from the Company or discharge from his obligation to provide services for the Company, the Board Member shall release to it all documents
relating to the Company or an associated company, including duplicates and photocopies of these in his possession, but excluding generally accessible documents or such documents that the Board Member
has acquired in another capacity, e.g. as a shareholder, and has to affirm to the Company in writing that this has been completed in full. The Board Member does not have any right of retention
in these documents in any case.
§ 10
Service inventions
- 1.
- All
rights in inventions that can or cannot be protected, suggestions for improvements, designs, etc. (in the following called "inventions") that the Board
Member makes during the service relationship pertain to the Company or to a third party designated by the latter. They are to be reported to the Chairman of the Supervisory Board in any event. The
Board Member will do everything for the account of the Company that is necessary according to relevant legal regulations to acquire for the
5
Company
or the third party the corresponding legal protection at home and abroad for inventions of this kind.
- 2.
- Inventions
of the Board Member that cannot be protected are compensated by the benefits laid down in this contract. For inventions capable of protection that
are reported in accordance with § 10 para. 1, the valid regulations of AIXTRON SE are to be applied.
§ 11
Duration of the contract
- 1.
- This
contract comes into force with effect from April 1, 2015.
This
contract ends as soon as the regular appointment as a board member ends, which would be the end of March 31, 2018 (regular term) at the time of conclusion of this contract, unless the
contract is extended or ends at an earlier date in accordance with § 12 below.
If
the appointment as a board member is extended by resolution of the Supervisory Board, then the duration of this contract is extended accordingly. The parties should agree on any extension at the
latest nine months before the contract expires.
- 2.
- This
contract ends in any event, without this requiring any notice of termination, at the end of the month in which the Board Member turns 65 years of
age.
- 3.
- The
right to terminate this contract without observing any notice period remains unaffected.
- 4.
- The
person competent to receive a notice of termination given by the Board Member is the Chairman of the Supervisory Board. Notice of any termination has to
be made in writing.
- 5.
- The
Company is entitled, in case of any overriding interests at any time, in particular following revocation of the appointment or following issuance of a
notice of termination, to discharge the Board Member from his obligation to provide services for the Company. If the service relationship is terminated or the appointment of the Board Member comes to
an end, then the Board Member is under the obligationeven when the effectiveness of the termination and/or of the ending of the appointment to the board is contestedto
terminate and resign from all offices and duties that have been assumed by him in connection with his activity for the Company and/or for its associated companies at the next possible date; the
Supervisory Board can stipulate that these obligations become effective at a later point in time, at the latest, however, by the end of the service contract.
§ 12
Compensationchange of control
- 1.
- In
the event of a premature end of the mandate of the Board Member by revocation of the appointment or as a result of a resignation by the Board Member for
good cause for which the Company is responsible, this employment contract shall end after expiration of the statutory notice period set forth in § 622 paras. 1 and 2 BGB
[the German Civil Code] without requiring any express written notice of termination. If the appointment of the Board Member ends prematurely as a result of a revocation of his
appointment, the Board Member will receive a compensation in the amount of the fixed and variable remuneration set forth in § 4 paras. 1 and 2 and expected to be owed by the Company
to the Board Member for the remaining term of the employment contract, but not to exceed twice the annual remuneration set forth in § 4 paras. 1 and 2 (compensation cap). For the
purposes hereof, the remaining term shall be the period between the end of the employment contract and the end of the regular term. The compensation cap will be calculated in accordance with
§ 12 para. 5. Any payments exceeding such compensation are hereby excluded. The total amount of the compensation shall become payable when the employment contract ends. The right to
terminate this employment contract for good cause without observing any notice period in accordance with § 626 BGB [the German Civil Code] remains
unaffected; if this right is exercised, § 12 para. 1 as a whole shall not be applicable.
- 2.
- If
the parties should in connection with a premature end of the appointment of the Board Member agree mutually on a cancellation of the employment contract,
the total value of the payments and benefits promised by the Company to the Board member in such a cancellation agreement may not exceed the value of the compensation in accordance with
§ 12 para. 1 by taking into account the compensation cap.
6
- 3.
- If
a change of control event as defined in § 12 para. 4 hereof occurs, the Board Member shall be entitled to terminate the service
relationship by observing a notice period of three months with effect to the end of the month and to resign from office on the effective date of termination; the Board Member has such right of
termination at the first event and all subsequent events of a defined change of control. Upon exercise of such right, the Board Member shall be entitled to payment of a compensation in the amount of
the fixed and variable remuneration set forth in § 4 paras. 1 and 2 and expected to be owed by the Company to the Board Member for the remaining term (as defined in
§ 12 para. 1) of the employment contract, but not to exceed the compensation cap (as defined in § 12 para. 1). The compensation cap will be
calculated in accordance with § 12 para. 5. Any payments exceeding such compensation are hereby excluded. The total amount of the compensation will become payable when the
employment contract ends.
- 4.
