As a manufacturer of capital goods, AIXTRON may be affected by the development of the general economic environment, as this could impact its own suppliers, manufacturing costs, and sales opportunities, driven by the customers' willingness to invest.
Multiple challenges impacted and significantly slowed global economic development in 2022. Global supply chains remained under pressure in the third year of the COVID-19 pandemic, due in particular to repeated large-scale lockdowns under China's zero COVID policy. In addition, the Russian attack on Ukraine from late February caused further severe dislocations in the global economic cycle. Far-reaching international sanctions meant that important Russian raw materials, particularly in the energy sector, were no longer available, leading to corresponding shortages and drastic price increases. The resulting sharp rise in general inflation rates prompted the central banks, above all the U.S. Federal Reserve, to react. With a series of significant key interest rate increases to fight inflation, they implemented the already announced monetary policy tightening much faster and more extensively than expected. The combination of material shortages, rising prices and rising interest rates confronted consumers, companies and countries with adjustment processes that were as difficult as they were severe, resulting in the short term above all in slower economic activities.
Against this backdrop, the International Monetary Fund (IMF) forecast in its January 2023 World Economic Outlook Update (WEO) significantly lower growth in global economic output in 2022 of 3.4%, down from 6.2% in 2021. The guidance for 2023 at 2.9% is 0.2 percentage points higher than it was in the October 2022 WEO. For the industrialized nations, the expected growth rate for 2022 is 2.7% (2021: 5.4%), expected to decline to 1.2% in 2023. The expected growth rate for the emerging and developing countries in 2022 is 3.9% (2021: 6.7%) projected to rise modestly to 4.0% in 2023. Expectations for world trade volume in 2022 were 5.4% (2021: 10.4%) declining to 2.4% in 2023, while global inflation is expected to have nearly doubled to 8.8% (2021: 4.7%) falling again to 6.6% in 2023.1
The strongly export-oriented German machinery and equipment engineering sector also suffered from increasing reluctance of customers to invest over the course of the year due to the increased economic uncertainties. According to reports from the German Engineering Federation (VDMA), companies recorded a price adjusted decline in incoming orders of 4% in 2022. Orders from abroad declined by 4%, while domestic orders decreased by 5%. 2
1 IMF: World Economic Outlook Update, January 2023
2VDMA: Order intake in machinery and plant engineering, December 2022
Demand for AIXTRON's products remains largely dependent on industry-specific developments, such as the introduction of new applications in consumer electronics, IT infrastructure, electromobility, or demand in sub-segments of the global semiconductor market. These developments are based on the megatrends of digitalization, electrification, and sustainability and thus continued to be very robust.
The U.S. dollar exchange rate initially strengthened significantly under the impact of the U.S. Federal Reserve's rapid and aggressive action to combat inflation in 2022. It had already fallen below parity with the Euro in August and at the end of September, one even had to pay less than 0.96 USD/EUR. By then the US dollar had appreciated by more than 15% in the course of the year. It was not until the European Central Bank (ECB) also took strong interest rate steps and the ECB announced that it would continue to fight inflation consistently that the Euro slowly recovered from its lows by the end of December. As a result, the US dollar closed the year at 1.0674 USD/EUR on December 30, 2022 (2021: 1.1372 USD/EUR), appreciating by around 6% overall. AIXTRON applied an average USD/ EUR exchange rate of 1.06 USD/EUR in fiscal year 2022 (Q1/2022: 1.13 USD/EUR; Q2/2022: 1.08 USD/EUR; Q3/2022: 1.02 USD/EUR; Q4/2022: 1.00 USD/EUR). On average over the year, the exchange rate was thus significantly below the prior-year average (2021: 1.19 USD/EUR). Compared to the previous year, this had a correspondingly positive impact on the Group’s US-dollar-denominated revenues.
