AIXTRON AG: Continued profits and revenues growth in the third quarter ‘98

!!! Press Release !!!

AIXTRON AG: Continued profits and revenues growth in the third quarter ‘98
Upward revision of forecast for the financial year

According to forecasts from independent market research institutes, compound semiconductor markets are growing at an annual rate of up to 100 per cent - this strong growth has boosted AIXTRON AG's business activities in the third quarter of 1998. The Aachen-based company is the global market and technology leader for MOCVD equipment - the key technology for the production of compound semiconductors. AIXTRON AG's revenues within the third quarter ran to DM 31 million. Pre-tax profits totalled DM 7.8 million, according to HGB accounting principles, while DVFA/SG consolidated net profits stood at DM 3.7 million. For the first nine months of the current financial year, total revenues amounted to DM 85 million. According to HGB, that left a DVFA/SG consolidated profit of DM 9.4 million, compared to DM 5.2 million in 1997. Profits therefore grew proportionally faster than revenues, as forecast by AIXTRON at the time of the IPO one year ago.

Alongside HGB standards, AIXTRON also compiles accounts according to US GAAP. In accordance to these accounting principles, revenues of DM 85 million produced a margin of DM 40.5 million in the first nine months of the year. Following deductions for expenses, the company posted an operating income of DM 19.4 million. AIXTRON invested DM 6.7 million in research and development - a ratio of 7.9 per cent in line with the plan for 1998. Pre-tax profits totalled DM 21.1 million, consolidated net profits raised to DM 9.5 million.

In line with the excellent third-quarter performance, management has adjusted forecasts upwards for the whole of the year. At annual revenues of DM 106 million (an increase of 36 per cent on the previous year) consolidated DVFA/SG profits of DM 11.3 are forecast (up 77%). Earnings per share will, accordingly, amount to DM 2.26. The return on sales will rise to 10.7 per cent, compared to 8.2 per cent in 1997. The return on equity will amount to 15.1 per cent, compared to 9.8 per cent in the previous year. An order backlog to the value of DM 80.5 million at end-October also promises further outstanding business growth.

In Taiwan, the expansion in production capacity for compound semiconductors continues unabated. Because of its technological advantages - the highest-quality products at significantly lower production costs than those of competitors- AIXTRON equipment is the first choice. And in Europe, companies such as Siemens, Philips or HP are investing increasing sums in the manufacture of compound semiconductors - destined for deployment in e.g. light-emitting diodes, a mass application for compound semiconductors. Experts are forecasting a revolution in lighting technology through these newly developed, ultra-bright and white LEDs - a transformation comparable to the introduction of the vacuum tube in the 1960s. Applications for LEDs include brake lights and interior lighting in vehicles, stadium screens, zippers and displays in airports and train stations, or in traffic management and signalling technology. Currently, Siemens is launching a pilot project in Germany which will see 200 traffic lights fitted with LEDs.

Compound semiconductors, comprising several chemical elements, the heart of many electronic applications, including new-generation mobile phones, CD/DVD layers, data transfer via optic fibre and solar cells in satellites.

For further information please contact:

Dr. Claus Ehrenbeck
Investor Relations Manager
AIXTRON AG
Kackertstr. 15-17
52072 Aachen
Germany
Tel: 49 241 8909-444
Fax: 49 241 8909-445
E-mail: invest@aixtron.com