- For
the purposes hereof, a change of control event occurs if and when a third party or a group of third parties who contractually combine their shares in
order to act subsequently as a third party holds, either directly or indirectly, more than 50% of the Company's share capital.
- 5.
- The
compensation cap in accordance with § 12 paras. 1 and 3 shall be calculated on the basis of the total remuneration resulting from
§ 4 paras. 1 and 2 for the financial year ended and of the expected total remuneration resulting from § 4 paras. 1 and 2 for the current financial year. This
shall also apply if the employment contract ends on the last day of the current financial year.
§ 13
Final provisions
- 1.
- Verbal
ancillary agreements are not made; amendments and supplements to this contract have to be made in written form as a minimum in order to be effective.
This requirement concerning written form can only be waived by written statement of the parties concluding the contract.
- 2.
- Should
provisions of this contract be legally invalid in full or in part or later lose their legal effect, then the validity of the remaining provisions of
the contract shall not be affected by that. The same shall apply if a gap should emerge in this contract. In place of the invalid provision or to fill the gap, a suitable regulation is to be created
thatin so far as legally possiblecomes closest commercially to what the parties concluding the contract wanted or, based on the spirit and purpose of this contract, what they
would have wanted had they considered this point.
- 3.
- The
two parties confirm that they have each received an executed copy of this contract.
§ 14
Venue
The
registered office of the Company is agreed as the venue for disputes arising from this contractual relationship. The law of the Federal Republic of Germany shall apply.
|
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|
June 12, 2014 |
|
June 13, 2014 |
[signed]
Kim Schindelhauer Chairman of the Supervisory Board of
der AIXTRON SE |
|
[signed]
Dr. Bernd Schulte Member of the Executive Board of
AIXTRON SE |
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§ 1 Preliminary remark
§ 2 Tasks and duties
§ 3 Secondary activities, working hours
§ 4 Benefits
§ 5 Other benefits
§ 6 Continued payment of the benefits
§ 7 Annual leave
§ 8 Prohibition on competition
§ 9 Confidentiality
§ 10 Service inventions
§ 11 Duration of the contract
§ 12 Compensationchange of control
§ 13 Final provisions
§ 14 Venue
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Exhibit 11.1
Code of Ethics
This Code of Ethics (this "Code") applies to the members of AIXTRON SE's Executive Board and the Senior Financial Officers nominated by
the Executive Board of AIXTRON SE (collectively the "Covered Individuals").
The
purpose of this Code is to deter wrongdoing and to ensure promotion of:
- (1)
- honest
and ethical conduct, including the ethical handling of conflicts of interest between personal and professional relationships;
- (2)
- full,
fair, accurate, timely and understandable disclosure of quarterly and annual reports to be filed by the AIXTRON Group;
- (3)
- compliance
with all applicable laws and governmental rules and regulations;
- (4)
- prompt
internal reporting of violations of this Code; and
- (5)
- accountability
for adherence to this Code.
Honest and Ethical Conduct; Conflicts of Interest
Each Covered Individual, in the performance of his duties for AIXTRON SE and any subsidiary of AIXTRON SE (the AIXTRON Group), assumes
personal responsibility to act with integrity. Integrity requires being honest and candid while still maintaining the confidentiality of information where required and adhering to a high standard of
business ethics.
Each
Covered Individual shall avoid conflicts of interest wherever possible. A "conflict of interest" occurs when a Covered Individual's personal interest conflicts or interferes with
the interests of the AIXTRON Group or would likely conflict or interfere with them. In particular, a conflict of interest exists when a Covered Individual has interests that make it impossible or
difficult to perform his or her work objectively and effectively in the interests of the AIXTRON Group. A conflict of interest may also arise when a Covered Individual receives improper personal
benefits as a result of his or her position in the AIXTRON Group. Furthermore, a conflict of interest also exists for a Covered Individual when a situation that would present a conflict of interest to
him or her involves a family member or close relative.
In
the performance of his or her duties, each Covered Individual is expected to consider whether a conflict of interest exists or may arise. If a Covered Individual becomes aware of a
conflict of interest or any material transaction or relationship that could reasonably be expected to give rise to a conflict of interest, he or she is required to promptly inform his or her superior
or the Chief Financial Officer, or, in the case of a member of the Executive Board, the Chairman of the Audit Committee. The concerned Covered Individual shall take all action necessary and
appropriate to resolve the conflict.
The same applies to such cases where the Covered Individual becomes aware that due to his or her activity it appears that a conflict of interest may exist.
Full, Fair, Accurate, Timely and Understandable Disclosure
Each Covered Individual, to the extent of his or her area of responsibilities, is required to ensure that the financial statements of
the AIXTRON Group and its public reports and communications provide full, fair, accurate, timely and understandable disclosure. In this context, effective disclosure and control procedures, internal
monitoring systems and financial reporting procedures are required to be established, maintained and communicated to the Covered Individuals.