AIXTRON’s Executive Board continues to carefully monitor the developments of the global economy and the financial markets to decide what can potentially be done to mitigate negative external effects on AIXTRON’s business. The global crisis situations and market developments continued to have only a minor overall impact on AIXTRON's business. Logistics and supply chains were tense, but remained stable overall in the view of AIXTRON's Executive Board. In 2022, no forward exchange contracts or other hedging transactions were entered into. Therefore, no currency hedging contracts were in place as of December 31, 2022. The Executive Board reserves the right to carry out hedging transactions in the future, should this be deemed appropriate.
Competitors in the market for CVD/MOCVD equipment are Veeco Instruments, Inc. (USA, “Veeco”), Taiyo Nippon Sanso (Japan, “TNS”), Tokyo Electron Ltd. (Japan, “TEL”), Advanced Micro-Fabrication Equipment Inc. (China, “AMEC”), Tang Optoelectronics Equipment Corporation Limited (China, “TOPEC”) as well as ASM International N.V. (Netherlands) (“ASMI”) and Nuflare Technology Inc. (Japan, “Nuflare”). Other companies are also continuing to try to qualify their own MOCVD-systems with their customers. For example, Technology Engine of Science Co. Ltd. (South Korea, “TES”), Zhejiang Jingsheng Mechanical (China, “JSG”) and HERMES Epitek (Taiwan, “HERMES”) are working on the development of their own MOCVD system solutions and are trying to establish them in the market.
According to a study by the market research institute Gartner, AIXTRON has extended its global market leadership for MOCVD tools in 2021. AIXTRON again holds the top spot: AIXTRON's market share has increased to 75% (2020: 58%), followed by AMEC (China) with 14% (2020: 16%) and Veeco (USA) with 11% (2020: 26%). At the same time, the global market for MOCVD tools grew 28% year-on-year from USD 438 million to USD 561 million in 2021. For fiscal year 2022, no current market share figures from independent market analysts are yet available.
Power semiconductors based on Wide-Band-Gap (WBG) materials are one of the main applications of AIXTRON's deposition technology. These materials enable the production of very compact and highly efficient power supplies and AC/DC as well as DC/DC converters which are used, for example, in the industrial space for applications such as power supplies of modern data centers, the more efficient feed-in of regenerative energies into the power grid and in electromobility. They are therefore increasingly used in a broad spectrum of applications covering a wide power range. WBG power semiconductors reduce conversion losses by up to 40% and thus contribute significantly to increasing energy efficiency and reducing CO2 emissions. There are two main groups of commercially available WBG power semiconductors: GaN (gallium nitride) and SiC (silicon carbide).
GaN semiconductor devices are used primarily in low and medium power and voltage classes, such as in power supplies for smartphones and laptops, and in power supplies for data centers. The market volume for GaN semiconductor devices in 2021 exceeded USD 100 million, highlighting the increasing market acceptance of GaN technology in the power semiconductor sector. For example, there is already a wide range of commercially available 65W power supplies that use GaN technology and are marketed as such. In addition, customers are continuously opening up new applications, for example in the field of data centers, in IT infrastructure as well as in micro inverters in the field of photovoltaics or on-board chargers in the field of electromobility. In addition, the customer base for AIXTRON's GaN semiconductor equipment is continuously expanding, while existing customers are increasing their production capacities.
Due to the wide range of applications, analysts of the Yole Group (Yole) expect the market for GaN power semiconductors to grow very strongly, from USD 126 million in 2021 to USD 2.0 billion in 2027, corresponding to a compound annual growth rate (CAGR) of around 60%.
Furthermore, GaN semiconductor devices are increasingly used in high-frequency applications. In 5G telecom networks and likely in subsequent network generations such as 6G, the GaN technology advantage of lower power losses at high frequencies comes into play. As a result, more and more manufacturers are switching their production of high-frequency switches from silicon to GaN. Yole analysts forecast the GaN high-frequency semiconductor device market to grow from USD 891 million in 2020 to USD 2.4 billion in 2026 at a compound annual growth rate (CAGR) of 18%.
The adoption of SiC power semiconductors in the area of high-voltage and high-power applications has increased further in 2022. The main fields of application within electromobility are in particular the main inverters in the powertrain as well as the on-board chargers, but also the charging stations, as well as the inverters in the field of industrial photovoltaics and wind energy. SiC is also used in industrial motor control systems. In all these applications, SiC enables a significant reduction in conversion losses during the conversion of electrical energy. This leads, for example, to a greater range per battery charge in battery electric vehicles and to lower conversion losses in the field of power generation.
Driven by significantly increased awareness of the importance of energy efficiency and CO2 reduction, both in the regulatory and private sectors, as well as by bans imposed in several countries on the sale of vehicles with internal combustion engines from 2035 onwards, car manufacturers worldwide have raised their targets for powertrain electrification.
Based on this development, Yole forecasts that the SiC device market will grow from USD 1 billion in 2021 to USD 6.3 billion by 2027 at a CAGR of 34%. According to the analysts, this is particularly due to the development of electric vehicles and the corresponding fast charging infrastructure.
Red, orange and yellow LEDs (ROY LEDs) are used in Mini LED displays, among other things, for large-format color displays in sports stadiums, airports and shopping malls, as well as in automotive taillights or in the area of indoor farming. In addition, televisions and monitors in the premium segment are increasingly being equipped with Mini LEDs for backlighting as an alternative to OLED displays. The market for infrared and ROY LED manufacturing equipment is expected to grow at a CAGR of 24% through 2027, according to Yole. The annual growth of the wafer area amounts to approx. 7%, as the size of the chips used is significantly reduced compared to backlight applications. The largest growth is expected in the area of fine pitch displays, which are applications with pixel sizes of less than 1 mm. According to Yole, these are expected to grow by an average of 34% per year in the same period.
The market for UV LEDs (Ultra-Violet Light Emitting Diodes) is another specialized segment in the LED market that AIXTRON addresses. UV LEDs are used for curing plastics and disinfecting surfaces, circulating air and (drinking) water. Due to the increasing demand for hygiene, this market is expected to gain importance in the future. After an initial strong increase in demand for mass production systems for UV LEDs in the first years of the COVID pandemic, this has been significantly reduced to tools for development and small series production in the past year. Nevertheless, UV LEDs are a product segment with very specific applications such as air disinfection systems, vehicle air conditioning or sterilization of running water.
Micro LEDs form a basis for new types of displays. Analysts expect Micro LEDs to be used initially in very small displays such as smartwatches and very large displays such as large-screen premium TVs. In the long term, other potential applications include displays in smartphones, tablets and notebooks. Micro LED technology is currently still in the early stages of development but has seen very large investments in the recent past. Market researchers at Yole estimate total cumulative industry investments to date amounting to approximately USD 8.3 billion and predict that all companies combined will invest approximately USD 3 billion in manufacturing capacity by 2025. According to Yole, this equates to an increase in demand for Micro LED epiwafers to 0.5 million 6-inch wafers per year in 2025 and up to 3.9 million 6-inch wafers per year in 2029.
As Micro LED technology matures, AIXTRON expects the currently still very young market for Micro LEDs to mature both technically and commercially. Developments are currently focusing on the cost per pixel, as well as on the yield and quality of the industrial manufacturing process. Accordingly, analysts also expect the initial commercial introductions in the area of high-end applications and a subsequent continuous expansion of the applications across other segments.
The volume of data transmitted via fiber optic cables continues to grow, driven by the increasing use of cloud computing and Internet services in particular during the COVID pandemic. Especially the growing use of video-on-demand, as well as the communication of networked devices via the Internet (“Internet of Things”) contribute to increasing data volumes. In addition to the data volumes, the enormously fast transmission at the speed of light for optical data transmission also plays a major role. Lasers, which are manufactured on AIXTRON equipment, are key components for high-speed optical data transmission. The growth in global data traffic due to mobile telecommunications, the switch to 5G standards, and continuous build out of glass fiber networks, increase the demand for lasers as optical signal generators, photodiodes as receivers, and optical amplifiers and switches.