To
the extent of his or her area of responsibilities, each Covered Individual is expected to be familiar and comply with the disclosure requirements applicable to the AIXTRON Group and
the AIXTRON Group's disclosure controls and procedures to ensure that the AIXTRON Group's financial reports and other public documents filed with or submitted to regulators comply in all material
respects with the applicable laws and regulations.
Compliance with Applicable Laws and Governmental Rules and Regulations
Within his or her area of responsibilities, each Covered Individual shall ensure that the AIXTRON Group complies with all applicable
laws, rules and regulations, in particular those relating to accounting and auditing matters.
1
Prompt Internal Reporting of Violations of this Code
Any Covered Individual who becomes aware of any potential violation of this Code is required promptly to notify the AIXTRON Group.
Violations shall be reported to the Executive Board and the Supervisory Board of AIXTRON SE. In addition, each Covered Individual
and every other employee of the AIXTRON Group may report violations of this code to the Chairman of the Supervisory Board by using an internally communicated email account.
To
encourage reporting of violations of this Code, the AIXTRON Group shall not retaliate or permit retaliation against any Covered Individual or against any employee who acted in good
faith when making a report or being involved in a violation.
Accountability for Adherence to this Code
Each Covered Individual takes personal responsibility to ensure that his or her actions comply with this Code.
Changes and Waivers
Any change to or any waiver of any provision of this Code for a Covered Individual may be made only with the approval of the
Supervisory Board. Formal changes or waivers shall be required in the event of any material departure from any provision of this Code. Any such change or waiver relating to a Covered Individual shall
be disclosed in the next Annual Report on Form 20-F filed by the AIXTRON Group.
Herzogenrath,
July 1st, 2014
For the Executive Board of AIXTRON SE
Martin Goetzeler, President & CEO
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Exhibit 12.1
Section 302 Certification
I,
Martin Goetzeler certify that:
- 1.
- I
have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2014 of AIXTRON SE (the "Company");
- 2.
- Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3.
- Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
- 4.
- I
am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company
and have:
- (a)
- Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is
being prepared;
- (b)
- Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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;
- (c)
- Evaluated
the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
- (d)
- Disclosed
in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
- 5.
- I
have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the Audit Committee of the
Company's board of directors (or persons performing the equivalent functions):
- (a)
- All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report financial information; and
- (b)
- Any
fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial
reporting.
Date:
February 24, 2015
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|
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/s/ MARTIN GOETZELER
|
|
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Name: Martin Goetzeler
Title: Chairman, President and Chief Executive Officer |
1
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Section 302 Certification
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Exhibit 12.2
Section 302 Certification
I,
Martin Goetzeler certify that:
- 1.
- I
have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2014 of AIXTRON SE (the "Company");
- 2.
- Based
on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3.
- Based
on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;
- 4.
- I
am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company
and have:
- (a)
- Designed
such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that
material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is
being prepared;
- (b)
- Designed
such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, 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;
- (c)
- Evaluated
the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
- (d)
- Disclosed
in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report
that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and
- 5.
- I
have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the Audit Committee of the
Company's board of directors (or persons performing the equivalent functions):
- (a)
- All
significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the Company's ability to record, process, summarize and report financial information; and
- (b)
- Any
fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial
reporting.
Date:
February 24, 2015
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/s/ MARTIN GOETZELER
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Name: Martin Goetzeler
Title: Acting Chief Financial Officer |
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Section 302 Certification
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Exhibit 13.1
Section 906 Certification
(pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the U.S. Sarbanes-Oxley Act of 2002)
In
connection with the Annual Report on Form 20-F for the fiscal year ended December 31, 2014 of AIXTRON SE (the "Company") as filed with the U.S. Securities
and Exchange Commission (the "Commission") on or about the date hereof (the "Report") and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, the undersigned, in the capacities set forth below, hereby certifies, that, to the best of his knowledge:
- (1)
- the
Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
- (2)
- the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ MARTIN GOETZELER
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Name: Martin Goetzeler
Title: Chairman, President, Chief Executive Officer
and Acting Chief Financial Officer |
Date:
February 24, 2015
A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature appearing in typed form within
the electronic version of this written statement, has been provided to the Company and will be retained by the Company in accordance with the applicable provisions of the U.S. Securities
Exchange Act of 1934, as amended, and the related rules and regulations.
This written statement accompanies the Annual Report on Form 20-F in which it appears as an Exhibit pursuant to Section 906 of the
U.S. Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the U.S. Sarbanes-Oxley Act of 2002 or other applicable law, be deemed filed by the Company for purposes
of Section 18 of the U.S. Securities Exchange Act of 1934, as amended.
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Exhibit 15.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in Registration Statement No. 333-123513, No. 333-134045 and
No. 333-165495 on Form S-8 of our reports dated February 24, 2015, relating to the financial statements of AIXTRON SE, and the effectiveness of AIXTRON SE's internal control over
financial reporting, appearing in this Annual Report on Form 20-F of AIXTRON SE for the year ended December 31, 2014.
/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft
Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Duesseldorf, Germany, February 24, 2015
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Consent of Independent Registered Public Accounting Firm
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