Market research firms such as Yole and Strategies Unlimited expect investment in laser-based communications to continue to increase to accommodate growing data traffic. For this reason, market research firm Yole predicts that revenues from transceivers used in telecommunications will grow at a compound annual growth rate of 15% from 2021 to 2027. The total market volume in 2027 is forecast by Yole to exceed USD 24.7 billion. Yole also expects demand for the laser diodes used for this purpose to rise sharply by 2026, and now assumes that data communications will be the biggest demand driver over the next five years.
Laser-based 3D sensors are often used in high-end mobile phones. Since this technology was introduced to the market with the iPhone X in 2017, Apple has been using it in its current generation smartphones and is also using it in its tablet series. With these sensors, the environment can be captured in three dimensions, which is important for many applications, e. g. augmented reality. Consumer electronics will therefore be a significant demand driver for laser-based 3D sensors in the next few years, according to market research company Yole. Their analysts expect surface emitting lasers to grow from USD 1.4 billion in 2021 to USD 3.9 billion in 2027, growing at a CAGR of 19%.
In addition to consumer electronics applications, edge and surface emitting lasers are increasingly being used in 3D sensing for the industrial and automotive sectors. Yole expects a strong increase in demand for these devices by 2026.
Fiscal year 2022 was dominated by significant geopolitical events with serious macroeconomic impacts. Disrupted supply chains, energy crisis, inflation, the shortage of skilled workers or the COVID-19 pandemic are just a few examples of external factors that many people and companies had to deal with. We successfully met these challenges by introducing targeted measures at an early stage. As a result, we were able to recruit many new colleagues and still achieve our revenues forecast despite delays in the granting of export licenses. Demand for our equipment and in particular our G10-SiC remained very strong. Our profitability also developed as we expected. Accordingly, we also met all other key figures of our guidance, which was increased in the course of the year.
In particular, a strong increase in demand for AIXTRON’s Silicon Carbide (SiC) and Gallium Nitride (GaN) energy efficient power as well as Micro LED device production equipment characterized the reporting year. AIXTRON’s other products also experienced strong demand in 2022, for example, systems for the production of lasers for optical data communication and 3D sensing, as well as systems for LEDs. With orders totaling EUR 585.9 million (2021: EUR 497.3 million), we recorded an 18% increase in order volume in the fiscal year 2022. As expected, revenues also developed very positively and, at EUR 463.2 million (2021: EUR 429.0 million), were despite the delayed granting of export licenses within our guidance range. At 42%, the gross margin met the expectations. The increased operating expenses of EUR 90.6 million included higher variable compensation components as well as higher fixed personnel cost and increased expenses for Research and Development. The operating result was EUR 104.7 million with an EBIT margin of 23% (2021: EUR 99.0 million; 23%). This resulted in a net profit of EUR 100.5 million (2021: EUR 94.8 million). For 2022, a free cash flow (cash flow from operating activities - investments + proceeds from disposals adjusted for changes in financial assets) of EUR 7.7 million (2021: EUR 48.7 million) was reported.
During 2022, AIXTRON has been actively pursuing the renewal of its product portfolio and the new G10-SiC tool was successfully launched in the reporting year, while the new G10-AsP tool was introduced to the market in early 2023. In addition, we were able to acquire further well-known customers for our deposition technology for the efficient large-scale production of high-performance SiC power electronics. In order to secure a sustainable profitable development of the AIXTRON Group, our product portfolio focuses exclusively on product lines with a positive earnings contribution or those that promise a significant return on investment (ROI) in the foreseeable future.
In fiscal year 2022, US dollar-denominated order intake and order backlog have been recorded at the budget exchange rate of 1.20 USD/EUR (2021: 1.25 USD/EUR). Spares & service orders are not included in the order backlog.
In 2022, total order intake including spares & services stood at EUR 585.9 million, thus significantly higher than the previous year’s figure. This development was driven in particular by continuously strong demand from power electronics and micro LEDs. In Q4/2022, order intake was booked at EUR 160.3 million and with that was up 12% against the previous quarter (Q3/2022: EUR 142.8 million).
At EUR 351.8 million, equipment order backlog as of December 31, 2022, was also higher than the order backlog of EUR 214.6 million at the end of 2021 (2022 budget rate: 1.20 USD/EUR; 2021 budget rate: 1.25 USD/EUR). Compared to the end of the previous quarter, the order backlog decreased due to the high number of shipments in the fourth quarter by 5% at year-end (September 30, 2022: EUR 369.4 million).
In line with strict internal procedures, AIXTRON has defined clear conditions that must be met for the recording of equipment orders in order intake and order backlog. These conditions include the following requirements:
In addition, and taking into account current market conditions, the Executive Board reserves the right to assess whether the actual realization of each system order is sufficiently likely to occur in a timely manner. If, as a result of this review, the Executive Board comes to the conclusion that the realization of an order is not sufficiently likely or involves an unacceptable degree of risk, it will exclude this specific order or a portion of this order from the recorded order intake and order backlog figures until the risk has decreased to an acceptable level. Such Risk factors include, for example, technological risks in orders for new product generations or delays in the granting of export licenses. The order backlog is regularly assessed and – if necessary – adjusted in line with potential execution risks.
Revenues in fiscal year 2022 amounted to EUR 463.2 million and were thus about 8% higher than in the previous year (2021: EUR 429.0 million). EUR 82.8 million or 18% of revenues in fiscal year 2022 were generated from the sale of consumables, spare parts and services (2021: 15%). Revenues with MOCVD systems rose by around 4% year-on-year. In particular, the strong increase in demand for MOCVD equipment for the production of SiC power devices led to an increase of equipment revenues in the power electronics segment. Demand from the application field of LEDs, including Micro LEDs, led to corresponding growth in this area as well. The proportion of application field revenues developed as following: Power electronics contributed 42% of equipment revenues, followed by optoelectronics with 28% and LEDs including Micro LEDs with 27%.
With EUR 316.1 million or 68%, demand from customers in Asia continued to account for the majority of total revenues in 2022 (2021: 70%). The slightly higher contribution from customers in the Americas were a result of customers located there serving the above mentioned demand drivers.
Cost of sales amounted to EUR 267.9 million in the past fiscal year (2021: EUR 247.5 million) and were unchanged at 58% in relation to revenues (2021: 58%). This resulted in a gross profit of EUR 195.3 million (2021: EUR 181.5 million) in the fiscal year, which corresponds to a gross margin of 42% (2021: 42%).
In absolute terms, operating expenses increased significantly during 2022 compared to the previous year, but only slightly in relation to revenue development. In absolute terms, operating expenses increased to EUR 90.6 million in the year 2022 compared to EUR 82.5 million in the past fiscal year. Higher personnel cost due to the increased staff as well as higher variable remuneration components contributed to the increase in expenses. In addition, R&D expenditures increased as well, while the previous year´s income from government grants was higher.
The following individual effects must be taken into account:
Selling, general and administrative (SG&A) expenses were higher in a year-on-year comparison at EUR 40.4 million (2021: EUR 35.4 million). In proportion to revenues, SG&A expenses amounted to 9% (2021: 8%). The development was mainly attributable to higher variable remuneration components and personnel cost.
Research and development (R&D) expenses, including expenses for development activities for our new generations of systems, increased slightly by 2% year-on-year to EUR 57.7 million (2021: EUR 56.8 Mio.). In fiscal year 2022, AIXTRON has both driven the completion of new product generations and already started to invest in the development of next generation products.
Die Forschungs- und Entwicklungskosten, einschließlich der Aufwendungen für die Entwicklungsaktivitäten für unsere neuen Anlagengenerationen, erhöhten sich im Vergleich zum Vorjahr leicht um 2% auf EUR 57,7 Mio. (2021: EUR 56,8 Mio.). AIXTRON hat im Geschäftsjahr 2022 sowohl die Fertigstellung der neuen Produktgenerationen vorangetrieben, als auch bereits angefangen in die Entwicklung von Produkten der nächsten Generation zu investieren.
Net other operating income and expenses in 2022 resulted in an income of EUR 7.6 million (2021: operating income of EUR 9.7 million).
In the reporting year, other operating income including grants for publicly funded development projects decreased from EUR 8.9 million in 2021 to EUR 5.3 million, which was largely due to the completion of a major funding project. In fiscal year 2022, a net foreign exchange gain of EUR 2.8 million (2021: EUR 1.2 million gain) was recorded from transactions in foreign currencies and the translation of balance sheet items.
At EUR 91.1 million, personnel costs in fiscal year 2022 were 15% higher than the EUR 79.3 million in 2021. This increase was mainly due to higher variable remuneration components and increased costs in-line with the higher headcount.
The operating result (EBIT) improved year-on-year by 6% and amounted to EUR 104.7 million in the fiscal year 2022 (2021: EUR 99.0 million). This resulted in an EBIT margin of 23% (2021: 23%). This development is mainly attributable to the year-on-year increase in revenues and related gross margin and is thus related to the business- and cost developments described above.
Result before tax at EUR 105.1 million in 2022 was higher than in the previous year (2021: EUR 98.9 million). This includes net interest income of EUR 0.45 million (2021: EUR 0.05 Mio. expense).
In 2022, AIXTRON reported a net income tax expense of EUR 4.7 million (2021: EUR 4.1 million income tax expense). This consists of a tax expense from current taxes of EUR 13.9 million (2021: EUR 13.6 million) and an income from the capitalization of deferred taxes on loss carryforwards in the amount of EUR 9.2 million (2021: EUR 9.6 million income) due to expected future profits.
The AIXTRON Group's consolidated net income in fiscal year 2022 was EUR 100.5 million, or 22% of revenues (2021: EUR 94.8 million or 22%).
The balance sheet total as of 31 December 2022 increased to EUR 902.6 million year-on-year (December 31, 2021: EUR 740.7 million).
Property, plant and equipment increased from EUR 74.0 million as of 31 December 2021 to EUR 99.0 million as of 31 December 2022. Capital expenditures mainly included laboratory equipment and expansions. In addition, rights of use for leased space were capitalized.
Goodwill was EUR 72.5 million compared to EUR 72.3 million as of December 31, 2021. The difference is entirely related to exchange rate fluctuations. No impairment losses were recognized.
Other intangible assets increased to EUR 3.3 million as of 31 December 2022 (31 December 2021: EUR 2.2 million), due to investments in software and IT-solutions.
Inventories, including components and work in process, increased by EUR 103.0 million year-on-year to EUR 223.6 million (December 31, 2021: EUR 120.6 million), pointing at the high number of deliveries planned in subsequent quarters. The inventory turnover rate at the end of 2022 was 1.2 (2021: 2.0).
Trade receivables were EUR 119.7 million at December 31, 2022 (December 31, 2021: EUR EUR 81.0 million), reflecting the high volume of shipments in the fourth quarter of 2022. The current days sales outstanding was 30 days at the end of 2022 compared to 23 days at the end of 2021.
Cash and cash equivalents and financial assets decreased to EUR 325.2 million as of December 31, 2022 (31. December 2021: EUR 352.5 million). The decrease is mainly due to the build-up of inventories reflecting the higher business volume, and to the increase in receivables resulting from a disproportionately strong revenue contribution of the last quarter.
As of December 31, 2022, other financial assets include fund investments of EUR 220.4 million (December 31, 2021: EUR 141.6 million). In previous year, there were also short-term bank deposits of EUR 60.0 million.
Trade payables increased to EUR 46.1 million as of December 31, 2022 (December 31, 2021: EUR 19.6 million), due to the increased procurement volume.
Provisions (non-current and current) increased from EUR 31.8 million as of December 31, 2021, to EUR 36.1 million as of December 31, 2022. This was due on the one hand to a high number of systems being shipped with including the respective warranty provisions, and on the other hand to higher provisions for variable remuneration.
At EUR 141.2 million as of December 31, 2022, advance payments received from customers were significantly above the previous year's level (December 31, 2021: EUR 77.0 million), reflecting the currently strong order levels.
Other current liabilities include payments received for publicly funded development projects and increased slightly year-on-year to EUR 6.6 million (December 31, 2021: EUR 6.4 million).
AIXTRON has a central financial management system whose primary objective is to ensure the long-term financial strength of the Group. AIXTRONs financial management includes the control of its global liquidity as well as its interest and currency management. Financial processes and responsibilities are defined throughout the Group. The investment policy is approved by the Supervisory Board.
Our capital structure management aims to determine an appropriate capital structure for each company within the Group while minimizing costs and risks. An appropriate structure must comply with tax, legal and commercial requirements. The Group increases or decreases the capital in line with the strategic orientation of the companies.
Our liquidity management aims to ensure the effective management of cash flows within each company of the group. The central finance department and local management monitor the cash flows within the group on a daily basis and take corrective action where necessary. Financing requirements are covered by cash within the group, either through intra-group loans or through changes in equity.
The principles of the investment policy are determined by the Executive Board and approved by the Supervisory Board of AIXTRON SE. Excess cash is invested by the finance department in accordance with this policy. The policy only allows for low-risk investments.
Due to its global business operations, AIXTRON generates a portion of its revenues in foreign currencies, i. e. in currencies other than the Euro. The most prevalent foreign currency relevant for AIXTRON is the US dollar. The associated exchange rate risk is monitored by the central finance department and taken into account as part of liquidity management. Speculative foreign currency transactions are not entered into.
In the semiconductor equipment industry, it is essential to have sufficient cash and cash equivalents at all times in order to be able to quickly finance possible business expansion. AIXTRON’s current cash requirements are generally covered by cash inflows from operating activities. The Company can draw on a high level of cash and cash equivalents and other short-term investments to secure further corporate financing and to support its indispensable research and development activities. In addition, AIXTRON has the option, if necessary and subject to the approval of the Supervisory Board, to issue financial instruments on the capital market to cover additional capital requirements.
The equity ratio decreased slightly mainly due to the significantly increased total value of advance payments from customers and the correspondingly higher balance sheet total compared to the previous year and amounted to 73% as of December 31, 2022 compared to 80% as of December 31, 2021.
The share capital of AIXTRON SE amounted to EUR 113,348,420 as of December 31, 2022 (December 31, 2021: EUR 113,292,020). It is divided into 113,348,420 no-par value registered common shares with a pro rata amount of share capital of EUR 1.00 per share. All shares are fully paid in. The increase in share capital is attributable to the shares issued in the fiscal year under stock option programs. In fiscal year 2022, 56,400 stock options from past stock option programs were exercised (2021: 364,700 options) and no new stock options were issued (2021: 0 options).
As of December 31, 2022 and 2021, AIXTRON did not have any bank borrowings.
To safeguard advance payments received from customers for orders, the Group had bank guarantee lines amounting to EUR 105.2 million as of December 31, 2022 (2021: EUR 70.1 million), of which EUR 49.8 million (2021: EUR 24.7 million) had been utilized as of the reporting date.
In the year 2022, AIXTRON´s total capital expenditures amounted to EUR 49.2 million (2021: EUR 97.6 million).
Driven by the Group's growth, EUR 27.4 million (2021: EUR 16.4 million) was invested in property, plant and equipment in fiscal year 2022. These investments include additional test and demonstration facilities as well as the expansion of production and development areas. In addition EUR 79.6 million were invested in fund investments while fixed-term bank deposits were reduced by EUR 60.0 million (2021: EUR 80.1 million investments in fund investments; no change in fixed-term deposits). EUR 2.3 million were invested in intangible assets including software licenses (2021: EUR 1.1 million).
All capital expenditures in fiscal years 2022 and 2021 were self-financed.
Cash and cash equivalents including other financial assets decreased to EUR 325.2 million as of December 31, 2022 (December 31, 2021: EUR 352.5 million). As of December 31, 2022, other financial assets exclusively included fund investments totaling EUR 220.4 million (2021: EUR 141.6 million). Bank deposits, primarily in euros, with a maturity of less than twelve months in the amount of EUR 60.0 million were included in the previous year balance (see also “Investments”).
There are no restrictions on access to the Company's cash and cash equivalents.
Cash flow from operating activities amounted to EUR 37.1 million in fiscal year 2022 (2021: EUR 66.4 million). This is mainly the result of the current year's earnings. This was offset by the effects of the increase in inventories and the higher level of receivables as of the reporting date. In the previous year, investments in funds amounting to EUR 79.9 million were reported in cash flow from operating activities. From fiscal year 2022, these will be recognized retrospectively in cash flow from investing activities.
Cash flow from investing activities in the 2022 fiscal year was EUR -48.3 million (2021: EUR -97.4 million). This figure is mainly attributable to investments in laboratory plant and equipment and fund investments (see also “Investments”).
Cash flow from financing activities amounted to EUR -34.6 million in 2022 (2021: EUR -8.6 million). The main drivers were the dividend payment of EUR -33.7 million (2021: EUR -12.3 million) and repayments of lease liabilities EUR -1.5 million, (2021: EUR -1.0 million). Cash inflows from the issue of new shares under stock option programs were of EUR 0.7 million (2021: EUR 4.8 million).
Free cash flow (cash flow from operating activities - investments + proceeds from disposals adjusted for changes in financial assets) for the 2022 fiscal year was EUR 7.7 million compared to EUR 48.7 million in 2021. The difference compared to the previous year is mainly related to the increase in inventories and higher investments in property, plant and equipment and intangible assets.
In fiscal year 2022, AIXTRON continued to focus on successfully serving the targeted growth markets with sustainable profitability. At the same time, the Group continued to drive development and sales activities, particularly for power electronics equipment and for the production of Mini and Micro LED displays.
Equipment revenues in 2022 amounted to EUR 380.4 million, of which EUR 160.6 million (42 %) was generated by MOCVD/CVD equipment for the production of power electronics devices (GaN/SiC), EUR 106.2 million (28%) by MOCVD equipment for the area of optoelectronics (laser, solar and telecom) and EUR 103.2 million (27%) for the area of LEDs including Micro LEDs. Further fundamental growth is expected in the aforementioned end markets, as modern power electronics devices are increasingly based on SiC or GaN material systems. The use of lasers in optical data transmission and 3D sensor technology also continues to increase and and new types of micro LED displays will increasingly be used commercially.
In addition to the above-mentioned activities, there is a focus on the costs as well as the margin contributions of individual revenue drivers. Furthermore, the Executive Board continuously reviews the product portfolio with a view to changing framework conditions, such as time windows for the market launch of new technologies or evaluation of our customers' product requirements.
Fiscal year 2022 developed very positively in all markets addressed by our core technology. Management expects further revenue growth in the future, driven by the megatrends of digitalization, electromobility, energy efficiency and environmental sustainability.
In this context, the AIXTRON Group maintains a healthy financing structure with a high level of cash and cash equivalents and without any bank debt.
The order intake, revenue, gross margin and EBIT margin forecasts for fiscal 2022 published in the Annual Report 2021 and adjusted in conjunction with the publication of the third quarter report were fully met:
*At constant budget exchange rate of 1.20 USD/EUR
Alan Tai
Taiwan/Singapore
Christof Sommerhalter
USA
Christian Geng
Europe
Hisatoshi Hagiwara
Japan
Nam Kyu Lee
South Korea
Wei (William) Song
China
AIXTRON SE (Headquarters)
AIXTRON 24/7 Technical Support Line
AIXTRON Europe
AIXTRON Ltd (UK)
AIXTRON K.K. (Japan)
AIXTRON Korea Co., Ltd.
AIXTRON Taiwan Co., Ltd. (Main Office)
AIXTRON Inc. (USA)
Laura Preinich
Recruiter
Tom Lankes
Talent Acquisition Expert- Ausbildungsleitung
Christoph Pütz
Senior Manager ESG & Sustainability
Christian Ludwig
Vice President
Carsten Werle
Director Investor Relations (Interim)
Ragah Dorenkamp
Director Corporate Communications
Prof. Dr. Michael Heuken
Vice President Advanced Technologies